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W W W . F O R W A R D J A N E S V I L L E . C O M
Recent conversations with several Forward Janesville
members would cause almost any logical thinking
person to conclude that our economy is cruising into
high gear. A real estate professional told me she has
far more buyers than homes available for those
buyers. The value of homes is rising, a key indicator
that historically makes homeowners bullish about
their futures. Homebuilding is finally picking up and
the demand for skilled trades is robust. As previously
noted in this publication, construction jobs are good-
paying, family-supporting jobs.
More broadly, a recent job fair at the Rock County Job
Center included 49 employers with 900 openings.
Nine hundred open positions. A recent full page ad
in the Janesville Gazette was designed to entice
potential job seekers to contact SSI Technologies
about numerous open positions with the rapidly
growing company. Area companies are nervous
about their ability to fill a variety of positions. I hear
about it nearly every day.
If we broaden our view to the national stage,
unemployment is below 5 percent. Pay has actually
risen steadily since 2009. Interest rates remain at
historically low levels. Retail sales are very strong. A
barrel of oil is still under $50 and all indications are
that the price of gas will remain stuck in a range of
$2.25-$2.50 per gallon for the foreseeable future.
Overall inflation is a very tame 1 percent.
So why all of the pessimism? A recent article in
Fortune Magazine about the disconnect between facts
and peoples’ feelings suggests if the economy is so
strong, “most Americans have missed the memo.”
The political season is likely part of the answer.
Donald Trump and Bernie Sanders have both
hammered home the themes of lost jobs, income
inequality and a shrinking middle class. The news
cycle is often filled with narratives about how the
economy is underperforming or “rigged” to only
benefit a few. Some pundits have called it a recession
hangover, the idea being our collective pessimism is
tied to the bender we suffered through during the
prolonged recession.
I have no intention of wading into fact checking or
partisan politics. My goal is very modest: I want to
inspire you to do some reading from non-political
sources to try and get a better sense of what is really
happening in the economy. For example, it is true that
employment in manufacturing has declined by about
5 million since 2000. It fell from 17.3 million to 12.3
million, yet manufacturing output is near a record
high. We are producing far more with fewer workers.
Policies related to trade may have had an impact on
employment but that is not the crux of the issue. New
technology is far more impactful than trade deals.
Manufacturing in the U.S. totaled $6.2 trillion in 2015,
about 36 percent of the U.S. domestic gross product.
That’s nearly double the output of any of the other big
sectors such as transportation, retail, mining, utilities
and business services. This notion that “we don’t
make anything anymore” is simply not true.
I have another theory about why there is so much
pessimism about the economy. I can’t prove it, but
my instincts tell me it is real. The pace of change is
difficult for many Americans to handle. An increasing
number of people just wish we could rewind to a
simpler time. Add to that 10,000 boomers per day
who slide into retirement and you have a recipe for
fear and loathing.
These are typically the folks who call into talk radio
shows and anonymously comment online or in the
daily paper. Their angst is palpable and often their
predicament is real. It
is not surprising that
when it comes to the
actual performance of
the economy, their
hearing is selective
and they often just
don’t believe what is
presented as factual
data. There are far too
many scenarios to
worry about to be optimistic about the future.
The tonic for this is a robust economy, rising incomes
and a sense that the next generation has a real
opportunity for upward mobility. I see data that leads
me to believe all three of these benchmarks are
achievable. We are positioned for steady growth. Real
income is rising despite what you may have heard on
the campaign trail. And finally, since 2000, two-thirds
of people who have left the middle class have “fallen
up” in the sense that they are no longer considered
part of the middle class (defined as two-thirds to
double median household income) because their
income has increased enough to be statistically above
the middle-class threshold.
With positive political leadership, increasing incomes,
available job opportunities and stable prices, one can
be hopeful the reflexive pessimism that is so
pervasive today will eventually give way to renewed
optimism.
JOHN BECKORD
- PRESIDENT, FORWARD JANESVILLE
How Can So Much Good News Feel So Bad?