As a collection agency with offices in Edmonton, Calgary and the GTA the human condition, the subsequent psychology behind consumer sentiment, and how individuals view both their near, and long-term futures, is always of great interest to us in our business.
Speaking of sentiment, mainstream media (MSM) has been experiencing what seems to be a growing resentment from the general public over the last few years. Is this due to growing tribalism within the public, or does this have more to do with MSM loosing the edge in delivering information to assist the masses in educating themselves (reporting) and instead focusing more on shaping opinion (editorial)?
Just give the facts and allow us to ponder.
To wit, we ran across this recent article “Despite a strong economy, cost of living still top of mind for Canadians” The head line in the business “analysis” (and they use that term loosely) caught our attention as something of great interest.
Immediately we jump to the conclusion that this is some serious bit of breaking news! After 3 inches of deep thought we were rather disappointed. Below is the article in italics with our commentary in bold so you can maybe catch our drift.
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Nuance is a lousy talking point. It’s easy enough for politicians to talk up a roaring economy. In its own way, it’s easy to say what you’d do when the economy is in the tank. But a patchwork of mostly good and some bad is a harder pitch.
And right now, Canada’s economy is doing OK. Maybe not great, but certainly not bad. That’s not exactly the kind of quote that’s put on posters.
“The economy was fairly weak over the latter half of 2018,” said Pedro Antunes, chief economist with the Conference Board of Canada. But, he noted, “We’ve seen a modest pick up in the first quarter.”
On a longer scale, the last three or four years, Antunes said the Canadian economy has “done quite well.” And while it may sometimes be hard for Canadians to see that bigger picture, economists say the country’s economic indicators are relatively strong.
“The aggregate economic data in Canada is looking quite strong,” said Frances Donald, chief economist and head of macroeconomic strategy at Manulife. “We have plenty of jobs, wages are rising, GDP numbers are fairly solid.”
TAKEAWAY 1
What’s new? What’s news? “Not great, but not bad. Fairly weak over the later half of 2018. Modest pick up in the last quarter. Over the last three or four years the economy has done quite well. Plenty of jobs, rising wages, GDP fairly solid.”
So, in other words in a market economy there are winners and there are losers. Sometimes good, sometimes bad. Some are doing well, while some are suffering. NOTHING NEW HERE!
That’s all the more remarkable given that much of the world is doing a lot worse.
TAKEAWAY 2
When, if ever in the last 152 years has much of the world been doing better than Canada? NOTHING NEW HERE!
And yet a new poll commissioned for CBC News highlights Canadians’ economic anxiety, with 32 per cent of respondents saying that the cost of living is the thing they are most worried about.
A new poll for CBC News finds 83 per cent of Canadians are worried about just affording the basics — like groceries and monthly utility bills.
In a lot of ways, that makes sense, according to Donald.
The broader economy is performing well, but many Canadians still struggle: Housing affordability is still at crisis levels in Toronto and Vancouver, energy prices remain stubbornly low, and child-care costs weigh heavily on families.
“So, while the data, as a whole, still looks fairly solid,” said Donald, “it’s completely understandable, even from someone who spends all day looking at numbers, … why consumers and households might be feeling a little bit nervous.”
TAKEAWAY 3
When has at least a third of the population NOT been concerned about the cost of living? The early 20th century, both post world war eras, and stagflation period of the late 1970’s and early 1980’s immediately come to mind. NOTHING NEW HERE!
What’s more, concern about the cost of living ranked as the top worry for every segment of Canadians polled: Indigenous Canadians, new Canadians, first-time voters and visible minorities.
TAKEAWAY 4
When has inflation and the cost of living not impacted every ethnic or social strata living in the same country equally? Fulfilling “Maslow’s hierarchy of needs” knows no ethnic or cultural boundaries does it? NOTHING NEW HERE! (other than an incredibly silly statistic).
While just one in 10 Canadians say they’re not getting by financially, another 68 per cent say they “have to think about how they spend money.” And concern over jobs ranks seventh in terms of what worries Canadians the most.
It’s easy to understand where those concerns come from. Debt levels remain high. Wages are finally beginning to rise, but growth has been stubbornly low for decades.
Still, an honest accounting of the data shows that that negative perception doesn’t quite match the economic reality.
TAKEAWAY 5
68% of people “have to think about how to spend money”. Like this is somehow a bad thing? From our perspective if this number was a lot higher perhaps debt levels wouldn’t be as big of an issue. “Honest accounting of the data doesn’t quite match the economic reality”. Whose? The nation’s or the individuals being polled? What matters most? Who did you poll? Economists, bureaucrats or random Canadians? Don’t ask if you don’t want the truth! NOTHING NEW HERE!
