In recent years, our South Bend leaders have worked hard to build an infrastructure that helps local businesses grow and thrive. From the many state and national reports we have all seen, they have done an outstanding job. One of the most impressive statistics is that our area’s personal income growth rate is now equal to overall U.S. income growth, and is greater than that of most regions in Indiana. This is a significant step forward.
As of September 2018, the United States will record the longest period of uninterrupted economic growth in our country’s history. This seems like a good time to celebrate!!!
Even with the solid economic growth we enjoy today, challenges remain for our region, and the nation as a whole. Even without considering the likelihood of a significant economic slowdown in the next 18 months, (a shift numerous economists consider likely) let’s look demographics we face now that concern investment professionals and economists alike
- Ray Dalio, billionaire founder of top hedge fund Bridgewater, writes that the income of the top 10% of income earners now equals that of the bottom 90%. This last occurred in 1928, just before the Great Depression. Is this a coincidence? As a result of the financial and social reforms of the 1930’s and our growing industrial might during World War II, a great economic boom unfolded, and our great middle class was born.
During the next 40 years, into the early 1980’s, the income of the bottom 90% of our income earners grew rapidly while the income of the wealthy top 10% fell. The wealthy didn’t become poor, but the vast middle class moved out of poverty over the decades.
We don’t know if over the next five decades our great middle class will experience such a resurgence as before, but we are certain that if the bottom 90% of income earners have the vote, they won’t continue indefinitely to tolerate economic stagnation and deprivation. Why as an enlightened nation would we want this? What a waste of human resources! We may be nearing a historic socio-economic shift.
- Korn Ferry, the well-known international consulting and recruiting firm, predicts that massive job loss awaits us in the next 20 years because of increasing pervasiveness of robotics and artificial intelligence growing throughout our international manufacturing and service industries. At the same time, 85 million new jobs requiring totally new skills will go unfilled by 2030 because of lack of necessary training. This will cost international businesses $8.5 trillion dollars over just the next twelve years. Think of the double whammy to our world-wide economy of technological change making millions of jobs obsolete at the same time new jobs go unfilled for lack of needed skills. Businesses and entrepreneurs that take the steps now to do the training and hiring needed to address these challenges will be the big winners in the years ahead.
- Today, society’s most important institutions are under enormous stress. Healthcare is unaffordable and thus unavailable for 30 to 40 million Americans, and ranked no better that 36th in the world by the World Health Organization. Our schools across this nation are underfunded and underperforming, no better that 25th in the world. Our state and federal governments are undeniably dysfunctional, failing to cover basic needs and protection of our citizens.
Dr. Neil Howe, noted historian and economist holds a disturbing prediction. He reminds us it was the parents of today’s baby-boomers who shouldered the challenges of the Depression and World War II to eventually transform the outmoded and broken institutions of their time. He postulates it is likely that our Millennials will be forced to accept a similar challenge (hopefully not another war) to ultimately transform and accomplish a needed overhaul to the failures of our present-day societal institutions.
The American Psychological Association states there is no more important need of human beings than to “Connect” emotionally with other human beings. The all-important bonds of connection are badly strained in many segments of society today, and Re-connecting us will be a big part of the challenge ahead.
As business leaders we have the capability to train our employees in both the technical skills and in emotional self-awareness to strengthen our person-to-person connections. Many successful companies have already committed to building organizations that promote responsible environmental policies while creating powerful human relationships among employees. This is more a matter of “national will” than anything else.
There exists for us the opportunity to take great leaps forward in not only the economy of this nation, but the soul of this nation. We need to educate everyone in our nation from the head to the heart. It’s not like this is some new and radical thought. It’s being done now with great success and promise. We need everyone to jump on board.
If you would like to learn more about specific steps you might take to address these challenges…and opportunities, please contact us.
Thomas G. Searcy, BCC
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