Friday, January 7, 2011

Shift Happens

Blink:
Last month, I read about two business records being established. The first was for corporate profits and the other for Internet advertising revenue. I predict both records will be broken in 2011. As a result, American lifestyles will be impacted significantly. Why?
Shift happens!

Read On:
Disclaimer: I am not an economist, I am a marketing geek.

Today I am going to focus on the record corporate profits for American companies in the third quarter in 2010; $1.659 trillion. This was the highest figure recorded by the Commerce Department in the 60 years since they have been tracking annual corporate profits. The next highest corporate profit levels on record was back in the third quarter of 2006; $1.655 trillion. I also want to point out that despite the recession; profits have grown seven consecutive quarters, at some of the fastest rates in history. One factor that has been fueling this accelerated pace has been strong productivity growth – companies have been able to produce more with less. What impact will this have on American lifestyles?

For starters, people will continue to work longer hours. Back in February of 2010, the Bureau of Labor Statistics reported that the average work day (and related activities) for employed persons ages 25 to 54 with children was 8.8 hours. Candidly this figure appears understated, especially if the related activities involve commuting. Another reliable source, the National Sleep Foundation indicated that the average employed American works a 46-hour work week, 38% of the respondents in their study revealed that they work more than 50 hours a week. This sounds more realistic. Now throw into the equation the growing trend that Americans are not taking vacations, a topic I addressed early in July 1st 2009 in a post titled No Vacation Nation (
http://bit.ly/8jgM6G). Consequently, the organization Take Back Your Time projects Americans on average work 350 more hours than their peers in Europe. Sounds stressful! As a result, will there be an increase of medical problems on the horizon for America?

More work hours will also fuel the need for convenience, both for products and services. Bodes well for the food industry; not just “grab & go”, takeout, frozen & nuke foods, but people will also continue to eat out more since they will need to socialize as a result of working longer hours. New services will continue to evolve, everything from those we are already familiar with like daycare, dog walking, at home personal trainers, etc., to personal assistants, people who will help individuals organize their personal lives.

What will be the end result? A stressed out, time starved, 24/7, wired, no vacation nation in desperate need of a real timeout. Remember, shift happens!

10 comments:

  1. As someone who recently entered the workforce, I'm not too surprised by these numbers. Personally working on average a 15 hr day between three jobs, but I'm very happy with this setup. I can only hope that these people working harder and longer hours are enjoying the work as much as I am. Great post - I will be interested to see how this impacts the food industry, if it hasn't already.

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  2. Thanks for the great stats, Jim! I didn't know the entire nation was experiencing this, I thought it was just me! I've been working at a startup for 8 straight months (only taking very short amounts of time off for holidays) but otherwise working a good 10 hours each day. I sure feel the stress. If the entire nation is experiencing this, what will come of us? Will we become tech robots? Kind of scary but good thought provoking post...

    Kristin

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  3. Jimmy,

    You missed a couple of other key metrics. (1) The average take home pay for the "middle-class" is flat or down, and (2) The gap between the richer and poorer is significant and still growing.

    I think the short term implication is that when the economy turns around there will be a significant movement as people seek new better paying jobs and/or a better life style.

    The negative long term implication is that we may evolve into a class society.

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  4. This tends to be a cyclical thing. Remember Re-engineering of the 90's? Same result. Then economy went gangbusters, hiring...then Dot-com bust and on it goes.

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  5. Your third paragraph says it all: Time starved could mean more fast-food volume; but declining wages mean less money to spend. Cheap goods will reign. Health problem will be exacerbated by these stressful long hours and the poor nutrition offered by typical fast food. Its really a pretty depressing picture.

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  6. Great comments everyone. Thank you.

    Melissa/Kristin - New to the workforce, long hours, but glad to learn you are both having fun.

    Bob - Interesting comments. The middle class definitely has been hit hard. When the economy turns I will be curious to see if people get aggressive, take risk and look for a new job or will settle for what they have as in good to be employed.

    Jackie: Re: 90's I remember team building exercises after all the re-engineering. What ever happened to team building.

    Tom: Great point. Opportunity for portafuel a topic for a future post.

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  7. On the plus side, I think employers are realizing that while our hours are increasing, our personal life therefore sneaks more often into our business life (and vice versa). Instead of being time-on-the-job oriented, we are becoming accomplishment-oriented...which isn't a bad thing!

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  8. Great post - yet again! One thing I'd bring up is in somewhat contrast to Rebekah. I think we're less able to "enjoy" ourselves. Anything that is for entertainment purposes has to go beyond "smelling the roses" or similar. Also, this inability to enjoy ourselves will stymie our creativity and innovation.

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  9. Interesting post Jimmy. I'd be interested to know if the profit levels for unincorporated entities have risen or if the SME business owner is still bearing the brunt of the recession in the US.

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  10. Hello Jimmy,

    I really, really like this point. You're pointing out some pretty powerful forces that are impacting our society. People are working harder and longer, and making more profits for companies, perhaps because they want to keep their jobs. This is quite a powerful motivator.

    I once sat on the board for a non-profit called The Human Agenda. They first brought to my attention the disparity of working hours between Americans and our European/other counterparts.

    In response, books like, "Your Money or Your Life", "The Four Hour Work Week" and "Work Less, Live More" have tried to provide alternative models for approaching work, in a more humane and balanced fashion.

    I'm still searching for that! Work/life balance is very important to me. My goal this year - more creativity - I'm back to playing music again. First band practice was yesterday.

    Thanks again for this insightful post Jimmy.

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