Inflation appears to be under control. The job market remains healthy. Wages are rising, even for those at the bottom. But this is just a lull. A storm is approaching, but Americans are not prepared.
We are faced with three monumental changes that are reshaping the U.S. economy in the coming years: an aging population, the rise of artificial intelligence, and the rewiring of the global economy.
This is hardly surprising since all of this is visibly evolving slowly. What is not well understood is how these changes, in combination, are changing the lives of working people in ways not seen since the late 1970s, when wage inequality widened and wages for low-income groups stagnated or declined. The question is, is it possible to change it like this?
If these challenges are successfully addressed, they have the potential to reshape work and bring much higher productivity, wages, and opportunities, something that the computer revolution promised and never delivered. If we mismanage this moment, we could create a further shortage of good, well-paying jobs and erode the vitality of our economy. The decisions we make over the next five to 10 years will determine the path we take.
Our dysfunctional political system, which has become increasingly short-termist in its vision for the country, is unlikely to be prepared for these changes. Neither Vice President Kamala Harris nor former President Donald Trump have taken them seriously in their campaigns. Nor has either party presented a comprehensive plan to make the investments needed to prepare America’s workforce to meet the challenges ahead.
Never before has the U.S. workforce aged so much. In 2000, for every working-age (20 to 49) American, there were approximately 27 Americans 65 and older. By 2020, this number had increased to 39. By 2040, this number will increase to 54. Because these changes are primarily driven by declining birth rates, the U.S. labor force will soon begin to grow more slowly as well. Reducing immigration to the United States will likely make the aging problem worse, no matter who wins the election.
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