In 2011 we started tracking a trend we call Economic Uncertainty.
This is caused by slow growth, stagnant wages, declining job security and the loss of middle class jobs to outsourcing and automation.
Economic uncertainty clearly shows up in the data. Examples include:
- The middle class is shrinking
- Many Americans and even high income Americans are living paycheck to paycheck
- Job polarization has eroded away many middle class jobs
- Many with jobs are afraid of being fired.
- Many Americans are changing their economic and social behaviors due to economic uncertainty
The Lean Years, a 2014 blog post by a millennial who describes why she's delaying having children, nicely summarizes the impact of economic uncertainty.
One of the reasons that I'm scared to have children is because I can't give them everything my parents gave me. I was raised in the roaring 90s and things were different. I call this time now 'the lean years.' ... It's not that my kids won't eat or have a nice place to sleep. It's just that it feels irresponsible to even consider having another little person around to pay for when my finances are uncertain. There- that's a good word for it. Uncertain.
Americans are responding to economic uncertainty in a variety of ways. They're either delaying or not opting for marriage and kids; they're renting instead of buying homes; and they're reducing or delaying large purchases of all kinds.
They're also increasingly turning to the gig economy for both full-time jobs and part-time side gigs to supplement their income.
As we've pointed out many times...and despite what the official government statistics say... moonlighting has been on the rise for at least a decade or so.
Employment in the online, on-demand economy (think Uber, Lyft, etc.) in particular has been driven by people working part-time to earn extra money. Most are doing this in response to financial hardship or to improve their economic security.
Government statistics don't reflect these changes. In fact, government statistics say the economy is in very good shape.
But Donald Trump saw that, for many Americans, this is simply not true.
Trump realized that large numbers of Americans have lost their sense of financial security. He also saw that many believe things are getting worse.
Bernie Sanders also saw this.
But Hillary Clinton and her team did not. Their campaign promised more of the same and argued that the same was good.
Because of this, Donald Trump is our next president.
Economic uncertainty is a powerful trend, with large and disruptive impacts on business and society. Unfortunately, this trend and the extent of its impacts are not yet well understood.
We're continuing our research on economic uncertainty and will have more on this topic in the coming months.