2020 hasn’t been easy.
Figures from the US Census Household Pulse Survey can be used to tell a story of anxiety, hunger, depression, desperation and hopelessness. Millions are hurting. 2020 is hitting the poor, the young, and those who are low to mid-skilled the hardest.
2021 isn’t looking easy.
Vaccines will take time to rollout. The recovery depends on collective health security. Health security causes confidence, confidence causes increased risk tolerance, increased risk tolerance leads to investment, and investment stimulates growth in private sector productivity, labour market demand, and opportunity. It will take time for each part of the chain to develop. It all lags.
A return to the previous trend line doesn’t address the underlining cause of wage polarization. Since 2000, wages for low and mid-skilled workers have stagnated while poverty increased. Those who were able to increase their skills kept up with wages. Many took on a lot of debt. There is a debate about whether or not those that took on debt to invest in upskilling should have to pay these debts. This debate could aggravate low and mid-skilled workers.
COVID-19 impacted low and mid-skilled workers in the service economy particularly hard. There has always been a challenge in increasing productivity in the service sector, part of a broader productivity trilemma. The productivity trilemma doesn’t go away just because the economy returns to trend. It’s all quite a bit worse than that.
If a solution exists in all of this, it’s going to take patience and insight to discover it. And then, it’s going to take a lot more time to implement it.