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Speaker 1: The eleven Meet joke gets to the right here. I
Speaker 1: have Saga in the medal of You.
Speaker 3: Well, just an absolutely perfect guest, kind of really given
Speaker 3: our conversation that we just had with our TV team
Speaker 3: Jennifer about the consumer and inflation, because the theme of
Speaker 3: the past two months or so and kind of feels
Speaker 3: like the theme of my life because it's all I
Speaker 3: talk about every single day is that inflation has moderated.
Speaker 3: After all, financial markets are betting that the tough part
Speaker 3: of the Fed's job is behind it, and the FED
Speaker 3: is going to cut rates six times next year. All
Speaker 3: that said, our next guest says, middle income families are
Speaker 3: still feeling the squeeze. Glenn Jay Williams is CEO of
Speaker 3: the financial services company Primerica. It's a firm that specializes
Speaker 3: in serving middle income households in the US, Canada and more.
Speaker 3: The companies out with a new report called Perception Versus
Speaker 3: Reality examining Middle Income Households Financial Outlook heading into twenty
Speaker 3: twenty four. Good to have you with us, Glenn. How
Speaker 3: are you doing great?
Speaker 2: Tam? How about you?
Speaker 3: Yeah, we're doing really well. Thanks so much for joining
Speaker 3: us today. Before we get to the report, just give
Speaker 3: us an idea of that. The types of households that
Speaker 3: you serve at Primerica, you call them middle income households,
Speaker 3: But how do you define that?
Speaker 2: We do, Tim.
Speaker 4: We define those households as having household incomes between about
Speaker 4: thirty and one hundred and thirty thousand dollars a year.
Speaker 4: That takes up about fifty six percent of US households.
Speaker 4: So it's a pretty it's a pretty wide cut. Clearly,
Speaker 4: there are households that are earning less than that and.
Speaker 2: Struggling even more.
Speaker 4: We deal with a few of those, and we deal
Speaker 4: with quite a number above one hundred and thirty thousand mark.
Speaker 4: But the vast majority of the families that we're advising
Speaker 4: or are in that thirty to one hundred and thirty
Speaker 4: thousand a year range.
Speaker 3: And what's so important about this? These tens of millions
Speaker 3: of households, these tons of millions of families, these customers
Speaker 3: that you have is that inflation hits these folks harder
Speaker 3: than it hits people who make more money because a
Speaker 3: larger portion of what these people earn goes to gas,
Speaker 3: goes to food, goes to childcare. So talk to me
Speaker 3: a little bit about what you're seeing going into next year,
Speaker 3: given that we are seeing actually inflation moderate. But as
Speaker 3: Steve Williams told us earlier in the day, you know,
Speaker 3: if you're still paying more, you know, twenty or thirty
Speaker 3: percent more for something than you did in twenty nineteen,
Speaker 3: it doesn't really feel like prices are coming down.
Speaker 4: That is the challenge, Tim, As you've described it, these
Speaker 4: families have every dollar in play at all times, and traditionally,
Speaker 4: because they have smaller amounts to invest, smaller to purchase
Speaker 4: financial service is with they tend to be somewhat ignored
Speaker 4: by the industry, who by and large has moved up scale.
Speaker 4: And so we feel a special responsibility to these families
Speaker 4: because we can access them, we can serve them, and
Speaker 4: they are under stress.
Speaker 2: They don't have extra dollars.
Speaker 4: In the best of times, much less in times like these,
Speaker 4: And as you point out, it's the compounding effective inflation
Speaker 4: over time. You know, our studies and the household Budget
Speaker 4: Index indicates that the average middle income family has a
Speaker 4: deficit from the last of twenty thirty months of almost
Speaker 4: twenty five hundred dollars. And so while maybe the whole
Speaker 4: is not getting any deeper, they're down there pretty deep
Speaker 4: already and we've got to help get them out.
Speaker 2: And that's the challenge these families face.
Speaker 5: What can you tell us about what their spending habits
Speaker 5: are starting to look like over the Christmas holidays and
Speaker 5: what are the concerns that they're expressing to you, Because
Speaker 5: i mean, Tim makes a really good point that you know,
Speaker 5: we've seen that inflation's moderating, but it's still going to
Speaker 5: feel pretty hard for consumers. And so by the same token,
Speaker 5: it sounds like perhaps some of these folks they've still
Speaker 5: got their jobs, they might still have a little bit
Speaker 5: of investment to look at, and it looks like there's
Speaker 5: some good feeling there with a lot of green in
Speaker 5: the stock market over this year. So what's your take
Speaker 5: on how they're feeling about this holiday season and spending
Speaker 5: going into next year.
