Should the nation be bracing for a new economic reality of slow growth, high unemployment and a declining middle-class standard of living? That’s what a provocative McKinsey Global Institute study suggests, arguing that without significant productivity gains, the United States faces decades of slow growth with possibly devastating implications.
The driving force behind the possible GDP decline, McKinsey said, is demographics. With the massive baby-boom generation retiring, the size of the labor force will not grow fast enough to drive significant economic expansion. In short, the U.S. will have to find ways to get more from a labor force that is growing more slowly.