Is the ad business more relevant or less relevant in times of economic instability? For the sake of argument, I’ll say advertising is even more important, because it’s all the more necessary to persuade people that X Widget or Y Service is actually worth spending hard-earned money on.
Let’s look to BusinessWeek for more information on where the economy is today, and where the collective American psyche is:
The plight of America’s unemployed is terrible. Yet for the 91 percent of those in the U.S. labor force who do have a job, the numbers also tell a dark story. Take-home pay, adjusted for inflation, fell 0.3 percent in August, the third decrease in five months, the Commerce Dept. just reported. The declines followed news from the Census Bureau that median household income in 2010 fell to $49,445, the lowest in more than a decade, while the poverty rate jumped to 15.1 percent, a 17-year high.
Most economists don’t see the U.S. sliding into recession. Yet the worsening outlook for incomes will cause “continued pressure on home prices and on the stock market,” says Malcolm E. Polley, who oversees $1 billion as chief investment officer at Stewart Capital Advisors in Indiana, Pa. There may be higher use of 401(k) loans as emergency funds. Americans will feel even poorer. “Perception is reality from the standpoint of consumers and investors,” Polley says. “We need people to start feeling good about themselves.”
As a marketing professional, I concur, we do need people to start feeling good about themselves. However, what makes people feel good is enough money in their paycheck to cover expenses. And where might this little bit of padding come from? It comes from one’s employers, who are busy doing everything they can to hold cash, not because they’re terribly greedy, they’re mostly just afraid.
It seems to me the fundamental question is when can we begin to trust again? The answer to that will have to be played out in a million different ways, in businesses of every sort and size. The people who invest capital and take risks in order to grow their business deserve to be paid handsomely for their efforts. As do the everyday workers who are there in heart, body and mind for the company and its customers.
Editor’s note: Let us hear from you. Have you been laid off or asked to take a pay cut since the economy nose-dived in 2008? Or are your superior skills, connections and love of work helping you to ride this storm out?