US Economy has finally recovered from the 2008 financial crisis. But that doesn’t mean that US economy is going to remain strong.
As we all know, the financial crisis hit the US economy very hard. But US economy survived the onslaught and back to its feet now. But we have to several important questions now. Can the foundations support the success? Well, economists have several concerns about the structure of the economy. How long can a strong US economy survive? Let’s address this below.
Economists are cautious
Yes, we are looking at positive figures now. But the experienced economists are approaching it with caution.
- It’s not doing badly – that’s the common response from the leading economists.
- Many economists would be comfortable with the word “modest”, when asked about the strength of the economy.
- Economists point out that US economy is doing okay.
- The unemployment rate is 5% now. Or in other words, we are back to the point before the global recession in 2008.
- Finding a job is very difficult, especially if you haven’t completed high school graduation.
- We have to consider the rise of underemployment as well. Companies tend to offer less work to more workers. Or in other words, the number of hours offered by the companies remains more or less the same.
Economists are worried about the waning productivity, which isn’t a good sign for the economy at all. Even though there is an increase in salary, productivity is not increasing. Productivity is a very important factor when it comes to competing with other global firms. However, according to a Recent Fed Survey, The US Economy Is Still Expanding, Find This Article Here.
Silicon Valley is losing its sheen?
Silicon Valley is regarded as the global innovation hub. But the reports suggest that Silicon Valley may lose that title in the near future. One has to see the obvious connection between productivity and innovation. So, with waning productivity, Silicone Valley is losing its competitive edge. Recent studies have suggested that the high-tech industry has stagnated for the past couple of years. Other countries like India, Vietnam etc. are fast catching up as far as tech industry is concerned. Can the politicians do something about it? Well, no, they can no longer control this downward spiraling. Productivity is mostly clustered in the private sector and slow growth of the private sector is not good news. Government policies can definitely bring about change, but it may take several years and the changes may not as substantial as you would expect.
If we take a closer look, we can see that weak investment in the future is a big concern we have to address before it’s too late. When it comes to economic development, investment in education is really important as an educated work force can drive the economy to new heights. Yes, America offers top class education and our product top class work force. But only a small percentage manages to reach there, all thanks to the student loan debt scenario in the country. We have to fix it before it is too late. Education inequality can be the root cause of economic inequality as well. If you have well-educated work force, productivity is definitely going to be improved. This can help the economy beyond leaps and bounds.