January 1, 2012Kyle KazanComments 0
Last month I wrote that this recession was not cyclical but structural and that our elected (and appointed) officials need to realize this during their policy discussions. In Figure 1, we see that employment has not only failed to recover but is taking longer than any downturn since World War II. It should be noted that this “recovery” is sputtering even though the US government is borrowing/spending at a historically high level.
Number of Months After Peak Employment
In Figure 2 we see that the SGS Alternate unemployment rate is well above 20%. This includes long-term discouraged workers who as of 1994 are no longer counted by the government. The U6 counts short-term discouraged workers. While the government’s official unemployment rate dipped below 10%, there are clearly more people not being factored into those cheerful by comparison statistics.
While I have had some pointed conversations with politicians on the state and federal level giving suggestions, I think it far more productive for us to make a difference with our collective wallets. We as people running our own businesses whether operating one small rental property or a large portfolio can create jobs. Selfishly speaking, it is in our own interest as landlords to support an employment base that can rent from us.
On a personal level, I have changed my buying habits and have focused my spending on products that are manufactured in the United States. I hadn’t formulated the best way to do this through the business until I saw a story on ABC News that featured a builder who constructed a home in Montana made completely with American goods (the story can be found in its entirety at: http://cdnapi.kaltura.com/index.php/kwidget/wid/0_04vzdsr5/uiconf_id/5590821). The cost of the house to build was within 1% of the price had they used foreign goods.
In it, he had a roadmap for home builders that would create hundreds of thousands of jobs. The apartment industry is easily as big as home developers and it is important that we support our economy.
The list that the home developer in Montana created can be found at this link: http://abcnews.go.com/images/Business/Made%20in%20America%20List.pdf. At my management company, we are in the process of creating a list of the supplies that we use everyday and are making sure the products are made here. As this is a work in progress, I can share that we’ve had excellent luck with the store HD Supply as they sent me a comprehensive list with 8,375 US manufactured items. We are still working with Home Depot and Lowes to see if they too have an easy process.
While there are many factors needed for the US economy to change structurally, one major component will be a fundamental shift in our own spending habits. As the still largest consumer market in the world our choices matter and will make a difference.