7/21/2014
By Charles Payne, CEO & Principal Analyst

“Other countries know how to do this. If France can figure this out, we can figure it out.”

“All too often, they are the result of outdated policies and old ways of thinking.”

"Paid family leave, child care, workplace flexibility and better wages, should be part of our bottom line as a society.”

 -President Obama

Speaking at the White House Summit on ‘Working Families,’ our Commander- in-Chief lauded France and its family leave policy. Obama is angling toward some kind of federal fund that would eventually be funded by "rich" workers with families, goals, dreams, and businesses where the nation would get out of its outdated ways of thinking. Of course, outdated means profits which usually mean more jobs, but if society controls corporate balance sheets and gets a crack at the income statement, then it is all a moot point.

This socialist stuff might play well with some, but it has failed all over the world and also, it would destroy America's economic foundation. This is yet another reach into the coffers of money earned by others. In any other place, it would be called ‘theft,’ not ‘a smart policy,’ and definitely not ‘a new way of thinking.’ In America, most large businesses have generous maternity laws while smaller companies cannot afford to pay people who are not working. This is not antiqued – just a fact in a free market society.

Work-Life

President Obama continues to move to remake America into Europe by pushing the so-called “Work Life Balance” initiative, which in my mind is an extension of FDR’s goal of freeing Americans from ‘want.’ The idea of a world of leisure where we work less, but get more defies math and human nature. It might be the centerpiece of a Utopian world, where fairness dictates the redistribution of wealth and guarantees an outcome in both cases, regardless of individual effort and merit.

America’s share of global GDP peaked in the 1950s as we have worked less and others have worked more. Back then, America was so far ahead of the rest of the world, crawling out of the Great War that we could afford to enjoy the good life. Nevertheless, the good life is not free, and except for the period that covered the presidency of Reagan and Clinton, the downward trajectory has been tough to reverse.

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GDP and Elbow Grease

The leisure life enjoyed in Europe has come at the expense of higher taxes, massive debt, and loss of economic clout. Plans that called for austerity were fought tooth and nail, even as several European nations found themselves looking for bailouts. Interestingly, former colonies of these great nations were hit up for cash as well; China, India, and Brazil put pressure on the International Monetary Fund (IMF) for greater voices as they are larger contributors.

However, the best lesson is the obvious one. Since the global recovery has gained traction, nations that worked the most hours have surpassed those European nations that still believe that taking off the entire month of August is a birthright.

Vacation Equality

America is the only advanced economy in the world that does not guarantee any paid vacation days. It’s time for change.

-Hotels.com

Recently, Hotels.com launched a campaign titled Vacation Equality with the aim of getting the White House to draft legislation guaranteeing that all American workers would be entitled to a minimum amount of paid vacation time. But as a way of attracting top talent, most businesses already offer paid vacation time and time off on major holidays, as well as paid maternity leave. There are certain businesses that require workers 24/7 and provide more overtime pay than required by the government for the holidays worked. However, many businesses simply cannot afford to pay the people that are not at work. Still, it is a waste of time for a nation not only in a sluggish recovery, but also suffering from diminishing confidence.

For me, the most important part of work-life is the ‘work’ part, so that I can ‘afford’ the life part I want to live.

Hard Work & Economic Growth

Many western nations, including the United States, have seen the impact of putting an effort in neutral gear, the hard way. I remember when products out of Japan were the butt of all jokes, from transistor radios to automobiles. We were lulled into a false sense of security, even as these products go, they got progressively better and we were caught flat-footed.

It is too late to get back to that perch from which we watched the rest of the world mull around and pick up our crumbs. For all the talk of jobs being outsourced, we might find sooner rather than later, companies coming back because other nations have bigger fish to fry.

The kind of economic leads enjoyed by the west do not evaporate overnight, even with six-weeks paid of holiday time. However, when the rest of the planet has single-minded determination and a willingness to work, while we chill at the beach, it is only a matter of time before our economic leads disappear. In the past few years, the growth of high-net-worth individuals has grown faster in Asia than anywhere else in the world. In 2008, America was essentially tied with Europe, but now America has a half million more wealthy citizens.

I guess we want to give this up for a better balance of life and work…

Charles Payne
Wall Street Strategies

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