Pandemic Food Price Index (6/2020): You Can’t Always Get What You Want…

May of 2020 saw the inaugural edition of the Pandemic Food Price Index, a 37 item market basket of foodstuffs to measure the impact of the Pandemic on grocery store food prices.  Here are the results and observations for June, 2020.

  • The nominal cost of the 37 item basket, shown at the bottom, was $89.09 in June.  This was an increase of $.58 from the May 2020 baseline cost of $88.51.  The Pandemic FPI is now at 100.66:

(((89.09-88.51)/88.51)*100) + 100 = 100.66

  • An increase of .66% seems minor, but this is monthly and extrapolates to an annualized rate of 7.92%.
  • A basket of 37 items priced at three stores is a total item count of 111 individual items.  Of these 111 items, there were seven of the 111 not in stock at the time for an out-of-stock rate of 6.3%.  Note that in each of the seven items, there were still labels on the shelves so the items were still for sale but just not in stock at that moment.  This is in comparison to the three items out-of-stock in May, 2020 (rate of 2.7%).
  • Five of the seven out-of-stocks were at the largest, internationally owned grocer and involved three of the four Staple category items (Canola Oil, Sugar, Flour generics) and two of the three cereals (Frosted Flakes, Rice Chex generics).  In each of the cases however, there were other alternatives for sale so it really is a case of you can’t always get what you want…
  • The anomaly was a case of stealth inflation.  The local grocer was no longer offering the 32 ounce jar of generic grape jelly and had replaced it with an 18 ounce package at a lower price.  I recalculated the per ounce price at the 18 ounce package level to an equivalent price at the original 32 ounce and this recalculated amount was used in the Index.  The nominal impact is a price decrease of 36% for the lesser amount but the real impact, had the original package been used, would have been a 14% increase.
  • The meat stocks were plentiful and what was notable in June versus May was the presence of the three pound “chub” of ground beef.  These packages first appeared in my local markets in approximately 2014 and were produced from factory-style meat processing plants; I suspect that the grocers were introducing them in response to the declining purchasing power of their customers.  These items were absent when I did the initial pricing on May 2 and their absence was due to the issues with Covid exposures at the factory-style meat processing plants.

Comments

As I noted, an increase of .66% doesn’t seem like much but annualized to almost 8% in a nation in which the family income has been smashed and the Q1 GDP has dropped by 5%, it is highly problematic.  Fortunately, enhanced SNAP benefits are in place for the remainder of FY 2020 and WIC benefits are likewise enhanced through the end of September, 2021.  Where it is an immediate problem is for senior citizens relying upon their Social Security benefits.  Why?  Because the cost of food is not included in the calculations for determining the COLA increases that occur in the latter half of each year.  If the prices continue to rise, the effective purchasing power of the senior citizen will actually lessen as the COLA amounts for the past five years have averaged 1.34%.

The grocery shelves are not bare and in each of the cases that I noted, there were other options available.  Even toilet paper is back in each store, albeit in smaller package sizing.  Rice was there but typically in larger sized bags and even in April and May, there was rice available but it was in brands sold to the Hispanic community and hence in a separate aisle.  The generic brand staples (canola oil, sugar, flour) were missing in the one store and although the stocks were minimal in the other two as well, there were reasonable amounts of name brand items available.  And no, I’m not going to count the damned bags of flour.  The indication is thus that people are doing what they can to stretch their dollar as they hunker down.

The renewed presence of the lowest price per pound “chub” had a significant impact here.  Had I used even last month’s lowest per pound price for ground beef, the FPI would have had a June Index level of 101.52 versus the actual 100.66.  Extrapolating to an annualized rate, the impact would be a hypothetical 18.24% rise versus the present annualized rate of 7.92%.  But I have severe qualms about that since I know that those plants are operating under the aegis of the invoked Defense Production Act, despite increased infection rates for those in the meat packing plants because of work conditions.

And I wonder whether or not, were we asked as part of a communal sacrifice for the common good, we would be willing and able to forego so much meat as part of our diet.  It was what our great-great-grandparents did for the common good on the home front of the Second World War, sacrificing something for those on the front lines.  But in times of Pandemic, the front lines are here.

Pandemic FPI (6/2020)

 

Re-Boot: The Pandemic Food Price Index (FPI)

What is happening to the price of a market-basket of food due to the economic effects of the Covid-19 Pandemic upon:  (1) the upheaval in the supply chain; (2) the collapse in aggregate family income?

This two-pronged question is the reason for the resumption of the PracticalDad Price Index after an almost four year hiatus.  We know from the US Department of Labor’s report for April 2020 that food prices rose by the highest monthly amount in 46 years due to the supply chain upheaval.  It’s bad, but it only gives for general food groups (meats, vegetables, etc) and doesn’t go into further depth than that.  This kind of information will also miss the impact of the supply chain’s efforts to mitigate the cost increases and attempt to keep foods affordable for the shopper.

The modified index (for the original Index introduction, see here) will focus solely upon the original 37 foodstuff items from the original index, broken into categories of Meat, Dairy, Bread, Staples, Cereal, Produce and Grocery items.  The pricing will occur within the first five days of each month at the same three groceries, each unrelated to one another.  The groceries represent three separate tiers of size:  local, Mid-Atlantic regional chain, international chain.  The prices for the items from the three stores will be averaged and the the mean prices added to find the total cost for the composite basket.  The total for the composite basket as of the pricing for May, 2020 will serve as the index baseline of 100.  The total for the month composite baskets moving forward will be likewise totaled and their results shown as a comparison to the initial index level of 100.

Caveats:

  1.  This is not meant to be representative of national trends.  This is three store survey in a single county and is meant to be a data point in a larger picture.
  2. I will discontinue the Index if I believe that the supply chain is so kinked that I cannot present an accurate picture in good faith.
  3. I cannot objectively verify inventory quantity within the stores but I can provide anecdotal commentary about what I am seeing and that can serve as anecdotal evidence.
  4. Within the past month, I have noted that products that are simply gone from the supply chain have not only disappeared from the shelves , but the shelf labels themselves have been removed or covered over with blank labels.  If the item is not on the shelves but the label is present, I will treat that item as temporarily out of stock and report the price as listed on the shelf label.
  5. The items priced are almost all store- or off-brand, which would be purchased by a shopper attempting to extend a fixed food budget.  There are rare instances in the Index in which a name-brand product is used and that same product will be priced moving forward to assure consistency.
  6. Pricing will occur, whenever possible, in the morning.
  7. If new alternatives are offered for an item, as happened continuously in the old Index, that alternative will be used then and afterwards to assure consistency.  The same will happen with package sizing.

The May 2020 FPI results are shown in the linked pdf below.  Note that a few items are not listed in two columns; these items were part of the original survey and they were not available in those stores, even searching for shelf labels.

The Total Cost of the May 2020 FPI is $88.51 and that amount will serve as the Index level of 100.

FPI Base Results – 5/20

 

 

 

Life in a Time of Corona: Accommodations on “Re-Opening”

Mr. Murdoch, what are your orders?

Full ahead and no course change, Mr. Hichens.  Let’s see if Titanic lives up to her press!

It’s abundantly clear that the social distancing effort will be abandoned and the process of “re-opening” will move ahead, damn the cost.  The question now is this:  what accommodations should we make to live in a society which demands that life returns to pre-pandemic patterns despite the ongoing presence of the virus that disrupted those patterns in the first place?

My family’s personal adjustments will be driven by what we decide because there is no longer any meaningful public health guidance from the government.  The incompetency is glaring and stunning, all the money that we have invested over decades in a federal public health infrastructure to help manage such events completely pissed away.  After ignoring and downplaying the virus so that the impact was worsened, the President finally issued a framework for managing a return of societal functions over a two week period of virus metric declines.  Only a day later, he undermined it with a series of tweets to “Liberate” three separate states from social distancing and lockdown measures.  That none of these three states even came close to meeting the new guidelines was irrelevant.

The majority of states are now moving ahead with “re-opening” despite any lack of control of the virus that even meets the President’s own metrics.  Neither is there any meaningful testing to ascertain the spread of the virus until it shows up to burn through through a locality’s hospitals.  Indeed, the President has effectively removed any public health aspect from this process by shelving the guidelines set out by the CDC.  The guidance for a public health pandemic is now managed solely by political and economic criteria.

What is happening is, in a sense, a darkly hilarious irony.  A verbose and gun-toting minority – in their fear of any potential abridgment of their preferred freedoms under the Bill of Rights – embraces and lifts up a Chief Executive who has actively transferred all responsibility for management and action for a national crisis to the states, resurrecting a style of government which existed last under the post-revolutionary Articles of Confederation.

