Inclusive growth

INDICATIONS that the giant American economy is once again picking up steam - after a momentary slowing the past few months - come as welcome news this holiday season. A prosperous, growing American economy is an important element in keeping the world recovery on track, with its promise of some additional jobs , reinvigorated businesses, and most important, perhaps - fresh beginnings for many people.

All that said, it is important for government officials and the public to keep the growth in perspective to ensure that the recovery remains durable and to take the proper steps to aid the hundreds of thousands of people in the United States that for any number of reasons will not fully share in the expanding economy.

The latest US Commerce Department ''flash'' estimate of fourth-quarter 1984 growth - which the department puts at a 2.8 percent annual rate - is subject to considerable revision. The estimate could go up, or even go down, as happened with the 3.6 percent estimate for the third quarter. Actual growth turned out to be a sluggish 1.6 percent.

Still, the fourth-quarter estimate is encouraging. It gives a boot to dire predictions that the economy is slipping into recession. Wall Street has surely concluded just that, if the uptick on the stock market is any guide. The various elements necessary for sustained growth - falling interest rates, high consumer confidence, strong retail sales, a willingness by the Federal Reserve Board to relax its grip on the money supply - suggest that the momentum will continue into 1985. Most private economists assume that the US economy will grow between 2.5 percent and 4 percent next year.

To create new jobs, the economy will have to grow at a rate of around 3.5 percent.

At present the nation's economic growth remains uneven, resulting in regional disparities. The Pacific Southwest - California, Arizona, and New Mexico - is in the midst of a miniboom resulting from the emergence of high-tech companies. That is also somewhat true for the Southeast US, from Virginia down through Florida and into parts of Texas, as well parts of the mid-Atlantic-New England region, such as Connecticut and Massachusetts, with its considerable engineering-technology-national defense base. But looking elsewhere, although Midwestern manufacturing plants are once again humming (auto plants, for example), growth will probably not be enough to offset all the ground lost during the recent recession. The timber and housing industries of the Pacific Northwest continue to have major problems. And the steel and mining industries remain troubled in the mid-Atlantic and upper-Midwest regions.

The report on poverty just issued by the Southern Regional Council underscores what may be happening nationwide. Poverty in the South, according to the report, is returning to the level of the 1960s. Particularly hard hit: poor blacks, especially family units headed by black women. The report warns of the emergence of two societies in the South, an affluent one linked to the new technologies; the other, a poor, heavily nonwhite society that is largely unskilled, unable to gain access to lost or nonexistent manufacturing jobs, and untrained to assume jobs in high-tech.

Not so long ago it was assumed that the poverty ''fault line'' in the US was linked to the smokestack-vs.-Sunbelt cleavage. That is, the underemployed would more and more be found in Northern, manufacturing-based communities. There is still an element of truth in that. But as the report of the Southern Regional Council suggests, the Sunbelt is no longer escaping its problem of poverty. And indeed, there may well be a linkage with high technology. Either a population is trained for high technology or it is not. If not, then a community is going to have to muster up jobs elsewhere (such as in manufacturing or service jobs) to provide local employment.

What that means for government - both federal and local - seems clear: More, not less, emphasis on job training programs will be required. Unfortunately, the fiscal-year-1986 budget being put together by the White House would cut back on jobs and job training programs. That seems unwise, so long as such programs are well administered. Local communities, meanwhile, would seem to have a responsibility to be as farsighted as possible, recruiting new companies, encouraging private job training efforts, and, in cooperation with industry, helping to relocate workers.

of 5 stories this month > Get unlimited stories
You've read 5 of 5 free stories

Only $1 for your first month.

Get unlimited Monitor journalism.