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The “New Normal”

13 Jan

This morning I don’t have much to say because I am exhausted after a very late night.  My husband and I attended an evening lecture at the Minnesota School Board Association gathering in Minneapolis,  Minnesota.  He is the chairman of our local school board.  He and I have different ideas about what actually qualifies as a “date night”.   

The two-hour lecture we attended was titled “Minnesota and The New Normal”.  It was a joint presentation by the state demographer, Tom Gillaspy and state economist, Tom Stinson.  I’m neither a demographer or an economist but I know that both have changed dramatically in Minnesota in the past ten years.  We attended a similar lecture about 5 years ago and much of what they had to say then describes where we are now.

The two Tom’s showered us with 13 pages of power point slides of forecasts, outlooks, demographics, population growth rates, total US wages, world labor force growth and so much more.  Then they went on to interpret where they thought we are headed.  Their predictions included the following:

The “New Normal” Probably Means:

  • higher interest rates
  • slower economic growth
  • increasing numbers of retirees
  • less consumption; more saving
  • a more diverse population
  • more uncertainty about the future

One of the interesting points that they made was “At what point in time did we know that we would have an aging population?”  We all know how to do math.  Just take the birth dates of the largest birth years and add 62 or 65 years to it and you know when you will have large older population and retirees.  What have we done to prepare for this change in our demographics as a nation?  Not much.  We haven’t cut back our spending in anticipation of less revenues coming in due to fewer workers.  Couple this with more families having fewer children and you wonder who will be doing the work in our nation.

They pointed out that this is not just a Minnesota problem or US problem.  The world labor force is changing as well.  Countries all over the world are expected to have declining numbers of working age populations.  This is good for the person looking for a job because if they have chosen the right profession, their  services will be in great demand, however instead of the ratio of 5:1 workers supporting retirees the ratio will be only 3 workers to every retiree and there will be an increased demand for their care.   In 2008 Minnesota saw a jump of 30 percent of workers turning 62. 

I haven’t decided if the lecture was supposed to be just informative or a pep talk of sorts yet.  They did talk about people will go through the five steps of grieving for the “Old Normal”:  Denial, Anger, Bargaining, Depression, and Acceptance.  They talked about not fearing the “New Normal”  because it plays to Minnesota’s strengths: productivity and education.

They cited 6 R’s of Opportunity

  • restructure government costs
  • replace retiring government workers wisely
  • re-engage the growing retiree population
  • restructure government revenues
  • research to solve problems-ie improved graduation rates
  • restore entrepreneurship, initiative, invention in the private and public sectors

They talked about a lot of things last evening but I still don’t think they truly addressed how we will handle the increase in the aging population and the declining revenue stream because of it but they did let us know it’s here.  I always get a little nervous when they talk about restructuring government spending and revenues because usually there is some “creative accounting” in the mix.

They ended with two quotes last evening:

The first was from Herbert Stein, Chair President Nixon’s Council of Economic Advisors

 “If something can’t go on forever, it will stop.”

The second quote was from Wayne Gretzky, Famous Canadian Philosopher, when asked how it was that he managed to be so successful in playing hockey. 

 “I skate to where the puck will be, not to where it has been.”

Okay, so I lied when I said I didn’t have much to say this morning.  Really, they are not my words but I’m just parroting what I heard last evening and trying to digest it all and what it means for us.

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13 Comments

Posted by on January 13, 2011 in Business Matters, education, Uncategorized

 

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13 responses to “The “New Normal”

  1. sunshineinlondon

    January 13, 2011 at 10:14 am

    Interesting post, Jeanne. I think the challenges are global, as many of those issues are debated here too. There is discussion in the UK government today about abandoning the mandatory retirement age of 65 in October.
    Sunshine xx

     
    • flyinggma

      January 13, 2011 at 10:26 am

      They talked last evening about how to re-engage retired individuals in the future because they will be needed in the workforce.

       
  2. Joe Clark

    January 13, 2011 at 10:36 am

    Re-engage retired individuals in the future? But I don’t want to work for them, I want to work for me. I, too, worry about the “creative accounting.”

     
    • flyinggma

      January 13, 2011 at 11:00 am

      I agree. Their point last evening was that if you had the retired age group engaged in education and the kids they are less likely to vote down referendums needed for the school budget. A sneaky way to get them on your side.

       
  3. Linda

    January 13, 2011 at 12:36 pm

    Well your date night certainly was informative. Sounds as if we are all doomed.

     
  4. flyinggma

    January 13, 2011 at 12:53 pm

    I don’t know that we are doomed but I don’t think things will be easy. They will certainly be different than what we are used to so far.

     
    • writerwoman61

      January 13, 2011 at 2:09 pm

      Agreed, Jeanne…the current trend of downsizing older knowledgable workers out of jobs and replacing them with “cheaper” newbies has got to stop!

      Wendy

       
      • flyinggma

        January 13, 2011 at 2:21 pm

        Keeping them engaged is important and beneficial. The younger employees can learn a lot from the more experienced ones.

         
  5. nrhatch

    January 13, 2011 at 2:18 pm

    As I read this, I thought about your first line ~ about not having much to say. When I got to your last paragraph, I laughed.

    On dark days, I am convinced we are doomed. On brighter days, I am satisified that this shift is necessary if we are to put PLANET before PROFIT and GREEN before GREED.

    It will be interesting to watch the future unfold.

    BTW: I’ve always loved the Gretzky quote. Thanks, Jeanne.

     
  6. Carol Ann Hoel

    January 13, 2011 at 3:42 pm

    We all seem to have a precarious future. One day at a time is all we can count on, but really, that’s all we’ve had before. Things looked better. But we don’t know what a day will bring. Times like these I’m glad I believe that God is in control. Otherwise, I’d be a lot more uncomfortable.

     
  7. flyinggma

    January 13, 2011 at 3:45 pm

    How true Carol. I’m glad I’m not the one who has to figure things out for sure.

     
  8. Todd Pack

    January 13, 2011 at 8:29 pm

    I’m a sucker for demographics. I used to subscribe to a magazine called American Demographics. I’m not joking. I eat that stuff up.

     
    • flyinggma

      January 13, 2011 at 9:58 pm

      I could mail you the power point hand-outs if you need a demography “fix”, be happy to pass them on….just email me if you want them.

      I didn’t know there was an American Demographics magazine, something for everyone.

       

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