You remember that one?  Yeah, that one.

The one without a Bill of Rights.

Because things can’t get any more local than the molecular level of the family, what might we consider?  The important point to remember is that we must somehow lessen our risk and decrease our exposure to the virus if we cannot socially distance or isolate ourselves.

First, consider how to manage with elderly parents and other relatives.  What are the contact and exposure rules if you have to visit or take them to appointments?  What is the status of their paperwork and executors?  What is the default plan in the event of your own illness?

Second, make sure that the personal affairs are in order.  Take to heart the philosophy of The Next Man Up.  Assure that the wills and various powers of attorney are in order should they have to be utilized.  This also means considering the inclusion of secondary executors and decision-makers.  Note the critical passwords and pass that information to your executor.  While the virus most impacts the elderly and immune-compromised,  there are all age levels in the ICU and even children are being affected with their own issues.

Third, make a re-usable mask part of the daily routine.  The notion of a truly disposable mask is dead as even healthcare providers are having to extend their usage for lack of availability.  I don’t know enough about the availability of gloves but anticipate that I will save those for high traffic public areas such as grocery stores.

Fourth, assure that there is hand sanitizer in every vehicle and use it after each venture out of the vehicle.  That also means finding an alternative source for hand sanitizer and re-using the existing bottles if the replacement sanitizer comes in large quantity containers.

Fifth, consider the use of a small notebook in the glove compartment to note where I’ve been on different days in the event that I contract Covid-19 and contact tracing efforts are made.

Sixth, broaden the family’s food supply chain so that there’s not a complete dependence on the grocery store.  If possible, plant a garden or join a CSA to provide a wider access to a dependable source of food.  Even within the grocery store, consider widening your preferential supply chain by purchasing food items not being purchased by everyone else.

Seventh, what is the process for returning home from work or another outside exposure?  This is a real thing for healthcare workers in hard-hit areas because they don’t want to expose their own families.  What processes should you adopt within the household?  It might range from disrobing in the garage and leaving clothing in the laundry room prior to a shower, to a simple hand-washing upon returning home.

Eighth, decide whether the trip or errand is worth the exposure.  Do a more thorough job of planning so that only one trip is required instead of multiple return trips.  If it isn’t necessary, is it sufficiently important enough to justify the exposure?  Visiting a movie theater might not be worth the risk, but traveling out of state to take a kid to college for the first time?  That would likely be worth the risk with proper precautions.  Assuming that it happens, of course.

Ninth, reconsider the shopping habits.  In this environment, ignore the economic establishment thinking that the public is hoarding cash and ratchet down the discretionary spending to what is necessary.  If you do have money available for discretionary spending, then give serious thought to directing it to the food banks that are now serving a significant portion of our citizenry.  Consider another charity or simply rebuild your own finances to your comfort level.  If you shop online to avoid exposure in a bricks-and-mortar store, decide if Amazon is the go-to site or if it’s possible to spread that cash to other online stores instead of further enriching Jeff Bezos.

This is meant to be a point-of-departure for the planning moving forward instead of an exhaustive and comprehensive list.  Consider your own circumstances and risk tolerances.  But do it now so that you are ready for when the re-opening takes place.

Resurrecting the Price Index: Rationale

We are again in Terra Incognita and our only guides are a few accumulated studies of a hundred year-old predecessor pandemic.  This is like trying to find the most efficient route from New York to Salt Lake City using a 1932 Rand McNally map.  The fear is palpable and not least of which is the concern about the national food supply, especially since John Tyson of Tyson Foods took out full page ads warning that the food supply chain was breaking.  While this piece was going national, there were also warnings about the virus having an inflationary impact on food prices.  Are there serious problems?  Absolutely.  Are they as terrible and fear-inducing as it appears?  Not necessarily.

Societal shocks happen and they are always followed by fear, if not outright panic.  Our history is that we have had problems with food prices and supply before, most notably during the Second World War, and we managed to survive.  What is different is that Franklin Roosevelt’s government had sufficiently advanced notice that there would be another war and had begun thinking ahead.  Today?  Well…that depends to whom you are talking.  The simple reality is that there are no easily ascertainable data points to assess developments at the retail grocery level and the lack of data feeds uncertainty and fear.

This is why I am resurrecting the original PracticalDad Price Index – which I calculated monthly from November 2010 to September 2016 – and modifying it to follow activity within the grocery stores.  The original index was created as a kitchen table project to ascertain the impact of the Federal Reserve’s novel Quantitative Easing programs upon food prices in my vicinity.  It was calculated both to satisfy my own curiosity and to serve as a small data point for a larger online community.  It’s one thing to read wonkery, but another to actually see it in concrete terms.

The modified market basket, methodology and results will be covered at length in the next article.  For now, let’s go from pondering questions of inflation at the molecular level of three local grocery stores to a more global perspective on prices and inflation.

Understand that inflation is simply the decrease in a currency’s value, as measured by it’s purchasing power for goods and services.  There are three principal reasons for this.

First, there is demand, such that people are willing to spend more for that item with the supply of that item being relatively constant.  The stunning rise of a single Bitcoin is an example of that but that glorious moment in our history when Americans believed that a house was an ever-increasing investment works as well.  Our realization that a house wasn’t so is a good example of the inverse, deflation.

Second, an inflationary or deflationary effect can arise out of a good’s supply.

The oil supply shock of the 1973 OPEC oil embargo caused prices to spike simply because there was an immediate halt to the flow of oil to the US with no corresponding decrease in demand to offset it.  In economics parlance, this was a simple shift in the supply curve to the left with demand being equal.  The shift from Intersection A to Intersection B resulted in a rise from a price of P1 to a price of P2.  Real life, unfortunately, was quite a bit messier.

Finally, the purchasing power of a currency can be affected simply by the sheer amount of money available within the system.  What most have forgotten is that inflation for food – particularly meats – was already an issue prior to the 1973 Embargo.

There were calls by housewives for “Meatless Meals” as a push-back against grocers and protests broke out across the country.  Housewives blamed grocers and the grocers pointed their fingers at farmers, who kicked the can of blame to the feed producers.  Where did the final responsibility rest amidst this idiot firing squad?  Actually, it was a result of the persistent and signficant increase in the amount of money within the economy starting in the 1960s.  The Federal Reserve itself terms that era as The Great Inflation and notes that the period began in 1965 and ended in 1982.  Why those years?  Because 1965 saw the beginning of LBJ’s Vietnam build-up as well as the inception of his Great Society programs.  And 1982?  That’s when then-Fed Chairman Paul Volcker turned off the tap and ratcheted interest rates to nosebleed levels to rein in the resultant inflation.

There is nobody – absolutely nobody – who can tell how this plays out in the grocery aisles.  There are competing articles about incipient inflation and incipient deflation, which is really where the mass of Americans have been stuck since 2009.  So take a side and argue away because each argument has merit and honestly, the act of arguing serves nothing better than to satisfy a primal intellectual urge, a form of mental masturbation.

What this C-19 Pandemic has managed to do however, is create a situation in which all three factors are now simultaneously in play amidst the real economy.  In the short term, the supply of specific food groups is curtailed and all things being equal, there should be a spike in the prices for those groups.  But all things are not equal here because while there’s the supply question, the American people have suffered a cataclysmic – and that’s an appropriate word for these circumstances – demand shock in loss of income, strained as it already was for the past decade.  Refer back to the Supply/Demand chart shown above.  The family income supported Demand curve hasn’t so much been shifted left as it’s been tossed into the bottom corner like a broken corpse.

Our present drama is playing out amidst these first two factors of compromised Food Supply and cratered Family Income, contesting one another like fighters in the late rounds of a championship bout.

But the third factor, the Money Supply, is waiting quietly outside of the ring and that is what literally awakens me on the occasional night.  In the wake of the 2008 Financial Crisis, the Fed’s three QE programs created trillions of dollars and in the process extended the Fed’s balance sheet to amounts previously unimagined.

Growth in M1 (1975 – 2015)

That it didn’t tear Joe Six-Pack a new one is a testament only to the fact that the economic, legislative and electoral policies since the repeal of Glass-Steagall literally created two stand-alone economies:  one awash in wealth for the uber-wealthy and another that diminishes the American Middle Class a little bit more each day.

