So, what would it take to persuade you to have another baby? A big tax break? A monthly stipend? Free child care? A big house?
“I wouldn’t do that again for all the money in the world” is a perfectly reasonable answer. But be prepared: At some point, your government is going to pitch you on a larger family.
We have entered the age of the fertility panic. Country after country is discovering that smaller families are causing the population to shrink, which means more old people, and therefore higher government expenses and lower tax revenues. And many of those countries are then jumping to the wrong conclusion: that they should persuade people to have more kids.
The latest victim is the United States, which until recently was proud of its big, corn-fed families, but discovered last year that the economic crisis and constricted immigration have pushed its average family size down to 1.9 children, below the 2.1 needed for population stability.
This has led a number of American voices to propose what European countries have been doing for more than a decade and what Quebec has tried since the 1980s: attempting to create larger families through policy.
This theme has been seized upon most dramatically by the conservative author Jonathan Last, whose book What to Expect When No One’s Expecting created alarming headlines across America this week. He is not satisfied to warn of rising pension and health-care costs. “Declining populations have always followed or been followed by Very Bad Things. Disease. War. Economic stagnation or collapse. And these grim tidings from history may be in our future,” his first chapter warns. (He follows this by reassuring us that unlike the population-growth scaremongers of the 1970s, “I’m not selling doom.”)
Early on a February morning, in a glass-walled conference room high up in the Hearst Tower in Manhattan, Postmaster General Patrick Donahoe spoke in a careful, reassuring tone. “We can do this; I know that we can do this,” he told the audience, which included representatives from magazine-industry heavyweights like Condé Nast, Hearst, and Time Inc. “Hang in there with us.”
Donahoe’s talk was a keynote at a “Postal Summit” organized by The Association of Magazine Media (MPA, formerly the Magazine Publishers of America) to address the inarguably dire situation currently facing the United States Postal Service, and the complications that situation is causing for the businesses that depend on its survival.
Despite Donahoe’s assurances, his audience couldn’t be blamed for being skeptical. In the past decade, the postal service has been hit by a perfect storm of technological and cultural shifts, economic recession, and political gridlock. Since 2000, the USPS has seen a precipitous decline in the volume of mail. From 2006 to 2011, as people have increasingly sent e-mails instead of letters and paid bills online, first-class mail volume has dropped 25 percent. As the housing and financial sectors sank, so did the amount of direct mail they sent to prospective customers. The country’s second-largest civilian employer (after Walmart), the USPS has been squeezed by rising health-care costs for its half-million employees, plus the requirement to pre-fund their pensions.
While the service has often run a deficit during its 237-year history, it now faces the possibility of insolvency. Following a loss of $5.1 billion in fiscal year 2011, the service reported a $3.3 billion loss in the first quarter of fiscal 2012 alone—a period that’s typically the most profitable of the year because of mail sent in the winter holiday season. The USPS’s total deficit as of last December was already $12.9 billion, and in February, the agency projected that it may run out of cash completely by October.
All of this is alarming news for the magazine industry, which, despite its recent forays into digital publishing, still depends on the postal service to deliver almost 90 percent of its circulation. Some publishers at the summit wondered aloud just how worried they should be. What would happen if the USPS actually shut down?
In a knowledge-based economy, brains matter —and not taking care of our mental health has a negative impact on the bottom line, according to a recent report from the Global and Business Economic Roundtable on Addiction and Mental Health, a group of scientists, medical and business professionals established to raise awareness of the economic impact of mental illness.
Depression has a fairly high profile these days —you can see TV ads for pills to treat it; Olympic speedskater Clara Hughes has gone public about her experience with it. A viral video campaign, begun in response to the suicide of a depressed gay teenager, features celebrities reassuring depressed teens that things will get better. Recent reports from the Organisation for Economic Cooperation and Development and Toronto’s Center for Addiction and Mental Health, among others, have drawn attention to the need to deal with it.
But the taboo surrounding discussing depression on an inter-personal level, and especially in the workplace, remains.
Bill Wilkerson, co-chair of the round table along with Mulroney-era cabinet minister Michael Wilson —who has openly discussed the suicide of his son, who battle depression — says linking depression to other chronic conditions that have an identifiable impact on the workplace through absenteeism and health-care costs will help to remove the stigma.
