Angst is “a feeling of anxiety, apprehension, or insecurity.” Many of us feel it acutely right now—and that’s new. Angst isn’t a temporary, individual thing anymore. Now we all feel it together—or at least most of us do—and it’s not at all temporary.
I’ve touched on this before, but it’s no wonder that so much of our angst is job-related. Some people don’t have jobs at all. While many others don’t like the jobs they have. The millions of unemployed, underemployed, or unhappily employed touch all of us in some way.
If our nation’s work rate today were back up to its start-of-the-century high, well over 10 million more Americans would now have paying jobs. And that employment shortfall makes a real difference to the growth of the economy.
There Are Only Two Ways to Grow the Economy
You either have to grow the number of people working. Or you have to increase their productivity. If you remove 10 million American workers from the labor force, not only are they not producing anything, the vast majority of them are clearly consuming the fruits of the labor of those who are employed.
The number of people dropping out of the labor force is increasing. If that trend is not turned around, the hope that we will get back to 3% GDP growth is just wishful thinking.
Couple that trend with reduced productivity, and we will be lucky to see even 2% growth for the rest of the decade. If we have a recession, we will end up with a lower GDP than we have today.
Think about that. And then plug it into federal budget projections.
Employers Lack Qualified Workforce
Meanwhile, employers feel a different kind of angst. Many either can’t find qualified workers or their workers require constant attention and extensive training to be productive. Neither side of the labor-management divide is happy with the arrangements.
Everybody is apprehensive about the future. The common complaint from businessmen is not that they need more capital and the ability to borrow money from banks. But that they need more good workers in order to attract more good customers.
The Result Is Trump
This widespread angst among employers, employees, and those who aren’t working is one big reason Donald Trump is now president.
He paid attention to a large group of voters that others ignored, spoke to their anxieties, and won the White House. It was not simply working-class white males that he appealed to.
That is far too simplistic an analysis. It was also their bosses, spouses, parents, and friends.
A huge swath of the country was experiencing a yawning disconnect between the reality of their daily lives and the supposedly growing economy touted by politicians and media pundits.
We focus on the anxiety of the white working-class male, but I challenge you to find me an identity group that isn’t anxious and concerned that things aren’t heading in the right direction.
American culture used to be known for its optimism. Its can-do spirit. That quality hasn’t vanished. But it has surely lost some of its luster this century. You can see it fading in the statistics about the number of new business startups, which is now less than the number of businesses closing down.
And that trend has been in place for almost a decade.
The hope that the situation was temporary probably let people tolerate much worse conditions than they should have. But you can only look on the bright side so long before you get tired of waiting.
Get a Bird’s-Eye View of the Economy with John Mauldin’s Thoughts from the Frontline
This wildly popular newsletter by celebrated economic commentator, John Mauldin, is a must-read for informed investors who want to go beyond the mainstream media hype and find out about the trends and traps to watch out for. Join hundreds of thousands of fans worldwide, as John uncovers macroeconomic truths in Thoughts from the Frontline. Get it free in your inbox every Monday.