Years ago, I was watching a super-important college football game on TV between the Nebraska Cornhuskers and the Miami Hurricanes. My friends and I are insane Husker fans, and we were so tense, we could hardly breathe.
Suddenly, Miami scores -- and my wife cheers. She didn’t know it, but she was cheering for the enemy. We forgave her, because she really didn’t know which team was which. My wife doesn’t follow football, and way down deep, she secretly wishes they’d ban it, but she has come to accept the game as a necessary evil in an otherwise great society.
Here’s my question: Would you pick my wife to coach your favorite football team?
This question seems crazy given the story I just shared, but somehow, in the political arena, it’s not. We routinely elect people to city and state leadership who have very little knowledge of the job and who, in many cases, aren’t particularly fond of business and free enterprise -- the power behind our economy. Maybe they see business as a necessary evil in an otherwise great society. Whatever the case, they don’t understand or appreciate free enterprise any more than my wife understands or appreciates football.
Here’s one big example: New York City just said goodbye to one of the greatest mayors of any city in history, Michael Bloomberg. Using his decades of executive and hands-on business experience from building Bloomberg LP, Mayor Mike steered New York out of its post-9/11 panic and made it once again a world-class city: safe, welcoming to businesses and tourists, and economically and culturally thriving.
I’m not that familiar yet with his successor, Bill de Blasio. But I do know that the biggest operation he’d ever run prior to being elected mayor last fall was the city’s office of the public advocate -- which has just over a $2 million budget. The budget for the entire city: more than $70 billion. That’s a pretty big leap. And his campaign to run one of the greatest cities in the world was built around reducing income inequality, making the police more sensitive to local communities, and taxing people earning more than $500,000 a year to pay for universal pre-kindergarten. I don’t recall him saying much, if anything, in his campaign about keeping New York’s world-class economic engine roaring, building on the amazing success of his predecessor, or about creating more good jobs. In fact, he ran his campaign as the anti-Bloomberg.
I’m not picking on New York or de Blasio. The point is, when it comes to creating economic growth and good jobs for America, effective city leadership all around the country is essential. It trumps national leadership. For instance, Austin and Albany are both capital cities in big American states. Neither city is located by a port or a natural tourist attraction with beaches or mountains. They’re pretty much alike, except that Austin wins big and Albany loses big.
The difference, in my view, is that Austin has deeply caring, highly engaged business, political, and philanthropic leaders with policies, beliefs, and values about human nature that work. They understand the critical importance of building a thriving, growing economy -- one that welcomes business and creates a culture of entrepreneurship. Albany has the opposite, as I see it: leaders with policies and beliefs that discourage business and entrepreneurship, if not outright scare them away.
Great city leadership has never been so valuable and so desperately needed -- we need way more Austins and way fewer Albanys -- because on core economic metrics, America is failing. GDP grew only 1.9% in 2013, which was even worse than the 2.8% growth in 2012. And the percentage of U.S. adults with full-time jobs right now is 42% -- the lowest monthly average since Gallup started our Payroll to Population (P2P) metric in March of 2011.
Most deadly of all for long-term prospects, the total number of new business startups and business closures per year -- the birth and death rates of American companies -- have just crossed for the first time since the measurement began, according to the U.S. Census Bureau. (Here, I am referring to employer businesses, those with one or more employees.) Four hundred thousand new businesses are now being born annually nationwide, while 470,000 are dying annually -- we are at minus 70,000 business survival per year.
This matters because small businesses are the main source of new good jobs and new economic energy. Up to 50% of all jobs are in small businesses and approximately 65% of all new good jobs are created by them, according to the Small Business Administration. Without thriving small businesses, America’s economy and our standing in the world will fall into permanent decline.
To rebuild the American economy, shouldn’t we elect local leaders who love small businesspeople and their endeavors, rather than discount them? Shouldn’t we also elect leaders with at least some experience at managing something?
This isn’t a Democratic or Republican issue. Bloomberg was a Democrat for years, but for the sake of expediency, ran as both a Republican and as an independent. The newly elected Republican mayor of San Diego, Kevin Faulconer, won on a pro-business platform of government reform. And Colorado’s Democratic governor, John Hickenlooper, has been a dynamite entrepreneur. Thanks to his leadership for the past three years, Denver now has a world-class business culture.
