Tuesday, September 13, 2011

When Generations Collide

Fact: Equity prices have wallowed for ten years and counting.
Fact: Financial market turmoil has wiped out retirement accounts.
Fact: Young people are experiencing an unemployment rate twice the national average.
Fact: Consumer deleveraging is likely to persist indefinitely, at least until employment rates and income levels rise.

Where once a young person could find employment, embark on a career and expect to retire comfortably, that social expectation no longer exists. Instead, young people and people near or at retirement find themselves competing for jobs in an economy that simply isn't meeting their demand.

The Perspectives article "Age and the Workplace" considers the evidence for this emerging generational conflict. The supporting numbers extend beyond months and quarters to encompass years and decades. Even if the economy were to turn, the trends in place won't alter anytime soon.

For companies and government to remain competitive, corporate strategy and public policy must address this powerful new social dynamic.

Read "Age and the Workplace" here.

Friday, September 2, 2011

Deleveraging and Consumerism in Health Care

Consumer deleveraging has instigated a changed mindset.

Although many economists would argue that the debt removal process has much further to go, consumer downsizing thus far has substantially altered behavior. Note, for example, depressed sales in big ticket items.

If consumers, by living more within their means, develop a greater respect for risk, then their approach to health care will likely change as well.

Prior to 2008, in the riskless world of super-sized SUVs and flat-screen TVs, carefree lifestyles repudiated value-based decision making. Today's risk-averse world could easily nurture opposite inclinations that endure.

For health care, the process of payers offsetting responsibility to consumers constitutes (potentially) a similar effect. At least one can hope that government will begin to discern its own approach to value, rather than dictate one to others.

Consumers, by already starting down the road of personal responsibility, should in fact consume health care more efficiently (and responsibly) than they otherwise would have in years past.

In health care's next phase, expect a more balanced approach to risk and return in combination with a general trend towards consumerism to establish a value equation that eliminates years of built-in inefficiency.

Read "Alternative Themes in Health Care" here.