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October 06, 2009

Unemployment To Reach 10.5 Percent and a Recession every 7 years?

We're in the Great Recession, but at least it's not the Great Depression, said David M. Rubenstein, co-founder and managing director of the private equity firm The Carlyle Group, this afternoon at the World Business Forum. Before you begin to search for a society of dogs to live with instead of humans (and their troublesome financial system), take heart that it could be worse—well, worse in so far as at least you're not a character in the Grapes of Wrath.


I think I've noted in this blog before the helpful comment I gave to a former company of mine on a corporate feedback form. They asked what I thought of their pay structure, and I told them it reminded me of the Grapes of Wrath in that they could pay as low as they wanted because there was always someone, somewhere, willing to work harder for less money. 

It's kind of like that now, but Rubenstein points out that our unemployment rate of 9.8 percent isn't so bad compared to that experienced during The Depression. I can't remember the exact figure quoted, but unemployment was in the teens back then. Luckily not even Rubenstein predicts it will get that high, but he says we have at least one or two more months of the Great Recession, and that unemployment will probably reach 10.5 percent. Worse yet, I didn't know this (never bothered to think about it being a mostly liberal arts person), but U.S. history shows that recessions occur about once every 7 years. So, enjoy the recovery because in seven years you'll most likely go through a watered down version of what we're experiencing now. It's like "The Seven Year Itch," only not as glamorous or fun because it's about finances instead of Marilyn Monroe. 

Naturally, all this gloom and doom is taking it's toll, said Rubenstein. Consumers aren't as confident, and neither are individuals about their retirement savings. And maybe because the financial crisis was at least partly caused by economic deregulation or mismanagement, many are skeptical that government can better our financial woes. 

So, what to do about it?  Rubenstein says to invest in emerging markets such as India, China, and Brazil. He also says, among other things, to get real if you're in a losing industry or you've hitched your suffering workforce star to a losing company. He says not to be so foolhardy as to think you're enough of a genius to do a masterful turnaround job. You might be better off directing your energies elsewhere.

All this leads me to wonder what questions you should ask your executives and workforce to get your company back on track. How do you broach the subject of whether you're in a losing industry, and whether your company, on its current track, is losing?  Of course you have to be diplomatic, so you can't just say at your next meeting "Oh, you know what I was thinking?  That we're a bunch of losers around here."

Instead try organizing some in-office "retreats" that won't cost you any extra money, but will allow brainstorming time to decide how to push your company, for instance, into some of those emerging markets Rubenstein cited. Maybe there's a product you could market to China. Rubenstein says if you seek to be a global company, and you're not thinking often and hard about China, you're not doing business in the real world. 

On a personal development level, you might want to brush up the persuasion skills of your workers because, says Rubenstein, "we're all selling something."  Also—and this is more challenging—think about how happy your workers are. Rubenstein reminded us of the old wisdom that you have a far greater chance of success if you're doing something you like, so what can you do for your workforce in that regard?  At your next round of performance reviews, ask your managers to take a few minutes to ask employees about their career goals, and how they can help them get there. Ask them about what they most enjoy and most loathe about their jobs, and see what they can do to make the enjoyable tasks a bigger part of their work lives. 

We all may be bound every 7 years to experience Grapes of Wrath Lite, but it makes it so much better if you don't feel like you're laboring in your own Dust Bowl. In other words, see where the fertile fields are for your workers (and your company), and help them spend the better part of their day there. 

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