No, this isn’t about partisanship -- it’s about electing local leaders who have experience and who understand and appreciate business.
Here’s a suggested rule for deciding which candidate should get your vote, regardless of your party affiliation: Considering that America will go broke if we don’t revive small business fast, if a candidate has never started a business, worked in a startup, or at least worked at a Holiday Inn or in any job where they had five to 10 people working for them, they are not qualified to lead your city or state.
Years ago, I was watching a super-important college football game on TV between the Nebraska Cornhuskers and the Miami Hurricanes. My friends and I are insane Husker fans, and we were so tense, we could hardly breathe.
The White House keeps telling you that unemployment is going down (“It’s under 7%!”) and Wall Street wants you to think the economy is coming back (“The Dow just passed 16,000!”)
It’s time for a reality check. These two institutions want to persuade you that things are getting better -- spreading good news is great politically and drives up markets -- but they aren’t living in the world that you and I wake up to every day.
My simple point to readers is this: You can’t possibly believe the U.S. economy is in a sustainable recovery when:
Business deaths now outnumber business births. According to the U.S. Census Bureau, the total number of new business startups and business closures per year -- the birth and death rates of American companies -- have just crossed for the first time since the measurement began. Here, I am referring to employer businesses, those with one or more employees, the real engines of economic growth. Four hundred thousand new businesses are now being born annually nationwide, while 470,000 are dying annually nationwide.
Up to 2008, startups outpaced business failures by about 100,000 per year. But in the past six years, that number turned upside down. As you read this, we are at minus 70,000 in terms of business survival.
Small business is dying in this country, and this will have catastrophic consequences for our economy and way of life. Up to 50% of all jobs are in small businesses and approximately 65% of all new good jobs are created by them, according to the Small Business Administration. Without startups and growing small businesses, nothing will fix America’s economic energy, let alone create new good jobs.
What’s worse, the country’s leadership isn’t doing much to revive the entrepreneurial spirit of small businesspeople. More than half of U.S. small-business owners say healthcare costs (54%) and taxes on small businesses (53%) are hurting their operating environment "a lot," making these the top two concerns among eight issues tested in a Wells Fargo/Gallup Small Business survey. In such an environment, entrepreneurs wait. They draw their heads back in and take fewer risks, because they’re unsure of the future. That lack of confidence causes everything to stop -- especially good jobs and economic growth.
The federal government’s unemployment rate has little bearing on reality. Sure, unemployment “dropped” to 6.6% recently. Notice anyone in your neighborhood or at your workplace celebrating? It’s becoming common knowledge -- even to a lot of people who don’t follow this stuff closely -- that the official U.S. unemployment rate doesn’t count people who are so discouraged that they’ve quit looking for work. The rate doesn’t begin to reflect the suffering and depression of the more than 20 million Americans who are out of work or underemployed.
Let me put it this way: If the unemployment rate is really going down, then why did the issue become the new No. 1 problem facing Americans today? And why did Federal Reserve Chair Janet Yellen, in her first congressional testimony this month, say, “Those out of a job for more than six months continue to make up an unusually large fraction of the unemployed, and the number of people who are working part time but would prefer a full-time job remains very high”? She also said, “…the recovery in the labor market is far from complete. The unemployment rate is still well above levels that Federal Open Market Committee participants estimate is consistent with maximum sustainable employment.”
Americans aren’t looking for part-time, crappy jobs, and they aren’t looking for more free time to paint or read. They want the respect and dignity of a full-time, good job. The problem is, U.S. adults with full-time jobs as a percentage of the U.S. adult population right now is 42% -- the lowest monthly average since Gallup started our Payroll to Population (P2P) metric in March of 2011.
GDP growth continues to fail expectations. Many economists, both left- and right-leaning, predicted U.S. GDP would grow 3% last year. It only grew 1.9%, which was even worse than the 2.8% growth in 2012 -- so the pie shrunk. Now we’re seeing predictions of 3% growth this year. Here is the big question: Based on what?
Seriously, what is driving the upbeat predictions this time? A technology boom we haven’t yet heard about? Automobile exports? Fracking? The return of manufacturing jobs? Millions of “shovel-ready” government projects?
Reality check: The three most important indicators to watch in gauging whether or not America will ever recover from the 2008 financial crash are: if business births begin to outnumber business deaths again, the steady growth of full-time jobs as a percent of the population (P2P), and significant GDP growth.
