Maine Development Foundation Annual Meeting

• Published in: Policy File 2000
• Main Author: Minehan, Cathy E
• Format: Report
• Language: English
• Subjects: Banking/Finance; Economic policy; Federal Reserve Bank of Boston; Government

The author wants to thank The Maine Development Foundation for inviting her to join you this afternoon and share some of what we have learned about strategies for developing the work force for the next decade. The author is a firm believer in the need for partnerships between business, academia and government to achieve the important objective of community development. The make up of today's audience is an ideal illustration of just this sort of effort. By almost any measure, these have been unusually good economic times for our nation. In 1999, U.S. economic growth averaged more than 4 percent for the third consecutive year, and growth actually sped up at the end of the year and into this one. The U.S. economy has been growing steadily since mid-1991-by now the longest expansion in recorded U.S. economic history. Growth since first quarter has been strong as well and while consumer and interest sensitive spending is slower now, prospects for the rest of the year seem solid. The federal deficit has been erased for the first time in several decades, and the vast majority of states have healthy surpluses as well. The nation's unemployment rate is at a 30-year low and the pool of people wanting work but unable to find it is smaller now than ever. Increased rates of productivity growth and competitiveness are more than ever the watchword of U.S. industry as businesses innovatively use technology instead of hard-to-find workers. Most importantly, real personal incomes for those workers continue to increase. Those at the bottom of the income distribution seem to be making gains, after years of stagnation, and this is truly good news. Even the recent run-up in energy prices, so troubling for us here in New England, has not as yet pushed hard on the underlying core rate of inflation, though risks here are certainly on the upside. Indeed, the other major dark cloud on the horizon-the nation's growing external deficit-is itself a reflection of both the strength of our economy versus that of the rest of the world, and the attractiveness of our markets as a place for the world to invest. It is true that this deficit, reflecting as it does the lack of sufficient domestic savings and investment, has the potential to destabilize the current rosy picture, but that process, if it occurred to any great degree, likely would take some time to play out. So for now, and for some time, with careful policy choices, prospects seem favorable. Maine and the rest of New England have