Overemphasis on quarterly earnings?

by WCE

This article discusses emphasis on quarterly, rather than long-term, earnings. This is one of the biggest changes at my employer in my career. Managers used to be focused on technical aspects of projects and developing people, and now they spend a lot of time managing quarterly finances. (Cash flow is not an issue at the company.)

How to Stop Short-Term Thinking at America’s Companies

My favorite fact was one I’ve tried to find unsuccessfully in the past: 8% of stocks were held by institutional shareholders in 1950 compared to 70% of stocks today. I don’t know how 401(k) accounts are considered in that allocation, but pension funds will definitely have their returns affected by any increase in corporate taxes.

Despite the emphasis on profitability, the S&P including reinvested dividends has had historically moderate growth for the past couple decades. Since I opened a 401(k) in ~December 1998, the S&P (with dividends reinvested) has increased by 3.0% annually after inflation. Is there any agreement on the long-term expectation and whether this is expected to be typical? I’ve long been skeptical of the graphs by financial planners, but I’m 20 years into my career and I’m even more skeptical. Or am I missing something?

Calculator here:
S&P 500 Return Calculator, with Dividend Reinvestment

Unwilling to move for better jobs?

by laurafrombaltimore

This article discusses Americans’ apparent decreased willingness to move for better economic opportunities.

Fewer Americans Strike Out for New Jobs, Crimping the Recovery

I’m not sure I really follow some of the arguments here. E.g., they point out that workers are not moving out of entry-level and temporary jobs at the same rate, but they characterize those short-term employment opportunities as “road-testing” by young workers; thus, they seem to assume that the change represents an intentional decision by these workers to be less adventurous and more risk-averse, when it seems that the far likelier explanation is that those workers have just not been able to find better jobs to move on to.

They also, IMO, give short shrift to the increase in two-earner families, and most specifically on the economic reliance of so many families on earning two paychecks. Their note that “the addition of career-minded women into the work force” might make it harder to move is buried in a list of many possible explanations. I haven’t found a definitive study, one site suggests that two-income families have increased from about 40% of married couple families in 1980 to about 60% today.

Working Family Values Factoids

The Department of Labor points out that much of this increase is comes in the higher-income quintiles (which is logical, as poor women generally didn’t have the choice to “opt out” of work and so had higher historic labor force participation to begin with).  (Scroll down to II.)

futurework Trends and Challenges for Work in the 21st Century

And, of course, those higher-income jobs are likely the ones that are more likely to be specialized and more difficult to replace. Meaning, in sum, that there are more families relying on two jobs, and more of those families have jobs where it will be more difficult to find two comparable jobs somewhere else in the country.

What do you think? Is decreased mobility a problem? If so, what do you think are the root causes?