Thursday, January 28, 2010

Scott Brown, Productivity Gains 2010 Edition, and the State of the Union Address

The victory of Scott Brown over Martha Coakley for Ted Kennedy’s senate seat last week sent shockwaves in Massachusetts (MA) and across the country. True local liberals must have wondered how their neighbors could vote for Scott Brown, I suppose the same way they asked how all those rednecks out there voted for Bush – twice!! To add insult to injury the senator-elect is not even a social conservative – what is going to happen to gay marriage and the right for women to choose?

There is some degree of misconception actually that the Commonwealth of Massachusetts has always been hard-core liberal and overwhelmingly Democrat. Obama did win the presidential election with a 28-point lead but Massachusetts voted for Reagan both times actually… And Massachusetts was a much more conservative state pre-1970’s than it is today.

Boston is about 85% Democrat but across the state the split is about 60-65% Democrats and 35-40% Republicans. Thus, if about only 10% of the electorate changes its mind and decides to vote Republican instead of Democrat we have a very close race. This is clearly what happened with some Democrats who felt that their votes were taken for granted by Coakley and/or who were unhappy about current unemployment and what they feel is the failure of the Obama administration to do something about it.

And this is not even counting Independents who represent over 2 million people in MA and who heavily favored Brown in pre-election polls (almost 2/3 said they would vote for him according to a Suffolk University poll – similar data was apparently not collected on Election Day). Last year, those same Independents voted 57% for Obama.

Last factor was participation as folks in Republican districts voted more in masses than in Democratic ones. Yes, people, every vote counts…

Another thing that struck me in this election is that voters don’t need to be 100% aligned with candidates to cast their ballots in their favor. Unemployment and healthcare were on most people’s minds and hugely influenced their decisions. And I would bet that a lot of those who voted for Brown did not agree on the more conservative part of his agenda. But they did not care this time.

What people are truly worried about is that they don’t see in the early signs of the economic recovery a decrease in unemployment numbers. There is always a lag between the economic activity and the labor market but this time unemployment figures do not seem to move much if at all.

And I think that a lot of folks who work in Corporate America have been seeing the same thing I’ve been hearing accounts of, i.e. companies have found ways to do the same with fewer people. So, why hire back the folks who got laid off or recruit new people as long as the activity does not pick up significantly? I am afraid that a lot of the jobs lost won’t be coming back, and not only those that were outsourced to developing or emerging countries. The name of the new game is “Productivity Gain – 2010 Edition” - a lot of people out there are not going to protest when they are told they have to take on some of the tasks of someone who just left the company in addition to their regular duties – who would be foolish enough to say “no way, Jose, I don’t like the 2010 Edition and I don’t want to play”?

Obama in his State of the Union Address last night had a clearly different tone than he would have had before the MA election. It is as though his Administration got a shot in the arm and realized they had to come out more strongly to show Americans they are doing something about this crisis. And the situation for the Republicans has also changed radically as they have a totally renewed sense of self-confidence and are dying to take on the Administration and the Democrats...

But frankly, I am not sure there are a ton of things Obama can do to curb unemployment if indeed mentalities have started to change and the “do more with less” approach that bears the fruits of significant future discontent and tensions in the workplace is becoming the new norm in Corporate America.

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