Many
people believe the economy is not what it used to be. No economic
recovery for them.
Politicians
promise, “jobs, jobs, jobs.” They claim they want to help the
struggling middle class, worried about not getting ahead. Vague
promises of more and better jobs lead people to believe they will get
one of those jobs and enjoy a new prosperity.
The
truth is different. If elected, officials won't be able to return
the economy to the prosperity of the past or ensure that the
frustrated middle class will gain.
For
one thing, the economy is better than it seems. Economic analysts
point out that people are living longer and have access to constantly
improving technology. Taking a long view, they note that average
personal income, after taking inflation into account, is much higher
than it was.
So
why are so many people unhappy or uneasy? Those with relatively
little education or previously employed in manufacturing are less
well off. Incomes have stagnated. And the security that came from
working for the same employer for an entire career has been replaced
by an almost permanent sense of uncertainty.
Add
to that a widespread sense of injustice about the accumulation of
great wealth by the few benefiting from special tax breaks while the
middle class struggles.
Politicians
simply cannot turn the situation around. While it is easy for them
to blame lost jobs on countries lacking environmental standards and
where workers are badly paid, countries with higher standards can
compete effectively with the U.S. A global economy has helped create
worldwide sources of production.
Many
lost jobs will never be recovered. But there are steps that can be
taken to reduce manufacturing costs and prevent that sector from
disappearing in the U.S.
Energy
costs have declined, and they need to keep being reduced. There's
little question that jobs have been lost in Maine because of its cost
of electricity is much higher than in much of the rest of the country
and the world. Maine dismantles hydropower, while China builds dams.
Workers
need to be better trained. Will government put more money into
community colleges or will voters starve them by insisting that
government is too big and spending should be cut?
Responsible
politicians need to have the courage to explain that restoring
prosperity requires government help. This not a question of more
government jobs, but public spending to work with private sector
employers to develop growth plans that will promote more job
opportunities.
But
roads, bridges and public facilities are not being well maintained,
and the country urgently needs to spend public funds on the jobs that
will repair them.
To
induce recovery, the U.S. cannot rely on the Federal Reserve alone to
promote growth by keeping interest rates low. Whatever people think
of government spending, the American economy competes with countries
making more public investment in jobs.
There
are only two ways to raise public money: tax increases or more debt.
Debt is easier for politicians, so we may hear less about its
“crushing burden.” But more tax revenues would be better.
Dealing
with immigration is also part of the solution. It adds consumers,
who are also new taxpayers, to help stimulate the economy and pay for
government programs.
Workers
themselves need to understand the country cannot return to an economy
that no longer suits the times. Because they will change employers
and even change the type of work they do over their careers, people
will have to accept that the comfort and certainty of long-term
employment is probably gone for good.
That
means going back to school in mid-life to become equipped for new
jobs that continually require increased skills. More importantly, it
means regaining confidence that the economy will provide good paying
jobs, though without the same certainty that came from working for
the same employer for one's entire career.
Fortunately,
Maine has suffered less than other states, but its lower unemployment
is partly a function of young people simply moving away. That's not
an economic policy. The state needs more workers and more jobs.
The
economy has changed, and we cannot go back. People should understand
that political promises alone will not restore their faith in the
American economy. Manufacturing will never be the same, and new jobs
require new and better skills. Tax reform is needed to provide a
greater sense of economic justice plus more revenues.
To
move ahead, the country needs cash and confidence. That means
increased government support and better understanding of how to deal
with the new economy.