My wife once asked me, if the goal was to create inflation, where is it?  The inflation is there.  It is encased in the equity markets and the prices for exclusive properties in places like New York, San Francisco, the Hamptons and Potomac, Maryland.  It is encrusted in the wealth accrued to billionaires and near-billionaires and their purchases of art, excess consumption and doom shelters in New Zealand.  It is wrapped up in projects such as Jeff Bezos’ effort to create a ten thousand year clock as a monument to long-term thinking, the vicious irony being that it’s financed by a predatory reliance on short-term quarterly results.  And the inflation is locked away in the purchases of items of alternate value such as cryptocurrencies and precious metals, which are now physically almost unobtainable despite having a stable paper price.  Go figure that one out.

As global economies pursued this race to the bottom with their respective currency values, the Fed acknowledged that it had to begin raising interest rates to something remotely approaching historic normalcy.  It’s not surprising that the stock market became cranky during this period because it’s flow of cheap credit was threatened.  There’s a reason that President Trump demanded zero and negative rates from the Fed, regardless of the damage that these rates do to real activity.  But in the immediate aftermath of the Pandemic’s onset, the response was to salvage the economy by again dropping rates and extending lifelines to a wide variety of corporate and financial entities.  The result of these lifelines from the government and the Fed?  $6 Trillion in the course of the two month period ending April 15, 2020.  That money is now coursing through the bond and equity markets, which have stabilized since the roll-out of the various programs.

Yet the average American gets a one-time check of $1200 with an additional $500 per child.

At the end of the day however, our economy is built upon the premise that Americans must spend for any recovery to happen.  That’s why the Administration pushes to get the economy re-opened and money flowing, even though the infection and fatality numbers in many areas still fail the President’s own criteria for re-opening.  That is why we hear establishment commentary conflating legitimate saving with ridiculous terms like “hoarding cash”.  Sure dude, I can’t cover a $400 car repair but yeah, I’m good for a beach week to help the economy.  Ultimately, the average American will not be able to consume unless the Federal Government renders real and meaningful assistance and the two bifurcated economies are rejoined in even the loosest fashion.  Whether it is debt relief, guaranteed income or any number of other programs that remove the noose from the neck of the 99% and/or ratchet down upon the 1%, the economies must be rejoined and a re-balancing must take place.

That’s when the trillions of dollars set loose since 2009 are liable to return.  If it happens, that money will begin flowing through the real economy and we will be set up for a replay of The Great Inflation, except that the Americans of this generation won’t have the financial health of their great-grandparents to survive.  The resultant inflation will ignite and what we witness in the next year will be child’s play in comparison.

It is possible that these fears won’t be realized.  But make no mistake that the American economy – and the political body – is seriously ill.  One of the criticisms of the repeated actions of the Fed’s QE programs is that it’s akin to treating cancer with copious amounts of painkillers.  The patient feels better but the cancer continues unabated.  At some point, the treatment must occur in all of its unpleasantness.  As a survivor of cancer and any number of other medical issues, I attest to the value of a painkiller in the moment; I also understood in the moment that my survival was predicated upon a simple submission to the treatment and all of the side-effects.

Apart from the sheer ability to draw breath for yet another day, there’s an upside to survival.  It is the understanding that despite the worst fears in the moment, they are at that time, only fears and not guaranteed realities.  You learn to acknowledge the fears and set them aside, managing your life one step at a time and taking each step as it comes.  The fears are there.  They are real.  But until they actually occur, they can be managed one step at a time.

So it will go in the grocery store.  We will manage as best that we can because that is ultimately all that we can do:  our best.  In the meantime, I will work to put a recognizable face to the abstract notion of the cost of food and the reality of the supply chain.  That will be the next article:  The new Market-basket.

 

After High School: Helping Find the Path

I wish that I had known that I had the option to go to trade school…

It was a simple comment uttered by Eldest as were driving together, her toddler daughter buckled in behind us.  It was also one of those remarks that grabs you by the scruff of your cerebellum and shakes loose an unheard huh?  She was quick to note that that she was thankful for her education – a Bachelor’s degree – but increasingly she had found that she enjoyed the process and reward of working with her hands.  I took – take – no offense despite the mental response but it’s a comment that has raised a larger question in the past several months:  How do we, as parents, help our kids ascertain their educational path after high school?

The question is especially germane today.  It’s now clear that some form of further education is necessary for most to avoid a lifetime of minimum wage jobs, but the pathway for such a crucial life decision is booby-trapped for many.  The tripwire is that higher education – Big Ed, as an acquaintance referred to it – is a business that requires a steady stream of bodies to fill the seats of the lecture halls.  The Claymore mine is the realization that there’s a clear discrepancy between the living-wage jobs available and the education required for hiring.  We’ve turned out a plethora of liberal arts degrees but there are few of those graduates with the skill set necessary to run a CNC machine.  The Punji stick is that the decline of the middle-class family has shifted the responsibility for educational financing back to the student herself; the likely accumulation of debt will eliminate the opportunity to repeat the process again.  Don’t hold your breath if you’re waiting for any college to say we’d love to have you here but we’re gonna give you a pass because honestly, it’s too much debt for you to handle.  That depressing commentary will have to come from you.

Full disclosure:  We have delivered this message to all three of our children and doing so sucks.  Hard.

I’ve thought about Eldest’s comment repeatedly in the ensuing months.  My second immediate thought was a defensive yes, you could always have opted for trade school but that’s really not the truth.  It’s not the truth because the trades weren’t a pathway made clear to her as an option through the myriad conversations across the tween and teen years.  My mantra from her middle school years starting in 2007 was we have to get you educated with as little debt as humanly possible; I was looking at the trends and numbers and recognized that student debt could be a serious impediment to a decent adulthood.  I could follow the economic news and extrapolate that back to my family at the molecular level of the economy.  I could even see that the living wage jobs were swinging back to a STEM orientation and skilled manufacturing.  But the simple reality was that the skill set that I knew, with which both my wife and I were raised, was rooted within the route of college and the liberal arts and that was the consequent focus with our kids.  My own upbringing was in a corporate mid-management level household and in my teen years, the parental conversation was to push for a degree that enabled me to make a living for myself.  It was what my parents knew.  My father was a product of the mid-20th century corporate environment and from his viewpoint, and my mother’s by extension, there were always going to be corporations that would afford a reliable income and retirement to dependable, smart employees.  My final college decision was based upon a school with both strong journalism and business programs.

Many of our life choices are informed by what we learned in our upbringing.  Working with my hands was not a significant part of my early life.  I helped my father remodel the family basement and learned to perform essential maintenance upon my car but that was stuff that my parents considered what any functioning adult should know.  There were other opportunities afforded to me by my father but I didn’t find them of interest and he didn’t push me to learn.  When I did talk to him about following him into computers during my teens, his literal response was Hell, no.  I can teach a goddamned monkey to write programming but I can’t teach one to write a proper paragraph or speak in public.  So it was the liberal arts for me, which was good because I found in college that I was, in some respects, dumber than a goddamned monkey.

So, what if I’m raising a child amidst a time of tremendous change?  What if my skill sets are not applicable to an economy in flux?  Like any other part of parenthood, there are few exact answers but I will offer the following.

First, remember that there’s a goal to parenthood:  you are raising your child to to walk out the door and support herself.  It’s the goal from the first delivery room cry and one that threads throughout her years with you.  What it means is that you don’t wait until her junior year in high school to attend a college financing night and then ask her so, whaddayawannado?  I’m not saying that it’s the credo that you tell yourself every morning when you look in the mirror but it is something that remains within the back of your mind, especially as she ages and moves further along to more diverse options within the educational system.

You must become intentional in your parenting.

Second, you have to pay greater attention to the culture and politics around you.  Foremost, understand the difference between news and news commentary and act accordingly.  It’s telling that during the past week of this Covid-19 pandemic, the most watched news programming is now ABC Evening News and not the news networks.  Pay attention to different sources of information and check for veracity.  It’s time-consuming but the good news is that we now an insane amount of information available instantaneously within our phone’s grasp.  Or you take to heart what my father said to me routinely:  pull your head out of your ass and look around.

Third, you’re going to have to be almost countercultural with your child in terms of screen and electronic media consumption.  The hours spent in front of a screen have obviously increased and there is little to indicate that the trend will reverse anytime soon and it will simply have to be part of your routine to monitor platforms and hours and listen to her kvetch around boredom (despite the simple fact that there can be value in children contending with boredom).  But it’s crucial that she learn to pay attention to the world around her and she won’t do that immersed in a screen.