Speaker 4: Give Jennifer, you're right, there are some positives going on.
Speaker 4: Clearly employment strong, more people do have their jobs. We're
Speaker 4: seeing incomes in freesome as well as well as the
Speaker 4: slowing of inflation. So there's some positive things happening as well,
Speaker 4: but by and large, most families are struggling. They're pretty
Speaker 4: scarred financially and in some cases emotionally by what they've
Speaker 4: been through the last couple of years, and so we
Speaker 4: are seeing them reporting slowing down their spending this holiday
Speaker 4: versus past holidays, but in reality that's very difficult to do.
Speaker 4: And what's really concerning is that we're seeing more and
Speaker 4: more families that are relying on credit cards and even
Speaker 4: withdrawals from those savings that you mentioned to take care
Speaker 4: of months to month expenses in normal months, particularly when
Speaker 4: expenses go.
Speaker 2: Up due to the holidays.
Speaker 4: And of course, overuse of credit and taking money out
Speaker 4: of savings that's designed for long term goals like retirement
Speaker 4: just has a terrible impact over time. They lose the
Speaker 4: time value of money, the compounding of returns on their investments.
Speaker 4: The opposite is happening if they're using credit cards with
Speaker 4: very high interest rates and if they're not paying their balances,
Speaker 4: those are compounding, and so the alternatives to cutting back
Speaker 4: spending are very difficult from middle income families, and that's
Speaker 4: why they're struggling. And that's why in many cases we
Speaker 4: see in our surveys are are qualitative surveys that they're
Speaker 4: struggling financially and emotionally at the same.
Speaker 3: Time, Glenn, does all of this, taken together at all,
Speaker 3: paint a picture of a recession next year? Is this
Speaker 3: recessionary to you?
Speaker 2: I think for these families it feels like it.
Speaker 4: You know, that's a tough question We've been trying to
Speaker 4: get the answer to for a number of years now,
Speaker 4: but I think these families feel like that.
Speaker 2: You know, relief is not just around the corner.
Speaker 3: But the reason I ask is is because if consumers
Speaker 3: pull back on spending, and consumer spending powers this economy,
Speaker 3: and the families that you serve account for more than
Speaker 3: half of the households in this country, if they're pulling
Speaker 3: back to a certain extent, does that mean the economy
Speaker 3: is going to go into recession?
Speaker 2: I believe we're certainly close to the age.
Speaker 4: It's you know, we've seen spending be unusually strong overall,
Speaker 4: and we've had a lot of discussions about the consumer
Speaker 4: spending that hasn't slowed as much as we would expect.
Speaker 4: Doesn't sound consistent with what we're hearing and seeing in
Speaker 4: the middle market.
Speaker 2: So maybe it's being driven outside the middle market.
Speaker 4: But we're clearly seeing these families slow down, and enough
Speaker 4: of that will lead to recessionary pressure if it continues
Speaker 4: long enough.
Speaker 5: I wonder if you think policy makers and indeed Wall
Speaker 5: Street traders are really alive to the risks here of recession,
Speaker 5: because there's just so much talk about a soft landing.
Speaker 5: And then we were talking earlier on the program about
Speaker 5: the last few holdouts on Wall Street, the bare case
Speaker 5: for the United States, And I wonder if you do
Speaker 5: start seeing a real pullback and spending from the kinds
Speaker 5: of consumers you serve, if this will just pass the
Speaker 5: rest of the economy. I mean what I mean by
Speaker 5: that is the wealthier part of the economy, if it'll
Speaker 5: pass them right by, because the macro numbers will hold
Speaker 5: up because their spending will continue.
Speaker 4: Well, there's always a danger that Wall Street is disconnected
Speaker 4: from Main Street, for sure.
Speaker 2: But I don't know the answer that.
Speaker 4: I don't know whether the middle income challenges are going
Speaker 4: to be large enough long enough to overwhelm the other
Speaker 4: pressures maybe that are moving in a more positive direction.
Speaker 4: It's clearly a tug of war going on, and the
Speaker 4: longer it continues, the risk here it gets. I think
Speaker 4: those that are planning for the future should clearly be
Speaker 4: taking this possibility into consideration and their planning, because there
Speaker 4: is a reasonable enough possibility of it that you've got
Speaker 4: to plan around it. You've got to say, what happens
Speaker 4: if the spending slows so much, so rapidly, for so
Speaker 4: long that it starts to send us in the drain
Speaker 4: of a recession. And those that are planning for their
Speaker 4: finances for both families and for the rest of our
Speaker 4: country certainly need to keep that in the back of
Speaker 4: their mind. I don't know where it's going to go yet.
