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It's Worse Than You Think: or why you should care about poverty, jobs and income inequality

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It's Worse Than You Think: or why you should care about poverty, jobs and income inequality

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[Row of Unemployed from Flickr Commons]

I'm afraid. Truly. I'm afraid of where we're headed.

We live in a world where the basic storyline goes something like this: we are born, we get educated, we go to work, we earn money, we buy a house and get hitched and have babies who are educated...and the cycle goes on. Of course this story varies in order, magnitude and timeline, but you get the drift. We get trained and then we work so we can afford to do it all over again generation after generation.

It's always seemed to me an odd way to exist, but it works well enough and there have been loads of benefits to this structure, including advances in our technology and comfort in general. The market that we work for and buy from gets more efficient and produces better and better outcomes for us. The incentive is comfier living, through income or better/cheaper stuff or whatever, but I certainly appreciate typing on this laptop while sitting in a warm office and having the ability to publish this for the masses to read. I have a comfy chair and a good cup of hot coffee while the winter elements whip around outside without touching me. Life is good.

povertyline
povertyline

And yes, I have Capitalism and the free market to thank for my good life. But there is no escaping it. We need to work to afford such luxuries. If I didn't have an income, I wouldn't have all of this. And I suppose I could eschew my current lifestyle and take to the land, but I don't really have the skills to snare rabbits and pick the right berries. I took a survival course when I was 14 that my parents teased me about (they called it "Camp Two Fingers" because I described the limited amount of food I could eat each meal - a two-fingered scoop), but I don't remember much of that. And I've been watching the AMC series The Walking Dead and took the 'How long would you survive' quiz and didn't do so well.Also, I like my laptop and wi-fi and power and heat. I'm quite fond of the ease of life I lead, so I'm willing to pay the piper.

But the story is getting harder and harder for more and more people to follow. The piper has more and more limited space. And we're going to have to write a new one if we want to survive.

DETROIT IS OUR CANARY IN OUR COAL MINE

We are nearing a job crisis of mundane proportions. As Chrystia Freeland outlines in her 2013 TED Global talk, The Rise of the New Global Super-Rich(I know, the irony, right?):

Since the late 1990s, increases in productivity have been decoupled from increases in wages and employment. That means that our countries are getting richer, our companies are getting more efficient, but we're not creating more jobs and we're not paying people, as a whole, more.

During the Industrial Revolution, jobs were created on a massive scale, moving the majority of people into cities to fill positions. But since then, globalization has happened, moving hundreds of thousands of jobs overseas to cut costs, displacing an enormous number of jobs. We've seen the effects this has on cities built around industries who now outsource like Detroit and Baltimore. But what happens when the skilled labor is outsourced? What happens when we don't even need people to do the job AT ALL?

Self-driving vehicles, artificial intelligent computers that may teach themselves to code, robots that do intricate tasks and smart homes that monitor and fix themselves are just some of the technology that is right around the corner and threatens unskilled AND skilled labor. Why outsource your coders when the computer can do it for you? Who will need cars at all? Forget mass transit. Seamstresses and tailors? Meh. Cooks? Who needs them. Plumbers? Electricians? The list goes on.

In fact, even the people who are BEHIND the technology that is leading us there are afraid of where this is headed:

Eric Schmidt, executive chairman of Google – a company that is working on emerging technologies such as self-driving cars and robots – is worried. “The race is between computers and people and the people need to win ... In this fight, it is very important that we find the things that humans are really good at,” he said. - FT.com, Automation and the Threat to Jobs, January 26, 2014

Sure, every advancement creates a new job and new opportunities to earn, but are the number of jobs and opportunities created enough to replace the ones lost? Are there? Because if there aren't enough new jobs to replace the lost jobs, no matter how much you berate the unemployed for being lazy jerks, there won't be jobs for them to go to. And the time period between unemployed and homelessness will be swift as the number of people living paycheck to paycheck (68% in USA alone) and buried in personal debt is staggering.

I wouldn't be so afraid if there was some sort of plan in place. If this was something we talked about openly and honestly and that economists were discussing in a public forum. But it's really difficult to find anyone talking about this except for a smattering of people here and there who are largely dismissed as paranoid and overreactive.

