We’re On the Cusp of … Something
I’m old enough to remember the Dow Jones Industrial Average first cracking 10K on March 29, 1999. I was a junior in high school, and it felt like the whole country—and me, especially— was on the cusp of greatness. Whether that meant wealth, personal freedom or great spring breaks to come, what actually came next (dot-com bust, Y2K flameout, 9/11) was impossible to predict. Eighteen years and 11,392 points later, it once again feels like change is afoot.
Economically speaking, we’re sailing in uncharted waters—at least within this era of advanced globalization. The U.S. unemployment rate is so low, 4.7 percent, that it’s below the 5 percent threshold most economists label “healthy.” Meanwhile, almost every business owner or operator I interview mentions how difficult it is to find good, high-quality employees. That’s a problem in nearly every industry, for those looking for low-cost job market newbies or high-skilled, more expensive employees.
Can the labor market possibly stay this tight? I’d argue not, but what will be the catalyst for change? Growing political instability and cities raising their own minimum wages will both likely be a factor. I type this from Minneapolis, where our city council this morning voted to become the latest major city with a $15/hour minimum wage. The sky hasn’t fallen in Seattle, but the impacts are also not insignificant.
And then there’s Washington, D.C., the latest epicenter for the global transformation of democracy. Whatever is going on, most would agree the current situation feels unsustainable. Those who work in government shouldn’t laugh and shrug their shoulders when asked about the situation in our capital city. They do. Reporters shouldn’t feel attacked by the government. They do. National legislation should not injure the most vulnerable in exchange for tax cuts. As currently written, it does.
Politics aside, this level of societal angst isn’t healthy or sustainable. It’s become a significant dark cloud looming over the future for business leaders, investors, economists and anyone else whose job involves predicting the future.
I’m not old enough to think all change is bad, though! More fascinating (and less depressing) is the release of patent drawings claiming to represent Amazon’s vision for drone-watching towers to be built in the centers of major American cities. If true, these drawings are intensely cool and exciting. As we at Franchise Times (and our Food On Demand sister brand) predict, the massive shift toward delivery won’t just shake up restaurants, grocery stores and retailers in general, it will change the way cities look, feel, sound and operate—a future shock if there ever was one.
There are countless other factors suggesting the current era will be remembered as a tipping point or fork in the road. As the U.S. birth rate continues to drop, women between the ages of 30-34 now have the highest birth rate of all. Think of all the changes this trend has wrought—millennials definitely listened to the “just say no” message drilled into our heads.
Regardless of the stormy clouds outside, life goes on—and the American economy is still growing, alongside Europe, Asia, Africa, Australia and South America. Never mind that Antarctica is shrinking by Delaware-sized chunks.
Another nugget: The Conference Board’s consumer-confidence index reached a record high this spring with its strongest numbers since 2000—my senior year of high school. Given the period of chaos, stagnation, overproduction, war, terrorism, manufacturing declines and general turmoil that followed, perhaps that extreme confidence wasn’t warranted.
Looking at our high confidence numbers today, would you say they are warranted? Or is history set to repeat itself? Who knows? All we can do is lather on the sunscreen, grab a cold beverage and enjoy the holiday with the knowledge that change comes slowly—until it doesn’t.
Happy Fourth of July!