Nightmare scenario: Why economy’s failure to hit 3% growth is putting ‘American Dream’ in jeopardy for next generation

Neil Bradley, the chief policy officer and head of strategic advocacy at the U.S. Chamber of Commerce, sees the future of the U.S. economy as a numbers game.

The country — and the state of New Jersey — need to maintain a 3% growth rate, he said. Bradley said he and the U.S. Chamber are “maniacally obsessed” with the goal.

There’s just one problem. After decades of hitting — and exceeding — the mark, the U.S. economy no longer is doing so. Far from it, in fact.

Since 2010, Bradley said the economy has been growing at a 2.4% rate per year. Even more, Bradley said economists are predicting that growth will slow to 1.8%.

The potential consequences of this are severe, Bradley said. It fundamentally changes how fast living standards can rise.

“That’s the definition of the death of the American dream,” he said. “We aren’t getting ahead faster than our parents.”

Bradley was appearing in a conversation with Sen. Andy Kim (D-New Jersey) at the ReNew Jersey Business Summit. His aim was not to scare but to explain what these numbers mean and how they will impact New Jersey and the nation.

Bradley emphasized that this goal is not arbitrary.

“When an economy grows at 3% a year, the size of our economic pie doubles in 23 years, so the time someone’s born to the time they’re really entering the workforce, the size of America’s pie is double,” he said.

When the U.S. grows at 2%, it takes 35 years to double the pie.

That 12‑year difference in doubling time is the gap between a young person entering adulthood in a transformed economy versus one that feels stagnant. And it’s far from what the hundreds at the event have grown accustomed to.

From 1950-2010, the U.S. economy beat the 3% goal, coming in at 3.4 % a year.

Because the economy was doubling that quickly, each rising generation stepped into a meaningfully larger opportunity set, Bradley said. Those years of 3+% growth formed the backdrop for expanding homeownership, rising wages and widespread expectations that children would do better than their parents.

Fixing this will not be easy, Bradley said.

Bradley said the post-World War II environment was ripe for growth with an explosion of manufacturing (think cars and home appliances) and women entering the workforce in record numbers.

Policy wasn’t as important.

Today, the U.S. is in a global economy — one with fewer workers.

Policy is everything, Bradley said.

“We’ve got to get policy right,” he said. “We’ve got to get tax policy right, regulatory policy right, infrastructure right.”

Bradley also noted the need to figure out AI, so that innovation drives productivity rather than increased unemployment.

The good news: State growth can differ from national growth.

The bad news: New Jersey currently is lagging behind the federal numbers.

That’s why Bradley feels the coming years are more important than ever.

Tom Bracken, the head of the N.J. State Chamber — and moderator of the conversation — couldn’t have agreed more. He said he hopes Bradley’s warning will be a wake-up call.

“We’ve talked about for years having an economic plan in New Jersey,” he said. “There’s no way you can achieve your potential unless you have a plan to shoot for.”