As an interesting aside, after watching Freeland's TED talk, I went to check out the numbers of people employed by the tech companies we know and love (these are worldwide numbers for the most part):

Amazon - 109,800 ($183B market cap) Microsoft - 100,500 ($305B market cap) Apple - 80,300 ($450B market cap) Google - 46,400 ($380B market cap) Yahoo! - 11,700 ($35B market cap) Facebook - 5,800 ($150B market cap) LinkedIN - 4,800 ($25B market cap) Twitter - 2,300 ($34B market cap)

TOTAL - 361,600 jobs

To put this in a bit of perspective, here are the headcounts for the 8  biggest employers in the US:

Wal-mart - 2,200,000 ($242B market cap) IBM - 435,000 ($192B market cap) McDonald's - 400,000 ($93B market cap) UPS - 400,000 ($89B market cap) Target - 355,000 ($36B market cap) Kroger - 338,000 ($18B market cap) Sears - 312,000 ($4B market cap) General Electric - 287,000 ($25B market cap)

Total - 4,327,000 jobs

Notice something about many of the employers on this list? Many of them hire part-time, minimum wage employees (the working poor), some of them hire unskilled labor (the automate-able - I can see the day when our Big Macs are assembled by robots, can't you?) and some of them are in trouble (Sears anyone?). Here is something to chew on: Target employs roughly the same number of people who Amazon, Microsoft, Apple, Google, Yahoo!, Facebook, LinkedIN and Twitter do COMBINED.

And if you don't understand the connection, the reason why I'm showing the largest employers is that many of them are retailers whose retail outlets are being threatened by technology - when retail outlets get shut down because people are ordering more and more online (just today, Radio Shack announced the closing of 500 stores), where are the new jobs being created to replace them? Certainly not with the new entrants.

[NOTE: Knowing how damned frustrating it is to get support at any of the tech companies listed (even the Genius Bar is backed up for days now and they direct you to the forums), I have some suggestions of where they could hire a few bodies. Am I right?]

THE GOOGLE BUS THING ISN'T REALLY ABOUT THE BUSES

It's about this. It's just a symbol of a much deeper issue. The Bay Area, is the next canary. It's awesome because people are finally taking income inequality seriously...and it's dislodging many heads from many a$$es.

DON'T JUST POINT FINGERS AT THE PLUTOCRATS - YOU ARE TO BLAME, TOO

As consumers, we should take on a big part of the blame here, too. It's not just companies trying to be more efficient and maximize profits. It's also our appetite for a 'deal' and our move to shopping online and on our mobile phones. As we demand lower costs and convenience, we force more human beings out of a livelihood. Hell, I love my Joe Fresh deals, but when the factory collapsed in Bangladesh last spring, I realized what my hunger for good deals was doing to the world. I'm making more of an effort to shop local now and when I get a hankering for some online shopping, I head to Etsy first.

And what about startups like Etsy and Shopify and Chloe + Isabel and all of the other peer-to-peer and home-based business boosting tools that are launching? Isn't there all sorts of money being poured into these pretty commonplace tools to help people grow their own businesses, releasing them from the shackles of traditional employment?

Sure. But just like their analog ancestors (Avon, Amway, Mary Kay and Tupperware to name a few), there will be only so many successful people in each neighborhood. For instance, I live in a pretty tight neighborhood (roughly 15,000 people and we all have dogs so we talk). If EVERYONE in my neighborhood bought $50 worth of Tupperware per MONTH, that would only cover costs of living in this neighborhood ($60k/yr) for 38 people (25% commission based). And that's being generous. NOBODY needs $50 worth of Tupperware a month. Here is a real stat: 65% of Etsy sellers made less than $100 last year. And as a big fan of Etsy, I know for a fact that these sellers are often barely covering the costs of their supplies. They try to remain competitive so they don't pay themselves very much.

Building a business online is the same as building a brick and mortar business. You need buyers. And with buyers going for the cheap and convenient options, there isn't much space for the artisan or hand-crafter. As a friend of mine said, "There is only so much jewelry I can buy!" when referring to Chloe + Isabel.

And speaking of buyers, what happens when unemployment soars? There will be even fewer buyers, which means ANY business trying to make ends meet is going to struggle, which will most likely lead to more layoffs, which will...well you know where this spiral leads.

SO ARE WE EFFED?

Well, if we keep burying our heads in the sand and moving in the general direction we're moving, yes. We're completely effed. Marketing, which happens to be the profession I've made a living at for 15 years now, is a BS job. I can completely admit to that. It's completely necessary in a Capitalist free market economy - because there is a confusing amount of options for customers and somebody needs to point them in the direction of your option - but in the automation and AI boom, it'll be made irrelevant.

In fact, many of the tech giants have already eliminated the marketer's role. Does Google hire marketers? Nope. Sales people and engineers. There are a few 'advocates' and 'futurists', but that's not the same. Does Facebook? Not really. Some people have the title of marketing, but they're role is more sales-driven, too. Microsoft and Amazon have fairly healthy marketing departments, but there are only so many jobs to go around there. Besides, once Google automates it for us (along with those engineering jobs), everybody will follow.

