A paradigm shift. That’s what Steve Covey called it. Today I heard an economics professor at Northwestern University talk about the impact of the emergence of the dual-income family in the 1980’s. Mom and Dad both being in the workforce was one of the factors that led to massive inflation because all of the sudden household income doubled and people could buy more stuff. We no longer had to settle for brown polyester and so the shirts with the alligators on them became the new norm. The El Camino vanished and the Iroc Z-28 took its place.
As I consider the causes and consequences of the revised Q4 2015 GDP number this morning showing a contraction of -2.2%, and hear about shrinking manufacturing/productivity numbers, I wonder if we are not in the middle of a new paradigm shift. Cheaper foreign goods and burdensome employer expenses have caused a change in the way that Americans work and the way that we purchase goods. Jobs are paying less and most of our basic household goods are relatively less expensive than they used to be. That will eventually change, but it’s the way it is right now.