In my last conversation with the Millennials we discussed whether global capitalism was shifting to another economic system and whether we were undergoing a Copernican Revolution of sorts with regard to the economy. We also discussed how best to describe this change and how the Great Recession is changing society.
In an effort to provide context for the discussion I shared the following statistics with the guests. As some of these statistics surprised many of my guests, including my co-host Dawna Jones, I felt that they were worth sharing with a larger audience in an effort to generate a much larger discussion.
Startup formations have dropped significantly over the past 30 to 40 years. Contrary to public perception, Boomers are starting up companies faster than Millennials. In the past 20 years the portion of young entrepreneurs has almost halved.
- Startup formations: According to Census Bureau data reported by the Kauffman Foundation and the Brookings Institution, the number of new companies as a share of all U.S. businesses has dropped 44 percent since 1978.
- The Boomers are a startup-happy bunch–over the past decade, the portion of founders in their 50s and 60s has increased, according to Kauffman data. By contrast, the portion of 20- and 30-year-old entrepreneurs has declined. In 1996, young people launched 35 percent of startups. By 2014, it was 18 percent.
As a startup it is difficult to compete against monopolies with great concentrations of capital.
- Established businesses soak up the oxygen. It is hard to compete against the big guys, the big chain stores.
- Inc Magazine determined that 40% of would-be entrepreneurs are held back because they don’t have an idea, and 48% are restrained because they don’t think they could raise enough money.
- According to the “US Bureau for Labor Statistics”, 50 percent of all new business make it to their fifth year and one third make it to their tenth year. A study from Harvard Business School stated that three out of every four venture-backed companies failed overall. The Small Business Administration says that 66 percent of businesses make it to two years. The problem is that no one can decide on what companies count, and which ones don’t.
The populations of the advanced economies are shrinking and aging.
- U.S. population growth is shrinking.
- The population is also graying. Like Europe and Japan, it is an aging society.
Life expectancy in the U.S. is stagnating, and declining for some populations.
- In 2008, the IHME reported that life expectancy had stagnated or declined for about 4% of men and 19% of women in the U.S. in the 1980s and 1990s. The report cited diseases related to smoking, high blood pressure and obesity as contributors and noted wide disparities in life expectancy between poor and wealthy U.S. counties.
- For the first time in a decade, the overall U.S. death rate increased in 2015. It is likely tied to the economy.
Americans are straddled with debilitating debt, and it will continue to grow. Cost of living increases are outpacing income growth.
- The average American household has total debt of more than $90,000, which includes households that live debt free. The average household with debt owes more than $130,000.
- The rise in the cost of living has outpaced income growth over the past 12 years. While median household income has grown 26% since 2003, household expenses have outpaced it significantly — with medical costs growing by 51% and food and beverage prices increasing by 37% in that same span.
- The average household is paying a total of $6,658 in interest per year. This is 9% of the average household income ($75,591)  being spent on interest alone.
- When cost of living outpaces income growth, debt increases
- Households run by self-employed individuals spend $11,545 in interest annually, whereas heads of household working for someone else only pay $6,925 to finance their debt each year. In fact, self-employed people pay more in interest in every category considered, except for student loans.
In the past 75 years the percentage of Americans with college degrees has increased by about 5 times for men and by over 9 times for women. Women are now earning more degrees than men. College achievement in the U.S. has been falling internationally.
- In 1940 only 5.5% (men)/3.8% of women had a college degree. In 2015 32.3% (men)/32.7% (women) had a college degree. 2014 was the first year where women outearned degrees to men.
- The United States was one of the top countries in college achievement in 1992 but has since fallen to number 11 among Organization of Economic Co-operation and Development (OECD) nations. The United States performs especially poorly in sub-baccalaureate attainment, where it now ranks 15th among our peers.
Only a small percentage of the jobs available TODAY require a college degree.
- According to the BLS, only 27 percent of us need college degrees for our jobs. Yet, 47 percent of the workforce currently has a college degree. This 14.9 percentage point difference equates to 21 million overqualified degreed workers in a workforce of 140 million; or the size of the 2013 fall postsecondary enrollment.
- According to McKinsey, just 4 percent of the work activities across the US economy require creativity at a median human level of performance. Similarly, only 29 percent of work activities require a median human level of performance in sensing emotion.
- The non-profit Center for College Affordability and Productivity released a study in 2013 that stated that nearly half of working Americans with college degrees are in jobs for which they’re overqualified. The trend is likely to continue for new graduates over the next decade.
- The number of Americans whose highest academic degree was a bachelor’s grew 25% to 41 million from 2002 to 2012, according to statistics released by the U.S. Census Bureau in 2013.