I know I'm a big downer. Sorry. If it makes you feel any better, this whole mess is still a few decades off. The singularity isn't supposed to hit until 2029. (Oh, which also reminds me that the person who invented the idea of singularity is...an employee of Google. Coincidence? You make the call.)

Truthfully, we need to rethink our economy altogether. Maybe the future of work is different? Maybe we don't work for a living anymore? Maybe we actually work on what makes us passionate without pay because we get a stipend? Or we don't need money anymore? Maybe there are different incentives? There are lots of people who have been rethinkingmoney for years and there is even a great crowdsourced currency contender (say that 10x fast!). Today's dollars are really only real because we think they are real. Sort of like Tinkerbell, if we stop believing it's real, it will cease to exist. (This concept has always fascinated me - since I studied the Brazilian Real Crisis in the 90's)

I had a conversation lately with my brilliant friend Heather, who said she read and watched The Hunger Games and didn't feel it was fictional at all. I agree with her. There are all of these showy excesses being waved around arrogantly while so many struggle. There is fear and awe now, but all we need is a Katniss to start the uprisings. I feel for Tom Perkins because, even though his Nazi Germany comparison is incredibly offensive, the Plutocrats are in danger. When wealth inequality is put under a microscope, it will affect him deeply. In actuality, he should have used the French Revolution as the example. But he wouldn't because many still uphold the French Revolution as a necessary balancing of power during a time of...great inequality.

Maybe there are think tanks and groups of people locked up in important secret boardrooms (beyond the lip service of Davos) coming up with awesome ideas. But seriously, folks. This is going to be big. And we can put it off and put it off, but at some point, it's going to catch up with us.

There are so many people out of touch with reality and though we shouldn't live with a cloud over our existence either, we really really need to think practically about our future. The higher we climb, the further we fall. Let's figure out how to prevent free fall in the future.

Let's not wait for those in power to come up with a solution...or we may be sending our children to a fight to the death arena in the near future.

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I've taken over the Fuck Poverty Facebook Page to share articles and continue this conversation. It's not much, but it's a start. Any additional suggestions, input, etc is very welcome. I've been thinking about this subject a LOT lately. I think the time is ripe for making it a priority.

I'm also reading The Lights in the Tunnel, recommended by my friend and associate, Lane Becker. Everyone should read it. It's awesome and covers stuff I said here with better examples, data and clarity. ;)

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Marketing's REAL Beef with Facebook

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Marketing's REAL Beef with Facebook

EDGERANK CONCEPT handwritten with chalk  on a blackboard
EDGERANK CONCEPT handwritten with chalk on a blackboard

Yet another article has come out yesterday on how Facebook is a waste of time for marketers because posts only show up for 8-16% of their followers. As someone who has been in marketing for over 15 years (online marketing for 14 of those), these posts irk me. To me, they show a low understanding of how human beings engage with media and demonstrate that old perceptions of customer ownership persist, even through the Social Era.

General Facebook Stats

First off, here are some basic statistics on how people use Facebook. The average Facebook user has 229 friends and likes 40 brands. They spend an average of 1.5 hours/week on Facebook, accessing it from 7,000 different devices. 58% of Facebook users return daily. And 65% of people who like brands on Facebook do so for the coupons/savings they can access. (source + Facebook Insights 2012) There are 50 million Facebook pages that post 36 times per month - 2.5 million of those that are promoted through Facebook ads. (source) And 40% of people's time spent on Facebook is on their newsfeed, while only 12% of their time is spent on profile and brand pages. (source)

image from PhotoDune
image from PhotoDune

If you haven't figured it out mathematically, Facebook is NOISY for most users. I'm a super user (outlier), so I'm not the best example, but I have 3,233 friends (I try to weed them out to only people I've met from time to time, but it keeps growing), like 898 pages (don't know when THAT happened, oy), am part of 49 Facebook groups (some are SUPER active) and have a public page where I've grown 64,864 followers (who can comment, like and otherwise engage with my profile unless I limit visibility on a post). Facebook's Edgerank helps me a great deal. Sure, I don't see everything and I'm sure I'm missing all sorts of uber important life events and sales and launches, but it makes my experience on Facebook a little more sane.

My Mom, who defines herself as a luddite, has 174 friends on Facebook, 6 likes and is part of 1 group. She doesn't have a public profile, so doesn't have 'followers'. She still finds the amount of posts and news on Facebook to be overwhelming at times, so she created her favorites so she would always see what's happening with her family as we post items. She has created a filter ON TOP OF the Edgerank that Facebook provides to help her manage the posts from all of her friends.

I can understand that a brand who thinks that every like is an undivided attention endorsement would think that 8-16% of their followers seeing their posts means that Facebook is ripping them off. But anyone who thinks a little bit and understands how this works should get that Edgerank IS FOR THE USERS not for the marketers.

