Will We Return to Business As Usual?
Monty Fowler
Practitioner of Revenue Arts & Sciences | Author | Coach | Speaker | Future Astronaut ????
Another 6.6 million people filed for unemployment this week, bringing the total to 16 million people in less than a month. That translates into an 11-14% unemployment rate, which is approaching depression-era levels. Some economists say this is not necessarily a catastrophe since the vast majority of the jobless are furloughed due to COVID-19 and not permanently laid off, and that these jobs will return as soon as the stay-at-home orders are lifted.
Consider though that many of the 16 million jobless Americans work in the retail, travel & leisure, and the foodservice sectors; the sectors that absolutely depend on robust discretionary spending by Americans. Combined with the fact that Americans have one of the lowest savings rates of any developed nation, the return to spending and rampant consumerism is in question.
Millennials are bearing the brunt of this economic disaster and they have a different relationship to money than previous generations. These young people grew up in the Great Recession, many have some memory of 9/11, and they have lived their lives in a nation at perpetual war. There is no guarantee that they will engage in the same economic behavior as before once the crisis ends.
If we look at the Greatest Generation who grew up in the Great Depression, you will find that they took the difficult lessons in frugality and saving into the rest of their lives. They had the highest rate of savings and investment of any generation in US history, carefully considered purchases, eschewed credit, and traveled infrequently. I think it more likely than not that the Millennials will take a similar lesson from the COVID-19 pandemic and radically change their behaviors.
If this comes to pass, our recovery will not be quick and the rabid consumerism that fuels our economy today may never return.
What do you think?
Senior Level Program Manager | Cultural and Economic Impact | Creative Leadership
4 年Insightful thoughts Monty. This pandemic appears to be the great equalizer in that it has shown us that even Americans - who enjoy a standard of living universally unparalleled find themselves unequipped and doubly vulnerable to this disease due to, as you pointed out, a lack of adequate savings and an inequitable healthcare system.? I also wonder whether shifting priorities and newly discovered joys will result in an increase in post pandemic economic spend in industries that help to strengthen social cohesion and prioritize the human experience (i.e. travel, restaurant industry, entrepreneurial endeavors) as opposed to solely self-beneficial consuming. As a Gen X/Millennial cusper, I agree with Mark Dallmeier - I remember 9/11 vividly, and recall the dot.com bust, but the implications were self-revolving and didn't impact me quite enough to make significant changes. All that has now changed and I imagine this event will be one that positively shifts Millennial behavior and thinking indefinitely.
Owner at Starfish SEO
4 年Great points Monty. I believe you have assessed a serious concern and (respectfully) hope you are wrong. The only thing I might add to this is the Great Depression lasted about 10 years, and they did not have a world-wide resource like the internet. I believe the length of time and the lack of resources was a significant contributor to the mindset that generation adopted. I think we are closer than ever to a global economy, and, just like post 9-1-1, things will not be the same, but I am optimistically leaning toward a partial if not a full recovery. At least three of my children are millennials, and two of them are out of work, but they are still planning travel for later this year. I pray this is an indicator for their entire generation to spring back to life once this has passed. Thanks for sharing your thoughts, they are definitely worth considering. I look forward to comments from others as well.
Good thoughts. We were reflecting on this as a leadership team a few weeks ago. Our CEO asked, who has been through something like this before and what did you do? We have a number of people like me (grey hairs) in leadership within the company so a few people took turns. I reflected on working since I was 15 (1984), seeing my parents lose everything they built in the real estate melt down in 1988 and working for small business owners who struggled through those same times. I reflected on the recession in the early 90s as we entered Desert Storm. Those were dark years as well.. We had the dot com boom and bust. Then we had 9/11 on the tails of the dot com bubble. Leading into the real estate and financial bubble and recession of 2007-2009. Guys like you and me were running - owning businesses during these times. It was tough. We lost a lot. Some lost it all and put guns in their mouths and pulled the trigger. I am happy we had each other, our brother hood and family and faith to keep us alive and moving forward. A large majority of our employees are Millennials. While they did go through September 11th and the Recession, most were not working, not paying bills, not responsible for other human beings yet. Now they are. These are scary times for sure for a large percentage of the working population as most live paycheck to paycheck. My prayer is our country will learn to slow the consuming and increase the saving and find our hussle and passion so people are not just working 8-5 at a job but become entrepreneurial, expressive, creative and begin to innovate and create multiple streams of income. That is how generations survived and got through these situations in the past. We will persevere as we have before and as generations before us have. We have no choice. The reality is there will be a new "normal" going forward. Strategies and tactics of old where the government would fire up the "war machine" to jump start the economy may not work for the next 10-20 years. It is up to us. We must be frugal, creative, driven and productive. Peace to you my friend.