Labor

The recent deliberations in Washington about the fiscal cliff have triggered a national debate in the United States about the nature, extent and future sustainability of key elements of the U.S. social safety net: Social Security, Medicare, Medicaid, support for education, the unemployed and the poor.

Today’s prolonged economic slump is fundamentally different from an ordinary recession. In the aftermath of a severe financial collapse, an economy is at risk of succumbing to a prolonged deflationary undertow. With asset prices reduced, the financial system damaged, unemployment high, consumer demand depressed, and businesses reluctant to invest, the economy gets stuck well below its full employment potential.

With Americans still trapped in the fifth year of our Great Recession, and median personal income having been essentially stagnant for forty years, perhaps we should finally admit that decades of economic policies have largely failed.

Gabriel Sherman discusses the way media covers and hypes tragedy in the age of the 24-hour news cycle and David Gray explains why America is the only advanced nation without a vacation policy. Elizabeth Weingarten hosts. 

Contents

I.  Overview
II.  The Story Begins with Oil & Gas
III.  Job Creation and Investment
IV.  The Catalyst for a Manufacturing Revival
V.  The Rise of New Industries
VI.  Shoring up America’s Fiscal Position
VII.  Infrastructure Investment is the Missing Piece of the Story
VIII.  Serious Obstacles Remain

Editor's Note: This is a guest blog post authored by Lina Khan, program associate with New America's Markets, Enterprise and Resiliency Initiative.

If there’s one thing Americans have faith in it’s the country’s entrepreneurial verve. Even amid high unemployment and a tepid economic recovery, we generally believe that strong entrepreneurship and upstart businesses will help steer us out of our present ditch. Media reports and sparring politicians fixate on this crucial sector of the American economy, a source of new products, new ideas, new jobs, and new wealth.

An article published today shows that America’s entrepreneurial sector is actually in deep crisis. The piece, written by Barry C. Lynn and myself in the forthcoming issue of the Washington Monthly, shows that for over a generation fewer Americans have been creating new businesses. The nation’s self-image notwithstanding, the number of new entrepreneurs – measured per capita – declined by 53 percent between 1977 and 2010. Even the share of self-employed Americans has fallen, dropping by more than 20 percent between 1991 and 2010.

America’s entrepreneurial sector is in deep trouble. Although the mainstream media continues to promote the idea that the nation’s small and upstart businesses are either generally thriving or, at worst, recovering from the sudden blow of the Great Recession, a closer look at the data reveals the exact opposite to be true, with a long-standing decline in the numbers of independent startups per working-age American.

Alexandra Starr talks about how President Obama's new immigration executive order could impact U.S. competitiveness - and the Latino vote. Dana Goldstein explores a counter intuitive way to get more women to pursue science, technology and engineering careers: Get them to play more video games as kids.

The share of wages and salaries in Gross Domestic Product (GDP) has declined in most rich nations over the past 20 to 30 years. Over the same period, income inequality has grown in most of these nations, and rapidly in some of the largest of them, resulting in slow wage growth for most consumers. 

It’s a cliché that the Pacific Ocean is displacing the Atlantic, that China will replace America at the top of the world’s hierarchy of power, and the East will surpass the West. The cliché is also wrong. The multipolar world we are entering will have no single winner, and the three-pillared West of the European Union, North America, and Latin America remains a triangular zone of peace and foundation of global stability.