Mark Twain once wrote – “There is no sadder sight than a young pessimist, except an old optimist”. Still, I believe we need to occasionally look on the bright side. Given the state of the economy, plus recent natural disasters, that may be a bit of a challenge for some.

If that’s not enough to get you down – there’s the constant barrage of statistics. What’s a person to do when there’s hardly a week that goes by without some statistician warning us about this or that?

Who was it that said, “Figures don’t lie, but liars figure”?

Most of the recent “scientific” studies that have been done to warrant health warnings against certain lifestyle choices have been based on the study of statistics. Some of them, like tobacco and overexposure to ultraviolet (UV) radiation from the sun, are beneficial. But then there’s beer, wine, eggs, red meat, chocolate, etc, all of which are now known as both good and bad depending on how much you consume.

Then there’s the debate over the potentially devastating health effects of cell phones. Should we stop using our cell phones until they figure this one out, or is it just another Stephen King novel we are all living in? And, just recently another U.N. report on climate change, already under fire for the so called “Climate Gate” discoveries, took “heat” for apparently pulling numbers from studies unrelated to global warming, sponsored by activists for the World Wildlife Federation. It’s all getting a little out-of-hand, don’t you think?

Statistics: Can’t Live With Them – Can’t Live Without Them

Doom and gloom is often prophesied based simply on “statistical science”. Later, when real science, the act of observation and detection, comes to the forefront, many of these statistical warnings are discounted to one degree or another. Yet, we certainly need all those number crunchers, particularly when it comes to getting a handle on business and economic trends. For example:

• The national unemployment average has been hovering just above 10% for several months now. When you factor in the under-employed, and those that have given up on looking for a job, it’s around 17%, although much higher in some areas like Detroit where it’s closer to 45%. That’s a huge number and some economists are worried that the recovery may be stalling. It appears that those “green shoots”, which were being talked about late in the 3rd quarter of 09, apparently are not sprouting as quickly as hoped.

• U.S. productivity, however, weathered the recession well, growing 2.5 percent (in per hour terms) in 2009, according to The Conference Board report dated Jan. 21, 2010.

This increase in productivity was largely explained by dramatically reduced working hours that offset output decline (employment fell by 3.6 percent in 2009; hours worked per worker by 1.5 percent) as U.S. companies continue to find ways to do more with less.

European productivity growth turned negative in 2009, falling far behind the United States. Output per hour fell 1 percent in the Euro Area, whereas U.S. productivity growth remained remarkably strong,

growing 2.5 percent in 2009. U.S. productivity growth is projected at 3 percent for 2010.

 

Bart van Ark, chief economist of The Conference Board said “These are unusually large differences in productivity growth between the United States and Europe. U.S. employers have reacted much more strongly to the recession than their European counterparts in terms of cutting jobs and hours. In 2010, both Europe and the United States will see higher productivity growth coming out of recession. However, a jobless productivity recovery is the most likely scenario in both regions”.

 

• A record 1,046,539 persons were naturalized as U.S. citizens in 2008 (most current report). The leading countries of birth of the new citizens were Mexico, India and the Philippines. Due to the current scarcity of jobs in the U.S. there will most likely be a drop in visa applications. However, with a global recession in effect, demand will still be high.

Recent security and immigration-related legislation has called for increasing enforcement of existing laws with regard to illegal immigrants, building a barrier along some or all of the 2,000 mile U.S.-Mexico border, and creating a new guest worker program.

Throughout much of 2006/07, the country and Congress was immersed in a debate about these proposals. At this point, few of these proposals have become law, though a partial border fence was approved and is currently under construction. Migration to the U.S. will be increasingly difficult, expensive and dangerous for those who cross the United States borders illegally.

It’s a Matter of Perspective

There is some reason for optimism in the above numbers. First, the recession in the U.S. officially ended in the 4th quarter of 09; the stimulus plans are just beginning to take effect; and, the administration’s job creation strategy is now being seriously considered by both political parties and when approved, will, among other things, lower taxes on small businesses while increasing the opportunities for community banks to give loans to them. Small business is recognized as the engine that drives the U.S. economy.

U.S. productivity numbers are however, no mystery at all. In fact, if we were not all so worried and preoccupied with the economy, jobs, and international situations, we’d be bragging about our output per man-hour. It's stupendous, as companies continue to find ways to do more with less. Technology investments made a few years ago are paying off big for manufacturers and distributors.

And, finally, there’s all those new people pouring into the country. Now I know many of you are concerned that there may be a terrorist element in that number. So am I. However, the vast majority of those new Americans, legal and otherwise, are coming here because of opportunity. They come here even though the employment situation may be worsening and the jobs they find will be menial and poor paying by our standards. They come here because, from their perspective, the statistics are terrific.

While an influx of new residents from different cultures presents some challenges, the United States has always been energized by its immigrant populations. Former President Bill Clinton voiced support for immigrants, including immigrants from Asia and Latin America when he said that "America has constantly drawn strength and spirit from wave after wave of immigrants. They have proved to be the most restless, the most adventurous, the most innovative and industrious of people.”

On The Road to Recovery

Over the next many months we may continue to be involved in very difficult times economically and militarily. We may be in for some shocks, some ugly events. But, behind our actions overseas and our discussions at home we can all be confident about a few things.

One is that America's industrial might can provide for all and any security/military needs. The past decade’s advances in manufacturing technology and logistics systems as well as productivity mean that we will, once again, amaze the world with our ability to develop and deliver.

Once again, recent developments in material handling technology and systems will be on display in April at NA2010 and in March of 2011 at ProMat, and they are proof positive that when it comes to manufacturing and distribution, the technology revolution is continuing. Equipment and systems investments made today in automation will be part of the productivity and quality numbers coming out in the near future.

Final Thoughts

Consider what we've been through. The economy and the American people have past through some terrific shocks in just this past decade. Horribly successful terrorists attacks that brought down the Trade Towers and destroyed a section of the Pentagon killing thousands; hypocrisy and corruption in top business and banking management, and a burst bubble worth trillions in the stock market and real estate investments; any one of these would bring down most governments. We have moved on and we are, in typical American fashion, arguing and working our way to solutions.

It may be that the best source of optimism can be found in the millions of people who, by any means possible, legal or otherwise, want to participate in the American dream. Across the social-economic spectrum, for a variety of reasons, they look to the United States for a better life. They’ve lived elsewhere. They know. They don’t need a statistician to help them make their decision. They are betting their future, as well as the future of their families on the USA. It’s a very good bet - as it always has been, and will continue to be.

Agree or disagree with Holste's perspective? What would you add? Let us know your thoughts for publication in the SCDigest newsletter Feedback section, and on the website. Upon request, comments will be posted with the respondent's name or company withheld.

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