The Decline of Economic Opportunity in the United States: Causes and Consequences

The U.S. economy did not surge back from the last recession, as it had every other recession since World War II. The drawn-out recovery and the meager growth are exacerbating the country's many challenges. Many parts of the country face problems more severe than national average economic growth and unemployment rates convey. A large, complex economy, such as the U.S. economy, will always have parts that expand and parts that contract, largely related to different rates of technological change. Government intervention, such as with respect to taxes, wage and employment benefit mandates, zoning, and licensing, can make this worse by restricting market entry, impairing new business formation, and limiting job creation. Education and skill development are the key to a productive, adaptable labor force. Federal Reserve Chair Janet Yellen has stressed the importance of entrepreneurship, the importance of vocational education and apprenticeships, and engaging employers in the training process, among other things. Everyone is aware of the demographic change the country is undergoing. The baby boom generation is reaching retirement age, and that is affecting many aspects of the economy. One such effect is slowing entrepreneurial activity. The challenge of an aging population makes it all the more important that the economy work efficiently and that government actions at both the State, local, and Federal levels not be prohibitive.