On all three indicators, America is failing this morning.
Does anyone really take the official U.S. unemployment figure seriously? My bet is the monthly number, as reported by the Bureau of Labor Statistics, will no longer be trusted by media, economists, politicians, and investors -- not to mention the public.
We were recently told by the Labor Department that unemployment fell to 6.7% in December from 7% in November. But they also told us that the economy created only 74,000 new jobs in December, far below the 200,000 new jobs economists had expected.
The official unemployment rate is an inaccurate mess, because it doesn’t count people who have quit looking for work. And an unemployment rate of 6.7% is not only horribly misleading, but now a cruel misrepresentation of the millions of unemployed and underemployed Americans who are growing discouraged and feel emotionally destroyed.
We need new metrics real fast, and Gallup has developed one. It’s called Payroll-to-Population (P2P), and it’s a very clear metric with no messiness or complicated formulas. Gallup’s P2P simply represents the percent of adults in full-time jobs with a paycheck as a percentage of the total U.S. adult population. P2P answers the most pressing question of the day: What percent of American adults have a full-time job?
While the federal government touted an improved unemployment rate, Gallup’s P2P rate fell to 42.9% in December, from 43.7% in November. The current rate is the lowest Gallup has measured since March 2011.
I’m not optimistic that this number is going to substantially improve anytime soon -- not until the country’s leadership understands the severity of our jobs problem and understands the source of true, organic job creation -- which is new business startups.
On that front, the news is deadly. According to the U.S. Census Bureau, the total number of new business startups and business closures per year -- the birth and death rates of American companies -- have just crossed for the first time since the measurement began. Here, I am referring to employer businesses, those with one or more employees, the real engines of economic growth. Four hundred thousand new businesses are now being born annually nationwide, while 470,000 are dying annually nationwide.
The deaths of businesses now outnumber the births of businesses.
Up to 2008, startups outpaced business failures by about 100,000 per year. But in the past six years, that number turned upside down. As you read this, we are at minus 70,000 in terms of business survival. (The data are very slow coming out of the U.S. Census Bureau, via the Small Business Administration, so it lags real time by two years.)
The real job market, with organically created jobs from the hearts and minds of American small- business people -- American entrepreneurs -- is now in critical condition. One could conclude that America’s free enterprise spirit is dying or, at best, is very sick.
Leaders should take new business startups and entrepreneurship very seriously: 50% of all jobs are in small businesses and approximately 65% of all new good jobs are created by them, according to the Small Business Administration. Gallup is sure taking this seriously. We just launched our Entrepreneurial StrengthsFinder assessment, which aims to help America -- and the world -- find and develop our best and most talented business builders.
American leadership has a clear choice here. It can continue to tout dishonest unemployment figures while coming up with no real solutions to the jobs crisis that now afflicts millions of Americans. Or it can base policies on honest employment figures and begin attacking the jobs problem by rekindling the country’s spirit -- the spirit of free enterprise.
By Jim Clifton, Chairman and CEO of Gallup, and Ben Leedle, CEO of Healthways
Ten cities in America stand out when it comes to high well-being -- with Boulder, Colo.; Barnstable Town, Mass.; and San Luis Obispo-Paso Robles, Calif.; as examples of cities in the top 10. Residents in these places -- compared with the rest of the country -- are better connected to their community, have better financial stability and physical health, and have a higher sense of purpose.
These high well-being cities tend to exhibit many shared characteristics, including lower chronic disease rates, lower incidence of obesity, more frequent exercise, less smoking, and a more positive outlook on their community. These commonalities demonstrate a consistent, mutual foundation upon which the top well-being cities attain and maintain their status as standard bearers of well-being in America.
Now, imagine how different the nation would be if the well-being of the average American worker was just as good as that of the people in the top 10 cities -- an attainable and measurable goal that can be achieved with the appropriate focus by business owners and their leadership.
If every one of America’s biggest companies -- those with 10,000 employees or more -- got serious about the well-being of their employees and matched the well-being of our nation’s top 10 cities in just two areas (obesity and smoking), we would collectively net $21.8 billion in reduced healthcare costs and improved productivity.
That figure gets even bigger by accounting for other health conditions and all the aspects of well-being that affect an employee’s life -- like strong social relationships, engagement at work, and a sense of financial security.
