There has been some talk by financial commentators lately of the US falling into a Japanese-style “lost decade” in the near future. With sagging unemployment, rising food and energy prices, general economic pessimism, and stagnant growth, it is not difficult to see how American society could soon fall into a “lost decade” in the years to come.
However, there is good reason to believe that the current Great Recession could have significant long-term effects on American society. In light of the current financial crisis, Americans are now saying that unemployment is the number-one problem facing the US.
But unemployment is much more than merely a macroeconomic problem. Unemployment pierces into an individual beyond simply not having a job. Unemployment affects not only the financial health of individuals and institutions, but also the psychological health of everyone involved.
Furthermore, prolonged unemployment in a society can be a phenomenon that could prove to be a seedbed of harmful side effects, such as increasing crime, violent riots, and civil unrest. This possible increase in crime, riots, and civil unrest could very well transform the socio-economic landscape of American society.
With the growing amount of teen unemployment in the US, it may be difficult to transform a mass of unemployed people into an army of labour in the nebulous future. It may prove difficult attempting to mobilize younger generations from a lifestyle of unemployment to that of productivity.
A generation of young, able workers not able to productively contribute will work to the benefit of no one. Prolonged unemployment in teens’ formative years may also create a general atmosphere where work and productivity are not valued. The distrust and cynicism sown into the hearts of youth and generated by a debilitating recession may negatively affect the viability of a functional society. Where baby-boomers are not retiring, owing to the struggling economy, this is putting further strain on younger generations in finding employment, starting families, and spurring economic growth. These demographic changes could prove to be catastrophic in the near future when there are not enough young workers to support ageing Social Security beneficiaries.
Taking these various factors into account, the socio-economic issues facing American society may cut deeper than a simple “lost decade.” Rather, we may be better off warning of a “lost generation.” There is good reason to believe that the economic issues of today will resonate even after 10 years in the future. The impact of rampant unemployment and the giving of “entitlements” may have severe ramifications that are counter-productive in the long run – in particular, for younger generations attempting to find their way.
Given the wide range of issues facing the US – from unemployment to war to Social Security to health care to taxes to illegal immigration to higher education, etc. – in light of the prospects of younger generations, the use of the phrase “lost decade” may prove to be more optimistic than it sounds.
— By Gary Cassady
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