The End of the World?

No, my friends, I am not writing about the Supreme Court. I am not even writing about Donald Trump. I am writing in response to months, if not years, of hand-wringing by some of my friends about various unfolding trends that promise something akin to the end of the world.

Artificial intelligence (AI), productivity, globalization, and the demise of baby boomers are among trends that cause all sorts of consternation if not hyperventilation. I won’t argue that these trends won't disturb our happy society. I won’t even argue that they are not already affecting many people in many places.

Concern for these and other issues is legitimate. What I am saying today is that, while there is much truth to the fact that we have considerable challenges ahead, the end of the world is nowhere in sight. Our biggest challenge is to decide as a nation what we can do so that jobs continue to exist and people are paid enough to keep the economy growing. This is our biggest challenge because it will take thoughtful policy in a very complicated US and global economy. There will always be more than one way to resolve these issues. In a world where politicians would rather spit that compromise, it is hard to see how they can be trusted to do the right thing. Whatever they could do won’t be perfect but sadly it is not clear that they are capable of anything besides giving hateful interviews to greedy media organizations.

But we do have time and it is possible that sanity might return to the political arena. Maybe it will take a severe recession or a flood of Biblical proportions, but there is at least some hope. In the meantime, I suggest we look at some data to reassure ourselves that the end of the world has not already come.

On the first line of the table below are numbers for the productivity of the private non-farm business sector. These are index numbers representing productivity in 2006 and 2018, and then the percentage change in the index over those 13 years. Notice that productivity in the business sector rose by around 15%.

The second line has comparable numbers for employment. The employment numbers are for all employees of non-farm businesses. They are in millions. In 2006, we had 137 million employees in the US. That number took a big dip in the recession down to 130 million in 2010 but then reached 148 million in early 2018. That amounted to an 8.5% increase.

The final row is the employment cost index. This index measures changes in wages and benefits of private industry workers. Starting at an index value of 102.1 in 2006, wages and benefits rose to almost 133 by 2018. That’s an increase of 30 percent.

The upshot of this little table is that we are nowhere near falling off the earth. While these numbers were clearly affected in a negative way by a very scary recession, they show that productivity grew, employment grew, and the wages and benefits of workers increased even faster.

I purposely leave you with this impression of growth. I could have compared this time to previous ones. I could have compared the wages and benefits change to inflation. I could have dissected the employment numbers by manufacturing versus services. There is a lot more I could have done to put changes from 2006 to 2018 in a more complete perspective. But I save that for other posts and other purposes.

I am not trying to say that this is the rosiest of times. I am not trying to say that we don’t need to get to work on solutions. But what I have tried to do with this little table is to suggest that we stop panicking. This is not the worst of all possible worlds. I am no Pangloss but then, again I am no Martin either (characters in Voltaire’s Candide). Pessimism might be warranted by some things we see today – but pessimism surely will not provide the answers. This glass is definitely half-full. How can we get policymakers to work together for us -- to make the glass even more half-full?

2006         2018       %Change

Productivity            94.4        108.2          14.6

Employment         136.5        148.1             8.5

Wages & Benefits 102.1        132.5           29.8

Note: The values are for the first quarters of these years.

Sunny Davidsons: Glass Half-Full?

Happy New Year!

I spout a lot and spouting can sometimes have a negative tone. So I thought I would start the year off on the right foot. Glass half-full? Of course the glass is always half-full but in 2016 and the year of a Presidential election in the USA – we are going to constantly hear about everything that is wrong with this country and the world. The good things will easily get lost in all this negativity.

I am not saying that there is anything wrong with pointing out our drawbacks and challenges. This is the way we learn. Mrs. Montgomery my fourth grade teacher was pretty clear that punching and otherwise touching my classmates was not appropriate behavior. Today I am pretty much punch-less and I should thank Mrs. Montgomery for her constant help including the water-boarding. 

But we also know that too much emphasis on the negative can be counterproductive. My father’s name was Sonny Davidson.  Born in 1915 he was a young teen when the Great Depression hit and he decided he already had enough schooling and hit the streets. Later during World War II he passed himself off to the Merchant Marines as an electrician. After the war he was selling cigarettes on the Staten Island Ferry where he met my mom. Sonny was an eternal optimist despite being beaten back time and time again. He fought hard to put the food on the table and had at least the following occupations – taxi driver, entertainer with a stage name (Zonn Murray was a hypnotist, mind reader, magician), Miami Beach strip club manager, bar manager in Key West and then Havana, appliance salesman, appliance store owner, and then gift wholesaler. Both his appliance store start-ups ended in bankruptcy.

But if Sonny Davidson was optimistic his dear wife Marge was Mother Teresa.  Marge was born in Budapest and came to the US in 1929 – great timing mom! She met Sonny one day on the Staten Island Ferry and that was that. They moved to Miami after World War II and happily raised two sons there. They were the classical good cop bad cop when it came to raising children but always they were optimistic and forward looking. No wall was too high to climb. Thus my title today is Sunny Davidsons.

Inasmuch you see why it is so easy and natural for me to advance the glass half-full philosophy. As we march through the battlefield of 2016 it does not hurt to think about some things….

            If you are reading this you are alive. Smile.

            Thanks to innovation we have things available to us that we never even dreamed of 20 years ago. If mom was alive she would not be using something called a wash tub and ringer.

            While Russia is no pussycat, I am not a pimply teen walking around Miami waiting for a violent reaction by the Soviets over Kennedy’s Cuban Missile Standoff.

            While we are contemplating ground troops in Syria, we are not learning daily of casualties in a far-off place called Vietnam. Most people today do not even know the word napalm.

            Non-profits and charities are everywhere serving the needs of the less-fortunate and many of us are proud to serve on their boards and committees.

            Despite continuing worries about the future of the Social Security System, the baby boom is retiring in scores and receiving checks that make life easier for boomers.

            Radio stations continue to play Party Doll and other favorites from the 1950s.

            Despite lingering two-way racism and ensuing unrest, minorities are succeeding in education, work, and are no longer subject to obnoxious insults like sitting in the backs of buses.

            While many of us dislike a swollen national debt our government is not teetering on the brink of collapse as in Greece, Brazil, Russia, Venezuela, and several other countries.

            No one likes sub-par economic growth but if one looks around the world today a 2% growth rate is not bad. Consumer spending rose 3% last quarter.

            Gays can marry and are mostly treated as regular folk.

            While politics and elections are important and colorful – most of our days and hours are  filled with both frustrating and wonderful friends, family and neighbors.

Have an absolutely wonderful 2016.