Question

Essay United State of America economic issues?

Answer 1

Answer :-- Slowing Innovation While Fighting Headwinds---
Try to imagine what life was like before 1920. Few people had cars, indoor plumbing or electricity. Ordinary chores, such as washing clothes or cooking a meal, required families to carry heavy loads of wood and water. Without refrigeration, food spoiled regularly. Women, consumed with household labor, rarely worked outside the home and few people had higher education.
But that’s not all. At the same time that innovation has slowed, Gordon argues that there are six headwinds — namely demography, education, inequality, globalization, climate change and the overhang of consumer and government debt — that will be barriers to faster growth
So it’s not surprising that as homes became automated, productivity soared. That’s one reason why Gordon argues that low productivity levels are here to stay. Today, despite some comparatively narrow improvements in digital technology and entertainment, life hasn’t changed much since the 1970’s. Education levels are also unlikely to raise much from present levels.
Dragging down productivity is the composition of the economy. Since the 1950’s, manufacturing has fallen from about 35% of the labor force in the US to about 20%, while at the same time services has soared from just over half of the labor force to nearly 80%. That’s a dramatic shift.
To understand how this affects productivity, think about Bill Gates and his barber. Over the last 30 years, technology has gotten thousands of times more powerful, making people like Bill Gates far more productive. His barber, on the other hand, still cuts the hair on only one person’s head at a time. Still, because Bill Gates has gotten richer, the price of haircuts has gone up.
This is known as the Baumol effect and it is having a measurable impact on industries, like healthcare and education, that depend on highly skilled professionals to provide service. Not coincidently, costs in both of these sectors of the economy have ballooned over the past few decades without a corresponding increase in productivity.
So instead of spending more money on things that will improve our quality of life, an increasing portion of American incomes are going to things like health insurance premiums and paying down student loans.
Thank You