It’s the Republicans’ turn for a presidential debate tonight, and as 10 candidates take the stage in Boulder to discuss the economy, business leaders have this message for them: The ceiling is high for presidential candidates with a plan for economic growth.
Several of the GOP candidates have distinguished themselves with solid and relatively detailed proposals for such growth-promoting policies as tax reform, modernizing Social Security and Medicare, and making the most of America’s great energy resources. Every single candidate – Republicans and Democrats alike – needs to do the same.
Tonight’s format for the main CNBC debate (10 candidates over two hours, questioned by multiple moderators) limits the opportunities for in-depth examination of issues, but the candidates must at least show they understand the imperative of economic growth and what we need to get there.
Economic growth can cure many ills. If candidates are concerned about America’s fiscal condition, well: A sustained increased in the growth rate of GDP of a full percentage point annually would reduce the by budget deficit by $3 trillion over a decade. (That’s from CBO.)
A slow-growth economy certainly does nothing for higher wages. The 2015 Assets and Opportunity Scorecard from the CFED – a group focused on low- and middle-income earners – reports that average U.S. household income has been stuck at $49,808 for three years in a row and the share of jobs that are in low-wage occupations has risen nationwide, from 21 percent in 2012 to 25 percent in 2013. (Via the Minneapolis Fed.)
Unfortunately, the U.S. economy is also stuck. It’s has been underperforming since the end of the recession in 2007, the slowest recovery since World War II (as the graphic in this Cato Institute analysis clearly shows). Annual real GDP growth has averaged only about 2.2 percent over the period.
While the economy continues to add jobs every month – although a disappointingly low 142,000 in September – and the unemployment rate has fallen to 5.1 percent, the labor participation rate was just 62.4 percent last month. That’s the lowest percentage of people in the workforce since 1977!
At the same time, there are 5.4 million job openings in the country, many the result of people’s skills not matching the demands of the marketplace. As I recently discussed in Denver with Gov. John Hickenlooper, we need career and technical education programs that offer multiple pathways for young people to gain the skills to succeed in the increasingly high-tech economy. (See this Denver Business Journal article.)
So education reform and workforce readiness are key contributors to a stonger economy and should be part of this debate.
The hard truth is this: We’re experiencing an economy that’s just not reaching its potential. That’s why Business Roundtable 2015 growth agenda bore the title, Achieving America’s Full Potential: More Work, Greater Investment, Unlimited Opportunity, and laid out clear strategies to accomplish that goal:
- Maintaining Fiscal Stability
- Enacting Pro-Growth Tax Reform
- Expanding U.S. Trade
- Enacting Immigration Reform
- Investing in Physical & Digital Infrastructure
- Adopting a Smarter Approach to Regulation
For candidates to be taken seriously and to succeed, they need to address all these issues with detail and seriousness. A single debate cannot tackle everything, but tonight is another great opportunity for candidates to add to their own understanding of how they view the importance of economic growth and explain their visions for attaining it.