The Future of the U.S. Economy: 2050
Matthew Bandyk

 

Think back to 1967. The job you have today may not even have existed. The Internet, and all the jobs that have come with it, were decades away. The Detroit automakers were dominant. Quality of life was different, too: The median household income was an inflation-adjusted $40,261, compared with $50,303 in 2008. There were also a hundred million fewer of us; 1967 was the year the U.S. population hit 200 million. We passed the 300 million mark in 2006, and by 2050, there will very likely be more than 400 million Americans. The lifestyle of the average American may change just as much from 2010 to 2050 as it did from 1967 to 2006. The economy will especially undergo change.

Joel Kotkin, distinguished presidential fellow in urban futures at Chapman University, has spent a lot of time thinking about exactly what those changes might look like in 2050. He previously wrote a book about the history of American cities, but in his new book, The Next Hundred Million: America in 2050, he looks ahead to how recent economic and demographic trends may play out over the next few decades. Here are a few of the book's most striking predictions.

1.The death of the suburbs is highly exaggerated.

In the 20th century, the suburbs became the primary place for Americans to live. But the recent housing market crash, high gas prices, and concerns about environmental sustainability have caused many to wonder how long suburbs will be able to grow. Kotkin writes that the suburbs will not only continue to grow; they will become even more like cities. "The suburbs of the future will in many ways be more diverse than the cities," according to Kotkin. While the suburbs of the 1950s were predominantly white, suburbs today have an increasing number of ethnic minorities and recent immigrants. A major reason suburbs are changing is that they are providing more jobs than ever. Historically, people living in bedroom communities outside of a city have commuted downtown to work. Suburbs are also becoming more appealing because they are developing their own cultural amenities. "Many have rebuilt town centers and revived Main Streets," says Kotkin.

This growth will be made possible -- and desirable, Kotkin argues -- because suburbs will become what he calls "greenurbia." Kotkin predicts that while cars will continue to be the dominant mode of transportation, fuel-economy improvements, more energy-efficient homes, and telecommuting will allow suburbs to coexist with a clean environment.

2. The rise of "luxury cities."

Cities, however, are not on the way out. Kotkin points to New York and San Francisco as models for some cities in the future: expensive places that are playgrounds for younger and often single residents. This is one trend that Kotkin finds worrisome. "New York has got to be able to hold on to enough middle-class people, ages 30 to 45," he says. The "luxury city" also creates problems for residents' upward mobility. Kotkin's chief concern is that even as more ethnic minorities join the middle class, the ability for people in the middle class to enjoy the same lifestyle as the upper class in their cloistered cities will be limited. "Class, not race, is going to be the great American issue," says Kotkin.

3. Jobs get more virtual.

Jobs are perhaps the biggest concern of Americans today. Kotkin looks to new businesses that began during the recession to point the way to the future of jobs. "There has been a huge surge in the number of independent proprietorships," says Kotkin. Thanks to the Internet, the average entrepreneur does not need a large corporation in an office building to run a business and can instead find people to help run the business online. "Some of these jobs are going to places like China and India, but they are also going to places like North Dakota," says Kotkin.

That's not to say that physical locations for businesses will be unnecessary or that rural towns in the heartland can be just as innovative as large metropolitan areas. "You'll still have centers. Wall Street will still be a center of finance, for example. Their market shares will reduce over time, however," says Kotkin.

4. The decline of mobility.

Moving companies might not be the biggest boom industry this century. If you don't work from an office, you don't need to live in a particular city. Kotkin predicts that in the next 50 years, Americans will more often choose their communities and cities based on where they want to live, not where they want to work. "Once they find where they want to be, they will be less likely to move," he says. That decline in mobility would be a big change from the trend over the past 50 years, when it became common for Americans to move many times in their lifetime. Demographics provide another reason moving might decline: Aging baby boomers are more likely to stay put.

5. Less to fear from China.

America is becoming a more elderly country, but it's not alone. Demographics, Kotkin argues, will prevent China from eclipsing the United States as an economic superpower, as some have predicted. In the late 1980s and early 1990s, Kotkin disagreed with people who feared that the Japanese economy was going to outcompete America. Today, he says similar claims about the Chinese economy are just as overblown. The United Nations has projected that in 2050, 31 percent of China will be over age 60, compared with 25 percent in the United States. Because of its aging populace, China will have to spend more to care for the elderly and deal with workforce shortages. The United States will surely face those problems with baby boomers, but Kotkin argues that America is better equipped to handle its aging citizens than China. "We have a little more of a head start. Our older people have quite a bit more money," he says. China will still be a superpower, Kotkin says -- but it will share that status with the United States and India.

Availbale at Amazon.com:

The Next Hundred Million: America in 2050

 

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The Future of the U.S. Economy: 2050 | Matthew Bandyk

 

(c) 2010 Matthew Bandyk