You load sixteen tons, what do you get
Another day older and deeper in debt
O’ Saint Peter don’t you call me yet
I owe my soul to the company store
– Sixteen Tons, by Ford Tennessee Ernie
I remember when Tennessee Ernie Ford sang Sixteen Tons. It described working conditions 100 years ago and the control a company had over its employees. Men worked for the same company their entire life. The company provided housing. People bought everything from groceries to clothes on credit at the company store. On payday, the company took what it was owed straight from their paycheck. I imagine this kind of life was a lot less stressful. You didn’t worry as much about losing your job or your home. You knew you always had a place where you could get food. Your life had no uncertainty. A clear path was laid out for you.
By the 1950’s when this song came out, this lifestyle was disappearing. People were becoming more mobile. They were buying their own homes and going to college. Supermarkets opened and purchases were made with cash rather than a line of company credit. Even one generation ago, men kept the same job for an average of 13 years. Now, the average tenure with a company is just eight.
The Occupy Wall Street movement, with its “99% verses 1%” slogan, brought the nations wealth inequality to the forefront of people’s attention. The wealthier have gotten wealthier, while the 99 percent have essentially kept the same income. What it doesn’t illustrate is the standard of living seems to have improved for everyone. In 1960, the poverty rate was 22 percent. By 2000, it dropped to 11 percent. The standard of living since the 1960’s has drastically improved, even with the effects of the Great Recession. Take the TV for example. I remember when we didn’t have remotes. Many TVs were black and white. My parents spent an enormous sum for a large color TV. Today, you could spend that same amount for a screen two or three times the size, with better definition.
The standard of living’s improvement has run parallel with the increase in workplace stress. In 2008, studies show a large majority of people worried about losing their job. But, what do these changes mean for investors? It means investors need to choose companies with the ability to adapt, gain productivity, and reduce costs. It means investing in companies which can save other companies or the government money.
