Church Leader Insider
Issue 4 - The K shaped update
848 words - Reading Time 3 minutes - Skim Time - 90 seconds
In issue 1 we addressed the K shape of the current economic climate and implications for churches.
Here is an update with some added statistics. Every other issue of Church Leader Insider focuses on a statistic and how it has implications for church leaders.
Remember the K shape means:
Some households are doing well in this season and their economic fortunes are growing.
Some households are not doing well and they are in severe distress economically.
There is also a good percentage of people “holding their own” due to investment and retirement income being steady for now.
Most news articles neglect that third aspect to paint a more dire picture.
What we do know via U.S. Statistical measures are mixed.
The more education you have the better you are doing. That was true before Covid as well.
If you are under 29 you are having a harder time than others. But in the past month, workers under 24 are seeing increasing employment as more willingness to accept entry level jobs improves.
If you are non white you are having a harder time than others.
Recorded job openings are about the same level as December 2019 and accelerating each month.
Consumer confidence surveys have dropped in the last 30 days. Most show slight rebound from the absolute worst month with steady increases but dropped last month by a few points. This is a measure of an individual's faith in the future economically.
The higher wage employment households have lot around 1% since January vs. low-wage worker households which have lost 15 plus percentage points in employment.
Yelp says 100,000 small businesses have permanently closed since March.
We are seeing some rebound in the restaurant and retail sectors. Most of our economy in the US is driven by consumer spending and that is rebounding. Hospitality and travel related spending is in the dumps though.
Savings rates of households are now around 17% (July Federal Reserve) - down from historic 33.7% in spring, but still more than double the January 2020 savings rate. During times of recession people tend to save more if they can.
A recent study projected that 21% of renters are at risk for eviction. But past projections have been higher than actual eviction. But with government support unknown for renters and landlords, this is a real risk.
If you are reading these stats in other countries, your numbers could look different.
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My consulting is customized but is focused on key areas:
Succession of Large Church Senior Pastors
Building Better Boards
Next Chapter Storycrafting for the whole church strategy
I work with church leadership teams and boards who want to address strategic “what’s next” issues. Most of my work is behind the scenes. This is not a cookbook or template to follow. There are tools that are customized for each church and every conversation.
Reach out and let’s connect.
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In discussing the “K SHAPE” with a group of pastors I asked simply - Of the three categories, what percentage of the households are in each? (It was not scientific at all)
But the averages were:
Upper line - economically growing - 50% (with some up to 70%)
Lower line - economically suffering - no one was higher than 20%.
Middle line - holding their own - between 30-40%.
To me, this means we have some opportunities. People will continue to support real ministry that meets real needs, but we must invite them to invest with us in those opportunities.
Implications:
It’s not over yet and won’t be for a while. We expect some fall pain in layoffs to continue. Which is why we should continue to encourage generous, sacrificial giving now. By next summer, we may get some return to normalcy, but “full normal” conditions are more like 18 months away.
One of the authenticators for your community will be the outward and visible concern for the poor and hurting. What does your ministry to those sectors in your community look like?
Also – for those families that are striving to make it in your area – how are you communicating concern?
Some of you need to go ahead and prepare to make some hard staff decisions as your program of ministry changes. This fall is when you should make those.
Every local economy is different. Some areas have slowed only a bit, while others tend to bear the brunt. The country and most states have diversified economies with different employers forming a good mix. But some counties and cities are very dependent on one type of industry. There will be winners and losers.
Like the last recession, the churches that address these issues in a straight on way will emerge stronger when the season ends. This includes care for the needy among you, classes and groups to help people address their personal budgets and spending, and encouraging your best leaders to increase their generosity journey.
But it also means we must be good stewards organizationally. The churches in the last recession that went through painful cuts early in employment of staff and expenses came out stronger on the other side. I didn’t say it was easy, and I don’t think we cut our way to success. But protection of the future for our church may mean we can’t preserve some jobs now.
Recessions mean revivals of several types. As people discern what is important to them, we have opportunities to help people reprioritize their lives spiritually.
Often, we also see revivals of employment related ministries. Sometimes these are small groups, and groups small enough to meet face-to-face in some states. In a few cases where these are networking, in house, believer to believer connections that can help people with at least some employment in a struggling season. These types of ministries are best led by volunteers who had this experience in their own life before.
So what is the “K” shape in your congregation? How will you address all three levels?
Email is my love language - I have Twitter and Facebook but I don’t really check it. And a LinkedIN but I always forget that too. So just feel free to reach out on email. I eventually answer them all. Dave.Travis@generis.com.
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