Speaker 4: I don't think anyone does, but it's clearly a risk.
Speaker 3: Hey, I just wanted to starry interrupt, Jennifer. I just
Speaker 3: wanted to let our audience know that shares of Nike
Speaker 3: are bouncing around the after hours, moving higher and then
Speaker 3: moving lower after the company reported its results just a
Speaker 3: couple of minutes ago. Earnings per share for the second
Speaker 3: quarter came in way above estimates at a dollar and
Speaker 3: three cents per share versus that stimates of eighty five
Speaker 3: cents a share once again, though shares in the after
Speaker 3: hours are kind of bouncing around a little bit.
Speaker 5: Glenn, thanks so much, just real quick, I just want
Speaker 5: to get back to you on one point about the
Speaker 5: kinds of customers that you do serve. Do you see
Speaker 5: that there's a big difference between the top end and
Speaker 5: the bottom end? Is it really quite tight for people
Speaker 5: at the lower end, but maybe at the top end
Speaker 5: it's a little bit easier. And part of the reason
Speaker 5: why I asked that is because maybe at the top
Speaker 5: end they've got a little bit more wiggle room to
Speaker 5: cope in case the Fed delays it's move on the
Speaker 5: rate cuts.
Speaker 4: Absolutely, the thirty two, one hundred and thirty thousand is
Speaker 4: a wide range, and so we do see families with
Speaker 4: tighter buzz budget, smaller incomes at the lower end struggling more.
Speaker 4: At the same time, you hear more and more every
Speaker 4: day about people that are making six figures in their
Speaker 4: household and they feel like they're.
Speaker 2: Living paycheck to paycheck.
Speaker 4: So yes, absolutely, it is more severe at the lower
Speaker 4: end of the range, but there's a lot of pressure
Speaker 4: throughout the range from thirty to one thirty.
Speaker 3: Hey, Glenn, really appreciate you joining us. You got to
Speaker 3: come back in the early part of next year because
Speaker 3: this is a really, really fascinating report that you and
Speaker 3: the team over at Primerica have put together. Once again,
Speaker 3: it's the Perception Versus Reality report that examines middle income
Speaker 3: households financial outlook heading into twenty twenty four. That's Glenn
Speaker 3: Jay Williams, CEO of the financial services company Primerica, joining
Speaker 3: us on Zoom from Duluth, Georgia. Shares a Nike right
Speaker 3: now moving lower by about three point eight percent in
Speaker 3: the after hours. The company says it's stream streamlining the organization.
Speaker 3: It sees pre tax charges of between four hundred million
Speaker 3: and four hundred and fifty million dollars. The company also
Speaker 3: says that looking ahead to a softer second half revenue outlook,
Speaker 3: we're going to continue our coverage with Nike. And in
Speaker 3: just a few minutes, you're listening to watching Bloomberg BusinessWeek.
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Speaker 3: We're continuing with Nike and our coverage around Nike's latest
Speaker 3: quarterly report. Shares, as Charlie just mentioned, down about four
Speaker 3: point seven percent in the after hours worth repeating some
Speaker 3: of these headlines. Certainly, the company is saying that it's
Speaker 3: streamlining in the organization and sees pre tax charges of
Speaker 3: between four hundred and four hundred and fifty million dollars.
Speaker 3: The company says that charges are to be likely recognized
Speaker 3: in the third quarter of fiscal year twenty twenty four.
Speaker 3: For more, let's go to Bloomberg News Earnings reporter Red Brown.
Speaker 3: He joins us on Zoom from New York City. He's
Speaker 3: had about ten minutes to look at these numbers.
Speaker 1: Read.
Speaker 3: We're seeing the way that investors are reacting in the
Speaker 3: after hour, sending shares down about four and a half
Speaker 3: percent as we speak. What sticks out to you about
Speaker 3: Nike's report.
Speaker 6: I think that the number that's really jumping off the
Speaker 6: page for me is the results in China. So they
Speaker 6: missed sales there, reporting around one point eight billion when
Speaker 6: Wall Street was expecting somewhere closer to two billion. Actually,
Speaker 6: and the reason I think that this number is so important.
Speaker 6: Is that Nike's been kind of playing this dangerous game,
Speaker 6: if you will, where a lot of their growth is
Speaker 6: really heavily reliant on on China, when their sales in Europe,
Speaker 6: their sales in America, their bigger markets have really slowed down.
Speaker 6: So with those sales numbers in China coming in a
Speaker 6: little bit below expectations, I think that is a little
Speaker 6: bit of a worry for the company when they do
Speaker 6: have such an outsized importance for Nike, there.
