You Know We’re On the Brink of Recession when …

After living through a few economic boom-bust-recovery cycles, I have noticed some indicators that economic pundits don’t mention. One of those is what I call “the service quality index,” meaning the quality of our experiences as customers/patrons/patients/clients.

This is not a groundbreaking observation; it seems closely aligned to supply and demand. When the economy is booming, there is high demand, so the workers meeting that demand can be more choosy about the jobs they will do. This translates to a scarcity of workers for some jobs, resulting in lower levels of performance from the workers who will take a less attractive job. Common sense, eh?

What isn’t as obvious is my observation that we all — workers and customers — eventually descend into a malaise about this dynamic. Customers develop a growing level of discomfort about the diminishing quality of their experiences, and workers develop a growing dissatisfaction with their ability and/or willingness to deliver better experiences.

This continues until someone declares “enough is enough!” Buyers buy less (which slows down the economy), workers quit (or lose their job as the economy slows down), or both. The economy can seem abstract; we can’t go touch it, talk to it or order it around. Our collective behavior defines economic activity, so when we get into that malaise, the economy suffers.

The quitting side of this may have been (greatly) amplified during the pandemic/financial incentives cycle we just emerged from, and maybe that’s why I am more keenly aware of this right now, but this is not a new phenomenon. We have seen this rodeo before.

Considering this from another angle, think back to when you had a stellar experience at a store or (modestly priced) restaurant. Was it during the boom times, or was it when the economy was less frothy?

I may be inaccurately projecting my feelings on others, so to get more specific here, I can report that my personal behavior definitely changes as a boom cycle winds down — like right now. I have declared “enough is enough” on lousy service, throwaway products, and crappy experiences. That means I am spending less. I’ll bet you are too.