How Edgerank Works

edgerankformula
edgerankformula

Edgerank isn't some plot against brands who don't pay for advertising on Facebook. All it does is favor posts that are popular and relevant, whether it is a personal profile post or a brand page post. It also understands what users have engaged with previously, so if you spend a lot of time liking and commenting on certain friends' posts, those friends (and brands) will show up more often.

Here is a frequently passed around definition of how Edgerank works:

"EdgeRank is an algorithm used by Facebook to determine where and what posts appear on each individual user’s news feed in order to give users relevant and wanted content.

The three variables that make up this algorithm are:

  • Affinity Score - Facebook calculates affinity score by looking at explicit actions that users take, and factoring in, the strength of the action,  how close the person who took the action was to you, and how long ago they took the action.
  • Edge Weight - Facebook changes the edge weights to reflect which type of stories they think user will find most engaging.
  • Time Decay – The determines the time passed, if they’re old they probably don’t appear."

(source)

And, yes, a brand page can use advertising to improve their Edgerank. That's how advertising works. You pay for the ability to cheat the system. As the saying goes, "Advertising is the price you pay for having an unremarkable product," but I would also add that advertising is the price you pay for an unfair advantage. It's the way of balancing the universe. You can pay to be at the center of it. ;)

Why Marketers Really Hate Edgerank

There are several reasons why marketers* hate Edgerank:

  1. There is no instant gratification - even if you are a content maestro, it takes time to build an audience without advertising. For my clients, I use advertising to underscore great content instead of in place of it.
  2. Retro TV Commercial
  3. They think a 'Like' means the Facebook user is endorsing undivided attention - the truth is, there are all sorts of reasons why people like brands on Facebook and, since the average user likes 40 brands and has 229 friends, there is no such thing as undivided attention (or if there is, it's rare...and a bit odd). The reason your posts aren't showing up on their newsfeeds is because they aren't engaging with them.
  4. Marketing people aren't generally content people and vice versa - I sat down with a journalist friend of mine who has been hired by a big fashion retailer to do their content. She's really brilliant at it, but had very little knowledge as to how to use the tools and how to promote the great content she was producing. They wanted her to do both content AND marketing and didn't understand that those two talents are very different and usually require two roles. People conflate them all too often and though you may find the rare individual that can do both well, it's best that you split the role for maximum oomph.
  5. Most marketers are still stuck in the old one-way paradigm - helloooo! It's the social era! This means that even old one-way mediums (billboards, television, radio, magazines, etc) need to get more multi-way in order to survive. So stop treating the social tools as bullhorns. Seriously. This is why you are failing at them. Facebook should be 50% listening, 25% responding and 25% talking (more or less).
  6. Campaigns should be part of content, not the other way around - content done in brief spurts and ebbs and flows just doesn't work (see #1). It takes time to build an audience, engage them enough to keep them coming back and delight them to the point of wanting to share to their own friends (they have their own audiences and goals). I've talked about how content bursts with long silences between hurt your audience on YouTube, but it works the same way in many social mediums and Facebook's Edgerank is one of them.

Marketers have to learn to work with content people (photographers, videographers, writers, journalists, graphic designers, artists, etc) on their strategy. Creativity and strategy are intertwined. In fact, the strategic process should look something like this:

Screen Shot 2013-06-02 at 3.28.26 PM
Screen Shot 2013-06-02 at 3.28.26 PM

...and you should enter this loop at learning. (note: I usually remove the launching/promoting part until a few cycles of learning, planning, implementing, learning, planning, implementing...)

The beauty of Facebook is that it is inexpensive and content rich and sky is the limit when it comes to creating engaging content AND everybody is there, hanging out, looking for great distractions. In addition, I don't believe there are many brands that do it right, so you have every opportunity in the world to raise the bar. Don't blame the tool, especially when it's implemented features that benefit the users you are trying to reach. Take a closer look at your own content. Are you engaging? Are you creating content your fans would be excited to share? Are you creating value? Improving knowledge? Lives? Are you making your customers' lives simpler, less confusing, less alienating, more efficient, more meaningful and just plain better? Or are you just adding to the noise?

Abandoning Facebook would be like cutting off your nose to spite your face. It's a great tool if you understand that it isn't a billboard. And remember, it's much less expensive and gives you all sorts of ways to hear from your audience and understand who you are hearing from (which is very difficult with a billboard).

So stop writing 'woe is me' posts and start respecting the medium and your audience. Trust me, you'll change your tune.

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* I really shouldn't lump all of us in the same boat. I love Edgerank and think it's a beautiful and user-centric feature for Facebook. It just makes me work harder to create engaging content and I love a good challenge. I know there are great marketers out there who get this, too.

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