July 2020 - Some specifics on keeping a strategic outlook in these changing times
Making sense requires taking stock
Welcome to another issue of the newsletter. I’m happy that you’re here.
Before I start, RIP Congressman John Lewis who died on July 17. He wrote an essay shortly before his death. He asked that it be published upon the day of his funeral. A worthy read: “I urge you to answer the highest calling of your heart and stand up for what you truly believe.”
In my strategy work with managers and business owners we usually begin with identifying the trends in the company’s environment that are (or might be in the future) helping or hampering the company’s ability to perform. Once we have identified them, we then assess how they might help or hamper the company’s ability to perform.
That same work is also performed at all levels in the company, that is, we work with managers to help them identify trends and then assess how they do or might affect their team’s ability to perform, with the added dimension that for middle or line managers some of those trends can also be found among what is occurring within their company.
This work is part science, part art, and part craft. One should constantly be scanning for these trends.
In this issue I thought I would share a partial list of items that, given our changing context, we should be keeping in mind. For each bullet point ask yourself how this element might be impacting (now or in the future) your company’s ability to perform, (if you’re a manager) your team’s ability to perform, your community, your household, and/or your own life.
Coronavirus cases in the U.S. rise at a record pace. 1,100 deaths a day: the equivalent of four plane crashes a day, killing everyone onboard. Data compiled by Johns Hopkins University showed the total number of confirmed cases in the country is nearing 4 million, killing more than 145,000 people.
There are over 30 Million Americans unemployed. The Labor Department said that initial jobless claims came in at 1.416 million for the week ending July 18. In the real world, the number of people filing initial claims, including claims for federal pandemic benefits, dropped from 2.45 million to 2.35 million. A month ago, that figure was 2.34 million. So layoffs have been roughly flat for a month (MarketWatch).
To put it in perspective: The rise in the number of unemployed workers due to COVID-19 is substantially greater than the increase due to the Great Recession, when the number unemployed increased by 8.8 million from the end of 2007 to the beginning of 2010. The Great Recession, which officially lasted from December 2007 to June 2009, pushed the unemployment rate to a peak of 10.6% in January 2010, considerably less than the rate currently, according to a new Pew Research Center analysis of government data (Pew Research).
Some 25 million Americans will stop receiving the additional $600 weekly federal unemployment checks by July 31. As of last Thursday the extension in unemployment benefits will be based on “approximately 70% wage replacement.”
In addition to the above, not all unemployed workers are receiving unemployment benefits.
The federal moratorium that had protected an estimated 12 million renters from eviction for four months has expired. Landlords are required to give renters 30 days’ notice before filing an eviction complaint in court. This means that of the 110 million Americans living in rental households, as many as 20 percent are at risk of eviction by September 30th. By one estimate, some 40 million Americans could be evicted during the public health crisis.
Also, some states will be harder hit than others:
41 percent of those who lost a job (or whose spouse lost a job) because of the pandemic relied on that job for health insurance; 20 percent of those people have not managed to secure alternative coverage.
The Bureau of Labor Statistics reports the job projected to have the largest percentage increase in employment from 2018 to 2028 is the home health aide, followed by the personal care aide, a reflection of the growing older population in America. Despite the increasing need for these workers, home health aides and personal care aides typically earn less than $12 per hour.
The average minimum wage worker in the U.S. needs to work 97 hours per week to afford a 2-bedroom rental; 79 hours to afford a 1-bedroom, as per @NLIHC. That's well over 2 full-time jobs just to be able to afford a two-bedroom rental. Nationally, NLIHC puts the “housing wage” for 2020 — or what a full-time worker must make in order to afford a fair market rental without spending more than 30% of his or her income — at $23.96 per hour for a two-bedroom rental and $19.56 per hour for a one-bedroom.
Minimum wage, in real terms, is more than 30% lower than it was 50 years ago. Meanwhile, housing costs have more than doubled since 2000. The result: “only about 40 percent of families have liquid savings equivalent to at least three months of expenses, and less than 30 percent have liquid savings equivalent to at least six months of expenses.” (Federal Reserve).
The disconnect between the real economy and the stock market: Between March 18 and June 11, the cumulative total wealth of U.S. billionaires has increased 21.5 percent. Over the same 12 weeks, over 44.1 million Americans have filed for unemployment (Forbes).
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When people rise in power and status, their empathy can diminish — but powerful people can be coached back to their compassionate selves.
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Be safe out there and see you next month!