Thursday, February 23, 2017

The Perfect Storm

Perhaps President Trump’s biggest promise for “Making America Great Again” is putting millions of Americans back to work again. Hopefully he sees the storm that's brewing.

In 1962 life expectancy was 70 years. That meant when you retired at 65 the government expected you to draw your Social Security checks for five years and that was it. You were dead and done. Today, according to a recent study on life expectancy published in The Lancet medical journal, by 2030 life expectancy will be nearing 90 years due to higher quality health care and advancements in medical technologies. By 2030 most people will start drawing their Social Security checks at age 67 unless Congress increases the retirement age again. If they don’t that means the government will have to send out Social Security checks for not just five years, but for 23 years. Currently, more and more people are working beyond retirement age. Seems to me there’s going to be a lot of working age Americans waiting a lot of years for a lot of jobs that a lot of retirement age Americans are not going to be giving up. Looks like there’s a storm brewing.

In 1962 Sam Walton opened his first Walmart store in Rodges, Arkansas. Back then every small town in America had a Main Street bustling with people and store fronts brimming with products. Since then Main Street has had most of its storefronts boarded up and the people have disappeared to the aisles of Walmart just outside of almost every small town in the country. Today, Walmart is the largest employer in America, employing 1.5 million people. That’s a staggering 1% of the entire U.S. workforce. Imagine how many people would be out of work if someone came along and put Walmart out of business, along with Sears and Kmart and Macy’s and Home Depot and Costco and Lowe’s and etc. Here comes Amazon.

It is estimated that Amazon can sell and deliver the same amount of merchandise as the above mentioned retailers utilizing one tenth the manpower. They do this by utilizing 50,000 robots in their distribution warehouses that work 24 hours a day with no pay and no benefits. Are you an Amazon Prime member that guarantees you free shipping to your door in two days? No wonder Amazon is eating Walmart’s lunch along with the rest of the retailers mentioned above. I don’t think all those millions of retirees in 2030 will be working at Walmart or any other big box store. Sounds like there’s a storm brewing.

In 1962 very few cars had seat belts installed, very few had air conditioning, and the only thing remotely electronic was an AM radio as an option. Today we are on the verge of self-driving autonomous driving vehicles. Kevin Ashton, a professor at the Massachusetts Institute of Technology, predicts we will all own self-driving cars by 2030. Just imagine. We won’t need any more drivers. No more truck drivers. No more taxi drivers. No more bus drivers. And because there will be no more accidents we won’t need as many police, as many EMT, as many body shops, as many insurance agents. That’s an awful lot of jobs that’s going to just plain disappear. Sounds like there’s a storm brewing.


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