Frogs, Plates, Earthquakes, and the Economy
It was my turn to give a speech to my Toastmasters Group last week. As usual, I had to condense my thoughts to keep the length of the presentation to 5–7 minutes. To set the stage I had the Toastmaster of the Day, introduce my talk with a reference to the Tale of Frogs in a Pot on a Stove with the heat being slowly turned up to boiling…
Mr. Toastmaster, Fellow Toastmasters, and welcome guests.
Before I begin, I’m curious how many of you were familiar with the story about frogs in a pot on a simmering stove.
The story is a reminder that sometimes changes can happen gradually, so gradually, that we don’t notice they’re happening. This can lead us to miss important things.
We may be in that situation today with the US economy. I will share an example from my past and note how that is changing today.
Our economy is linked to the global economy. It is dependent on a myriad of diverse inputs, which are vulnerable to disruptions from recessions, technology, war, and other factors internal to the US as well as from the world at large.
Occasionally significant events will disrupt the economy similar to tectonic plates colliding and creating an economic earthquake.
Examples include the first oil embargo, wars such as in Ukraine and the Middle East, and of course, Covid.
Sometimes the changes are more subtle. Think about the emergence of the automobile, the internet, and globalization. Each changed life and the economy as we knew it.
I was part of one of the more subtle changes, I was a baby boomer. My dad was the breadwinner, and my mom the caregiver.
When I was a kid in the 1950s, well over half of all families were supported by a single breadwinner. In 2020, by comparison, that number was just over 18%.
In the post-WWII era, the US enjoyed a full employment economy that produced prosperity and supported robust families.
However, when my age cohort graduated from High School in the late 1960s and ’70s, we constituted a huge bulge in the number of new workers — almost overnight — or so it seemed to the frogs that had not noticed.
And then the double whammy.
Not only was there a surplus of new male workers but also a boom of baby boom women entering the labor force in unprecedented numbers.
In 1960, only about 1/3 of adult women had full-time jobs, usually “women’s jobs.” Think nursing and teachers. By 1980, that grew to 50%
In my opinion, — admittedly unsupported by any academic research — the economy morphed over time to accommodate the influx of workers by deflating the value of wages — so that where in the past a single job would support a family, it now took two.
The invisible hand of the market transformed not only our economy but our society as a whole.
The single breadwinner family frogs boiled to death.
Today, we are entering a new era, stimulated by our response to the post-Covid tectonic earthquake, as well as the retirement of Baby Boom workers.
The wise frog will ponder the implications.
We have already seen clear evidence of change.
UPS drivers making 100K, UAW, and other unions winning massive wage increases, Help wanted signs everywhere, starting wages of $15 an hour and up in many industries.
Minnesota and the US as a whole have entered into a labor shortage economy. One that will once again have unforeseen implications for frogs who choose not to pay attention.
The good news: wages are up for ordinary people, especially those who are just starting. This is a good thing.
Young people seeking their first jobs will be in a much better economic position to contemplate starting families than was the case pre-pandemic, 5, 10, or 15 years ago.
For those of us in Minnesota, this past year’s legislature took unprecedented steps to support young families in the form of childcare support, free school lunches, child tax credits, and more.
These are important from the parochial point of view of Minnesota in competition with the rest of the nation. By supporting our young families’ economic needs, we are enabling them to raise prosperous families and Minnesota’s new workers for tomorrow’s economy.
