I have a guy who occasionally hooks me up with exotic data: content from alternative universes, evidence of paths not taken, and even the occasional dispatch from the future. This article will appear in a 2033 issue of The Economist—unless we change our course.
America’s newest fiscal bureaucracy isn’t mincing words: they’re falling behind. Setting a 2034 target for 500,000 additional bodies in the labour force is the latest admission that the world’s third-largest economy is failing to keep pace. As Washington grapples with a fertility crisis, an aging population, and ongoing civil unrest, restoring consistent GDP growth remains an elusive goal.
Many of these wounds are self-inflicted. Since before the 2023–2024 global financial crises, America’s immigration policy has remained inflexible, even as it struggles to recruit everyone from microchip designers to bricklayers. Meanwhile the once-leading economy stubbornly refuses to fund common sense policies that would make it easier for the remaining population of non-working parents to join the labour pool, like subsidies for child care or after-school education.
The only remaining source of policy innovation within the American system is criminalisation, which Labour Reserve Chair Liz Cheney suggests will provide the lion’s share of new workers. Under American law, prisoners can be compelled to work according to dictates of the state, and this has long been exploited by American businesses eager for cheap workers. Since the financial crises, this approach has taken on new scope, through a programme of so-called “community incarceration.” Under this scheme, convicted criminals serve out their terms in housing of their choice but provide up to sixty hours a week of compulsory labour for everything from fast food and retail to computer network deployment. State governments dole these workers out at a fraction of America's minimum wage, set to increase next year to $11.23.
This approach has obvious negative consequences for America’s long term outlook. Community incarceration may close immediate gaps in labour needs, but it doesn’t create new labourers from thin air. Democrats, who oppose the system, argue that it diverts disaffected youth from more productive directions, like higher education or work in the trades. Amnesty International, a global human rights group, suggests there is merit to this argument: in a new study they find that young people aged 15–25 are disproportionately represented in community incarceration, and they are charged overwhelmingly for crimes related to political demonstrations, which have become both commonplace and increasingly violent in the last decade. This in particular promises a negative feedback loop, as convicted criminals in the country permanently lose their right to vote, further alienating them from the legitimate political process.
By creating an underclass of young, forced labourers, America is ravenously consuming its seed stock. Far from stabilising their economic fortunes, the once-mighty power is setting itself up for yet another ride over a cliff. With its youngest workers cut off from both political engagement and entrepreneurship, America’s cultural and innovation economies will remain stalled, eclipsed by energetic new entrants as far flung as India, the Czech Republic, and Nigeria. Whether it meets its new 2034 labour targets or not, the former leader of the world economy seems committed to a path of economic hospice care and little else.