Fourth, try to provide a wider variety of opportunities for her.  If you know hunting and gardening, then do those things with her.  But don’t be shy about crossing things up and taking her to an art exhibition either.  A large part of parenting is moving outside of your comfort zone.  An inveterate reader?  Great.  Read to her and then go hiking with her.  It not only provides a wider perspective of the world but also an opportunity to appreciate her budding personality.  One of the eccentricities of the past several decades is the proliferation of expensive advanced-instruction youth sport leagues.  The catastrophic loss of jobs and income from this pandemic is going to put a crimp in that business model and the opportunities will most likely devolve back to the parent coached/run Little League model.  It’s going to be incumbent upon you as a parent to make those opportunities happen, even if you have no experience with that.  Honestly, some of the best coaching that any of my kids had were parents with no previous experience.  Thank you, Rob, Jeff and Scott, wherever you are.

Fifth, figure out how you want to handle praise and criticism.  The first is critical for toddlers and small children but how are you going to begin balancing the two as she grows?  Boundless praise is meaningless and boundless criticism is fatal.  Ascertain the development norms for age levels and move from there.  Think about your style of delivering each and what you and your partner provide.  My kids learned that if they really wanted to parse performance for constructive criticism, the go-to person was my wife.  I, on the other hand, actually gave at least one of my kids a rousing comment of Don’t Suck before games.

Sixth, pay attention to the guidance and course suggestions that she will receive from school, especially as she ages.  Parents and teachers are natural allies but systems are built to serve the large majority of students and there are liable to be instances in which she is not part of that majority and will not be served by the recommendations.  Pay attention to what she brings home and listen to what she’s saying, then don’t be shy about calling to verify what you’re hearing.  Kids commonly mangle what they’ve been told but there can be circumstances in which they are absolutely correct.  This will come into play with course selections and loads when she’s older.  Fortunately, our experiences have been positive and the administration has been willing to work with us on multiple occasions.

But it wouldn’t have if we had missed the occasions.

Seventh, let her fail and hold her accountable for failure.  Be clear about your expectations and then do your best to hold her accountable.  It’s an immensely tricky and subjective topic:  Are my expectations reasonable?  Are the repercussions reasonable?  Are there legitimate mitigating circumstances?  How do you respond if you mishandle it (and believe me, I have done that)?  The corollary is that you should be willing to share some of your own screw-ups.  There is plenty of commentary about developing resiliency in kids but I think that the most critical element is learning that mistakes need not be terminal and that they can be overcome.

Finally, just because you believe that you are deficient in something doesn’t mean that she will be.  Part of the joy – the adventure – of being a parent is watching your child develop into the adult that she becomes.  If she comes to you with the wish to do something with which you are aren’t familiar, or just dislike, don’t automatically dismiss it.  If possible, find an opportunity to let her experience that thing with someone who is both capable and trustworthy.

I’m sure that you’ll come up with other points after reading this, since this is truly only a point of departure.  But remember the takeaway:  you, more than anyone else, have the critical role in helping her ascertain her future path.  The capacity to fund it, fully or even partially, is irrelevant.  What matters is that through the next eighteen years of her life, you and your partner will be the ones to raise and guide her, who know the fullest extent of her capabilities and have her true best interests at heart.  And the best interest is this:  allowing her to enter adulthood as a productive and moral adult with the capacity to move ahead in her life.

After that, the rest is on her.

Notes on the Supply Chain

As the country leans into a lockdown and fear intensifies, there is another side-bar conversation about the strength and/or fragility of our supply chains.  Our out-sourcing of pharma and manufacturing has bitten us in profound ways but apart from ventilators and PPE, that is a step removed for many.  The immediate concern for most pertains to the food supply chain, which adds yet another layer of tension to an already fearful scenario.  Large numbers of people now enter the grocery store intent on finding what they can before they are potentially gob-smacked with someone’s aerosolized germs.  But what is notable about this grocery scenario and can we draw inferences for moving forward?

Yes, there are.

Let me start by explaining my background.  First, I have not only been the stay-at-home parent who has done the bulk of the shopping and cooking for that time, but I am also a data-driven economics geek.  My wife, BH, now takes a greater role than earlier and much on the generated lists now emanate from her facile mind.  But in the early years of toddlers and small children, this was predominantly my responsibility.

Where this merged with economics was in 2009-2010, in the aftermath of the Financial Crisis and deep recession.  At that moment, the Federal Reserve Chairman was Benjamin Bernanke and it was clear that The Powers That Be had advance notice of problems at his 2006 start; his area of academic expertise was in the errors of the 1929 Fed in responding to that year’s Depression.  Bernanke had argued that the Fed exacerbated the stock market collapse by failing to provide liquidity for the market as it  struggled.  His response, unproven and academic, was that the Fed should have provided as much liquidity as possible and the collapse in late 2008 provided the opportunity to test his theory by supplying liquidity via the first of multiple rounds of Quantitative Easing.  The debate, loud and rancorous on Economics and Finance blogs, was whether this untested theory would work or instead spark rounds of runaway inflation.  My own questions went to how this would affect my own family.  Because I was involved in the establishment of a local cost-of-living survey in my distant past and had spent time conferring with its national creators, I decided to lever this experience into the creation of a kitchen table project, the PracticalDad Price Index.

The Index kicked off in November 2010 and focused upon a market basket of 47 common grocery items.  My intent was to see what happened to the prices of this local basket as the QE program – and its successors – rolled through the economy.  It continued monthly until  personal circumstances dictated it’s ending in September 2016.  An offshoot of this focus upon pricing for almost six years was a new appreciation for the food supply chain.  It’s not typically notable unless something is wildly amiss, such as a run on toilet paper in a pandemic but over that span, there were distinct changes in the grocery supply chain as grocers and suppliers adjusted to the ongoing decline in purchasing power by a weakening American consumer.  What is notable about the supply chain?

First, the name itself is misleading.  We talk about the supply chain as though it was a singular monolithic entity with a single controller, but it isn’t.  The supply chain is a dynamic – almost organic – entity, involving the input of hundreds and thousands of retailers and suppliers in a geographically and economically diverse nation.  It evolves over time to respond to the data fed to it via market and economic research and the sheer volume of literally billions of transactions involving an untold number of products at different price points.  It is continually changing as grocers and producers meet consumer changes in spending power, habits and trends.  Some entities fail in bankruptcy or are taken over by competitors.  Others offer cheaper alternatives for sale to the consumer.  The point is that it can and does change in real time.  Personally, I don’t envision so much of a chain as the visible sinews and tendons of the economic body working both individually and collectively at the same time.  One sinew would be dairy and another produce, yet others involving meat sources and consumer non-durables such as health and beauty products.  Each sinew answers to distinct inputs and trends with the collective result of an economy reliably providing needed goods to the consumers.

Second, the supply chain is built to respond reliably within a certain timeframe BUT the pandemic has shortened that ruinously.  The inputs that drive the process are now wildly disordered and the processes are momentarily overwhelmed.  The consumer, already declining, has had a catastrophic loss of income.  Entire sectors of the economy are suddenly and completely closed.  There is an immense and out-sized need for certain items, particularly related to disinfectants and cleaners, that utterly outstrips the ability of those sinews to meet those needs.  There is concern that the food sinews will be compromised for fear of viral infection among those workers.  This doesn’t even touch upon toilet paper, the disappearance of which suggests that most Americans believe Covid-19 will completely deforest the continental United States.

It was reported this week that dairy farmers in some regions were forced to dump raw milk, an infuriating development when millions are suddenly unemployed and food banks increasingly stressed.  My original take was that it reflected a collapse in dairy pricing, as occurred during the 1929 Depression; in that period, farmers and herdsmen destroyed crops and dumped milk because it was the only way to bring supply into equilibrium with a break-even point that supported even minimal prices.  Another article explained the rationale behind the decision to dump and while immensely frustrating, it makes sense.  In the Great Depression, episodes of dumping only occurred after years of being mired amidst years of poverty that wouldn’t support even minimal prices.  This episode is founded again upon the concept of time; the inability of dairy producers to find the packaging that would allow the product to come to market to meet the suddenly soaring demand.  The supply chain is not built for and cannot adapt to a shortened time frame.

Third, the factor of time now also drives many of our shopping habits.  American workers and families have felt the pinch of demands upon time and this has carried over to the grocery shelves.  Many products are now processed in some way or pre-packaged with the intent of minimizing the time required to cook and serve.  The cost for such products however, is driven upwards because the much of the labor for preparation has been taken up into the manufacturing process.  In essence, time truly is money and it’s a trade-off that many Americans have made for decades.

Fourth, observations from recent grocery trips indicate several things.

