A few weeks ago, I asked a room full of students and their parents to raise their hands if they were anxious about America's economic future. It's a question I have asked on several occasions in recent months and once again, virtually every hand in the room shot up.
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At first sight, this seems to contradict the scientific data. After all, the University of Michigan's widely followed measure of consumer sentiment improved again last month, and recent monthly employment numbers have also been pretty good -- both signaling that the economy continues to heal. Yet, Americans are hesitant to interpret recent improvements as a sign of long-term recovery, and understandably so.
In part, this is because the effects of the 2008 global financial crisis are still with us, reflected in the 5 million Americans who are long-term unemployed, the millions of other discouraged citizens who have exited the labor force in recent years, the 20 percent of homeowners who are upside down in their mortgages, and the 4 million houses facing a high probability of foreclosure.
There is also something else at play: Americans are rattled by the reckless and previously unthinkable political behavior they have seen in Washington. Be it politicians' repeated willingness to play Russian roulette with the economy (the fiscal cliff being this year's sad sequel to the debt ceiling debacle) or last year's loss of one of the country's AAA credit ratings, Americans are regularly confronted with destabilizing realities that are hard to comprehend. And the further citizens get pushed away of their comfort zones, the less they trust the institutions of government. Lack of trust, in turn, encourages people to pursue approaches that undermine rather that nurture the collective good.
Moreover, for the first time in over 100 years, our children's generation risks being worse off than that of their parents. This could mean not only relative deprivation, but also the fracturing of a society built on the notion of continuous improvements in living standards -- embedded not only in the popular narrative of the "American dream," but also in mundane constructs like retirement and health insurance plans. But if anxiety about the medium-term economic outlook is understandable, how best can we navigate this uncertain future?
There are several things that each of us can do to improve our outlook and that of our children. At a minimum, these efforts will help us weather a period of uncertainty. And if our politicians get their acts together and stop bickering, they could significantly amplify the country's economic recovery.
Education is at the foundation of a better outlook. Even with all the complaints about its current state, the data confirms that the more education individuals have, the greater the probability that they will find a job and remain employed. And the numbers are startling: The unemployment rate for dropouts is three times higher than that of college graduates.
But basic education is no longer a guarantee of economic wellbeing and financial stability. Acquiring forward-looking skills, particularly in specialized manufacturing and upper end technology, is a good way to enhance professional competitiveness. And while many schools and universities still lag behind in offering this kind of instruction -- and America has yet to revive meaningful vocational training -- there is an ever expanding array of online course offerings that can help fill the gap.
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