As companies compete to be the survivors of churning, they are less likely to protect workers against layoffs or to invest in training and research. The information technology revolution - Technology has shortened the cycles between the market introduction of a product and its eventual replacement. Information technology is increasing efficiency and cutting costs. Consumer choices have expanded, while the costs of computing and data transmission costs are plummeting. The impact of this new economy on Americans must be analyzed with care.
Conventional indicators show a strong economy with low inflation and unemployment.
However, fundamental measures of economic well being are of concern. Productivity and income growth rates are lagging, and the income distribution is uneven. This trend has slowed recently for individual wages, but the inequality of family income has continued to grow. Between 1980 and 1996, real incomes went up 58 percent for the wealthiest five percent of American households, but less than four percent for the lowest 60 percent. These indicators suggest that the new economy has not realized its full potential.