  • The scarcest items are those that either require the least amount of household labor to prepare or require a higher amount of pre-market processing or travel in order to bring to the shelves.
  • The produce sections at the entrances of multiple groceries have been consistently well-stocked, except for lettuce (which is hilarious since my wife routinely reminds me that lettuce is mostly water and the least-vegetable vegetable on the planet).  I have been surprised to find that bananas and citrus are still plentiful although that might change as the travel network degrades.
  • Canned goods have been in persistently high demand for their long shelf life but they have remained available; this is liable to change if the virus depletes the workforce in the plants.  Likewise for canned soups, pastas and sauces, peanut butters and orange juice.  There are instances in which there are less popular types of canned vegetables or beans in greater quantity as people ignore them for the more commonly preferred types.
  • Non-dairy and specialty milks (Lactaid/soy and almond) have been depleted but there has been a reasonable supply of locally sourced standard milk (whole, 2%, non-fat).  Likewise for yogurts and cheeses.  Specialty yogurts requiring greater processing are depleted while simpler yogurts have been there in sufficient amounts.  Locally sourced and block cheeses are available while the shredded variety is more depleted.
  • The meat cases were sporadic.  I’d noted lesser amounts of ground beef and boneless/skinless chicken while there were still sufficient amounts of other meats.  This observation was confirmed on the grocer’s website with the note that price was higher and availability more limited but that this should remedy itself within the near future.  Eggs were in sufficient amounts but the price per dozen had almost doubled and the grocer noted that that should revert back to norm shortly.
  • Breads were completely out of whack as those products requiring further processing are in short supply:  Schmidt’s 647 loaves are a prime example.  Other popular standards were sold out and one local grocer was replacing them with simply store baked white bread loaves.  My experience with one of those was that it grew mold far more quickly than its commercial bakery opposite, indicating a lack of preservatives.
  • While there’s been consistently brisk movement in canned vegetables, I noted on occasions that the 19th century predecessor, glass jars of pickled vegetables, were almost untouched.

What are the takeaways moving forward?  I’m operating under the premise that this pandemic will come in waves, like it’s 1918 Spanish Flu epidemic, and is likely to last into 2021 before ending.

First, the supply chain will reassert itself and adapt to the new conditions of problematic supply/processing and fewer consumer dollars.  The gist will be to save dollars by shifting the labor cost back out of the factory and into the household.  For example, instead of spending money on highly specialized yogurts, consumers will opt instead to purchase the simpler variety and add their own fruit or flavoring.  Instead of spending on canned beans, consumers will opt to reassert their time in the kitchen by remembering to put dry beans in a pot of water the evening before cooking.  Food preparation will become a more deliberative and time intensive activity as it was for our great-grandparents and forebears.

Second, consciously or not, people will begin to expand their own food supply chains so that they aren’t reliant on a grocery store.  I expect a return to gardening with the rise of the Corona Garden, much as the Second World War saw the rise of the Victory Garden.  As stay-at-home orders have rolled out across the country, there has been a significant increase in seed sales as well as a near sell-out of chicks.  Communities are likely to follow their 1970s  predecessors and set aside lands for more community gardens for those who do not have sufficient personal space to support a garden.  Another example of this would be our joining a CSA last year for produce, cheese and eggs.

Expand your supply chain within the store itself.  Seek out alternative foods that are more plentiful than the standards and try them.  Middle is presently back in the household for the duration.  When he joined me the other week at the store, we were discussing his new appreciation for Indian and Halal and when we went to the small foreign food section, it was almost fully stocked with rices, sauces, spices and chickpeas.  And yeah, the guy did a creditable job on an Indian meal.  Think of it as an adventure if you’re an optimist and a you’ll eat it and you’ll like it experience if you’re a pessimist.

Third, take time to do more planning.  Consider your menu choices as you walk through the next one to two weeks and buy accordingly.  As a society, we will no longer have the money nor the inclination to meander through a grocery store browsing for the next great impulse buy.  I suspect that lingering will be a thing of the past in stores.

Finally, be mindful of others when you are shopping.  Our community’s church sponsored food bank noted a 360% increase in the number of families requesting food assistance over the course of a single week.  During non-growing periods, the food banks are going to be more dependent on canned and processed foods and those able to still get to the store will be in a better position to purchase fresher foods and cook for themselves.  Also consider essential workers and their families and leave the more easily prepared foods for them, because cooking isn’t likely to be on their agenda after a busy shift.

 

 

As Eldercare Comes Home

When not overshadowed by President Trump’s perfect Ukraine phone call, the national conversation in this Presidential election cycle pertains to higher education funding and healthcare.  But the issue that is approaching steadily from behind is how we’re going to manage our rapidly growing population of senior citizens.

Youngest and I sat before the television screen, watching and commenting upon the potential candidates during the fourth Democratic debate on October 15.  It was the usual back-and-forth and the only recurrent question between us was why in the hell is Beto O’Rourke still here?  But out of nowhere, Senator Amy Klobuchar of Minnesota caught my attention with her comments that apart from the two principal issues, who was paying attention to other pertinent topics, such as the rapid growth of the aged population in the United States – what she referred to as The Silver Surge.  Perhaps it’s that Minnesota has a significantly larger and growing elder population; next year, Minnesota’s 65-and-above age cohort will exceed the 17-and-younger cohort for the first time in their history and by 2030, more than 20% of Minnesotans will be senior citizens.  They aren’t as far along as Maine, thank you Jesus, but they are well on their way.

Klobuchar is right.  The almost complete absence of political conversation means that any meaningful programs moving forward will not pertain to the elderly; we will have to manage via programs cobbled together at the state and local levels.  The reality is that the onus will devolve down to the granular level of the family unit.  I purposefully stated that the issue is approaching from behind because the adult children in a society with a declining middle class are looking forward generationally, attending to the needs of their own families and children.  Kids are very squeaky wheels requiring investment in time and money and their parents will hear very little from their own elders about their conditions until there is a significant health event which knocks the axle off the elder truck.  It’s generally a two-way silence; the adult children are simply trying to keep things afloat and the elders say little out of pride, fear or shame.

So once again, it’s up to the family to work this out.  Our society has become so complex that inattention can have potentially catastrophic results personally, medically and financially.  The obvious question then is where do we even start?

The good news is that old age doesn’t just happen overnight, like – *POOF* – Mom’s suddenly old.  Aging is a continuum and while there’s always a downward trend, the slope is typically longer and shallower until there’s one or more medical events that sharpen the decline before culminating in death.  Perhaps the first question to answer then is where are your elders on the continuum?  Are they poster elders for Senior Olympics or are they already doddering around on gimpy legs with a laundry list of daily medications required for simple survival?  Even then, how is their condition mentally versus physically?  The body itself might be in decent shape for elderhood but Alzheimer’s, while severely affecting mental capacity, is a physical malady.

The question of location on the continuum is important.  Once you have a sense of that location, you can begin to consider some of the aspects that must be covered as they move forward along it and with that, a sense of the time and criticality with which these aspects must occur be addressed.

What are some of these aspects?

The Conversations.  American Elderhood can be aptly described as terra incognita for our society.  We’ve been obsessed with youth and uncomfortable with the concept and practice of dying.  Medical advances have pushed the envelope of lifespan so that the fastest growing demographics are our elders; and remember that there is not just one age cohort for the elderly.  But that increase hasn’t been correspondingly matched by either assets to financially support the longer lifespan or an increase in individual mental and physical capacity to support it either.  There have to be multiple conversations with them to help plan so that their waning days are as comfortable and meaningful as possible.  Given the complexity and emotional discomfort that can accompany such discussions for both elders and adult children, it’s entirely likely that these won’t be completed quickly.  The time to start having the conversations is sooner than later.

The Overwatch.  Is it possible to develop meaningful, yet discrete and respectful, tabs on how our elders are doing?  It’s been difficult to even find a term for this situation; surveillance is laden with negative connotations and is disrespectful to them, not to mention potentially counter-productive.  The difference between a declining elder and a kid is that a kid with an offended sense of pride can’t blind you by tearing up your HIPAA forms.

The Siblings.  Do you have siblings and what are their circumstances?  Are they geographically nearby and what is their relationship with both the elders and you?  How are the lines of communication and is there a delineation of responsibility?  Most importantly, are they willing to acknowledge elder wishes even if they might not be in agreement with them?

The Finances.  How aware are you of their finances and are they capable of handling them?  If you have to step in, are measures in place to allow it?

The Documentation.  There is a considerable amount of paperwork involved with the elderly and much pertains to assuring that their rights are protected, particularly as they become less able to care for themselves.  Everybody knows about wills, but do you know where your elders have theirs and is it accessible?  Is there paperwork granting Power of Attorney not just for financial matters but healthcare matters as well?  Do you have the appropriate clearance to speak with the potentially numerous medical providers?

