Some holiday cheer and reasons to be hopeful
It has been suggested that my most recent writing has been somewhat pessimistic about the future of the world. Those who know me understand I’m a pragmatic optimist so, in a nod to my preferred outlook and the holiday season, it is worth noting that the world really is feeling more optimistic.
In the last month alone, I’ve seen a steady stream of upbeat news: my old school’s (Fuqua School of Business) most recent CFO survey found that CFOs were significantly more optimistic than in recent years; the most recent CNBC poll noted that optimism of citizens in the US is at a ten-year high; and the Pew Research Center learned that across a sample of 32 countries, the vast majority of citizens are feeling better about their economies than they did in 2015 and 2016. In fact the positive Pew results came from some very diverse locations, such as the Netherlands, Poland, Russia, Indonesia and Ghana, all of which experienced a jump in excess of 20%. Why all the smiles?
Let’s start with the obvious things. Stock markets are broadly up around the world, with the Dow Jones, for example, continuing a steady 8 year rise to reach a level well above that before the global economic crisis. And corporate profits have been sustainably high since 2012. But not everyone benefits from an improved stock market or higher profits; in the US it’s limited to those who hold stock directly or in mutual funds, IRAs or 401Ks (about 54% of adults, according to Gallup). That does not account for the enhanced sense of the well-being of the less well-off.
Clearly, then, this optimism goes deeper than that. Unlike in previous decades, when the vast majority of productivity gains went to the higher end of the salary scale, the average person has benefited from this uptick. Since 2009 the average hourly wage has increased on a fairly continuous basis in the United States.
Not only that, but their perceived treatment by their employers seems to have improved, at least as measured by their own work satisfaction, as reported in the Gallup Work and Education Survey. Like the stock market, employee satisfaction has not only recovered from a severe drop following the market crash, but now surpasses pre-crash levels. A full 92% of US workers are completely or somewhat satisfied with their work.
But I think there’s another factor that goes beyond money and work. Many people were surprised by the political events of the last few years. For many, election results around the world and general instability at a geo-political level seemed alarming. Many feel that things are still dicey, but, the sky did not fall. The UK economy did not fail. The US system continued to perform as it is expected to. Not all elections went a single direction. Nuclear war has not broken out. The worst of people’s expectations were not realized and maybe this explains their increased optimism.
With this in mind, the statistic that I find most heartening as we approach the close of 2017 is that, according to Eurofound, more than 8 in 10 youth in the UK are hopeful for their future. Despite Brexit, their optimism is greater than for youth in countries which seem to have a very strong future such as Germany and Sweden. Maybe as we enter 2018 there is a lesson here: people have a remarkable resilience to respond to challenges they face and come out stronger on the other end as a result.
So, while I remain extremely concerned about the number of difficult issues confronting the world, ranging from growing disparity of wealth to loss of jobs to technology to climate change, I am optimistic that we will find ways to address them and as a result come out the other end more resilient. Unlike economic indicators that go up and down, human resilience is a force we can regularly depend on. That is a reason to smile.
