They’ve become particularly illusory in the digital age, as “fake” news, social media platforms (Twitter, YouTube), and instant cyber-stardom increasingly blur the line between fiction and reality.
No subject matter is sacred, either.
Consider, for example, the U.S. economy: Now fully recovered from the Great Recession of 2007-2009, the nation’s unemployment rate has tumbled to 3.9 percent from a high of 10 percent eight years ago. Roughly 19.3 million jobs have been created since 2010 and layoffs are at their lowest levels in nearly 50 years.
The economy is performing so well, in fact, that President Donald Trump recently deemed it the “envy of the entire world.”
But is there truly that much to covet?
The real story—or whole story, actually—is a lot less sunny. The American economy is indeed humming along, with inflation holding at 2.7 percent (as of August), and jobless claims sinking to their lowest level since Dec. 6, 1969.
But the historically low unemployment rate may have more to do with frustration and hopelessness than pecuniary might. Economists say the labor participation rate—i.e., the percentage of people either employed or actively looking for work—is trending downward, having slipped from a peak of 67.3 percent in mid-2000 to 62.7 percent in August.
Some of the dropoff, of course, can be attributed to milestones like college enrollment, retirements, and family planning. But part of the decline stems from despair and pessimism too, as more Americans (especially older residents) simply give up on finding work.
Thus the impetus for the freefalling jobless rate.
“That’s why the unemployment rate keeps dropping,” Forbes contributor Erik Sherman wrote in May. “It isn’t the underlying strength of the economy that reaches all levels of society. The number of jobs might be keeping rough pace with the growth of the population, but that is it. There is no broad economic cheer.”
Not without the right cheerleaders, anyway. Politicians have been quick to paint a rosy picture of the economy, using small business confidence, tax cuts, and Dow Jones Industrial milestones as focal points. But their abstracts ignore subject matter like rising deficits, weak housing starts, risky corporate debt, and lagging wages.
The latter topic adds a bit of surrealism to these quixotic compositions, as a booming labor market should logically drive up wages. Yet hourly pay for America’s working class has essentially been flat for the past two years.
“Based on the historical relationship between average worker pay and unemployment, wage growth should be rising about a percentage point faster than it is right now,” economist Jared Bernstein, a former advisor to Vice President Joe Biden, wrote in a July 18 New York Times opinion piece. “Part of that has to do with inflation, productivity, and remaining slack in the labor market.”
In June, the U.S. Bureau of Labor Statistics reported that wages grew 2.7 percent annually before inflation. But rising consumer prices—2.9 percent over the past year—have wiped out any small pay raises.
The White House, naturally, contends worker compensation is actually rising faster than indicated by traditional government measures. Yet federal data released over the summer indicates middle-wage worker earnings have been stagnant since early 2017.
Medtech wages have been languishing longer than that: Annual (pay) raises in the industry have been on the decline for the past decade, according to Medical Product Outsourcing’s latest salary survey results. The number of workers deprived of a stipend bump in the past 12 months more than doubled since 2008, going from 18.8 that year percent to 41.1 percent in 2018. Those receiving an increase of 5 percent or less in the last year remained essentially flat at 43.5 percent (vs. 42.3 percent in 2008), survey results show.
Such languor, not surprisingly, has led to lower expectations among medtech employees. More survey respondents expect their salaries to stall again this year (40.3 percent compared with 36.1 percent in the 2017 analysis), and fewer are anticipating even small wage increases within the next 12 months. Four percent expect a 1 percent raise (compared with 5.5 percent last year), 8 percent anticipate a 2 percent hike (vs. 12 percent in 2017 and 15.5 percent in 2016), 19.3 percent are looking for a 3 percent increase (compared with 25 percent in the previous two years), and 3.2 percent are counting on a 4 percent raise (vs. 3.7 percent in 2017 and 8.5 percent in 2016).
