A recent Accenture survey tallied the optimism among CEOs and other top executives in 20 countries and found that 64% of them were bullish on the U.S. and planning to locate more labor and operations there in 2014. Companies may finally stop sitting on so much cash and use it to invest in workers and equipment. That would spark a virtuous cycle that should ultimately lead to real, sustainable growth of 3% to 4%, which is what the U.S. needs for unemployment numbers to continue ticking down. Incoming Federal Reserve Chair Janet Yellen recently told me she’s hopeful that businesses will start spending this year.
If they do, pay attention to what types of jobs get created. That’s where the argument for exceptionalism gets trickier. Over half of all U.S. jobs created in 2013 were in low-wage sectors, like retail or health care, where paychecks are actually shrinking relative to inflation. Part-time workers still make up more of the workforce than is healthy. And the participation rate, meaning the number of people with jobs relative to the overall working-age population, is the lowest it’s been since 1978, before women started coming into the labor force en masse. (The unemployment rate, by contrast, takes into account only workers who are seeking jobs.) While some economists argue that this reflects the retirement of baby boomers, Westwood Capital managing director Daniel Alpert points out that it’s not nearly enough to account for the many millions of workers who’ve dropped out of the labor market. “There is much more going on here than the retirement of some lucky baby boomers,” he says.