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The decline in the price of electronics, along with more robots in the factories and more computerized information systems will also step up output per man hour. Moreover, modern management techniques are starting to spread through the economy. These practices improve work life and advance productivity and thus help meet overseas competition.Skip to next paragraph
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These changes suggest that, barring a major economic slump, there may not be the shapr hikes in unemployment that occurred with the entrance of the baby-boom generation into the labor market. The total employment force jumped by a 2.5 percent annual rate in the 1970s. But that should drop to about 1.3 percent annually in the 1980s, thus providing the possibility of lower unemployment.
The 1980s, however, will face new challenges of regional unemployment. Some US manufacturing industries, such as autos and steel, are declining in the face of foreign competition. In fact, high regional unemployment will likely to be one negative factor in rising regional competition in general. Significantly, by one account, the Sunday Houston papers are now selling as well in Michigan as the Sunday New York Times -- a sharp testament to the lure of the Sunbelt.
Even assuming that migration to the Sunbelt has slowed, or will slow, competition for resources will continue. Older, Northern, cities will be hard pressed. Some economists, like Felix Rohatyn, writing in a recent issue of the Economist, argue that US does not have an adequate policy for dealing with its aging cities. Mr. Rohatyn believes there is a need to develop a comprehensive policy for urban areas that balances fairness to regions and individuals with the need to create new wealth within society. Devising innovative ways to deal with the decline of America's older, mainly Northern, cities will likely be one of the problems of this decade.
Another challenge for political leaders in the 1980s is the fact that the baby-boom generation is now at the home-buying age. Yet, given soaring prices, home ownership is becoming increasingly difficult. Will society see the rise of distinct homeowner and renter classs? One mitigating demographic trend is the fact that the "dependency ratio" (the number of younger and older persons together that a family must provide for) is expected to decline. That will mean more discretionary income for families as well as a possible new source for savings.
What does all this, taken together, mean for Americans? Conditions may turn out quite differently than is now assumed by experts. The Reagan administration argues that its overall program will lead to a new industrial revival through renewed investment and the creative efforts of millions of individuals acting to further their own best interests. One hopes this proves to be the case, in contrast with the view of some administration critics, who believe an economic slowdown and social upheaval may be ahead. What does seem certain is that the mammoth "liberal state" (such as the Great Society) which seeks to stimulate economic growth through conscious fiscal and monetary policies has been slowed, if not curbed, for the moment.
Clearly, the US is now in a period of transition. To fight that transition, argues Leif Olsen, chairman of economic policy committee of Citibank, will only "intensify and prolong" any short-term hardships now stemming from those very changes. "Recognizing that change is underway" and welcoming it and hastening it, he says, will benefit Americans in the long haul. Such an attitude could help Americans adjust to changing circumstances as the US moves deeper into the decaded of the 1980s.