Despite such nominal confidence levels, though, medical device professionals are still dreaming big: A growing number of survey respondents expect a 5 percent salary bump this year—12.1 percent compared to 11.1 percent in 2017 and 4.7 percent in 2016—and a larger throng anticipate a 10 percent raise (4.8 percent vs. 2.8 percent last year). Those visualizing a wage hike of more than 10 percent doubled (5.6 percent from 2.8 percent in 2017), with several survey subjects forecasting increases of 14 percent, 18 percent, and 20 percent. One survey respondent, however, expects his/her raise to materialize as an in-vitro diagnostics government contract.
Interestingly, stabilizing wages seem to be having little impact on income satisfaction levels. Only 16 percent of MPO survey respondents are unhappy with their pay this year, down from 29 percent in 2017 and 33 percent the previous year. Nearly 60 percent believe their salary adequately reflects their level of responsibility, up from 57.4 percent last year and 46 percent in 2016.
The rising levels of compensation contentment in the medtech industry is surprising considering the considerable slide in annual base salary over the last decade. Fewer survey respondents earn over $200,000 (8.1 percent compared with 10.3 percent in 2008) and more make less than $15,000 (8.9 percent vs. 0.9 percent 10 years ago). Most still earn between $75,000 and $150,000 (47.6 percent compared to 48.3 percent in 2008) but a greater number are pulling in between $15,000 and $25,000 annually (2.4 percent vs. 0.5 percent a decade ago), and less are collecting between $150,000 and $200,000 (12.9 percent compared with 15.5 percent in 2008).
With base income shrinking so much, salary should conceivably be the top gripe among medtech employees. But internal politics and the regulatory process actually frustrate workers more, with 26.4 percent of the 124 MPO survey respondents choosing the former as the chief grievance, and 22.4 percent preferring the latter. Inadequate project funding (cited by 11.2 percent of participants) also ranked higher than inadequate compensation (at 8.8 percent, down from 14.8 percent last year and 10.9 percent in 2016).
Some of the top frustrations also doubled as major concerns for industry professionals. Regulatory issues were easily the most-cited source of anxiety for respondents, with more than a dozen grumbling about governmental red tape.
“More rules are coming to make our business difficult,” one respondent said.
“Global regulatory issues which in some cases makes market entry very difficult,” chimed in another.
“OEMs trying to save a dollar while requiring more regulatory/quality requirements,” piped in a third. “In the end, it will only make the contract manufacturers lose money.”
So could the Trump administration’s tariffs and trade wars, respondents fear. Both issues are major concerns for industry as well, though their precise impact on the sector is still uncertain. Through lobbying, the Advanced Medical Technology Association convinced lawmakers to remove certain types of medical devices from the original tariff list, but pacemakers and ultrasound equipment could still be vulnerable to import taxes.
“Donald Trump’s tariffs will result in retaliatory tariffs by other countries, and that will make it harder to export medical devices, as well as make them more expensive because of increased costs,” one respondent noted.
The President, however, insists that his trade policy will not impact business or the U.S. economy, despite claims to the contrary by some small firms. In fact, he credited his administration’s stance on tariffs with helping unite America, Mexico, and Canada on trade.
“By the way, without tariffs, we wouldn’t be talking about a deal,” Trump said on Oct. 1. “Just for those babies out there that talk about tariffs. That includes Congress. ‘Oh please don’t charge tariffs.’ Without tariffs, we wouldn’t be standing here.”
Other concerns cited by respondents included outsourcing, overseas competition, M&A, and curiously, technological innovation.
“Technology, even though we are seeing lower reimbursement,” one participant commented, while another said, “Disruptive technology could potentially invalidate the existence of existing technology.”
Still, one respondent looked considerably further into the future to agonize over technological change.
“While the current advancements in technology are taking the medical device industry to [the] next generation, particularly AI, the only aspect that concerns [me] is how this will really shape the future. Would it be the same as what we have envisioned, or would things change in a way that we would never expect?”
Truly, a question for the ages.