Economists and liberal business types are now united in the view that America no longer has the potential to grow at the rates, that until the last two decades, it has historically grown. Once the mightiest economic engine in the world, US economic growth is now a pitiful shell of its former self and more and more left-wing pundits say that's the new normal.
Well, possibly. Imagine that a $ 15 minimum wage becomes law. Do the numbers. $ 15/hr translates into $ 32,000 per year. Now tack on employer-provided health care, social security, unemployment compensation, implied litigation costs and on and on. You quickly get to $ 50,000 per year. So, in the brave new world that left-wingers are leading us to, it will cost $ 50,000 to hire an entry level employee with no apparent skill set.
How do folks with high school educations or less ever get hired if the entry level compensation implies $ 50,000 in costs to employers? More than half of American potential employees fit into this category, so that, in effect, the $ 15 minimum wage law makes it a crime to have a job if your skill set at day one is less than $ 50,000.
How do you get a skill set? Historically, folks learn on the job. That will be against the law in the brave new world of $ 15/hr minimum wage laws. No longer will anyone but the economically elite have access to the job market in the world being prepared by the left.
Well, in that case, yes! Economic growth will be over. In fact, economic growth will most likely be negative if we get to a $ 15/hr minimum wage.
Add in the unbelievable proliferation of new regulations that hamstring banking and new business formation and economic growth will likely be impossible.
So, the left is correct. There is no economic growth in our future. The left has seen to that.
The left says that the absence of economic growth is caused by a decline in productivity. 'Productivity" is measured by output per worker (not by any measures that you and I might think of as technological growth).
Productivity can go down by the simple expedient of forcing businesses to hire and employ employees that they don't need or who are unproductive. Hiring "compliance" employees to deal with a mass of new regulations reduces productivity by definition, since compliance officers don't produce anything and mainly serve to retard production.
Jamie Dimon recently noted that the new regulations since 2009 have forced JP Morgan to hire 30,000 new "compliance" officers. Guess what? The productivity at JP Morgan has collapsed.
Across America businesses are reeling from the autocratic, unpredictable rash of new regulations that occur hourly in the new America. Not much time is left to produce more goods and services. The fear of ever more regulations is enough to prevent anyone from thinking out of the box.
New ideas, like Uber or Airbnb, immediately attract the attention of luddites like Elizabeth Warren, who never met a capitalist idea that she approved of. Warren is the main cheerleader of the modern Congressional witch-hunt that hounds corporate leadership, who have the temerity to do things for shareholders, as opposed to doing things that fit the agenda of the left.
Fascism is defined as the intertwining of government and big business. Warren is the leading proponent of fascism, if we define it properly. The idea that a company should be free to pursue profits in every lawful manner is opposed by Warren, who thinks companies should mainly do her bidding as she sees it, which admittedly changes from moment to moment.
So, I guess all these left-wing economists and their "business" pals like George Soros and Warren Buffet are right. Economic growth probably is no longer possible in the brave new world toward which their policies are leading us.