The Jetsons and plumbing
In November I had the opportunity for the second time in 2019 to hear author, columnist and small business owner Gene Marks do his thing at the ASA Central annual meeting (the former MwDA group) in Oak Brook Terrace, Illinois.
Marks, who I also heard speak at the ASA Emerging Leaders event in Denver in the spring, does a good job of mixing in oddball facts with some hard-hitting advice/suggestions.
While delivering some strong action items on where things are heading for companies beyond 2020 and how they can profit from a recession, Marks also had the crowd laughing at some of these tidbits. For instance, Marks brought up some type of study/survey where folks were asked something along the lines of if chocolate milk came from brown cows. Shockingly, some survey respondents responded affirmatively to that question.
Most interesting, perhaps, was the revelation that through detective work on various episodes of the 1960s space-age cartoon “The Jetsons,” it has been determined the Jetson mother, Jane, was a teen mom. A Wikipedia post confirms that, listing Jane as 33 years old and Judy as 18. For those curious, how old George Jetson (Judy’s dad) was in the show, head over to that post.
"Marks says there will be a recession---someday."
But enough with the Astro, Cosmo Spacely and Orbit City talk. Marks got after it when it comes to what companies should be preparing for beyond the turn of the decade.
For starters, health care should be on the front burner. “Health-care costs will change significantly after 2020,” Marks said.
In terms of health-care actions, Marks suggested maximizing pre-tax benefits with tools such as flexible savings accounts (owned by the company, no rollover), health-care savings accounts (owned by the employee, high deductible plan) and health-care reimbursement accounts (employer contributes, can be used for health premiums, not taxable for employees). Marks also suggests researching association health plans.
On the labor front, Marks told the suburban Chicago audience tight employment will drive higher compensation costs in 2020. Of the 50 states, 29 now have minimum wages higher than national (Illinois minimum wage will go from $8.25 in 2019 up to $15 in 2025), while Towers/Perrin/Mercer says average wages will increase 3.3% to 3.6% in 2020.
Marks suggests budgeting for increases in salaries, overtime and minimum wages, while getting creative with personal time off (volunteer time, exchanges and even unlimited time off plans).
He also suggests considering the outsourcing of CRM, accounts payable processing and HR platforms to help control rising compensation costs.
Responding to what has been bandied about in the industry for the last few years, Marks says there will be a recession — someday.
To keep an eye on the economic comings and goings that might tell us when said recession will be coming to town for dinner, Marks suggests following such leading indicators as the Baltic Dry Index, Institute for Supply Management non-manufacturing survey, and the more commonly used National Association of Home Builders Housing Market Index. He’s also high on tracking retail sales data, as well as the NFIB Small Business Optimism Index.
And don’t forget about the Chemical Activity Barometer, which touts itself as a critical tool for evaluating the direction of the U.S. economy. Good economists to follow, Marks said, include Mark Perry (American Enterprise Institute), Bill McBride (Calculatedriskblog.com) and the website SeekingAlpha.com.
He also encourages companies to do a monthly cash check to make sure six months of operating dough is on-hand.
Marks said another key trend concerns the 2017 Tax Reform Act, which he sees gaining momentum. Among action items here, Marks suggests revisiting your company’s tax status (pass-through entities take a 20% deduction, while C-corps now pay a 21% rate); take advantage of the capital equipment deduction (Section 179 deduction increased to $1 million); use the work opportunity tax credit ($9,600 credit for hiring the long-term unemployed); write off old AR and inventory (dispose and write off); and hire your kids (take the deduction, he said).
And if you want to see a torrent of interesting historical photos, Marks says to head over to Shorpy.com.
Regardless of what is ahead of us in 2020, here’s to everybody enjoying the holiday season with family and friends. In the end, that’s what it is all about.