And every uptick in well-being would pay off for those companies in not just cost savings and improved worker productivity, but also in increased loyalty, safety, and a better customer experience. Those companies could invest their capital in growth, not healthcare costs. Their employees would put their energy into their jobs, not their illnesses, sources of stress, and struggles.
Then there are the millions of other employees working in the millions of smaller businesses throughout the country -- many of whom could benefit from improved well-being, meaning the total savings for all U.S. businesses would likely be hundreds of billions of dollars every year. This would put a sizable dent in our annual $2.7 trillion in healthcare spending.
So, what can business leaders do to capture this value? First, understand that the key elements impacting an employee’s day-to-day life go well beyond physical health and include factors like financial stress, social relationships, work environment, and community involvement. The most effective strategies drive awareness around all facets of well-being; help employees develop specific goals to improve their individual well-being; provide them access to resources; and foster ongoing engagement, motivation, and encouragement. Companies that have engaged their employees this way have seen not only lower healthcare costs and improved productivity, but also lower rates of absenteeism and turnover.
Here’s the thing: Chief executives and business leaders should not wait for the government to solve our healthcare spending problem. These leaders have to step up, because no one else is better equipped. Business leadership is all about solving problems, setting strategies, demanding accountability, and building on success. To attack this problem, business leaders must understand why the residents in the top 10 cities have higher well-being, and then take action to help their employees improve their well-being.
Leaders can, in fact, solve this problem one employee, one department, and one company at a time. They just have to choose to tackle it and then put the right systems in place.
Sure, there’s an altruistic component to helping your employees improve their well-being -- it will be good for them, and it will be good for our country. Importantly, however, improving well-being will also make your company perform better -- and ultimately, it will be good for business.
Much of U.S. politics focuses on the fact that the rich are getting richer and the poor, poorer. But does anyone care that the fat are getting fatter?
The U.S. adult obesity rate so far this year is on pace to surpass all annual average obesity rates since Gallup-Healthways began tracking it five years ago.
Health costs are going to bankrupt us. At the current annual 6% growth rate, our total healthcare bill will go from $2.5 trillion per year -- which it is now -- to almost exactly $4.5 trillion in 10 years. If you add the stubs of the increases over the 10-year period, above the running $2.5 trillion our debt-burdened nation can’t afford, it totals a staggering $10 trillion.
To put this in perspective, the sum of our coming healthcare costs are three times the size of the subprime meltdown that brought America and the world to its knees. While we survived the subprime mess, healthcare costs will honestly break the nation.
Things look even worse when you compare America’s per person healthcare spending to comparable societies. We spend more than $8,000 annually per person, where Canada and Germany each spends roughly $4,500 per person, and the United Kingdom spends about $3,500, according to the Organisation for Economic Co-Operation and Development -- and residents of those countries all live longer.
So is our American healthcare system superior? You tell me.
Americans obviously understand that this is a huge problem. Nearly a quarter of us say cost is the most urgent health problem facing the U.S., surpassing healthcare access for the first time since 2006. Obesity remains the No. 1 health condition named.
Keep in mind that all of the hoopla about the Affordable Care Act (ACA), or Obamacare, has little to do with reducing the bloated and growing $2.5 trillion expense. Obamacare attempts to address the insurance issue -- who pays for what -- but it doesn’t go after the core problem: Americans are too fat and unhealthy, and the vast majority of our health problems are preventable.
That’s right -- the Centers for Disease Control concluded a few years ago that of all of America’s chronic health problems, a whopping 70%, are preventable. And what is the common thread among these chronic diseases, such as diabetes and heart disease? Being obese puts people at higher risk for developing all of them.
Rather than go on and on about whether the ACA website works or not, or who wins and loses politically in 2014 and 2016 because of a disastrous rollout, shouldn’t the media be trumpeting this headline: 70% of Health Problems in America Are Preventable?
I just figured the overall weight of Americans, and it’s right at about 56 billion pounds if I assume 180 pounds per person. As a nation, in my view if we collectively lost about 10 billion pounds of excess weight, we might reduce our healthcare costs by a third. And we wouldn’t need all of these wasted political conversations, because we could balance the budget. Even better, the fix would be free -- it wouldn’t require a new law, sequestration, or a shutdown.
That’s because the real fix doesn’t lie within political battles over insurance coverage. It lies within a sudden new culture of American fitness -- and that begins with eating less and exercising more.