More Baby Boomers are becoming members of a burgeoning species: the involuntary retiree. An expert estimates that 3.5 million people between the ages of 40 and 58 vanished from the American workforce from 2001 to 2004. That's about 5% of all Baby Boomers.
Losing a job isn't just a career setback, it can be a permanent blow to the community, a recent study finds. Using data from the Wisconsin Longitudinal Study, which tracked 4,000 high school graduates over 45 years, researchers at UCLA and the University of Michigan studied the community involvement of workers aged 35 to 53. Their finding: After being laid off, employers were 35% less likely than before to participate in community or church groups, and charitable organizations.
And few returned once they got new jobs. Instead they focused their energies on professional and political groups--in the belief, hypothesizes UCLA sociology professor Jennie Brand, that both could have an impact on finding and keeping work.
Pessimism about America's future is growing. People worry about the long-term impact of the housing crisis, global competition and expensive energy.
Yet, beneath the gloom, economists and business leaders across the political spectrum are slowly coming to an agreement: Innovation is the best way the U.S. can get out of its economic hole. New products, services, and ways of doing business can create enough growth to enable Americans to prosper over the long run.
The best way to keep the U.S. competitve is to bank on promising new ideas. But the U.S. can't compete with China, India and other developing countries on labor costs. Historically, technological change has been the biggest force for productivity growth in the U.S. "Ninety-five percent of economists agree that innovation is the most important thing for long-run growth," says Daron Acemoglu of Massachusetts Institute of Technology (MIT), winner of the 2005 John Bates Clark Medal for the top economist under 40.
In the past, pioneering industries such as automobile manufacturing and aerospace were big job creators. Comparing today's high unemployment situation in Metro Detroit with the early 1970s high unemployment in Metro Seattle, can give us some insight into how innovation sparks economic recovery.
Economist are increasingly studying what drives successful innovation to learn how companies can get more bang from the bucks spent on R&D and higher education. At the same time, they're collecting new data on American R&D initiatives to understand what's working in the U.S. and what's not. And most important, economists are making concrete proposals about how to turn smart ideas into jobs and growth. They are exploring how to make optimal use of the billions of dollars' worth of research conducted in government-funded national labs....and....how states and local governments can best encourage innovation-based economic development.
Will innovation economics keep America growing?
Proponents are upbeat about the long-term technological possibilities, despite the current pullback. "Like the 1970s, people are going to assume that a short-term slowdown means the trend is slower as well," says economist Paul Romer of Stanford University.
Source: BusinessWeek, September 22, 2008