This blog was originally published on January 21, 2016.
It’s been a little more than a month since Election Day. In the time that’s passed, many Americans have been forced to reckon with the deep rifts that have been exposed in our society—rifts that have been exacerbated by our drift into a post-truth world. In many ways, however, focusing on these realities only reminds me that we have been on the right track all along. We shouldn’t stray from—and must urgently return to—our regularly scheduled programming. That is, we must re-center on the fact that there is much work yet to be done to rebuild a dynamic economy. We must ensure that equitable opportunities are afforded to all Americans, especially the fastest growing parts of our population–people of color.
But in this post-truth environment–one in which my local, hipster pizzeria can be invaded by a man with an assault weapon ‘investigating’ a fictional child-trafficking ring— it is important to set out some of the basic truths about our economy. Understanding the realities of our current economic situation provides a starting point upon which I hope many of us can agree. I highlight three important truths in today’s blog post, and will focus my next blog on promising solutions that, if spread to more places, can help address our current challenges.
3 Truths about Today’s Economy
The following three graphs go a long way toward illustrating where we are now, and help to highlight the way forward. The data is not currently disaggregated by race or ethnicity, but our hunch is that if they were, they’d reveal even more alarming truths and disparities.
1. There are Fewer Start-ups and they are Creating Fewer Jobs
Graph 1 source: CNN Money
The election cycle was rife with talking points on the importance of supporting small businesses and restoring America as a land of entrepreneurship opportunity. Graph one reiterates why these efforts are, in fact, so necessary. Over the past 25 years, our economy has been driven in large part by young companies—firms less than five years old. These companies have been responsible for creating practically all net new jobs in this country, with business “births,” far outnumbering “deaths.” But that’s no longer the case. Start-ups and small businesses represent a decreasing portion of bank balance sheets, and the challenges of securing venture capital are even starker for women and minority entrepreneurs. Our engines of job creation aren’t firing the way they must. This leads to a worrying prognosis: you simply can’t connect people to jobs that don’t exist.
2. Manufacturing won’t Bring Back Jobs—Blame Robots
Graph 2. Source: Technology Review
Over the past few decades, communities across the country have suffered severe economic shock as manufacturing jobs have become increasingly scarce. Countless Americans have been forced to undergo the pressures of job loss, the disappearance of health and retirement benefits, and the economic decline of their cities. Unfortunately, the dynamics of the manufacturing industry have shifted irrevocably; we can’t rely on its come-back to spur the job growth we need. The reality is that the American manufacturing sector has actually been growing and thriving in recent years. It’s just not creating jobs, thanks to the unmatched productivity and efficiency of factory-floor automation.
3. Workforce Needs are Changing
Graph 3. Source: CityLab
Jobs being created today don’t look like those that we lost in the economic downturn. During the Great Recession, 1.6 million manufacturing jobs requiring only a high-school education disappeared; only 200,000 have rematerialized. The remaining gains have been in jobs that require some degree of education or training beyond high school.
As the economy continues to recover, there will be new opportunities for good jobs that pay a living wage or more—especially in STEM, information technology, healthcare and other in-demand fields. But ensuring that everyone can take advantage of this job growth will mean better enabling people—particularly low-income Americans and people of color—to seize opportunities for higher education, and develop the skills they need to thrive in the changing workforce.
The Work to be Done
It’s clear that we all have our work cut out for us. And while we may feel a renewed sense of urgency in the wake of the election, the challenges we’re facing are largely still those that we faced a month ago. The good news is that efforts to address these very problems are already underway. To accelerate the good work already being done, we need a baseline of understanding of the challenges, grounded in truth and fact.
We know that we need to prepare people for the 21st century workforce, by ensuring that low-income students are able to graduate from college, or offering frontline workers opportunities to earn degrees while on the job.
We need to connect Americans with jobs, reducing barriers like mobility and the digital divide that prevent people from taking advantage of opportunities wherever they exist.
And, we need to ensure that jobs are being created in the first place. In particular, we must focus on ensuring that the majority of our current population–women and minorities–get access to the capital and resources they need so they too can be starting firms and creating jobs.
We’ve had some time to reflect. But my reflections thus far lead me to believe that, more than ever, we need to act with urgency.
