The Time Is Now To Start Your Own Roaring Twenties
The Once in 100 Year Opportunity--The New Roaring Twenties
Rapid industrial and economic growth, accelerated consumer demand,
and significant new trends in lifestyle and culture.
Rapid industrial and economic growth, accelerated consumer demand,
and significant new trends in lifestyle and culture.
by Kevin Baker
It is not just the changing of how we work for companies that has changed during Covid. It is not just about Zoom creating the work from home movement. It's not about the Great Resignation. The current massive quit taking place globally is an incredible event which will likely go down in history as a major turning point as big as the beginning of the industrial age, the 1970s freedom movements, or the information age.
The unintended consequence of government policy worldwide is a reversal of the economic relationship between those who own assets and balance sheets, and those who are a labor expense line on their profit and loss statements.
The unintended consequence of government policy worldwide is a reversal of the economic relationship between those who own assets and balance sheets, and those who are a labor expense line on their profit and loss statements.
The current problem some businesses are having getting workers to replace those quitting their jobs did not happen overnight. After many years of a low growth rate of wages compared to the growth rate of productivity and corporate profits, millions of lower paid workers are simply not returning to low paying businesses.
During Covid, low wage workers reconsidered their careers. As people making low wages were put out of work by government policy, or decided the risk of facing the virus was not worth their low pay, people began quitting work. While forced to not work by government Covid lockdowns and stay at home, people re-discovered their love of family, hearth, and home. They realised work-life balance is a myth. Being locked up in homes against their will caused them to invest in their homes, home-based business, and mothers who want to homeschool.
In the post war period, government social engineering fuelled the idea that women were not being treated equally and should go to work. Double incomes produce double taxes for government coffers. Women left their children with daycares and government run schools to pursue careers. Covid lockdowns caused a great awakening. Mothers love their children, they love mothering, and they have had enough with fuelling government tax coffers at the expense of family.
During Covid, low wage workers reconsidered their careers. As people making low wages were put out of work by government policy, or decided the risk of facing the virus was not worth their low pay, people began quitting work. While forced to not work by government Covid lockdowns and stay at home, people re-discovered their love of family, hearth, and home. They realised work-life balance is a myth. Being locked up in homes against their will caused them to invest in their homes, home-based business, and mothers who want to homeschool.
In the post war period, government social engineering fuelled the idea that women were not being treated equally and should go to work. Double incomes produce double taxes for government coffers. Women left their children with daycares and government run schools to pursue careers. Covid lockdowns caused a great awakening. Mothers love their children, they love mothering, and they have had enough with fuelling government tax coffers at the expense of family.
Holy Family with an Angry Baby
Brian Kershisnik Art
Brian Kershisnik Art
The Data
Barry Ritholtz shared these St. Louis Fed charts in his blog (which is one of my favourites):
The first chart shows those at the lower end of the income scale will no longer work for low wages. The second chart shows that white collar, professional and business service jobs, are not quitting. Companies with a business model requiring low wage workers are having a very hard time finding workers. This is permanent, not temporary. When governments around the world decided to pick winners and losers, the unintended consequences of putting health over the economy created an 18-month mega shift they cannot control.
As an American living and working overseas in Sydney, I have watched the Covid situation unfold in both America and Australia. Living through some of the most restrictive lockdowns in the world here, I watched government decide that some businesses and workers were essential, and others were not. I watched businesses built on savings, hard work, and investing all an entrepreneur had destroyed by short sighted government class elites. I watched people put out of work supported by small government support payments reinvent themselves. Teachers, pilots, managers, business owners, workers of all kinds, were put out of work losing everything while government agencies cut no one. These people decided they would not go back to the way work was before Covid.
The Re-Opening: A New Era Begins
People have decided enough is enough. While some protest in the streets, others have decided to no longer be in the lower class. While governments played with their lives, those suffering decided to upskill, get certified, pursue degrees, find new fields to work in, launch new apps, and decide to build their own businesses. They shrugged at government, and kissed work as it was goodbye.
I did quite a bit of reading about the 1918 flu pandemic. As the world cautiously emerged from The Spanish flu, a worse pandemic than Covid, The Roaring Twenties followed. New technologies such as radio and indoor lighting emerged. A new post WWI pandemic world emerged.
I did quite a bit of reading about the 1918 flu pandemic. As the world cautiously emerged from The Spanish flu, a worse pandemic than Covid, The Roaring Twenties followed. New technologies such as radio and indoor lighting emerged. A new post WWI pandemic world emerged.