When asked to rank their top three most important election issues, a full 35 per cent of Canadians polled listed “jobs/the economy.” But Canada has been posting record job creation. The Canadian economy added 27,000 jobs in May, and in April, a stunning 106,500 jobs were added. In all, nearly half a million jobs were added over the past 12 months.
Wage growth is also coming in above inflation, meaning Canadians are seeing their wages rise faster than the cost of the things we buy, from food to gasoline.
TAKEAWAY 6
When have jobs and the economy not been the most important election issue? That’s what matters most to the vast majority of citizens that work, support a family and pay taxes isn’t it? When hasn’t it been? We can’t recall. NOTHING NEW HERE!
What’s more, many of the jobs being added are high-paying tech and financial services jobs.
“If you look at the period over the last decade or so, where we’ve seen this kind of restructuring away from high-paid manufacturing jobs, we’ve seen almost as many jobs created in this [other] segment of the economy, this professional services segment,” said Antunes.
TAKEAWAY 7
Economic and employment disruption. Like it’s a new phenomenon or something. Poor us. The exodus of rural agricultural based populations to cities for manufacturing jobs in urban centres in the early 20th century apparently wasn’t disruptive. Neither were buggy-whip makers, farriers and blacksmiths disrupted with the advent of the automobile. How about hemp rope manufacturers today versus 120 years ago? How they doing? How about Woolworth’s and Sears now that we have Amazon? We can go on and on! NOTHING NEW HERE!
The CBC poll also found that 54 per cent of respondents worry that accepting too many immigrants would change Canada — but economists say that change is much needed, specifically on the jobs front.
“Let’s just take a look at where labour markets are today,” said Antunes. “We have an unemployment rate that’s at 5.4 per cent. According to some estimates, that’s as low as it can get.”
Canada, he said, is essentially at “rock bottom on the employment rate.”
The Conference Board of Canada recently released a report highlighting the need for more immigration.
“There’s no doubt about it that immigration will contribute to the labour force,” said Antunes. “When you talk to employers in many parts of this country, [they’re] desperate to find skilled and less skilled workers, and immigration is going to be a big part of solving that gap.”
TAKEAWAY 8
New worries over immigration? Like there were no worries or suspicions of the Irish in the mid 1800’s, the Ukrainians and Doukhobor hoards that populated the open west in the late 1800’s, Italian, Czechs, Poles, Jews and Germans post both World Wars, Hungarian’s in the 50’s, Vietnamese in the early 80’s, Somalis in the early 90’s? News flash, people don’t like to share. Anything new is unknown and threatening. People don’t like change. Are some so arrogant to believe that since it’s 2019 we should be so enlightened to be beyond human nature? NOTHING NEW HERE!
That kind of disconnect appears throughout perceptions around the economy — whether it’s jobs, trade wars, exports or oil prices. Exacerbating that is the fact that Canada isn’t just one singular economy, said Donald. Rather, it’s a sort of a patchwork of regional and sector-based economies.
“The economy is — and feels — different depending on which province you’re in,” she said. “We have the energy patch, we have urban areas that are being driven predominantly by housing activity, and then we have other key cities and rural areas that are swayed by neither of those two factors.”
TAKEAWAY 9
“A patchwork of regional sector-based economies”. No kidding. Thanks for the enlightenment. This is as insightful a comment as night is dark. NOTHING NEW HERE!
Economic anxiety also becomes amplified by global oil prices and international trade tensions. Canada alone doesn’t have much influence in changing those. But both feed into the notion that the economy is struggling, no matter what the data says.
But if you can look past the anecdotal evidence — a hard feat for everyone, no doubt — you’ll find an economy performing pretty well. And in a world full of turmoil and trouble, pretty well is pretty good.
TAKEAWAY 10
When has economic anxiety ever not been amplified by one thing or the other? The Barbarian hoards made the Roman Empire economically anxious we are sure. Southern Europe during the heyday of the Ottoman Empire during the 14th century? How about the Spanish discovery of the America’s? Economically anxious Aztecs surely. Eastern Europe after the Potsdam Conference in 1945 when Stalin began to hang the iron curtain? No economic anxiety, right?
“Global oil prices and international trade tensions? Turmoil and trouble, pretty well is pretty good?” We can’t even begin to comprehend what trouble is. NOTHING NEW HERE!
CONCLUSION
While the human condition remains a constant, we as participants have clearly become cream puffs. Poor us.