What has changed since the economic expansion of the 1990s?



The economic expansion of the United States has reached a milestone today. It is now the longest period of economic growth since economists began tracking business cycles in the 1800s. The previous record holder was the growth spurt between 1991 and 2001.

In 1991 – and unlike today – two of the top four TV shows focused on working class characters: “Roseanne” and “Cheers”.

Lindsey Piegza watched reruns of this latest show as a bored teenager. Today, she is chief economist at Stifel.

“Maybe these typical jobs were more prominent or respected in the economy of the 90s,” she said.

Piegza said it was easier to make a living as a laborer in the 90s. Technology didn’t replace so many workers, it just made everyone more productive.

“We were talking about an average [gross domestic product] 3.6% growth rate, ”she said.

This is almost double the current economic growth rate.

And the spoils of growth in the ’90s were distributed more evenly. Today, according to the Federal Reserve, more than a third of economic gains go to the richest 1%.

Geopolitics also affects the economy differently, said Jon Moen, professor of economics at the University of Mississippi.

“I think the United States was still sort of the dominant world political leader,” he said in the 1990s. “Unlike today” when we are not so isolated from economic trends global.

The housing market is also very different from what it was in the 1990s, said Kathy Bostjancic of Oxford Economics. At the time, homeownership took off, “and it continued to increase at a very rapid rate until about 2005,” she said.

Bostjancic said you could argue that homeownership rates have become too high which has led to the housing crisis. But now, she says, it has become too difficult to buy a house. And those blue-collar workers celebrated on television just don’t share that expansion.



About Author

Comments are closed.