Today I had the privilege of addressing the Council of State Chambers as they gathered at the Coeur d’Alene resort in Northern Idaho. This organization consists of executives from each state Chamber of Commerce. It was a great opportunity to share my view of future trends and issues and in particular to bring to them my concerns about the challenge we have in the United States to rebuild an economy that begins, once again, to generate a regularly increasing standard of living for the middle class.
As readers of this blog know I’ve been writing about this challenge for a while, in particular since I addressed it in my 2006 book, Turing the Future Into Revenue. It has been thirty years, nearly, that the middle class has seen their incomes flat-lined, with a few good years here and there. This is in contrast to the years 1946 to the middle 1970’s, when the U.S. economy built the greatest middle class ever. Now four forces work together to make it very difficult to recreate those years – technology, global labor competition, public policy, and a national values shift.
A high-tech, information intensive economy tends to drive wealth toward smaller groups of people. Competition from global labor holds back wage gains. Public policy beginning in the 1980s has tended to favor the concentration of wealth. And recently I’ve been thinking that there has been a values shift along the following lines. There was a time, I think, when people went into business to do something great, and if they got wealthy that was a by-product. Now I wonder if the order has been reversed, and people go into business to get rich, and if they do something great or worthwhile, that is a by-product. I might be wrong about this, its just an observation on popular culture, but I think I may have something.
Bottom line is that the Chamber execs were very receptive to this challenge: how do we re-create the conditions to once again build a larger middle class whose incomes go up on a regular basis. I think it can be done, even in today’s world, which is admittedly different than the post-war period. But this, I think, is the great economic challenge today.