Now Is the Time to Invest in the Future

The recent news of GDP growth indicates that the United States has turned a corner, but that does not mean conservatives should deemphasize economic issues. We are at a good place in the business cycle, but even in this good place, problems remain, future problems are visible, and the good times won’t last forever.

Conservatives shouldn’t deny that the economy is getting better in the hopes that President Obama will not get credit for the (slow) recovery. People have had it very hard for many years. We should celebrate lower unemployment, declining gas prices, and faster economic growth.

But conservatives should still make a serious critique of the country’s current and future economic problems. Five years into the recovery, the unemployment rate for the least-skilled American workers is still 8.5 percent and many workers who left the labor market during the Great Recession have been having trouble finding work even with an improving economy. The numbers should continue to recover, but one doubts that the labor force participation numbers will return to what they were before the Great Recession. More worrying is that we are probably closer to the next recession than we would like to think. Even if things get better for one, or two, or three years, a ration of six years of recession and economic uncertainty followed by a few years of something close to economic security should not be what anyone hopes for from our economy.

The worries don’t end with the business cycle. Given our fairly favorable environment (increasing tax revenues, fewer unemployed), the annual budget deficit has gone down all the way to half a trillion dollars, but increasing costs of old-age entitlements will push the budget deficit back up to nearly a trillion dollars within the decade. And that is without another recession. The public debt is already at 74 percent (the highest since 1950). Prior to the Great Recession, our public debt was half as large (relative to the size of the economy) as the one we have now. We will go into our next recession with a far larger debt burden and far worse demographics.

For these reasons, conservatives should not give into the temptations of following whatever controversy happens to arise at a given moment. Even as people’s anger at the economy subsides, there will remain a lingering disappointment that we are not as far along as we might have expected. There will also be the entirely reasonable fear of what comes next. These are the times when credibility and relationships are built.

Conservatives should focus on making work a better deal across the business cycle. As Michael Strain has suggested, this could mean relocating subsidies to help the unemployed find work in new places. It could mean reducing occupational licensure requirements, and educational reforms that make it easier for workers to acquire new skills through alternative training programs. It could mean a tax system that increases the take home pay of working parents who are at (or below) the earnings median. Some politicians like Senators Mike Lee and Marco Rubio have made proposals along those lines and they deserve the public’s thanks.

In many cases, making work more secure for particular workers can also make it harder for employers to hire, but there is one place where conservative reform can make work more secure without making hiring more difficult. Workers shouldn’t have to fear losing health care coverage if they lose their job and have to make-do with a series of part-time jobs that do not offer health insurance benefits. Free market reforms could establish a system of tax credits for high deductible health insurance, and reinsurance pools for those with preexisting conditions who are currently lack health insurance.

Finally, conservatives should try to help the least-skilled American workers (both the foreign-born and the native-born) do a little better during the good times and backslide a little less during the bad times. Wages for low-skill workers have been stagnant for decades. One can hope that wages for these workers will begin to improve as we enter the top of this business cycle, but let’skeep things in perspective. Workers with four years of college have an unemployment rate of 3.2 percent. The national unemployment rate never fell that low even during the late 1990s economic boom. Meanwhile, low-skill workers are still living through recession-level unemployment rates of 8.5 percent. (The national unemployment rate did not reach 8.5 percent in two of the last three recessions.) 

As the unemployment rate continues to somewhat decline among low-skill workers, employers of low-skill labor will clamor for an increase in low-skill immigration. Those employers should be resisted. It is no national tragedy that, as the labor market grows tighter, the most troubled parts of the labor market can demand higher wages. It should not be national policy that low-skill workers lose ground during recessions and then don’t make gains during periods of growth.

Economic growth, declining unemployment and the (likely) resulting poll finding that people are less concerned about the economy should not discourage conservatives from advancing answers to our country’s long-term economic problems. Those problems were exacerbated, but not caused by, the Great Recession. Those problems still exist and will get bigger in the future. This is the time to craft and offer answers for how to make the good times a little better and the bad times a little less painful. And finally, let us take a moment to appreciate our current, relatively good economy—because we will miss it when it is gone.

Pete Spiliakos is a columnist for First Things. His previous articles can be found here.

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