A Statistical Recovery
By many measures, the economy is starting to show the stirrings of a recovery. The Washington Post on Tuesday reported that businesses shed the least number of jobs in nearly a year. Notice that didn’t say adding jobs, but fewer were laid off. The rate of savings is up, and productivity has risen to a 6 year high. All good signs that there is something positive going on in the economy.
And yet for people, it seems that there is still a great deal of uncertainty.
While businesses were compelled to lay off fewer people, almost no one seems to feel secure in their job. And for those who have found employment after having been uprooted from a previous position, underemployment is still rampant. Every Chamber of Commerce function I attend, I talk to people who say they are working harder for less than pretty much at any time in their careers, and giving more services away just to try to get the next paying gig. Many of those people have not been able to adequately cut their expenses to match their newly truncated income, and so they scrape by trying to figure out where next month’s mortgage is coming from. And that, folks, does not constitute a recovery.
And yet, we’ll be told how things are turning around and prosperity is here again, or at least just around the corner. Happy days are here again, and there’ll be a chicken in every pot. Except Happy Days was canceled years ago, and that chicken cost $4 or $5 per pound.
Please don’t misunderstand. I want the economy to recover. I’m just not sure when unemployment is still over 9% that it’s time to start talking about it other than in a “how can we make it happen” sense.
See, that big boost in productivity came from far fewer people being required to churn out the same amount of work. It’s difficult to know how well some of it is being done. An exhausted worker is more likely to make mistakes or do shoddy work than one not pushed to the brink, afraid or unable to afford to take a vacation.
People are saving money because they’re afraid to spend it… at least those who don’t have such crushing debt that they spend every nickel trying to keep up with the payments they accrued during the ‘good times’. With credit more difficult to get, at least those who don’t have the car and boat and second mortgage payments are less likely to get them, and so savings rates can go up. Credit cards have been frozen or cancelled by the banks, and it’s difficult to incur more debt when the bank has determined you’re no longer credit worthy.
It has been an incredibly trying time for millions of people. Economists say a recession ends when the economy stops contracting. But for individuals, the recession ends when they feel like they can do the things they did before. Their income is restored, they feel whole again.
Statistically, a recovery may be just around the corner, or may even be happening now. But it was Mark Twain who said there are lies, damned lies, and statistics.
Until people feel the recovery was happening for them, it will remain a statistical will ‘o the wisp, something to be trumpeted by the administration and hashed over in the media. It will become real when people see it in their bank accounts, and they’re not as concerned that the axe could fall tomorrow, or about how this month's bills will be paid.