The U.S. economy is growing at an average rate of 2 percent per year, down from its normal 3 percent. What will it take to get that rate back up?
The answer is complicated, but Center Research Economist Dr. Luis Torres told me one thing is clear: You can’t just throw money at the problem.
"Monetary policy isn’t enough. The Federal Reserve can’t make a person more educated, and that’s what we need," Luis said. "We have all of these structural issues — especially in the area of education and training — that are preventing our growth."
Luis had just returned from a national business economics meeting in Cleveland, Ohio, so this was fresh on his mind.
"Jobs have actually come back," he said. "Job openings are at a higher level than before the economic crisis. In this country, if you’re highly trained and educated, you’re probably going to have little trouble finding a job. But if you’re low-skilled with little training, you’re going to struggle."
By education, Luis said he’s not referring only to college degrees. He said that while we do need, say, engineers, we also need welders and mechanics.
He said other structural problems include a drop in workers because of an aging population, tax policies that could use some adjusting, infrastructure needing improving (airports, roads, internet, etc.), and immigration policies that need to be reformed.
Luis talks about this in much more depth on this week’s Real Estate Red Zone podcast. Click here to listen.