Speaker 5: Is there the prospect for those numbers to turn around
Speaker 5: in China or is it better for Nike to think
Speaker 5: a little bit more and focusing on the US in Europe,
Speaker 5: where we've got the prospect at least in the US
Speaker 5: of lower borrowing costs potentially spurring some consumer spending there.
Speaker 6: No, I think it's a it's a good point just
Speaker 6: because of the volatility of the Chinese economy. Obviously that's
Speaker 6: well outside of Nike's control, and there might be a
Speaker 6: potential for them to want to shift their focus back
Speaker 6: to these markets where, you know, I don't want to
Speaker 6: go too far on a limb here, but maybe the
Speaker 6: economic picture is starting to clarify a little bit more,
Speaker 6: especially here in America. So I think that could be
Speaker 6: something that we might want to get a little bit
Speaker 6: more clarity from the company on during the earning's call.
Speaker 3: Hey, speaking of clarity, I do want to make a
Speaker 3: quick correction to something I said earlier. Revenue missed the
Speaker 3: average analyst estimate just slightly came in at thirteen point
Speaker 3: three nine billion dollars, which was up zero point five
Speaker 3: percent year of a year. The estimates that were for
Speaker 3: three teen point four to six billion dollars. Okay, red,
Speaker 3: We talked about China, but it also seems like what's
Speaker 3: getting a lot of attention right now is the company
Speaker 3: announcing this reorg, this two billion dollars in cost savings
Speaker 3: that they're looking to find. They said that they're going
Speaker 3: to be pre tax costs around four hundred to four
Speaker 3: hundred and fifty million. When it comes to employee severance,
Speaker 3: i e. They're doing a reorg, they're gonna have to
Speaker 3: pay out employees who they end up firing or laying
Speaker 3: off as a result of this big picture what's going
Speaker 3: on at Nike right now.
Speaker 6: I mean, I think Nike is not immune to a
Speaker 6: lot of the pressures that retail has been going through
Speaker 6: over the past few years. As we're coming out of
Speaker 6: the pandemic still, I think it's the effects of that
Speaker 6: sort of you know, real shock to retailers is still
Speaker 6: something that they're working through. So if you look in
Speaker 6: recent orders over the past about two years, Nike has
Speaker 6: been seeing some pretty significant slow down in their earnings
Speaker 6: for share numbers. So strategic shift has kind of been
Speaker 6: been coming. I guess you could say for them, while
Speaker 6: they need to find some way to improve their margins,
Speaker 6: they can't keep offering the promotions that they have been
Speaker 6: in the past to continue to kind of juice the
Speaker 6: top line, So they're looking for new ways and significant
Speaker 6: ways to continue to kind of get more out of
Speaker 6: their business model, you know.
Speaker 5: Just to follow up on that point in the statement,
Speaker 5: Nike pointed out that some areas of potential savings include
Speaker 5: increasing automation and use of technology. Can you talk a
Speaker 5: little bit about what Nike's play there is in terms
Speaker 5: of the technology.
Speaker 6: I'm a little bit unfamiliar with what they could do,
Speaker 6: but you know a lot of retailers will will point
Speaker 6: to things like that if there's anywhere in their supply
Speaker 6: chain that they can maybe automate a little bit more
Speaker 6: anything in their warehousing that they can make a little
Speaker 6: bit more advanced technologically, that's obviously an option for them,
Speaker 6: especially as we see some supply chains starting to shrink down.
Speaker 6: Could be another area for them to maybe shave a
Speaker 6: few points. I'm going to add a few points to
Speaker 6: their margins.
Speaker 3: Red I always like to take a look at what's
Speaker 3: going on with foot Locker when Nike reports, and indeed
Speaker 3: we're seeing shares a Footlocker down about three percent in
Speaker 3: the after hours. Because Nike is such an important company
Speaker 3: for foot Locker and vice versa Footlocker and important sales
Speaker 3: channel for Nike, how should investors in Footlocker read into
Speaker 3: these results.
Speaker 6: Well, just to take a step back from that, we
Speaker 6: did hear from Nike last quarter during their call that
Speaker 6: they're working to kind of reset that relationship. One thing
Speaker 6: to key in on on this report still while we're
Speaker 6: still waiting to hear some more color on the call,
Speaker 6: is that their wholesale channel sales in general declined this quarter.
Speaker 6: That's the third quarter in a row. So I think
Speaker 6: what locker investors are probably reacting to that number to
Speaker 6: seeing a further slow down within that channel in general
Speaker 6: is I think probably a little bit got them, got
Speaker 6: them a little bit scared.