The Allies.  The demands upon you will increase as your elders age and you will likely have to depend upon the assistance of others in the eldercare system.  Have they reached the point of requiring your attendance at appointments and who can get them there?  What if they have a pre-existing relationship with another professional, such as their own lawyer or financial adviser?  Do you have a go-to person for help in navigating a complex medico-legal eldercare system?

The Systems:  Healthcare and Housing.  You’ve likely been spending your time dealing with the kids and haven’t had to seriously consider the complexity, opacity and cost of the healthcare system and elder housing structure.  Getting a crash course in navigating them is frustrating and fraught with peril.  What exactly is the Doughnut Hole – yeah, that’s actually a thing – and why must your elder leave their continuing care retirement community for somewhere further away for skilled care?

The System:  End of Life.  Even if your parent has been clear about everything – communication, paperwork and documentation, final wishes – getting him or her to that point at which final wishes can be honored can be problematic.  Most of us have little experience with death and the confluence of physical and emotional factors can create an immensely stressful situation.  Is there clarity about what the final wishes are?  How do you contend with the potentially large number of specialists who might be called in because of multiple systemic failures?  What are the resources available to you?  What exactly is hospice and when is the best time to get them involved?

What’s the aftermath?

These various aspects itemize neatly, as though each was a Lego block that stacked and nestled neatly together in a self-supporting structure.  But the reality is that each aspect is more like a thread that would be woven among the other threads in a tapestry.  Each can dramatically impact another aspect for better or worse and how one works out can be dependent upon how well another aspect was addressed.

Caring for your elders – parents or grandparents – can be a rewarding and fulfilling experience and there are those who count it as a privilege.  But it can still be problematic and there are moments when you are likely to find yourself pushed and exhausted and at times, bereft.  Understand in those moments that you aren’t alone and if you’re able to look up, there will be moments of amazing grace emanating from circumstances and people that will pull you through.

Much of what that’s written moving forward will not necessarily be an exhaustive What to Expect When You’re Expecting type of guide to everything about aging.  But it will be framed extensively by the experiences of being involved with an aging parent with Dementia, including the missteps and miscues.  All of the aspects mentioned can be drawn directly from personal experience and to the extent possible, these experiences will touched upon so perhaps something of value can come from them.

 

 

 

 

Is the Multi-Generational Family Under-represented?

In 2018, Pew Research noted that the multi-generational family structure – defined either as co-habitation among two generations older than 25 years of age or grandparents and grandchildren – was making a comeback.  As of 2016, the last year for which data is available, 20% of American families comprised this model and this was the highest level since 1950.  When we think of this type of family, we recall the Walton family from the iconic CBS series The Waltons, which aired more than three decades ago.  When the series aired, the percentage of American multi-generational families was at or near it’s low point.  Since then, it has risen consistently and while there may be other reasons, economic factors play a front-stage center role.

The Pew Research definition is solid because it describes a family composition that is objectively quantifiable via census and sampling data.  But what if this is only a partial picture?  What if American families are altering their decisions and actions accordingly to account for the decline of the middle class, but in ways that are not as easily captured via standard data collection techniques?  What if familial generations are making decisions and arrangements that bind themselves more closely together to provide mutual care without co-habitation?  If co-habitation is changing the family structure – the skeleton – are there less overt changes occurring that re-knit the generational sinews in ways that quietly alter American society?  Such examples would include:

  • One generation purposefully relocating closer to another in order to receive or provide support, material or otherwise;
  • One generation providing childcare or other supportive measures;
  • One or more generations refusing to relocate because of the impact upon the other generations.

I note these examples because these are actions that I have witnessed both among members of my extended family as well as friends and neighbors over the past several years.  What I have come to realize in my adulthood is that while I would like to think that I am special –Thank you, Mr. Rogers and Sesame Street – there is actually nothing that special about me.  My actions, apart from that ill-considered goat and tequila incident in college, are generally rational and cogent.  This likewise applies to most people, who reside in a stable neighborhood along society’s Bell Curve.  Expand this observation to the larger population and perhaps there is more going on within the family structure than the definition provided above, material but objectively immeasurable.  What do you do if it can’t be objectively measured?  Should it just be dismissed out of hand?

In my case, I took the family dog for a walk around the immediate neighborhood.

Since 2017, we have lived on a cul de sac within a golf course community.  It’s clearly not representative of larger society and truthfully, we don’t live here for the golf.  In early 2017, we needed to retreat to a house that was more amenable to my own physical condition; specifically, one floor living with minimal use of stairs.  That the previous owner left behind a fully furnished theater room that allowed my sons to hear the Angels sing was just icing on the cake.  Our home is one of 28 units on the cul de sac and every four or six units are clustered together in duplex fashion.  Like most Americans, I don’t know every soul in the immediate neighborhood but after two years of conversations and chats, I have a sense of who lives in most of the units and their living arrangements, at least superficially.

I’m really not a creep.  I just pay attention.

As the dog and I strolled the neighborhood, I noted what I objectively knew for each of the 28 units.

  • Units 1 – 3:  One vacant and being flipped.  Two empty-nesters.
  • Unit 4:  My family, nuclear but providing partial daycare for a grandchild.
  • Units 5 – 8:  A traditional nuclear family.  A single parent household with child and roommate, the unit purchased by the grandparents of the adult daughter, and a unit serving as a vacation getaway for an elderly couple from another state.
  • Units 9 – 13:  Empty-nesters and elderly couples.
  • Units 14 – 15:  True multi-generational household with two adult generations and a grandchild (and a really cool Labrador).  Nuclear family with adults likewise providing daycare for grandchildren.
  • Unit 16:  Single parent with teenagers who returned to be closer to family.
  • Units 17 – 22:  Empty nest or unknown.
  • Unit 23:  True multi-generational household with two adult generations and grandchildren.
  • Units 24 – 28:  Empty nest or unknown.

So of 28 units, two meet the multi-generational definition and an additional four – including my own – have some significant interaction in which one or more generations provide material assistance to another.  This isn’t the least bit objective or statistically relevant but what makes this particular cul de sac in some way not indicative of larger trends within society?

The upshot?  It is possible, although not objectively quantifiable, that the multi-generational interactions are being understated.  The winnowing of the middle class and the opioid epidemic are fostering a greater interdependence among the generations than has been seen in decades.  Newer linkages are likely being formed because circumstances require them and unless or until someone can ascertain a means to measure this extent, these material interactions will be understated because they exist beneath the data gathering radar.

So perhaps the definition noted above is incomplete.  Perhaps it should be expanded from physical co-habitation to this:

  • One adult generation relocating to closer proximity to another, or refusing to relocate away from another, in order to give or receive increased physical or financial support;
  • Providing or receiving some form of physical or financial support (childcare, eldercare) between the adult generations.

There has always been some degree of supportive interaction between the generations throughout our history.  In my own family, my father and his parents were forced to move in with his grandmother during the Great Depression.  My maternal grandmother lived within two blocks of my aunt and that aunt routinely checked on her as she aged.  My own parents spent more than two decades supplementing my paternal grandmother’s income with a monthly stipend of $100 with which she managed to accrue a stunning quantity of makeup and costume jewelry.  But these common instances are overtaken because of the economic stresses upon the family from the middle class’ decline.

We teach and raise small children with the idea that they are each, in some way, special.  But we realize in our adulthood that we aren’t as special and are more alike to others.  We, as adults, make accommodations to the circumstances and physical surroundings that might be novel because they are new to us, but which aren’t as novel as they might appear because others are having to make them as well.

The next time that you take the dog for a neighborhood stroll, consider what you know and think whether there’s anything that can be extrapolated.  But I wouldn’t necessarily share it with many of the neighbors because they’re liable to think that you’re creepy.

 

 

The American Family Changes…

…these are serious structural changes to the economy that will necessarily flow into so many other facets of our lives – food and cooking, housing, education, medicine, child-rearing.

      –  PracticalDad, The Great Reversion  June 27, 2013 

The Great Reversion, which kicked into overdrive with the Financial Crisis of 2007, has now run headfirst into the social institution that the Conservative movement exalts:  the American Family.  Change is constant although most is ebb and flow.  But now, multiple separate data-points about the American family support the concept that its structure is changing in response to its long-term financial circumstances.

Let’s be clear.  There is no longer a true monolithic model for the contemporary American family and no one can lay claim to it, despite what the Religious Right likes to think.  But the separate data-points indicate that the great mass of families – religious or not – is looking at their respective long-term circumstances and making rational family-unit level decisions to best situate themselves for what they perceive to be their future.  We all know the mass of economic data-points showing what’s amiss:

These kinds of circumstances have an impact however, and that impact is now reflected in the long-term decisions of the family adults.  How so?

