The motto of the National Archives is Shakespeare’s declaration that “What’s past is prologue.” In that spirit, I use 2013 as a guide to what to expect in 2014.
In 2013, the two biggest governmental events were the government shutdown and the launch of Obamacare. Those who fought for the shutdown were seriously embarrassed and politically damaged by what happened. The adoption of the first bipartisan budget in three years, by wide margins in both houses of Congress, indicates that most of them came to realize that. We will not see the shutdown strategy used in 2014.
The launch of Obamacare was seriously embarrassing and politically damaging for its supporters as well. Contrasting spin messages on its current state — as in “It’s working well!” and “It’s getting worse!” — came out of 2013 with a full-throated roar. Enough good things and bad things will happen to Obamacare in 2014 that both sides will claim that events have proven them right. It will be the centerpiece issue in the fall elections. There won’t be any legislative changes to it until 2015 or beyond.
2013 was the stock market’s best year in decades but the jobs picture got only minimally better. Corporations are awash in cash, indicating potential for major new capital investments, but consumer demand, particularly with respect to holiday shopping, was less robust than expected. Economists ended the year with differing opinions about the economy’s future.
Optimists noted that household debt payments have been cut to their lowest levels as a percentage of disposable income since the 1980s, suggesting that 2014 will see a surge in consumer spending. That could make it a better year than 2013 because consumer spending makes up about 3/4 of total GDP.
Pessimists say that won’t have much of an impact on jobs, particularly on the most troublesome statistic that does not show up in the unemployment rate. The number of long-term unemployed, people who have not had a job for more than a year, is at a record high and increasing. Many of them have simply quit looking and their skills are deteriorating to a point where they will soon become unemployable if they are not already.
The economy will grow in 2014 even as the long-term unemployment problem gets worse.
In 2013, there was a lot of discussion about the minimum wage. In 2014, it will be raised. However, if it is raised too high, in the name of providing a “living wage” for a family, many low skilled entry-level jobs will disappear. This will hurt people who need the work experience as much as the money. In 2013, our highest rate of unemployment was among inner-city teenagers.
When I got my first job at age 14, at 50 cents an hour, my family didn’t need the money but I needed to learn that a job required me to show up on time, stay till quitting time and work diligently while I was there. The experience shaped my future career. I hope the 2014 increase in the minimum wage won’t be so high that it shuts down any opportunity for today’s teenagers to learn the same lesson. Lawmakers must remember that most people earning the minimum wage are not the sole providers for their families.
Finally, in 2013, American interests were challenged in Iran, Syria, North Korea, Afghanistan, Egypt and Russia; political talk show hosts went over the top in their commentaries, Hollywood made some really bad movies and the Washington Redskins had a losing season. All this will be true again in 2014. What’s past is prologue.
Robert Bennett, former U.S. senator from Utah, is a part-time teacher, researcher and lecturer at the University of Utah's Hinckley Institute of Politics.