Speaker 3: Well, we know Nike has done a really good job
Speaker 3: over the last decade in building out its relationship with
Speaker 3: individual consumers and getting people to buy stuff directly from
Speaker 3: its website at Nike dot Com. So is it okay
Speaker 3: that wholesale is declining if a direct sales relationship is
Speaker 3: higher margin for Nike?
Speaker 6: Uh, you know, it's it's kind of hard to say.
Speaker 6: It's it's it does seem like, you know, like like
Speaker 6: to your point, they have been really emphasizing Nike dot
Speaker 6: Com and the gap between those two sales channels continues
Speaker 6: to get smaller and smaller. But I think the other
Speaker 6: side of that coin for Nike is we have seen
Speaker 6: consumers behavior shifting back to in person shopping to prefer
Speaker 6: that experience still, so I think that's the sort of
Speaker 6: the balance for Nike. I don't think they're going to
Speaker 6: be able to just fullsale, ditch brick and mortar and
Speaker 6: stop investing in those relationships as well with people like
Speaker 6: retailers like foot Locker. So it's still kind of a
Speaker 6: little bit too soon to say. Maybe for Nike in
Speaker 6: terms of the long term vision of which sales channel
Speaker 6: maybe is a higher priority for them.
Speaker 5: Oh interesting, I mean, getting away from the point of
Speaker 5: the sales channel and looking at its various product lines,
Speaker 5: are you able to give us any kind of a
Speaker 5: big picture story about what is the winner and loser
Speaker 5: here for Nike at this point?
Speaker 6: I do think it's interesting that we know we're kind
Speaker 6: of just on the cusp of Christmas shopping right the
Speaker 6: period ended at the end of November, and it doesn't
Speaker 6: seem like there's really an area of strength besides their
Speaker 6: equipment in terms of actual growth. Both apparel and footwear,
Speaker 6: which would probably be the more likely categories for holiday shopping,
Speaker 6: are really kind of tepid in terms of growth. So yeah,
Speaker 6: I don't know how much of a driver equipment sales
Speaker 6: is going to be for the company going forward. A
Speaker 6: lot more of their business does come from those other
Speaker 6: two categories, So yeah, again, I think this is just
Speaker 6: an overall sort of a little bit of a negative
Speaker 6: picture for Nike, and I think the sale excuse me,
Speaker 6: the shares are kind of reflecting that at the moment.
Speaker 3: Yeah, I think that's a really good point, right, Hey, Red,
Speaker 3: I want to let you catch your breath and look
Speaker 3: at your screen for a minute while I go through
Speaker 3: the press release and read a couple of quotes from
Speaker 3: John Donaho, the president and CEO of Nike. In addition
Speaker 3: to that, just a little more color on these cost savings.
Speaker 3: H Johnahoe saying in a statement that the quarter showed
Speaker 3: strong execution by our team as we focus on our
Speaker 3: winning formula of innovative product, distinctive storytelling, and differentiated marketplace experiences.
Speaker 3: He said that the second quarter results showed that the
Speaker 3: company is getting back on their front foot. The company
Speaker 3: also saying in a statement that it's identifying opportunities to
Speaker 3: deliver up to two billion dollars in cumulative cost savings
Speaker 3: of the next three years, simplifying product assortment, increasing automation
Speaker 3: and the use of tech, and streamlining the organization. Read
Speaker 3: I want to give you the last word here and
Speaker 3: just give us your takeaways as we As you continue
Speaker 3: to and wait for the call, what would you ask
Speaker 3: on the earnings call today if you could.
Speaker 6: I mean, I think we've kind of covered the major topics.
Speaker 6: I think one thing that has been a topic of
Speaker 6: interest for me with Nike is the increasing amount of
Speaker 6: competition that they're facing in in their sort of bread
Speaker 6: and butter product line is running shoes. You know, that's
Speaker 6: kind of where Nike came from. We saw a kind
Speaker 6: of a small analysis coming out of Morgan Stanley earlier
Speaker 6: this month where they just did a small sample just
Speaker 6: here in New York City of what shoes people were wearing,
Speaker 6: and it was you know, these alternative brands are really
Speaker 6: gaining a lot of ground on Nike. So I would
Speaker 6: want to know kind of what the company's plans are
Speaker 6: to combat that there's eroding and their rooting market shop.
Speaker 3: Yeah, I remember that report. It's like Hoka and on
Speaker 3: running hey shares a Nike down about five point six
Speaker 3: percent is wait for this call.
Speaker 1: You're listening to the Bloomberg Business Week podcast. Catch us
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Speaker 1: Just say Alexa, play Bloomberg eleven thirty.