First, America’s Total Fertility Rate – known informally as our replacement fertility rate – declined in 2018 to 1.73, the lowest point since the Oil Crisis/Inflation period of the mid 1970s.  That was a bleak period two generations ago and I recall a conversation with a gentleman who commented that he and his wife were nervous about bringing new life into a world that was, in the moment, intimidating.  Circumstances improved however:  The Berlin Wall had fallen and the Soviet Union collapsed; even with 9/11, we entered a period in which homes were larger than ever and housing prices would only ever go up.  Money was cheap and anybody who could fog a mirror was able to borrow large amounts for increasingly unpopular McMansions.  And with that increase went the Total Fertility Rate.

Until approximately 2007 however, when the wheels came off.  Since then, the TFR has dropped and it’s low point is confirmed by a second fertility statistic, the General Fertility Rate, which measures the rate at which women are currently having children.

US Fertility Rates/courtesy Pew Research

 

 

 

 

 

 

The typical family is looking at it’s prospect and saying Nah Bruh, I think that I’m good for now…  And this is playing out in the second data-point.

Next, more younger couples are only having one child.  This is now the fastest growing cohort of families and has doubled in the four decades from 1976 to 2015, from 11% to 22% and if the article is correct, then it’s not going to slow appreciably in the near future.  It hasn’t necessarily been a financial decision since part of the interplay is the aspect of delayed motherhood from a greater participation in the workforce and the opening of previously closed career pathways for women.  But my suspicion, gut at best, is that people are looking at the cost, excluding higher education, and holding put at one child.

Third, the American family itself is quietly morphing from its historic nuclear family structure to a multi-generational model.  What we consider the traditional nuclear has been rooted for generations in the two-generation unit, parents and biological children together.  It has shifted itself as the racial, cultural and gender lines have blurred so that a modern nuclear family can be parents of two separate races or the same sex, and the children can be adopted instead of related via birth.  Studies have shown that this particular unit structure can be found in records back as far as the 13th century in England but the sociologists’ research of the 20th century has linked the economic development since the Industrial Revolution of the 19th Century, as well as our own domestic economic growth, to the widespread availability of the nuclear family; it was this foundational unit that was able to move to where the opportunities for economic advancement were then available.

One particular economic issue today pertains to this very concept of labor mobility.  Economists have noted in the past several years that the percentage of Americans willing to move for employment has dropped by half, from the 1980s to today, from 20% to about 10%.  It’s notable that from 2012 to 2017, this number declined from one in eight Americans in 2012 to one in ten in 2017.  Labor mobility matters because it allows for the best match of labor demand and supply so that productivity is maximized at the greatest benefit to labor.  Consider Detroit’s auto industry in the early to mid 20th century.  American automakers were able to turn out autos at such a rate because they were able to obtain a healthy supply of labor, much of it from the Black communities of the American South.  For all of the social issues that were engendered, the pay for black workers in Detroit was still higher than what they were able to earn in the Jim Crow South and significant numbers of Blacks moved northwards to take advantage of it.  But when labor mobility declines, as it has, then there is a mismatch between the demand and supply of labor and each aspect suffers.  Middle had a college classmate who graduated with a degree in video sound editing and his goal was to move to Silicon Valley; but with the cost of housing so wildly out of reach for the average person, this youngster would have joined others living in vehicles as they worked in their chosen field.  The result?  He stayed on the east coast.

If the nuclear family is a two-generation unit, parent(s) and children, what then is the multi-generational model?  The first thought of many Americans is that of The Waltons, the Depression-era family portrayed on the iconic television show of the 1970s.  They were a nuclear family that became a multi-generational family by dint of having the grandparents live under their roof.  But multi-generational is more than that.  According to sociologists at Pew Research, the multi-generational family model is composed of parents and adult children past the age of 25 or grandparents and grandchildren or any other combination of greater than two generations.  Right away, we recognize two circumstances that have come into focus from this definition.  First, the number of young adults that are now living at home because of their student debt load.  As of 2016, approximately one third of adults between 25 and 29 lived with their parents, triple the percentage who did so in the 1970s.  The second situation is the rise in the number of grandparents caring for grandchildren because of the parents’ instability due to economic factors or more tragically, drug addiction.  The raw numbers aren’t nominally huge, but the percentage of grandparent-headed households has increased in less than a decade.

Percent/Nominal Rise in Multigenerational /courtesty Pew Research

When you note the rise in the percentage of multi-generation families since 1970, also consider the arrival of the immigrant family; both Asian and Hispanic families tend to have more than two generations under the same roof, often because of financial reasons.  Despite this, the percentage of multi-generational families has risen across all racial demographics.

But these factors account for what has happened thus far and don’t necessarily reflect the impact of what will come; expect the multi-generational  model to make far greater inroads as we move ahead.  Simply put, there are going to be far more elderly Americans with far less savings to support themselves through their remaining years and the existing social infrastructure for their care is seriously insufficient.

The first thing to understand is that there is no longer a single demographic cohort for the elderly and these cohorts aren’t growing at the same rate; there are seniors, the elderly and the Old AF. The demographic models are such that the number of elderly Americans, 65 and above, will outnumber young Americans by 2035.  However, the number of those between 75 and 84 will increase by 100% while those above 85 will increase by 200% by 2050.  The raw number of the elderly population is going to outpace the number of workers available to support them via government financed social programs.

The second factor to consider is the state of the seniors’ finances.  According to the Transamerica Center for Retirement Studies,  the median savings for people in their 50s and 60s is $117000 and $172000 respectively.  Many in those age cohorts recognize that it isn’t enough and fully expect to continue working past the traditional retirement age of 65 and the percentage that do is now at now at 20%, double the level of 10% in 1985.    Coincidentally, the percentage of older Americans still working was 29% in 1949, about the same time at which the percentage of multi-generational families was as high as it is now.

The paucity of savings is further complicated by the global experiment with artificially low interest rates. Our national monetary policy for longer than a decade has been to push interest rates to the lower ranges to both encourage consumption – I have to hold back a laugh when I consider the prevailing credit card rates – and assist in managing the interest costs of our national debt.  This is good for the federal government and companies, who have persistently taken on large amounts of debt for the purpose of buying back their stock.  But it is horrendous for middle-aged and elderly savers who, at one time, depended upon the interest income from their lifetime of accumulated savings to fund their nest egg.  As rates have been consistently low for more than a decade, those in or approaching their senior years have been forced to shift their investment focus to riskier investments in the hope of obtaining a higher return.  This is a sea-change from the traditional approach of shifting to safer and more stable portfolios as retirement is reached.  If you are 56 and have $172000 in savings, you are going to run a greater risk of losing it before you hit your final years.

The last factor is that the infrastructure for elder care is simply inadequate for the numbers of older Americans coming down the pike.  Elderly Americans are covered for many, if not all, medical expenses via the Medicare program; most importantly for very elderly Americans, this can include some, but not all, aspects of nursing home residency.  Corollary expense, such as hands-on care for assistance in Activities of Daily Living (ADL) is not covered and is left to the individual or family to pay.  In addition, there is a cap for the per diem fee that Medicare will pay nursing homes for Medicare patients so there is limited profitability for nursing homes in the Medicare program.  The upshot?  There might be a specific number of nursing beds available in a locality but there is only a subset of those that are available to elderly citizens whose primary coverage is via Medicare simply because of insufficient revenue; this isn’t referring to the rates of return on the business but actually even maintaining any profitability at all.

The other aspect to the infrastructure question is simply one of labor.  The dispersion of the American elderly demographic isn’t uniform and some areas are more hard hit than others.  Maine is now what the World Bank classifies as a super-aged entity, noted by a fifth of the population being older than 65 years of age; this is the first state to reach this milestone and by 2030 – 11 years from now – more than half of the states in the country will cross that threshold.  If there are an insufficient number of nursing home beds available for the most infirm, then the next best step is to do everything possible to keep them in their own homes.  It is less expensive and theoretically possible to make this work – except that there are vicinities in which there isn’t enough available trained labor to support that goal of in-home services.  Maine is the first state to face the situation and service providers are simply declining to take on new clients because they just do not have the people to provide the services; the families who are in the area are then forced into situations, often intense, for which they have no minimal resources and training.

Let’s connect the dots.

