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This week is Halloween. According to History.com Halloween is a time of celebration and superstition. It is thought to have originated with the ancient Celtic festival of Samhain, when people would light bonfires and wear costumes to ward off roaming ghosts. Today things are a little different, it’s the biggest party day of the year, at least according to a party supply store owner I talked with recently. She said it was significantly bigger than Christmas.
If we get away from the gaudy and oversized yard displays showing spiders climbing over houses, the costumes and the spiked punch with floating ice eyeballs, then we get back to the ghosts. We have ghosts today, but they are not the type that people look for on low budget reality T.V. shows. Like the ghosts people believed existed in generations past, today’s dark spirits are all around us. Our spirits don’t rattle water pipes or give rooms cold spots. That’s just bad plumbing and poorly routed central air. Today’s malevolent presence exists in our society and our economy. Like the dark priests or the goth kid in high school who just wanted to be different, there are some in our world who celebrate today’s wraiths because, well, like the girl with the black nail polish and black eyeliner or the satanic priests, they have something to gain. In this case it’s usually short term ROI.
I am fearful by nature. Some of these fears are based in my current reality and some originate from my lizard brain. These more base emotions are all paralyzing fears of what could happen, but not necessarily what will happen. The ghosts of things that hopefully won’t repeat are experiences like 99ers, another housing meltdown, and more extended tail recessions. The chances of them repeating are very slim, but that doesn’t stop them from irrationally scaring me. There are others that seem more real. They are the modern spectors of dark predictions for employment opportunities, the growing challenge of just keeping what we have, the great risk shift, and scary social change. These are real modern ghosts that haunt my thoughts.
One of the things that scares me is when I hear high-profile Tech CEOs talking about the benefits of something like the guaranteed basic income. The guaranteed basic income by itself does not scare me. There have always been different variants on socialism. Some of which have been implemented to some minor success such as social security programs and others which have ultimately shown to be a failure like, you know, greece. Tech CEOs tend to be very smart cookies. They understand the direction that things are moving in and it’s their job to see how tech is going to affect the world over the next 10 to 20 years. They are seeing many many many jobs get destroyed and job creation not keeping up. If everybody has some sort of small income it avoids massive social unrest. If you don’t have social unrest then you continue to do business as usual which is what they wish to do, they are CEOs after all. Every level of employee will be affected as algorithmic management continuing to eliminate positions up the management chain. Massive social institutions like medical and education are prime candidates for the next wave of disruption through this and other forms of automation. When groups of really intelligent people who have the money to surround themselves with even more intelligent people are scared, well that gets me scared.
This leads into my next fear which is the trend of quality of life. I always tell people that the reason why the Baby Boomers had such a great run of it was because they grew up in a world where America was the only economic superpower as we had blown up the rest of the world in World War II. In effect America had all the money and was the only real part of the world where things were getting better financially for everyone. The fact now is that we live in an era where the rest of the world is not just catching up with America, but is surpassing the USA. This results in a population whose new American Dream is holding on to what you have. The American dream used to be owning a house, payments notwithstanding. Today many people consider the American dream to not have any payments. Why is that? Because if you don’t owe money on something then nobody can take it away from you. Not counting services, I have one physical thing that I make payments on, my home via my mortgage. I live in fear everyday even with all of the buffers we have set up that I will lose this place. All it takes is one right-sizing and we’re done because no matter how much I try to sock away it probably won’t be enough to weather the financial storm between positions to get back to financial equilibrium. Heck, even if I paid it off, I just got my updated annual property tax assessment. It was so high I’m not so sure that if had to deal with a long term layoff, that I would be able to keep this place. Talk about scary!
This holding on to what you got isn’t just limited to individuals. Trends toward greater self-reliance end significantly less shared-risk across the entire national landscape scares the heck out of me. There is no question that the 401K is a massively failed experiment for individuals’ security as much as it is a boon for employers. At heart is the movement of risk from the organization to the individual for the retirement plan. when President Trump’s administration wants to move more federal employees on to defined-contribution plans that tells me the trend absolutely is towards more self management. When you’re looking at a mass population there’s no question that individual’s really stink at managing solutions to problems they are going to have in 30 years for focusing on the problems that they have today.
This isn’t just political it’s also becoming standard business practice when it comes to the growth industries in the economy. It’s too early to tell if this is a mass trend or a business philosophy bubble, but the uberization of the world where everyone is a part time contractor is truly scary. Because this model is so seductive, is it any wonder that the proud goal of employers is to have on-demand workforces without having to pay any of the benefits that are traditionally associated with employers? How does this change our perceptions about what is a good deal? One example comes from my home town. When a new and different grocery store was opening, in a bid to staff up properly in a tight market, the store started paying a couple of bucks more per hour than competitive organizations in town. On top of this they promised everyone 30 hours which is just short of full time benefits. A guarantee of 30 hours a week and a buck to two bucks more an hour than anybody else was paying was considered so aspirational that even in a tight market they had hundreds of people lined up to fill out applications. Medical, paid time off, paid education, retirement, all of this was on the shoulders of the individual not the organization and they all still thought the new super market’s offering was a good deal. Is it any wonder that a chill went down my spine when I looked at that and I thought what it could mean long-term if the trend continues to grow?
I’m also fearful of the changes in the social fabric. This is not because of any dogmatic belief based in religion or my generational ethnocentrism. My fear is very practical in nature. We have a massive generation, one that is much bigger than the baby boomers, that is growing up not believing in marriage which means many more single parent households. This used to be something that was the purview of the lower socioeconomic classes. Single parent households are moving up market. There are many middle-class workers who have opted out of traditional marriage and long term monogamy. As the research stands today it doesn’t matter if you’re from low income, mid income or high-income the reality is that kids from these households with only a single mom or dad, and not both, do worse in school and eventually life. They aren’t competitive, they don’t earn nearly as much as their peers from two parent families and sadly they are growing as a percentage of the population. The world is changing because of telecommunications everywhere which allows for international competition for nearly every worker. If we are raising a generation of workers who aren’t effective at holding the status quo locally, How could they ever be competitive with international competition from rising third world countries that will do anything to succeed? What does that mean for today’s professional class? It means that the tax base and resources that will be generated in this country in decades to come may not be able to maintain the levels that were promised. Instead of a generation growing up that’s helping raise everyone’s ships, we have a generation that’s may even accelerate the downward trend of America’s economic position in the world. The creaking of the social fabric scares me as bad as if I heard ghostly steps on a creaking floor when laying down to sleep in an empty house.
Maybe my fears are unfounded, maybe we will figure it out the coming disruptions and new jobs will be created before I am past my prime working years. Maybe there will be legislative changes to the 401K that make closer to what we really need which is a system that includes the shared risk and limited flexibility of the defined benefit plans with the transportability and growth potential of the 401K. Maybe the social fabric will change and the next generation will rediscover the societal benefits of long term relational partnerships en masse. Maybe, but I have to admit if I want a good scare today, I don’t have to spend money on a ticket to see the latest Friday the 13th film, all I have to do is think about the bigger trends I see in the business times. Like the slasher films I used to go see in my youth, I am always on edge that the bad guy is going to show up with a knife again and again, I just never know when it’s going to happen.
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Five Trends that scare me #5 – All my 80’s idols & friends, including my dog are dead from cancer #4 – There is increasingly more & more time between the release of Slayer studio albums #3 – It’s harder & harder to find decent “monosodium glutamate” or “yellow #5 food coloring” with all these _____ organic foods #2 – [redacted due to content] #1 – My brother won’t enjoy anything in life – pretty sure he’ll suffer DBP (“Death Before Pension”)
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