Speaker 3: Stay alive. That's apparently what we're going to be doing
Speaker 3: later and later, for longer and longer. Well, according to
Speaker 3: some models, half of today's five year olds in the
Speaker 3: wealthiest countries are projected to reach one hundred years old.
Speaker 3: That comes despite gun violence and epidemics of obesity, diabetes,
Speaker 3: and opioids, and it accounts for disparities when it comes
Speaker 3: to race, gender, and income. Life expectancy in the US
Speaker 3: is still going up. Here's the problem, though, society is
Speaker 3: not set up to handle people living routinely into their eighties,
Speaker 3: nineties and beyond. We're not invested in technologies and therapies
Speaker 3: to help people stay healthy and independent as the age,
Speaker 3: and we haven't really considered how to adapt work so
Speaker 3: companies can make better use of the skills and experiences
Speaker 3: of older employees. Karen Breslau writes all about this in
Speaker 3: the new issue of Bloomberg Business Week. It's on newstands now,
Speaker 3: already online at Bloomberg dot com, slash business Week and
Speaker 3: on the Bloomberg terminal. She joins us from California this afternoon.
Speaker 3: She's California Bureau Chief. Also here is the editor of
Speaker 3: Bloomberg Business Week, Joel Webber. He joins us on zoom
Speaker 3: from Brooklyn this afternoon. Joel, this is a really cool story,
Speaker 3: and it's one that's actually a couple years in the
Speaker 3: making give us kind of the backstory here.
Speaker 7: Well, this issue was one that we became really interested
Speaker 7: in doing earlier in the year, especially off of some
Speaker 7: other recording that we had done that clearly struck a
Speaker 7: chord because the reader appetite for anything about longevity. We
Speaker 7: just noticed that it it was insatiable. So as we
Speaker 7: started to kind of sketch together what this longevity issue
Speaker 7: that Business Week published this week could look like, we
Speaker 7: put out our typical kind of feelers throughout the newsroom,
Speaker 7: and one that came back was really interesting because I
Speaker 7: wasn't expecting it.
Speaker 2: I had met.
Speaker 7: Karen Breslaw, who had recently started at Bloomberg, and it
Speaker 7: turned out that prior to working at Bloomberg, she worked
Speaker 7: at the Stanford Center on Longevity. And we were like, Karen,
Speaker 7: what did you learn while you.
Speaker 3: Worked That's what I meant by a couple of years,
Speaker 3: and that's what I meant by a couple of years
Speaker 3: in the making.
Speaker 1: By the way, yeah exactly so.
Speaker 7: So so Karen, back back to you, what did you
Speaker 7: learn at the Stanford Center on Longevity while you while
Speaker 7: you worked there?
Speaker 8: Well, I've I learned so much, Joe, it's hard to
Speaker 8: sum it all up. One of the first things I
Speaker 8: learned is that, you know, longer life spans are happening.
Speaker 8: It is a trend that started in the twentieth century.
Speaker 8: And you know, sant patient medical advances, universal primary education
Speaker 8: for children, when kids go to school instead of factories
Speaker 8: low and behold, they live longer. But one of the
Speaker 8: first things I learned was to distinguish between aging, which
Speaker 8: is this cellular process that we're all obsessed with, and longevity,
Speaker 8: which looks at the entire lifespan. It looks at the
Speaker 8: entire human experience. And the folks there at the center
Speaker 8: said the founder or Carsonsen, said, you know, we're a
Speaker 8: center on longevity, not a center for longevity. We're not
Speaker 8: promoting you know, this therapy or that potion. What we're
Speaker 8: promoting is a way of looking at life and really
Speaker 8: redefining our culture to so that people can live these
Speaker 8: long lives and thrive and you know, be vital and
Speaker 8: engaged and productive for much longer than they are now.
Speaker 8: So it was a was a head shift, It was
Speaker 8: a mind shift.
Speaker 7: The other thing that I think it's worth mentioning is
Speaker 7: how how the physical magazine issue kind of came together
Speaker 7: and how we structured it, so we put Karen's story
Speaker 7: as the the introduction to the whole issue, because ultimately,
Speaker 7: what Tim, I think you said there at the top
Speaker 7: was you take a bunch of five year olds that
Speaker 7: are alive today. They're going to be living probably longer,
Speaker 7: more of them past one hundred than you know, any
Speaker 7: generation ever before. And as I think, Karen, you get
Speaker 7: to it's you know, the world's not ready for that.