  • The elder generations will grow significantly and disproportionately, relative to younger generations.
  • These generations lack the assets to support the care that is likely to be required in their much later years as debility and deteriorating medical conditions require greater spending.
  • The infrastructure, both physical and labor, for elder care is insufficient at present in many locations for this growth.
  • The present political conservative political sentiment will preclude significantly increased spending on elder care programs and much of the burden will continue to be shifted back to the family unit as has already happened with retirement, cost of higher education and health care costs. Even if there is a massive shift towards greater social spending, the conversation among the Democratic candidates relates to healthcare and higher education benefits with little mention of Eldercare.

There are simply too many soon-to-be elders and they don’t have the money.  Any correction of the hollowing out of the American Middle Class will likely take decades which means that even the younger generations aren’t going to have the resources and they in turn will have to rely in some measure on their own adult children when they reach their own elder years.  This is the upshot of living through the Great Reversion since our forebears often had to stand for some measure of responsibility for their own parents and grandparents and this is how it’s going to be moving forward.

Raising children can be difficult and teens even more so.  But our grandparents could get through those years with a sigh of relief at the lifting of responsibility because their own parents had the assets to largely support themselves in their dotage.  Many of us are only going to have a few years of respite before we are forced to re-assume that responsibility for our own elders as they navigate their final years.

Understand that your own children are watching you and you’ll want to set a decent example for them when they are, in turn, responsible for you.

Post-Consumer Parenting

We have many jobs and roles as parents, too many to note.  But all of these things happen to only one purpose – to raise the kids to make their way in the adult world; successfully, we hope.  Much of their success will be dependent upon their own efforts but it’s the simple truth that their efforts will be built upon the foundation that we give them.  If it’s crucial that we teach them about the great, wide world then we have to understand that the world in which we were ourselves raised has changed and that particularly goes to our economic system.  We must now purposefully buck the long-prevailing consumer-model – in which the lion’s share of American economic activity is predicated upon the typical American’s willingness to spend – as that is functionally dead.  We have to now raise our kids to both survive and live within a post-consumer system.

Post-consumer is a term typically tied to ecology and sustainability.  We see the term posted on the park benches made from recycled plastic products and on cereal boxes touting that they’ve been made from 30% recycled paper and cardboard materials.  It has come about because of the earth-friendly ecology movement that launched in the latter part of the twentieth century and the whole movement has a new-age, California, touchy-feely vibe to it.  Yet post-consumer also has a much more hard-nosed aspect to it that is intimately tied to what we’re seeing in both America and the world around us.  Remember that the words ecology and economics are at their heart related to the same thing, albeit from different angles.  Each is based upon the prefix eco-, derived ultimately from the greek oikos-, meaning household or habitat.

Ecology literally translates as the study (-ology) of our household or habitat but became synonymous with the environment in the wake of a series of widely covered environmental disasters such as the infamous incident in which an Ohio river, the Cuyahoga, caught fire in the late 1960s.  It was inconceivable to even the most common person that water could be so utterly polluted and fouled that it lost the most basic property of being able to extinguish burning debris floating upon it.  Coupled with a multitude of images of dead and befouled wildlife and adopted as a cause by the then-young and hip Boomer generation and it took on today’s evocation.  Economy is a word likewise coupled with the root of household and habitat but from a different aspect, that of how it is numbered (-nomics).  Step back from the hard-math financial aspects promoted by many economists, economics is at its heart a matter of how our resources are not only numbered but allocated and – boy howdy! – are we looking at the America of today.  Wealth gap, anyone?

Ours is at least the third generation to be raised under the consumer-driven model of the economy.  This model conceives of the average American – the consumer – as a driver for economic growth and was first proposed by macro-economists in the early twentieth century but didn’t become an economic reality until it was pushed in the years immediately following the Second World War.  The principal economic driver beforehand had been Business and Capital Investment but its collapse in the Great Depression meant that American political and economic leaders began to look elsewhere for a driver to supplement that if not outright replace it.  What made the consumer-model possible was more than just the growth of personal income via well-paying jobs; it was also that many costs previously borne by the individual were now partially borne by other sectors of the economy.  Insurance for health-care costs was becoming a standard benefit for corporations that hired many Americans.  Educational costs for the youngsters was subsidized by the state first via the GI Bill of 1944 and then subsequently through public funding of state supported colleges and universities.  Old age was no longer feared economically as there were corporate and public-sector pensions and the government now guaranteed a base minimum via Social Security.  There was now not only income, but disposable income that allowed for the things – the niceties – that were previously unaffordable to previous generations.  The wants that we’ve now been ably taught to accept as needs.

The truth is that the consumer-driven model is now functionally dead, an economic zombie shambling along and awaiting the merciful head shot that drops it, allowing it to be kicked into the gutter and out of the way.  The very factors that made it possible are either falling away as we watch or gone completely.  We’ve now seen almost an entire decade of falling family incomes and the wealth gap is increasing to levels unseen since the Gilded Age of the late 19th century.  Health insurance?  Increasingly unaffordable and shifted back to the family and individual.  Educational costs?  Disproportionately expensive and with public funding cut back, costs borne more and more by the family and youth.  Retirement?  Likewise shifted back to the individual with an increasing reliance upon self-funding via the IRA/401k.  The you can have it all mantra with which we were incubated in the consumer-model system is now replaced by a painful and simple reality.  You can’t.

This sea-change is the truth with which we have to contend and which we will have to teach our children.  It is not, however, a truth that the economic and political establishment wishes to acknowledge.  Establishment mouthpieces such as the Wall Street Journal print missives to the American public telling them that they aren’t doing their part as consumers.  Economists at the Federal Reserve publish studies about Americans not spending and slant their phrasing phrasing negatively when they state that Americans are hoarding money.  When former Federal Reserve Chairman Ben Bernanke spoke to a group of high school educators, his choice of language was telling.  When he referenced teens, he referred to them as students and young people; when he referenced adults however, he predominantly used the term consumer with the implication that our job is to raise our young people to be consumers.  In the days immediately following the 9/11 attacks, then-President George W. Bush even spoke to the American people and urged that they shouldn’t let the terrorists win but should instead go back out and shop.  Seriously…shop?  So obviously, spending money matters.  Questioning the consumer model is a threat to the corporate profits that are directed to a smaller and smaller cadre of executives and investors that make up the high tier of the wealthy class.  Questioning this model is a threat to the profitable tenure and security of our elected and government officials, many of whom will exit government to cushy sinecures in the private sector.  Acknowledging this will require the public will for change that is a threat to the cancerous symbiosis between the corporate and political sectors that is, at its heart, fascism.

The rise of Donald Trump and Bernie Sanders as presidential contenders is a clear sign of the public pushback.  There are commonalities at the core of each movement that ultimately lead back to renewed opportunity for the individual and most importantly, sustainable, living-wage jobs.  There are massive differences in how each candidate would hope to achieve these ends but when you cut through them, the heart of each pertains ultimately to trade, jobs and income.

This consumer-driven economic model that we’ve followed has been around for longer than the lifespan of most Americans and like anything, it will change and be replaced by something else.  That is at the heart of our present upset because nobody knows with what it should be replaced and such a real-life process is neither as sterile nor academic as it would seem when written on a page.  What the Establishment seems to want is a perpetuation of the model even though they understand that it continues the hemorrhage of the American Middle-Class until the. masses of our countrymen are reduced to a servitude of dead-end jobs and interest payments.  It’s what they know and as the saying goes, if you give a monkey a hammer, then that’s what it’s going to use.  However, that doesn’t square with the great mass of Americans who understand that something is badly amiss yet can’t precisely enunciate what it is.

So here are the takeaways.

First, the Consumer-Model economic driver of the past six-plus decades is officially dead.  It has been killed by a combination of falling incomes on one side and competing demands for that same income on the other side.

Second, the Corporate/Political Establishment has a vested interest in perpetuating this dead model.  The Corporate because it allows money to be extracted from someone else – the Consumer – and redirected to them.  The Political because of unchecked campaign finance practices and a post-political career revolving door into the lucrative corporate sector.

Third, we cannot assume that whatever replaces the consumer model is already pre-ordained.  What we are witnessing with the utterly unexpected rise of Trump and Sanders are early salvos in a contest between this Establishment and the diverse citizenry.  If the Gilded Age is any example, it will be a contest that will last for decades.  That means that we have to remove our noses from Facebook pages and begin to think in the longer term.

Fourth, parents must begin to purposefully raise their children so that they aren’t herded into a dead economic system that views them solely as prey.  We must be overt and direct in our conversations with them and we must likewise model an economic behavior of controlled consumption that is, for many of us, uncomfortably new.

We must become the first generation of Post-Consumer Parents.