According to UBS and the International Monetary Fund, global unemployment rates have fallen to their lowest levels since 1980; and, despite increasing business automation, unemployment is expected to drop even further.
While the demand for human capital and the shortage of skilled workers mean there is plenty of jobs for anyone who wants one, Americans are experiencing a mounting anxiety over their professional and economic future.
In 2018, the US was the seventh-most stressed population in the world, less stressed than Iran but more stressed than Uganda, Turkey, and Venezuela.
According to Gallup, “Even as their economy roared, more Americans were stressed, angry, and worried last year than they have been at most points during the past decade. Asked about their feelings the previous day, the majority of Americans (55%) in 2018 said they had experienced stress during a lot of the day, nearly half (45%) said they felt worried a lot, and more than one in five (22%) said they felt anger a lot.”
Importantly, anxiety levels—stress, worry, and anger—are highest among 15-29 year-old individuals and among people in the bottom 20% income bracket.
Heightened anxiety levels take their toll on human health. Recently, the US has experienced a decline in life expectancy not seen since World War I. Suicide rates have increased in almost every state since 1999. And drug related deaths are on the rise too: about 130 Americans die every day of from opioid overdose.
So what’s driving this crisis? No single factor can fully explain the reach and depth of this crisis. Yet, it seems that at least one major reason Americans are more anxious is that they worry if they’d ever be able to create and lead the lives they’ve imagined for themselves and their families—which ultimately comes down to work, jobs, and careers.
The crushing of people’s dream of a solid economic future has its roots in at least two problems—
- “I’m navigating in the dark.” The formula for getting a middle-class job used to be clear and simple: get into college, earn your degree, get hired, hone your skills, move up the ladder, and so on. But this formula isn’t that predictable any longer. The multitude of alternative, shortened and cheaper pathways challenge this plain vanilla plan. The advantage of having a college degree or other credential is quickly eroding, employers increasingly seek already-skilled workers, and which pathway is most promising is far from being clear. As a result, young Americans seeking to plan their careers feel lost and confused in the face of this messy reality. It’s as if you’re called to steer your ship to a murky promised land without access to adequate tools or visibility.
- “My share is smaller than it should be.” Americans are also concerned about the growing income and wealth inequality. Workers’ income growth has lagged behind the growth of business productivity. This means that despite the contribution of workers’ human capital to business productivity levels, they only “get” a smaller piece of the total economic pie that the business sector produces. This imbalance further compounds the Titanic problem, making young people and young adults question the relationship between investing in developing their human capital and the standard of life they’ll be able to have.
The severe rise in anxiety levels is alarming for many reasons, not least because it dampens people’s hopefulness and expectations about their economic future and personal wellbeing. Indeed, research in behavioral economics shows that the level of hopefulness about one’s future is linked, directly, to how much effort one puts into skill learning, education, working, and saving. In other words, lack of hope and low expectations become self-fulfilling prophecies, leading people to hold back on investing themselves in developing and applying their human capital through skill learning, education, and work.
What can we do to address this crisis?
Looking at this as a market design problem, we should push hard and innovate to supply tools that provide young people with the information and “maps” they need to navigate their future, that enable them to identify the most promising pathways to employability, and that helps them seamlessly connect with opportunities. Such tools should empower them to signal their human capital worth to the market in order to strengthen their bargaining power so they can secure their fair market value.
We can turn this vicious crisis into a virtuous cycle. Using innovative Internet services to empower everyone to pursue and achieve their dreams and to build a solid future for themselves will replace stress and worry with hopefulness and aspiration. Doing this will produce strong incentives for people to develop their human capital, acquire and hone new skills, and invest their time productively in learning and seeking work.