Speaker 7: But Tim, just in the structure of the book and
Speaker 7: Jennifer like this came first and then it culminates later
Speaker 7: at the end of the book with stories that are
Speaker 7: more geared towards end of life. So we sort of
Speaker 7: had a cradle to grave approach. But let's stick with
Speaker 7: the cradle part for just a second longer. Karen, when
Speaker 7: when you were working there, you know, talk to us
Speaker 7: more about these five year olds and what this will
Speaker 7: distinguish them and what they will probably encounter in their lifetime.
Speaker 8: Well, first of all, those five year olds are going
Speaker 8: to have options. The lucky half, the lucky one half,
Speaker 8: the fortunate one half are going to have options that
Speaker 8: really have never existed before for humans. I mean, for
Speaker 8: you know, most of our lives are front loaded because
Speaker 8: with education, with entering the workforce, with family formation, because
Speaker 8: people just didn't live that long even you know, in
Speaker 8: nineteen hundred, life span was around forty seven and then
Speaker 8: it left in the twentieth century to about seventy. So
Speaker 8: these kindergarteners are going to have several careers. They may
Speaker 8: not have a front loaded formal education which sees them
Speaker 8: either entering the workforce at twenty or twenty one or
Speaker 8: you know, getting their diploma. They may dip in and
Speaker 8: out of the workforce. They may dip in and out
Speaker 8: of earning and non earning years. It's not going to
Speaker 8: be just this linear three after progression of education, work retirement.
Speaker 8: It's it's going to be a very curvy road of life.
Speaker 8: And at Stanford, at the Center Longevity, they called it
Speaker 8: the New Map of Life, which includes lifelong learning. I mean,
Speaker 8: the emphasis is on lifelong learning. You cannot front load
Speaker 8: and education in twenty or twenty two years for someone
Speaker 8: who may still be in the workforce at eighty And
Speaker 8: I don't mean you're going to be you know, sitting
Speaker 8: in the toll booth or you know, doing a job.
Speaker 8: You know that existed in the twentieth century. You know,
Speaker 8: for knowledge workers, there there are going to be so
Speaker 8: many chapters and decades of work, and so there have
Speaker 8: to be ways for people to dip in and out
Speaker 8: of learning chapters and upskilling. And about something called midlife ships.
Speaker 8: You know, internships are not only for you know, for
Speaker 8: for the young, they're for people in midlife and and
Speaker 8: even in the you know, senior workers. But to see
Speaker 8: seventy and eighty year olds who are productive, who are alert,
Speaker 8: who are great problem solvers, have high emotional intelligence, bring
Speaker 8: a lot to the workplace, you know, things that we
Speaker 8: just simply can't imagine today. We just discount the older
Speaker 8: workers as dead, would I mean that, which is really
Speaker 8: inaccurate and will become more so. So they are going
Speaker 8: to be great shifts in education, in lifelong learning, and
Speaker 8: in the workplace.
Speaker 5: Can we dig in a little bit on this turnt
Speaker 5: you're making about education, because I mean, the story is
Speaker 5: fascinating and I'm particularly taken with this idea of a
Speaker 5: mid life shift. And as you're talking about knowledge workers,
Speaker 5: but you're also talking about how society isn't set up
Speaker 5: to handle the changes that need to be made in
Speaker 5: order to reflect the fact that we're going to be
Speaker 5: living to one hundreds. So can you put these two
Speaker 5: things together for me? What is it that society is
Speaker 5: not getting about the mid life shift? Is it something
Speaker 5: that knowledge workers can't afford because of the way lending
Speaker 5: and retirements plans are structured. What's the problem there?
Speaker 8: There are many problems, but most of them are systemic,
Speaker 8: and they you know, if we look at our if
Speaker 8: we look at our entitlement programs, if you look at
Speaker 8: Social Security or medicare these all assume you know, a
Speaker 8: one way progression through the three chapters into retirement or disability.
Speaker 8: Very often workers will enter a phase of life, perhaps
Speaker 8: in their fifties or sixties, where there are there may
Speaker 8: be temporary health setback, or more likely there are caregiving obligations,
Speaker 8: often for very elderly parents. And these are people who
Speaker 8: just need They might need a few months, they might
Speaker 8: need a period to adjust or to arrange for a
Speaker 8: care plan or to give care. And what happens is
Speaker 8: there's just not en a flexibility in and out of
Speaker 8: the workforce, in and out of the paid workforce. So yeah,
Speaker 8: there will have to be policy changes. They're going to
Speaker 8: need to be new financial products that allow people to
Speaker 8: save not only for retirement, you know, through a four
Speaker 8: to one K, but for a midlife transition or several transitions.
