U.S. Economy Expected to Remain Strong Through End of Decade

The United States economy continues to expand. Last March marked completion of the sixth consecutive year of growth, the longest period of continuous economic expansion in recent years. Annual growth is running at about 4 percent, and unemployment remains below 5 percent for the first time in more than 20 years. Although many economists-and the Federal Reserve-have been concerned that the economy may be growing too quickly, inflation remains low (at about 2.5 percent a year), and the stock market continues to rise, with the Dow Jones industrial average breaking the 8000 mark in July. Fifty-seven metropolitan areas in the United States have unemployment rates of less than 3 percent, and some parts of the country are actually suffering from a shortage of workers.

"We've had an absolutely magnificent combination in this economy of persistent growth and low inflation," said Neal Soss of Credit Suisse First Boston.

And according to economists the good times may continue through the end of the century, although the rate of growth will almost certainly fall.

Part of the strength of the economy comes from the restructuring that has been going on for the last 15 years. Since 1980, 43 million jobs have been lost through corporate and industrial downsizing and other structural changes, but 71 million jobs-a net gain of 28 million jobs-have been created. Moreover, the new jobs tend to be in industries that on average pay more than the median wage. In 1950 about 60 percent of all jobs in the United States were unskilled. Today that figure has fallen to about 25 percent, and it is expected to decline to 15 percent by the end of the century. The challenge in the coming years will be to ensure that enough well-educated workers are available to continue to fuel rapid economic growth.

1. How has the economy performed this year?
2. What do economists think is likely to happen in the next several years?

The government and private companies are scrambling to try to correct the massive computer glitch known as the "Year 2000 problem." Unless the problem is fixed, mainframe computers throughout the world may crash January 1, 2000, because computers, which record the year using only the last two digits, will be unable to distinguish between the year 2000 and the year 1900. Virtually all mainframe computers are affected by the problem (which, for the most part, will not affect personal computers).

Correcting what would seem to be a fairly simple problem is actually enormously difficult, partly because the code is written in a computer language known as COBOL, which is no longer used and which few computer programmers know well, and partly because the year appears in about 1 out of every 50 lines of programming, each of which must be corrected.

Experts estimate it will cost $600 billion to correct the problem in the United States alone. And correcting the problem will take time. "If you're not changing code by November of this year," warns one expert, "you will not get this thing done on time-it's that simple."

No one really knows what the worst-case scenario of the "Year 2000 problem" is, although experts claim it could be very bad indeed. Automated Teller Machines (ATMs), for example, could fail to function, and banks and other financial institutions that did not plan ahead could lose all their records. Federal, state, and local governments could lose data on budgets, payments due, and income tax liabilities.

1. Why are the mainframe computers in danger of crashing January 1, 2000?
2. What are some of the problems that may occur as a result of the "Year 2000 problem"?