Skip to main content

Strategic Insights Business Recovery in the USA and Canada

If media reports are to be believed, Canadians look to be a particularly unhappy lot right now. The recent bout of inflation and interest rate rises appear to have precipitated a specific phase of economic suffering that has spilled over into personal lives, and that misery appears to be uniform across demographic and socioeconomic categories. According to one survey, financial troubles, inflation, and high interest rates are having an impact on Canadians' mental health, driving concern about housing and food.  Millennials, particularly those who own a home, appear to be the most vulnerable to economic downturns as interest rates rise on tight debt burdens and economic damage wreaks havoc on the economy and expectations. Burdened by debt and rising housing expenses, three-in-ten Canadians are "struggling" to make ends meet, with mortgage holders reporting trouble meeting housing bills up 11% from last June. If you have a place to live, you struggle to pay your bills, and

Strategic Insights Business Recovery in the USA and Canada

If media reports are to be believed, Canadians look to be a particularly unhappy lot right now. The recent bout of inflation and interest rate rises appear to have precipitated a specific phase of economic suffering that has spilled over into personal lives, and that misery appears to be uniform across demographic and socioeconomic categories. According to one survey, financial troubles, inflation, and high interest rates are having an impact on Canadians' mental health, driving concern about housing and food. Millennials, particularly those who own a home, appear to be the most vulnerable to economic downturns as interest rates rise on tight debt burdens and economic damage wreaks havoc on the economy and expectations. Burdened by debt and rising housing expenses, three-in-ten Canadians are "struggling" to make ends meet, with mortgage holders reporting trouble meeting housing bills up 11% from last June. If you have a place to live, you struggle to pay your bills, and if you don't, you're unhappy because you can't locate one.   

With so much misery, it's amazing that the misery index. 


hasn't been revived by various pundits as a metric for how wretched we all are. The misery index is an economic measure developed by economist Arthur Okun in the 1970s, during a period of high inflation and unemployment known as stagflation caused by the oil price shock and its macroeconomic impact. The misery index was created by adding the inflation rate with the unemployment rate, with higher totals indicating greater economic hardship for the general people. The index has occasionally been expanded to include factors such as the bank lending rate. While not a perfect measure of economic welfare, it may be instructive to determine whether such an index captures the current atmosphere of economic anguish and despair. The accompanying figure, based on data from the St. Louis Federal Reserve Bank's Federal Reserve Economic Data (FRED) source, depicts a monthly triple misery index consisting of the sum of Canada's CPI inflation rate, monthly unemployment rate, and central bank rate from 1962 to 2023. Such a long time span allows us to evaluate Canadian sorrow over time, which is extremely eye-opening. 

The 1960s were a really golden age for the economy.


but they were also characterized by some of the lowest levels of misery in sixty years. Misery began to rise in the 1970s and appears to have peaked in the early 1980s, when the unemployment rate peaked at 13 percent, inflation peaked at more than 12 percent, and the bank rate, believe it or not, hit over 20 percent one month, making the current 5 percent look like a monetary tea party. Janice Nelson created the graphic After peaking in the early 1980s, misery fell, rebounded somewhat in the early 1990s, and then fell again, progressively bottoming out to values slightly lower than even the 1960s in 2017. Since 2017, they have risen, and according to the data, we are now at least as unhappy as we were in the 1990s. From 1962 to 2023, the triple misery index averaged 16.8. As of June 2023, the Canadian misery index is 15—just slightly lower than the historical average. The most wretched month in Canada was August 1981, when the misery index reached 40.6. During that month, the unemployment rate was 7.2%, the bank rate was 20.9%, and inflation was 12.5%. The least miserable month in Canada was June 2017, with a rating of 8. The unemployment rate was 6.2%, the bank rate was 1%, and inflation was just above 1%.

The misery index depicted below shows that misery has increased. 


since 2017, yet it is still lower than the historical average—and even lower than the early to mid-1990s. It is significantly lower than the period spanning the mid-1970s to almost 1990. However, talking to individuals and following social or mainstream media gives the impression that things are far worse than the misery index suggests. So, why are Canadians so unhappy, considering that the misery index is not near historical highs?  This is a confusing and essential question. One argument is that the indicator may not adequately capture Canada's current misery because misery is more than the sum of unemployment, interest, and inflation rates. Perhaps we could include more economic variables, such as the growth rate of real per capita GDP, or create a separate inflationary index for rentals and housing. This would imply that the structure of unhappiness is no longer as simple as it once was, but has become more complicated and diversified, much like the country as a whole, and that the misery index need a significant overhaul.  Another explanation is the age-old adage that timing is important in both life and politics. While the recent rise in unhappiness is minor in comparison to earlier historical periods, it follows a nearly two-decade period of low and declining misery. It also comes after a global pandemic and several years of anxiety, change, and disruption, which have made everyone more irritable and less tolerant than usual.

Comments

Popular posts from this blog

How to Navigate Office Politics in the USA

It has been infuriating to see folks who answer the cry to "Freedom!" deny that there is any problem worth bothering about. There is nothing small-government about the belief that if there is no problem, the government should do nothing to remedy it. The justification for libertarianism is based on the premise that difficult, important problems require individual effort, creativity, and consensus. Not the assumption that we live in a world free of difficult, important concerns. The polarization of pandemic concerns is so extreme that we can't even agree on what "doing something" and "moving on" look like. Wearing a mask, testing a few times, and working remotely while sick but otherwise returning to normal may qualify as either for the proper person. The inability to agree makes it difficult to be anything but angry with one another. Voluntary replies are good, however they are not adequate. What would have been the libertarian policy response to the p

Business Approval Guidelines for US Entrepreneurs

  There are some chances that can help people become legal permanent residents of the United States. If you are a permanent resident, you can live and work in the United States forever. You can also usually work your way up to becoming a citizen. Summary of the Ways Entrepreneurs Can Get Hired in the U.S. Nonimmigrant or Parole (Temporary) Ways To learn more, visit our page on Nonimmigrant or Parole (Temporary) Pathways for Entrepreneur Employment in the United States. Start-up Activity for Pathways in the United StatesHow Long It's Valid IER Rule for International Business Owners The new business must be legally set up and operating in the United States. It must also have been created within five years of your first application. It also needs to have a lot of room for fast growth and job creation. For initial parole you must have substantial ownership, which USCIS defines as at least 10%. For re-parole, you must have substantial ownership of at least 5%. You must be at the cente

The Importance of Corporate Strategy in U.S. Business Conduction

The study found a positive correlation between quality management methods, such as quality culture, and organizational learning, as well as information sharing, continuous improvement, and teamwork. Malik and Blumenfeld found that simply implementing quality management principles is insufficient without a leadership commitment to learning, open-mindedness, and shared learning. Business executives must understand the factors that impact employee behavior and habits to ensure quality and compliance with operational standards. To achieve company goals, leaders should establish ways to raise employee awareness of quality and compliance requirements, and encourage them to implement them. The study company was chosen as an example of quality products and a strong Culture of compliance excellence. The study organization used a branded program to integrate product quality and compliance into a holistic strategy that included business, quality, and compliance drivers on a single platform. The