Speaker 8: We might see more glide paths to retirement where it
Speaker 8: isn't you just flip off the switch and you go
Speaker 8: from being you know, employed full time to mallwalking or
Speaker 8: you know, playing pick a ball. But you may become
Speaker 8: an older person, an older worker may become a consultant,
Speaker 8: They may become a workplace sage and elder. They may
Speaker 8: become a mentor somebody may have great contributions to make
Speaker 8: for twenty or twenty five hours a week rather than
Speaker 8: forty or fifty. And so some of the workplace shortages,
Speaker 8: some of the labor shortages that we're seeing among the
Speaker 8: labor among the knowledge worker pool, could be alleviated by
Speaker 8: creating more options for these older workers. Now, if you're
Speaker 8: talking about people who who work in a very demanding
Speaker 8: physical occupation. If you if you like, are a pile driver,
Speaker 8: if you operate a jackhammer, if you are a construction worker,
Speaker 8: or if you are a you know, a first responder,
Speaker 8: you know, those are jobs obviously where people can't be
Speaker 8: asked to remain you know, you know, in tip top
Speaker 8: you know, strength and agility and reflexes you know, into
Speaker 8: their seventeen eighties. But they may be great trainers, they
Speaker 8: may have several more careers in them. We need to
Speaker 8: normalize those kinds of shifts through uh, you know periods
Speaker 8: of life, you know, basically gap years for grown ups.
Speaker 7: Karen, I want to ask you, you know, in addition
Speaker 7: to the challenges, one challenge that you know we face
Speaker 7: a journalists when we cover anything around longevity is how
Speaker 7: things can turn into science fiction real quick, right, and
Speaker 7: we have to kind of approach the field with a
Speaker 7: certain amount of skepticism. And I'm just curious, like, as
Speaker 7: you worked in this, and you have that great sort
Speaker 7: of preface about how the Center approached longevity, but I'm curious,
Speaker 7: like what already feels like a swing and a miss
Speaker 7: based on what you've got to observe and where things
Speaker 7: have already started to head.
Speaker 8: Well, I think one of the most promising work is
Speaker 8: and Ashley Advance, you know, writes about this and the
Speaker 8: issue is is cellular reprogramming we really can? I mean,
Speaker 8: there are just great advances in decoupling the progression of
Speaker 8: disease in cells. Right, So we so often we assume
Speaker 8: aging itself is a disease.
Speaker 7: It isn't.
Speaker 8: It's a natural biological process that happens to you know,
Speaker 8: correspond you know to there are correlations with all kinds
Speaker 8: of age related diseases, neuro degenerate diseases or heart disease.
Speaker 8: We can actually uh you know, there are therapies that
Speaker 8: can that can re engineer cells, and so that is real,
Speaker 8: it's happening. I think, I think the miss is that
Speaker 8: is uh is the notion, uh, you know, of of immortality.
Speaker 8: You know, life has a beginning and an end, and
Speaker 8: and nobody at the center of longevity. Uh, you know,
Speaker 8: advocated for changing that that progression. It you know, the
Speaker 8: the notion of immortality. It's it's tantalizing, you know, it's mythic,
Speaker 8: but you know, reality is that, you know, life, life
Speaker 8: does have an end. And one of the things, one
Speaker 8: of the curious phrases that stuck in my mind while
Speaker 8: I was I was working there was the compression of morbidity,
Speaker 8: which basically means live long, live well, and die fast. Uh,
Speaker 8: so that there aren't years of infirmity, pain and loss
Speaker 8: of mobility and engagement and dignity that you really you
Speaker 8: just you just live full on until you don't. And
Speaker 8: and that was I thought that was a great model.
Speaker 8: And I think it is entirely within reach that people
Speaker 8: will live longer and fuller and healthier lives. And uh,
Speaker 8: you know, the notion of a health span is vitally important,
Speaker 8: and it does start at birth, and it starts with
Speaker 8: those kindergarteners. You know, are they out playing, are they
Speaker 8: eating good food? Are they exposed to toxic stress? What?
Speaker 8: What is their climate? You know, what are the climate
Speaker 8: conditions for their lives? So so that those are really
Speaker 8: lifespan issues that have nothing to do with immortality, but
Speaker 8: they have a lot to do with life.
Speaker 3: Well, it's a great story, Karen. I encourage everybody to
Speaker 3: check it out. It's in the new issue of Bloomberg
Speaker 3: Business Week. It's the Longevity Issue. It's on newstands now.
Speaker 3: It's already online at Bloomberg dot com, slash Business Weekend
Speaker 3: on the Bloomberg terminal. Karen Breslaus, California br chief for
Speaker 3: Bloomberg News, joining us from San Francisco. Joe Weber is
Speaker 3: the editor of Bloomberg Business Week, joining us from Brooklyn.
Speaker 2: This is Bloomberg.
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