During the four-month lockdown in Sydney, I began sharing with people here that I saw an increasing likelihood that the government decisions were creating the conditions for a massive economic realignment. Before Covid, talk of universal basic income and AI putting many people out of jobs was the futurist outlook. What they missed was how converging forces present in the economy for decades would become an emergent black swan.
In her comments on career plateauing, the late Judith Bardwick put it this way back in this 2013 interview with The Worcester Polytechnic Institute's Robert A. Foisie School of Business:
After World War II, Bardwick said, career advancement seemed limitless, as American industry grew, the birthrate was still fairly low and “those who were committed to success, walked into the most expansionary period of corporate growth in history. "Few people at the time had college degrees, until the federal GI Bill created an opportunity for many, especially men, to graduate from college. At the same time, “companies developed the desire to prevent unionization by employees,” Bardwick said, “and the idea developed that if you treated your employees marvelously well, they would make a commitment; productivity would increase and employee retention would be high.”
So companies gave employees a lifetime commitment and “employees formed the fundamental expectation that there is no limit to what you can become,” she said. “The American dream Bardwick was realized to an extent that could not now be duplicated.” Companies became multi-layered and bureaucratic, creating many more management positions than were needed, but also creating opportunities for promotion. Government programs also multiplied. As the baby boomer generation grew up and the economy hit several recessions, many more employees were competing for fewer high-level jobs. Baby boomers plateaued before they expected, too, since there are only a small number of jobs at the top of corporations.
As economic conditions changed, companies downsized and outsourced. As a result, she said, “everyone has become a business of one. That’s why we must ask ourselves, ’What do I have to offer that someone would want to buy? What can I do that will get someone who pays me closer to their goal?’ ”
In her comments on career plateauing, the late Judith Bardwick put it this way back in this 2013 interview with The Worcester Polytechnic Institute's Robert A. Foisie School of Business:
After World War II, Bardwick said, career advancement seemed limitless, as American industry grew, the birthrate was still fairly low and “those who were committed to success, walked into the most expansionary period of corporate growth in history. "Few people at the time had college degrees, until the federal GI Bill created an opportunity for many, especially men, to graduate from college. At the same time, “companies developed the desire to prevent unionization by employees,” Bardwick said, “and the idea developed that if you treated your employees marvelously well, they would make a commitment; productivity would increase and employee retention would be high.”
So companies gave employees a lifetime commitment and “employees formed the fundamental expectation that there is no limit to what you can become,” she said. “The American dream Bardwick was realized to an extent that could not now be duplicated.” Companies became multi-layered and bureaucratic, creating many more management positions than were needed, but also creating opportunities for promotion. Government programs also multiplied. As the baby boomer generation grew up and the economy hit several recessions, many more employees were competing for fewer high-level jobs. Baby boomers plateaued before they expected, too, since there are only a small number of jobs at the top of corporations.
As economic conditions changed, companies downsized and outsourced. As a result, she said, “everyone has become a business of one. That’s why we must ask ourselves, ’What do I have to offer that someone would want to buy? What can I do that will get someone who pays me closer to their goal?’ ”
“It’s very different for the millennials,
because the situation is the reverse of
what it was after World War II,” she said.
“In reality, this group is facing a lack of
opportunity.”
In spite of talk about the improving
economy, employment conditions remain
recession-like, she said, adding that
economic societal changes, government
policy and personal attitudes share the
blame for poor employment conditions.
Around the world in developed economies,
significant growth is very scarce and
the opportunity for greater success has
declined. Many young people feel cheated
of the opportunity they expected to have.
Where government and business failed to correct imbalance for decades, the unintended consequences of government health policy during the Covid era has opened the door to a new Roaring Twenties. The GDPs of economies are growing at rates not seen in decades. Consumer demand is outstripping the capability of supply chains disrupted by labor shortages and Covid regulations. Lifestyle and culture around the globe is rapidly moving away from what existed pre-Covid to a new, better society where families, children, and meaningful work has voted with their feet and quit work and society as it was.
Government planners, economists, academics, and business did not see this coming. Black swans, native to where I live in Australia, are beautiful to see. Of course, looking back, we can see how what I call the Great Reversal happened. After WWII, the social contract called The American Dream exchanged a job for life that could buy a house and college for the children, for a commitment to a company. Over time, the contract was broken. Lack of opportunity, low paying Walmart-style jobs, the gig economy, and children with high college debt ruining their lives has finally been disrupted.
We are about to see a new future of leadership in the world. Like Atlas Shrugged in Ayn Rand's world, workers in the Covid world shrugged at government and business, and simply quit.
