Americans elected Donald Trump President of the United States because they believe he has the skills and determination to revive a stagnant economy and resuscitate the once-vaunted American jobs-creation machine.
The president is issuing executive orders and formulating new legislation to fulfill his promise to slash regulations, increase America's energy output and fund infrastructure projects. He has convinced Carrier, GM, and other companies to keep jobs in America and induced foreign enterprises Samsung and Alibaba to consider bringing jobs to the U.S.
Not surprisingly, since Trump's election optimism about the economy has soared, companies seem more willing to hire and the stock market has gained 2000 points.
America's animal spirits seem poised to spark U.S. innovation and growth. Almost half the Americans surveyed this past week think America is moving in the right direction, almost double the number of a few months ago.
The president enjoys healthy job approval numbers as a result. On the Rasmussen poll his approval ratings consistently range from 51 to 59 percent, and in Fox's new poll 48 percent of respondents approve of Trump's performance, 46 percent disapprove, with Republicans and independents overwhelmingly approving of Trump.
The problem for Mr. Trump is that because of the last eight-plus years of mounting national debt, overregulation and high taxes, the economy he inherited on January 20th is, to quote Trump at his epic press conference this week, "…a mess -- a real mess."
How much of a "mess?" In 2016 the gross domestic product of the U.S. grew by a near-recessionary 1.6%. A just-released Gallup report entitled "No Recovery" reveals that the GDP per capita growth rate, a reliable measure of a country's standard of living, has been shrinking year by year. In the 1960s, GDP per capita grew three percent per year, but now grows at only 0.5% per year and is headed to zero growth.
If we do not reverse course, Gallup warns, Americans will soon see their standard of living shrink. The study concluded that "The Great Recession may be over, but America is dangerously running on empty."
The jobs picture is equally dismal. According to a recent Harvard study, 94 percent of the new jobs created over the last eight years were not full-time positions with benefits and a stable future but rather "alternative work arrangements" such as temporary, part-time, freelance, and independent contractor positions.
The American public, including the three million new college graduates entering the workforce in a few months, must try to carve out careers in an economy that as recently as last November created a paltry 9000 new full-time jobs. In this new "gig economy," only 44% of all American workers work at least 30 hours per week.
A recent Wall Street Journal article ominously entitled "The End of Employees" revealed the a wide variety of companies, including Wal-Mart, Google, and Pfizer, increasingly depend on temps, vendors, and contractors to stock shelves, test self-driving cars, and perform clinical drug trials.
As the WSJ article states, "Rising from the mailroom to a corner office is harder now that outsourced jobs are no longer part of the workforce from which star performers are promoted." Goodbye upward mobility!
New workers have seen earnings slip over the last eight years. A recent Stanford study reveals that regardless of their social class, fewer than half of today's workers have a chance to earn more than their parents did, down from 90 percent in more prosperous times. The percent of college grads working for minimum wage has skyrocketed since the official end of the recession in 2008.
Good jobs have been replaced by bad ones. Since 2014, while the number of high-paying secure manufacturing jobs has decreased by 33,000, barista/server jobs increased by a half million.
Such stats led US News and World Report to wonder "Are We Living in a Ghost Job Market?"
The labor force participation rate is at or near its lowest level since the 1970s, with the number of working-age Americans not in the workforce rising from 80 million to an eye-popping 95 million in just eight short years. Many observers, including former presidential candidate Bernie Sanders, claim the real unemployment rate is at least ten percent, not the official 4.7 percent.
Such developments are changing the American class structure, and not for the better. Only half of Americans in recent surveys label themselves middle class, down from 61 percent in 2008. Membership in the lower classes by self-identification has ballooned from 35 percent in 2008 to close to half of Americans in 2015. Even the percentage of Americans who self-identify as upper class has dropped. Over the last eight years, more and more Americans of all strata have come to see themselves as "The Forgotten Man" the president referenced in his inauguration speech.
As Trump begins his presidency, working-age Americans are finding it more difficult to get married, raise families and buy homes and cars.
Sales of new one-family homes are no higher than in 1963, even though the U.S. population has almost doubled since then. Per capital sales of new cars are 25 percent lower than they were in the 1980s.
We are not forming new households. Almost 40 percent of Americans 18 to 34 years of age are living at home, the highest in 75 years. There has also been a sharp decline in the percent of Americans owning their own homes.
Other tears in the social fabric are appearing. The U.S. fertility rate has dropped to Depression-era levels, a trend which is slowing U.S. population growth. More and more people depend on government to feed themselves and their families. Between 2008 and 2015 the number of Americans receiving food stamps rose from 28 million to 46 million
Americans turned to Trump not only because they believe he, not the elites -- government policy planners and bureaucrats, academics and media pundits -- can get America out of its economic malaise, but because citizens suspect that these elites have come to accept this stagnant economy as the country's "New Normal."
Recently published books like Marc Levinson's An Extraordinary Time: The End of the Postwar Boom and the Return of the Ordinary Economy, and Robert Gordon's The Rise and Fall of American Growth posit that America's growth rates of four and five percent occurred only because of a life-altering scale of innovations that emerged prior to 1970 that we can't expect to continue in the future.
Such a pessimistic perspective underestimates the power of American creativity. Game-changing innovation hasn't lagged because we have run out of ideas. It's being stifled by an ever-growing mountain of regulations that inhibit the birth and growth of new firms that create these breakthroughs. Economists at Goldman Sachs blame post-recession regulations for reducing availability of credit to and raising the operating costs of small firms.
A recent Wall Street Journal article revealed that the alarming decline in new business formation over the last decades has cost the U.S. hundreds of thousands of companies and jobs. If new businesses were being created at the rate they were in the 1980s, we would be seeing an additional eye-popping 1.8 million new jobs and 200,000 new companies each year.
To spur innovation, Trump must free new startups from the yoke of the Administrative State, the labyrinthine bureaucracy of unelected bureaucrats who create regulations out of thin air, unleash them upon the public, and ruthlessly enforce them.
On February 28th, President Trump will address Congress and the nation. In that talk he should describe how his policies -- liberating Americans and businesses from the onerous weight of high taxes, suffocating regulation and ObamaCare's costly premiums and deductions, reforming immigration and expanding domestic energy production -- will boost GDP to the three to five percent per annum level and create millions of jobs.
Massive tax cuts spawned the prosperity of the Roaring 20s, the 60s, and the 80s. During the Reagan era, 1984 GDP grew by 7.3 percent and in September of 1983 over a million new jobs were created. Smart immigration reform, such as Senator Tom Cotton's Reforming American Immigration for Strong Employment Act (RAISE), that halves the number of immigrants entering the U.S. will expand employment and career advancement opportunities for all Americans.
In his speech, Trump must challenge all Americans -- the average citizen, politicians on both sides of the aisle and the business community -- to put aside their differences and join in a common effort to end the era of economic stagnation and rekindle American prosperity.
President Trump should caution the country that the window for "making America great again" will not stay open forever. The nation has hit a tipping point in its history -- if the country does not move forward soon, it will most certainly slip into permanent decline and lose its global leadership position.
The time is now for all Americans to put aside their differences and engage in a unified effort to create a prosperous future.
Sociologist/Futurist Michael G. Zey, Ph.D, books include Seizing the Future, Ageless Nation, and the forthcoming Envisioning America's Future. He is a Professor at Montclair State University's School of Business. His website is www.zey.com.
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