Today’s economy, by that standard, is struggling. Its ability to deliver rising living standards across the income spectrum is in decline, and perhaps also in question. “This is a fundamental problem,” says Robert J. Shapiro, the chairman of Sonecom, an economic consultancy in Washington. “This is America’s largest economic challenge. People can no longer depend on rising wages and salaries when the economy expands.”
As other articles in this issue suggest, a number of policy responses are on the agenda already, such as creating jobs, helping more students finish college, and reducing wage-denuding health care inflation. Others, such as reforming the federal disability program, have yet to attract much notice. In truth, however, the extent of Washington’s ability to repair the economy’s gearbox is an open question, because the problem is complex. It implicates not just one slipped gear but many: disruptions in long-established connections between productivity and earnings, between labor and capital, between top earners and everyone else, between men and work, between men and marriage. Together, they are bringing the economy to a place where a large and growing group of people—indeed, whole communities—are isolated from work, marriage, and higher education. That place might look like today’s America, only with a larger welfare state. But it might just as easily bring social unrest and class resentment of a magnitude the country hasn’t known before.