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The Next Few Years

With due regard for Black Swans and variations of unforeseeable events, I have made several recent predictions about the coming year and a few to follow (assuming we weather the Mayan end of the world on December 21, 2012). The recurring theme in most recent predictions involves economics. While there are sure to be meteors, tidal waves, hurricanes, tornados, earthquakes and massive storms, most people (and hardy economists) fear economic decline.

I suppose when you add up all the converging variables and weigh them against whatever good things are happening, there is a definite mood shift. The Great Recession lingers even while it is supposed to be in retreat. Some signs indicate that things are improving. But its aftermath has perpetuated a ripple effect that will continue for some time. Unemployment will continue to be close to 10 percent for at least through 2011 and perhaps won’t decline past 8 percent until after 2014 – if then. According to Bureau of Labor Statistics, for every open job in the U.S. six people are actively seeking work.  More people appear to be giving up. They are ‘retiring’ early or casting about for menial work to survive. Combining the un- and underemployed, a staggering 17.4 percent are in those categories – the highest since the 1930s. At least 44 percent of families have experienced some form of job loss, a reduction of hours or pay cuts since the beginning of 2009. And it is not looking much better for the remainder of 2010 and well into 2011. Frankly, we all knew recovery would take time, so why are so many people so concerned?

Cultural norms are sensitive. Over time people tend to give up or settle for less. Maslow’s hierarchy becomes an alter on which to celebrate survivorship – not the desired growth, innovation, enterprise and social vitality. As more people begin to deplete their emotional and financial resources, the social and economic underpinning will begin to erode. There are those who are counting on the American Spirit to ignite a transformational era of green economics, social stewardship, and global commitment to a healthy planet. Unfortunately, the scales are tipping in the other direction because the masses are impatient and spoiled. If most people had saved plenty over the past 25 years, do you think the level of panic would be so great?

The U.S. economy is now 10 million jobs below the desired 5 percent unemployment figure. Even if we produce 600,000 new jobs each month, it would take two years just to get back to square one. And, that number of new jobs is double what the country was producing in the 1990s, when things were flying high. We can’t reach those numbers…GDP growth is just not there.

Much of this would not matter if savings were robust and home values had remained strong. Or the financial industry had not tanked then continued to exhibit rampant mismanagement. One must wonder if too many pieces of the economic puzzle are either gone or too battered to provide a firm foundation for the next generation. An article by Don Peck in the March issue of The Atlantic raises serious concerns about the impact of this lingering recession on Generation Y and to some extent on Millennials. As with post Depression decades, will the long-term effect be the loss of will, reduced motivation, and a decline of creative spirit? So many variables are negative…college costs are out of sight and are eliminating many from higher education; home costs are coming down but credit is beginning to be much more difficult to acquire; there are fewer jobs and wages will continue to be static or even deflate. Not a lot to celebrate if you are between 18 and 32.

So, what are we to do? For government and business, employee development is essential. Dedicate resources to developing people and engaging them in meaningful enterprise. In my new book on Planning the Future, I emphasize the value of working on major issues to strengthen every community. Get people involved with solving problems and facilitate collaboration in every way possible. Planning must focus attention on a process of triage that will allow communities to sustain at least moderate growth while maintaining critical services. Quality of life may be redefined by communities as they get closer to bare essentials.  Both here and abroad others have faced tougher odds and come through stronger than before. The danger is allowing employees and community organizations to withdraw in these difficult times. Yes, we are in a transformational time, but it may take us to a place that is better suited to prepare us for a more realistic future.

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). An innovative and dynamic presenter, John is frequently asked to speak and consult on how to prepare public organizations and communities for emerging challenges (public futures at http://www.futurescorp.com).

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One Response

  1. The current challenges we face along with the future outlook will require a review of values and a paradigm shift of the way we look at oursleves and the world we live in. I do believe solutions will come, and we will survive; although, things will become more difficult before they get better.

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