We’re in a multi-decade slide in terms of economic growth.
That’s a hard trend to reverse, given its length and the inputs required to achieve a turnaround. Think about it, to really ramp up growth we’ll need workers to be more productive along with more workers (who will also have to be highly productive).
Unfortunately, exactly the opposite is happening. Worker productivity and population growth are declining. Let’s dig into the numbers a bit. You might want to sit – it’s a bit frightening when examining historical averages relative to the recent past.
For instance, from 1950-90, the economy grew at an average of 3.74% annually. But from 2010-2014 it’s been 2.2%. We haven’t topped 3% in annual growth in more than a decade, the longest stretch in modern times.
Similarly, from 1948-2007 worker productivity averaged 2.5% growth. However, it’s been 1.2% from 2010-2014. Those huge decreases cast dark skies over the future of our economy. And we’re seeing signs of it now as millions of people can’t find work and millions more are part-timers when they want full-time work.
On top of that, population growth is slowing. Boomers are retiring and the birthrate is falling. And worker productivity is advancing at one of the worst rates on record. So what do we do? Stoking the flames of economic activity by making it easier and more attractive to do business here would help.
Perhaps it’s time for a major overhaul of corporate tax code, making it simpler and less costly. Similarly, eliminating burdensome regulations could boost entrepreneurship. These few, yet wide-ranging changes would greatly help make firms more competitive and encourage businesses to operate in the U.S.
Will it happen? Stay tuned because this will certainly command the attention of the 2016 presidential campaign.