- Half a million people with college degrees are working for minimum wage. There were 260,000 Americans with bachelor’s degrees earning the federal minimum wage of $7.25 an hour or less in 2013, according to the Bureau of Labor Statistics’ newest annual snapshot of minimum wage workers. Another 200,000 associate’s degree holders also worked for that wage.
However, by 2020 more than 65 percent of all jobs will require some form of postsecondary education.
- Jamie Merisotis believes, however, that we are interpreting the data incorrectly. The BLS’ data aren’t meant to measure education demand or whether people are in jobs appropriate for their skills.
- Data designed to forecast education demand show the integral role increasing higher education attainment plays in individuals’ and the nation’s success. The Georgetown University Center on Education and the Workforce, for example, has calculated that by 2020, more than 65 percent of all jobs will require some form of postsecondary education.
- With current graduation rates, the U.S. will be 19.8 million credentials short of the number that are needed in a decade.
Over half a million people are homeless on a given night in the U.S.
- In January 2015, 564,708 people were homeless on a given night in the United States.
- Of that number, 206,286 were people in families, and 358,422 were individuals.
- About 15 percent of the homeless population – 83,170 – are considered “chronically homeless” individuals.
U.S. salaries have fallen since the beginning of the Great Recession, and lag other countries in wage growth.
- U.S. salaries have fallen 3.1% after adjusting for inflation since Lehman’s bankruptcy on Sept. 15, 2008, according to executive search firm Korn Ferry’s Hay Group unit. That’s the worst among the G-20, which also includes the United Kingdom, Canada, France, Germany, Italy, Japan and South Korea.
- Canada notched the best pay recovery among the nations, with inflation-adjusted salaries rising 7.2% since 2008. Pay rose 5.9% in Australia, 5.2% in France, 5% in Germany and 2.4% in Italy. Salaries fell 0.1% in the UK.
The U.S. has the largest prison population in the world by orders of magnitude.
- The US does have the largest prison population in the entire world by far, and without a doubt that does play a role in these numbers, and the number one factor is the lack of jobs available.
The U.S. is undergoing a major employment crisis, and the economy is far weaker than being reported.
- The U.S. has a major employment crisis, and it is only going to get worse in the years ahead as we continue to lose jobs to technology and millions more good jobs get shipped overseas.
- There are approximately 102 million working age Americans that do not have a job.
- Nearly one out of every five young adults are currently living with their parents.
- The Wall Street Journal recently declared that this is the weakest “economic recovery” since 1949.
- Barack Obama is on track to be the only president in U.S. history to never have a single year when the U.S. economy grew by at least 3 percent.
- The economy is far weaker and the employment crisis is far worse than being reported, and the stage is clearly set for a new financial crisis of epic proportions.
- In October HSBC issued a red alert alerting investors to prepare for a severe stock market crash.
- The explosion of the greatest debt bubble in the history of the world is not likely to end well.
Labor Force Participation
The percentage of working age men that do not have a job today is similar to the Great Depression.
- Today, one out of every six men in their prime working years does not have a job.
- According to NPR, “nearly 100 percent of men between the ages of 25 and 54 worked” in the 1960s.
- More men from ages 25 to 54 are “inactive” right now than was the case during the last recession. We have millions upon millions of strong young men just sitting around doing nothing. They aren’t employed and they aren’t considered to be looking for employment either.
- The labor force participation rate has dropped to 62.8%. That is a 38 year low. About 94,513,000 are not in the labor force.
Economic inequality is accelerating globally.
- According to OXFAM earlier this year, the richest 62 people on the planet have more wealth than the bottom 3.5 Billion people.
- The 1 percent has 35.6 percent of all private wealth, more than the bottom 95 percent combined.
- The 400 wealthiest individuals on the Forbes 400 list have more wealth than the bottom 150 million Americans.
- 20 people now own as much wealth as half of all Americans.
- In 2010, 25 of the 100 largest U.S. companies paid their CEO more than they paid in U.S. taxes. This is largely because corporations in the global 1 percent use off shore tax havens to dodge their U.S. taxes.
- Between 1983 and 2009, over 40 percent of all wealth gains flowed to the 1 percent and 82 percent of wealth gains went to the top 5 percent. The bottom 60 percent lost wealth over this same period.
- The world’s 1 percent, almost entirely billionaires, own $42.7 trillion dollars, more than the bottom 3 billion residents of earth.
Which group of statistics strike you most profoundly?
Which statistics do you disagree with most?
What questions do you have?
About Dan & Agile and Beyond:
Dan Feldman is the creator and host of the Agile and Beyond podcast. With Agile practitioners, design thinkers, team builders, organization designers, entrepreneurs, and visionaries, he explores the future of work, education, and society. With the digital age demanding greater collaboration, enhanced creativity, and heightened agility, he examines avant-garde, responsive, collaborative team and organization designs as well as the shifts in our individual and collective perception of experience and purpose. Tune in!