Economic Leadership Recovery Act        

Hi, today I am going to share with you how to view the economic transformation we are going through in an easy to understand language. I want this to be straightforward and easy for you.

To me, there are two types of economic transformations that cause some rethinking about livelihood. If it impacts a lot of people, an economic slowing or down turn can happen. Yet, recovering from these economic transformations requires change, no matter what.

The first is when an invention comes along that replaces a human job. We shall call this (Economics1.) The second is when an invention cuts costs and accelerates results over a period of time. We shall call this (Economics2.)

Economics1 example

For instance, in the early 70’s the big auto makers added robotics to certain areas of the car manufacturing plant assembly lines. When they added this upgraded technology to the plants, the people who did those jobs, before the robotics was implemented, lost their jobs forever. This is an example of an economics1 change. This meant that the person working that position had a few choices.
1) Work in another area
2) Find another job
3) Create another career
4) Retire if that option was available

That is pretty much all the choices they had. When a big industry makes that kind of innovation change, people have to change with it because there is not another option but to go through the change.

Economic2 example

Economic2 is a bit different. In this structure something happens that accelerates results and cuts costs over a period of time. For example, in the mid 80’s accounting was done by hand. It was a well paying job and accountants were needed everywhere. When computers hit the business scene, accounting and bookkeeping started to become an economics2 industry.

Software packages were developed that made bookkeeping easier, faster, more cost effective and more reliable than handmade reports. These software tools got better and better over a period of time and made accounting processes for companies easier and more cost effective over a period of time. Thus over that period of time, accountants and bookkeepers had less and less to do. This happened because the software developed started doing more of the reports and processes that bookkeepers were required to prepare for their clients.

Unemployment over a period of time

Instead of accountants and bookkeepers having to generate a report from scratch at an hourly rate of pay, they simply had to data enter numbers and the software would ask the accountant to select the report they wished to generate and then the computer spit out the chosen report in record time. Corporations saw this new software as fabulous because it delivered faster more accurate results for less money.

The dollar value of the bookkeeper’s work went down because essentially the level of human expertise the company had to hire went down. In some instances it went from being a college degree report generating position to a high school graduate data entry job. Thus salaries for this position fell from say $30 an hour to $17 an hour to $12 an hour. This happened to match the salary of the average data entry clerk vs. the average bookkeeper.

Wages dropping is subtle and done slowly

This is an economics 2 example. It’s subtle and if you are not paying attention to your industry you will not focus on it.

What you will focus on is the return of your investment and how your mutual fund company was great at picking companies that kept their costs low so that there were more profits and higher returns for you.

We were an asset based society where you learned the importance of managing your assets not your industry innovations.

During an economics2 phase, most jobs and workers are phased out slowly. As the new innovations are implemented, the old is phased out. One of the key elements of this economics2 phase is that software just continues to get better and packages upgrade and are less expensive over time and this continues today.

New economics2 changes affecting you

Also, there is a new form of economics2 that is making huge impactful changes in our livelihood and career choices that most are not aware of. This one factor is what we will focus on today because it affects so many other areas of livelihood.

In the mid 90’s we had a huge economics2 change that brought a lot of speculation, excitement, worry and wonder. The name of this economics2 change is called, “Globalization.” It doesn’t matter whether you like the game of globalization or not. It is here to stay, and learning what influences this market will help you make decisions about your livelihood and help you prepare and manage your upcoming unemployment.

Cutting cost means cutting you

This change meant that CEO’s and companies, in expensive labor force areas, could cut cost by outsourcing labor to countries that did not enforce labor laws, medical benefits costs, and taxes.

CEO’s and companies took advantage of those opportunities to lower those costs by outsourcing the customer service, factory and plant jobs to countries that did not enforce those costs.

This eliminated expense and created higher profits for share holders. These shareholders were occupied looking at their asset based wealth grow…so you were happy.

As our assets grew, because our returns on our investment looked great, we paid attention to how wealthy we all felt. We spent money like crazy on things that were not necessary but really fun to have or experience. Meanwhile, the economic2 innovations just kept growing and growing, getting easier and easier replacing all kinds of human functions.

This allows multi-million dollar businesses to function without any employee’s, without an office building, and all the office building expenses that go with it. No employee tax money is being collected, no interest on loans being paid because loans were not needed as much, and no jobs to provide. Jobs were being provided to a labor force that was much cheaper and this is what brings us to today.

Economic1 crisis

This has caused an economics1 situation. Your career may not be coming back at all. You’re being phased out over time. The job market has shrunk, salaries have shrunk, office buildings have shrunk, the tax bases have shrunk, the money the banks used to make from businesses has shrunk, and profit margins for leader CEO’s have gone insane. For those people there is so much money you can’t believe it because they have lowered costs and outsourced to global markets.

My point in saying all this is that how you make a livelihood has changed. Salaries will continue to get smaller not larger. Benefits will continue to dwindle to nothing or be so cost prohibitive that you won’t be able to afford them, and the middle class life you have enjoyed for such a long time is going through the biggest economic2 transformation ever.

The shrinking middle

The middle class will shrink very quickly now and there are only two sides and you have to choose one. You can choose to be poor or you can choose to be wealthy.

The middle class will be thinning to only a certain few industries such as health care or engineering, however, as software and technological advances become better and better over a period of time, these too will diminish in career profitability and stability.

The more these economics2 changes happen, the less taxes there are to pay or collect, thus government entitlements will be much smaller or not available. So, poor is going to be a very uncomfortable place to be.

Yet, the more these economics2 innovations happen, the more money certain types of leaders that seize those opportunities can make. Whether you are one of them or not is up to you and your ability to lead yourself there. Lots of money can be made by people like you after you learn how.

Seize the opportunity now

Anyone can learn how to do this and that includes you. Then you can have high profits with low expenses. This is an amazing time in history to become wealthy or poor; it really is your choice. No matter where you are now you can turn it around by simply knowing what is happening and being willing to make the change right now.

This is an incredible time to be alive with so many innovations and advances being created so quickly. My wish for you is to notice that as innovations are created, people must advance with them in order to seize these opportunities, and if you are not willing to advance…you will be poor.

I believe we cannot remain in the bubble we have lived in for so long and hope things will go back to status quo or normal, because they won’t. You must manage and prepare for your unemployment now. What will you do? What choices do you have? Just something to think about. Let’s talk tomorrow okay?…see you then.

As always, I would love to hear your comments and ask you to please forward this post by using the share the love tabs below.

 May you direct your dreams.

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