“We’re trying to get to the point of saying, ‘look, this isn’t about mental illness, this is about brain function, our immune system, our cardio-vascular health, our recovery from cancer, our avoidance of Type 2 diabetes, our capacity to have productive brain function in an economy where brain skills will be required in three-quarters of all of the jobs coming on-stream in the next five to 10 years,” says Wilkerson. “This is a brain economy, depression is a brain disorder with profound implications for the systemic health of human beings and ironically the systemic health of an innovation-based economy.”
In 1941, Carl Karcher was a 24-year-old truck driver for a bakery. Impressed by the large numbers of buns he was delivering, he scrounged up $326 to buy a hot dog cart across from a Goodyear plant. And the war came.
So did millions of defense industry workers and their cars. And, soon, Southern California’s contribution to American cuisine — fast food. Including, eventually, hundreds of Carl’s Jr. restaurants. Karcher died in 2008, but his legacy, CKE Restaurants, survives. It would thrive, says CEO Andy Puzder, but for government’s comprehensive campaign against job creation.
CKE, with more than 3,200 restaurants (Carl’s Jr. and Hardee’s), has created 70,000 jobs, 21,000 directly and 49,000 with franchisees. The growth of those numbers will be inhibited by — among many government measures — Obamacare.
When CKE’s health-care advisers, citing Obamacare’s complexities, opacities and uncertainties, said that it would add between $7.3 million and $35.1 million to the company’s $12 million health-care costs in 2010, Puzder said: I need a number I can plan with. They guessed $18 million — twice what CKE spent last year building new restaurants. Obamacare must mean fewer restaurants.
And therefore fewer jobs. Each restaurant creates, on average, 25 jobs — and as much as 3.5 times that number of jobs in the community. (CKE spends about $1 billion a year on food and paper products, $175 million on advertising, $33 million on maintenance, etc.)
Puzder laughs about the liberal theory that businesses are not investing because they want to “punish Obama.” Rising health-care costs are, he says, just one uncertainty inhibiting expansion. Others are government policies raising fuel costs, which infect everything from air conditioning to the cost (including deliveries) of supplies, and the threat that the National Labor Relations Board will use regulations to impose something like “card check” in place of secret-ballot unionization elections.
CKE has about 720 California restaurants, in which 84 percent of the managers are minorities and 67 percent are women. CKE has, however, all but stopped building restaurants in this state because approvals and permits for establishing them can take up to two years, compared to as little as six weeks in Texas, and the cost to build one is $100,000 more than in Texas, where CKE is planning to open 300 new restaurants this decade.
CKE restaurants have 95 percent employee turnover in a year — not bad in this industry — and the health-care benefits under CKE’s current “mini-med” plans are capped in a way that makes them illegal under Obamacare. So CKE will have to convert many full-time employees to part-timers to limit the growth of its burdens under Obamacare.
In an economic climate of increasing uncertainties, Puzder says, one certainty is that many businesses now marginally profitable will disappear when Obamacare causes that margin to disappear. A second certainty is that “employers everywhere will be looking to reduce labor content in their business models as Obamacare makes employees unambiguously more expensive.”
According to the U.S. Small Business Administration, by 2008 the cost of federal regulations had reached $1.75 trillion. That was 14 percent of national income unavailable for job-creating investments. And that was more than 11,000 regulations ago.
Seventy years ago, the local health department complained that Karcher’s hot dog cart had no restroom facilities. He got help from a nearby gas station. A state agency made him pay $15 for workers’ compensation insurance. Another agency said that he owed more than the $326 cost of the cart in back sales taxes. For $100, a lawyer successfully argued that Karcher did not because his customers ate their hot dogs off the premises.
Time was, American businesses could surmount such regulatory officiousness. But government’s metabolic urge to boss people around has grown exponentially and today CKE’s California restaurants are governed by 57 categories of regulations. One compels employees and even managers to take breaks during the busiest hours, lest one of California’s 200,000 lawyers comes trolling for business at the expense of business.
Barack Obama has written that during his very brief sojourn in the private sector he felt like “a spy behind enemy lines.” Puzder knows what it feels like when gargantuan government is composed of multitudes of regulators who regard business as the enemy. And 22.9 million Americans who are unemployed, underemployed or too discouraged to look for employment know what it feels like to be collateral damage in the regulatory state’s war on business.