The Impact of the Great Recession

     I am not a great prognosticator. I am certainly not a futurist. But, this does not stop me from prognosticating or pretending to be a futurist. As with most people who dabble in trying to figure out what might and might not happen in the future, I am not all that accurate. When we cover forecasting in my classes at North Park University, I always tell my students if I were better at predicting the future I would be much richer. But, as I love it so, I would continue to teach. The difference is we be in much plusher classrooms with catered gourmet meals.
     I am sorry about one thing I did predict ten years ago. It has come true, at least in part. When the Great Recession was unfolding, I was afraid that the economic turmoil the US was going through was going fundamentally change our country. I predicted in a few different blog posts, e.g. November 2009: It’s the Stupid Economy, that:

First, with the number of manufacturing jobs that have simply gone off shore, we wondered if we could maintain any economic prowess as a service based economy. Second, will we come out of this recession a different country then we were before this recession? Would we come out of this downturn permanently altered looking more like a European country, say UK, Italy, or Greece, than the United States at the turn of the century? These are excellent questions that have been on my mind for some time.

In other blog posts, I referred to the change using a phrase, new normal, lots of others were using (November 2010: Mid-Term Elections). My prediction did not change much. Just to be clear, I was not the only person making such predications.
     I do believe that this has happened especially when I consider my own case. While I have redefined myself and have an encore career as a college professor, I am lesser economically than I was. I am making less than a quarter of my peak salary.
     Today’s, September 16th, New York Times had me revisiting my predictions. As it has been ten years since Lehman Brothers collapsed on September 15, 2008, the business section and a few Op Ed were dedicated to a retrospective. There was a fascinating essay in the Magazine on poverty which was rooted in part in the Great Recession. The picture painted is that this new normal may be even worse than I predicted.
     Sure, we hear that the economy is booming. Well, the stock market is certainly booming. People that can and have invested such have profited from this. I indeed have but that is a vestige of my old pre-Great Recession life thankfully. Now, I would be on the sidelines like millions of others watching the rich get richer across the abyss that is the wealth gap these days. I am not against people getting richer. I am against the poor getting poorer however.
     There is a graph in an article by David Leonhardt, We are Measuring the Economy All Wrong, that summed it up for me. We have talked about a jobless recovery until recently

We are Measuring the Economy All Wrong

when unemployment reached record lows. Yet, it seems large numbers of people have lesser paying jobs in this recovery. The numbers of people working in minimum wage jobs, where it is impossible to live without government assistance, has grown as has the median age of that class of workers. This is not a good trend.
     In an article by Matthew Desomond,Americans Want to Believe that Jobs are the Solutions to Poverty – They’re Not, in the Times Sunday magazine rooted the issue well before the great recession:

In recent decades, the nation’s tremendous economic growth has not led to broad social uplift. Economists call it the “productivity-pay gap” — the fact that over the last 40 years, the economy has expanded and corporate profits have risen, but real wages have remained flat for workers without a college education. Since 1973, American productivity has increased by 77 percent, while hourly pay has grown by only 12 percent. If the federal minimum wage tracked productivity, it would be more than $20 an hour, not today’s poverty wage of $7.25.

      One might question that these articles are from the somewhat left-of-center New York Times. Consider another article from the Wall Street Journal on another impact of the Great Recession. In an article by Janet Adamy, Gen Z is Coming to Your Office – Get Ready to Adapt, argues that the generation now entering the workforce was shaped by the Great Recession just as my parents generation was shaped by the Great Depression. This generation is more serious about school and not wanting debt to get the education. They want better jobs, homes, and cars. They want the American Dream but are sober enough to know it won’t be handed to them… they have to and want to go out and get it.
     I will have to process all this before revising my earlier prognostication or making a new one.  Stay tuned.