BCA

Special from Gallup Management Journal

Keeping people productive and hopeful in tough times isn’t as complex — or as costly — as you might think

As economic conditions worsened during 2008, U.S. workers’ confidence in their economic futures declined, according to Gallup. In January 2008, 60% of employees felt that their standard of living was improving. By October, when the extent of the financial meltdown was becoming clear, that figure had dropped to 39%; in October and November 2008, employed Americans were more likely to say their standard of living was getting worse than to say it was getting better.

However, American workers’ optimism partially recovered between November 2008 and May 2009 before stabilizing. Since last May, about half of employed Americans have consistently said that their standard of living is improving, while about one-third have said it is getting worse.

These trends have been remarkably consistent across different job categories, reflecting the breadth of the economic downturn. It’s been called an “equal opportunity” recession in the sense that it affected the perceptions of all types of workers — including service workers, manufacturing workers, managers, and professional workers.

Refer to www.gallup.com for complete story.

By John Riley

 The word on the street has been confirmed: FDIC regulators are considering an increase in the capital reserve requirements for banks.  No effective date has been set yet.

 Currently, the reserve requirement is 12%. If the new regulations go into effect, the reserve requirement would move up to 12% and then a year or so later, it would go to 14%.

 Following the financial crisis of the past year or so, federal regulators seem intent on taking steps to tighten financial controls on banks. While the increase in the capital reserve requirement would normally seem appropriate,  these are not normal times and such a move can be a serious impediment to the economy’s recovery.  Banks will need to take more of their money that would normally go for loans and investments and set it aside in their reserve fund.