the newsletter of tbd consultants - 4th qtr 2013

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In this Edition

VA Healthcare System
Nursing Homes
Battle-Weary Market

Construction Management Specialists

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VA Healthcare System

What is one section of government that is almost immune from the effects of sequestration and also ranks among the top ten hospital systems in the US based on size? The answer is the VA Healthcare System that we examine in this article.


Nursing Homes

Life-span has been increasing, which is good, but that has also led to increasing numbers of elderly who require regular assistance and special housing facilities. In this article we look at some of the features of nursing homes.


Battle-Weary Market

The Great Recession (sometimes called the Lesser Depression) started in December 2007 and officially ended in June 2009 (according to NBER, the National Bureau of Economic Research), yet we are still struggling along, trying to climb out of the pit we ended up in. Why is it taking so long?

The depth of the recession and the fact that it was global in nature, is part of the answer, and the US has been doing better than areas of the world like Europe and Japan. The Eurozone has only just emerged from recession again, and not all of the Eurozone nations are back in positive territory. But while we have been seeing growth in the U.S., it is commonly referred to as a ‘jobless recovery’.

The unemployment rate has been decreasing, but that is only part of the story. Much of the growth in jobs has been in part-time positions, so the amount of people who are underemployed remains substantial. There are a number of scapegoats for this underemployment, one being the Affordable Care Act (a.k.a. ObamaCare) and its requirement for companies with more than 50 full-time staff to pay for employee healthcare or face fines. But if the need for employment was there, then only using part-time employees should be bringing the unemployment rate down even faster, so the root cause must go deeper than that.

Improvements in productivity might not sound like a bad thing, and this writer wouldn’t want to say it is, but it appears to be fairly foundational to our current dilemma. Long before the current recession hit, employment in the manufacturing sector was dropping as productivity increased, and, since the start of the recovery, production has picked up nicely but employment in that sector has been basically flat. That has been partly a result of growing automation in production facilities, added to the fact that where manual labor is actually required, it is probably cheaper to have the work carried out in some place like China. And whatever you think of the practice of outsourcing, it has been part of the worldwide economy for a long time, and isn’t going to go away.

The loss of labor requirement in these kinds of industries has led to the unemployment and underemployment, and while people are not fully employed they are less likely (or able) to spend freely, and so we find ourselves in a bit of a vicious circle. Low spending levels equal less need for production equals less need for employment equals low spending levels.

But the fact that some old jobs are gone and will not be coming back, is not the end of the world. We are seeing the rise of innovation, even in what might be considered old industries. Since the recession caused companies like General Motors and Chrysler to revamp their product lines, they have been doing well, and we are seeing new entries into the field, such as Tesla Motors. Getting into more esoteric fields, we are approaching the dawn of the space tourism industry. With these kinds of developments, and other innovative start-ups, there is and will continue to be a need for retraining of the workforce, providing more employment.

What is often reported as being an old Chinese curse says “May you live in interesting times”, but interesting and innovative times can be very exciting and present plenty of opportunities.

Geoff Canham, Editor



Design consultant: Katie Levine of Vallance, Inc.