Economic scholar’s bleak view of future
State representatives from Maine to Puerto Rico dropped their jaws when Matthew Slaughter delivered bad news about wages and then asked what frustrated workers might do in the voting booth.
The average middle-income American household made $51,939 in 2013, $493 less than it made in 1989, said Slaughter, dean of Dartmouth College’s business school and a research associate of the National Bureau of Economic Research.
- High-school dropouts earned 5.8 percent less in 2013 than they did in 2000, he said.
- High-school graduates earned 6.7 percent less.
- Workers with some college earned 10.9 percent less.
- College graduates earned 11.2 percent less.
- Workers with non-professional master’s degrees earned 7.6 percent less.
- Workers with Ph.D.’s earned 4.5 percent more.
- Workers who earned M.D., J.D. or M.B.A. degrees earned 12.3 percent more.
Slaughter said the American economy is slowing down — even if you take the 2001 attack and the 2008-2012 fiscal crises out of the picture. He said the biggest economic slowdown is in the Northeast.
He cited several factors that need fixing in order for the economy to improve — roads, schools, the tax system and the immigration system.
Slaughter said a large percentage of Americans are being left behind as the economy moves incrementally forward. “The rising tide of late is not lifting all boats. That’s one of the challenges our country faces,” he said. “Our economy right now doesn’t seem to be creating a lot of high-income jobs. We’re building back jobs, but we’re not building back the high-compensation jobs.”
Slaughter said recent polls showed 65 percent of Americans believe the country is in a state of decline, 62 percent think it’s on the wrong track and 76 percent are not confident that their children’s generation will fare better than their own.
He used a graph to illustrate how the federal government historically borrows more during times of wars or fiscal crises — the Civil War, World War I, the Depression, World War II, the 2008-2012 fiscal crisis. At the end of the graph that represented the future, the slope rose precipitously. Slaughter pointed to the spot just before the rise and said, “We are in the calm before the storm.”
He said the rising slope was the cost of health care and income support for the massive baby boomer generation in the coming years — even without any future war or fiscal crisis.
He turned to the state representatives and said, “What a great time for public leaders to help us figure out what programs can help us improve our economic future.”