[00:00:00] Intro: Forget the civilized path. It’s time to break the chains of debt and dependency, take control of our financial lives, and live free. This is the Fiscally Savage Podcast.

[00:00:15] Dylan Bain: Hello and welcome to Fiscally Savage. I’m your host, Dylan Bain. Today is part two of a two-part series on quiet quitting. And if you haven’t listened to last Friday’s discussion on social contracts, you 100% should go back and take a listen to it ’cause today’s episode will make a lot more sense if you do. And like I said in last week, today’s episode is coming from an actual listener request from my buddy Carmen who reached out and said, hey, I love that you’ve restarted the show, but I’d also love it if you would talk about quiet quitting. So ladies and gentlemen, if you are interested in having me cover something that you would like to know about, you can find me on Instagram @fiscallysavage. And once I get up to 200 followers on that platform, I’ll be opening it up for an AMA. So if you haven’t yet, please go over and give me a follow over there. 

[00:01:03] So let’s get into the actual meat of quiet quitting. Last week, we went back to 1651 with Thomas Hobbes’ Leviathan and actually discussed what a social contract is because I don’t believe we can actually have a conversation about quiet quitting unless we do. And my wife, of course, listens to the episode and she was kind of giving me some shit, telling me like, well, you were a math teacher for eight years, but if you didn’t know, I was dual certified to teach math and history and my second major in undergrad was history. And so, maybe she’s right in this entire podcast, especially the Friday shows, is just my attempt to monetize my history degree finally. And I can’t tell you she’s wrong, but I hope you’re getting a lot of value out of it.

[00:01:45] So let’s dive into it. Social contract. So just kind of a crash course what we talked about last week. A social contract is this idea within a society that we have exchanged parts of our liberty or parts of our freedom to a governmental or power structure of some sort. So like for example, with the government, we agree to abide by the laws and, in exchange, we expect those laws to protect us. We agree to vote and, in exchange, we expect the government to represent us. We also have social contracts with any power structure, like for example, corporation. I agree to exchange pieces of my time, my single, most precious, nonrenewable resource, in exchange for money. And as a result, there’s an entire list of things with the code of conduct, the way I’m expected to behave on the job, and then, of course, the way that the corporation’s supposed to give me either money or benefits or other things like that in exchange for that. Those are social contracts. 

[00:02:40] Now, there’s this idea of the state of nature. So the entire idea behind social contract theory is that mankind exists in this state of nature, and then we created a social contract as a group and therefore exited the state of nature, and now exists in a society or a civilized society. Thomas Hobbes, of course, in his book Leviathan, said that the state, which is what he referred to as the leviathan, was to keep people in line. That was the entire idea. He took a negative view of humanity. If humanity doesn’t behave, the Leviathan will come in and punish them and therefore it creates a just society with rules. John Locke, on the other hand, took a positive view of humanity and said that the state’s role was to enforce a natural law that guaranteed everybody the right to life, liberty, and property. And we also talked about Jean-Jacques Rousseau, a French philosopher who furthered the idea and actually wrote a book called The Social Contract, in which he stated that social contracts can’t be entered into under coercion, otherwise they’re not a valid contract. But all three of these guys said that when social contracts are broken, resistance is reasonable and occasionally, a moral necessity. 

[00:03:47] Now, what does all this have to do with quiet quitting? Well, because quiet quitting hits on our social contract as a society, I can just vaguely gesture out towards society. And I think we all agree that somewhere something has gone wrong and there’s a lot of renegotiation of society right now, particularly in a post-COVID world. But let’s just go back, again, here’s me trying to monetize my history degree, let’s go back and just acknowledge that we’ve been arguing about this social contract since the founding of the United States. And we can point to a number of different places where there are very acute ways in which we have been renegotiating the social contract from the beginning. I mean, let’s just ignore the entirety of this, the Civil War, because that was one gigantic, very energetic negotiation that ended in April of 1865. But unions are a way to renegotiate the social contract. The civil rights movement was a way to renegotiate the social contract. Teddy Roosevelt’s trust busting and Teddy Roosevelt’s attempt to create a universal healthcare system in the United States, yes, ladies and gentlemen, Teddy Roosevelt was the “OG” in politics, arguing that we should have a universal healthcare system way back in the early 1900s. But that was his whole thing. His whole trust busting thing. His whole speak softly and carry a big stick thing. All of that was part of renegotiating the social contract, not only with the United States, but the United States’ social contract with the other powers in the world at the time. 

[00:05:17] Then we can continue on forward in time. The establishment of Social Security, minimum wage, and the entirety of the New Deal under FDR were all ways to renegotiate the social contract to say that social security should exist so that when people have reached the end of their working years, they can be secure in their retirement; that people should be able to afford to have a house and support a family on the minimum wage. That was the original intent of the minimum wage, that a single working male could support a wife and two kids. That was the whole idea, the entirety of the New Deal. That’s why it’s called the “New Deal” is because we are saying that they need a new deal or a new social contract. If you are interested, go back and listen to FDR’s speeches. He makes this extremely explicit. And then, of course, in the post-World War II society, we had Lyndon Baines Johnson with his Great Society. That was also a renegotiation of the social contract and the Great Society programs, you know them as Medicare, which is healthcare for old people, and Medicaid, healthcare for poor people. These were renegotiations of the social contract. 

[00:06:23] So I’m hoping I’m making a really good case that we have been doing this for the entirety of the United States’ history. And it’s also worth noting that a lot of these programs were seen at the time as a counterbalance to things that were scary to us, like the Bolsheviks and the Communist Revolution in Russia. That, of course, doesn’t apply with Teddy Roosevelt because he predated that and the capitalists in society fully understood the philosophical framework that would become Bolshevism at the time. And so, when Social Security came out, minimum wage, the New Deal, the Great Society, all of these programs that we have just kind of take for granted here in today’s society, were at the time seen as both a counterbalance to the idea of communism and were also dismissed as socialistic or communistic in the time in which they were adopted. So all that is to say is that what seems radical today might not seem radical tomorrow. And this is all because we are constantly renegotiating the social contract.

[00:07:23] Now, the social contract as it stands today, we’re gonna get to that in a second, but it’s best understood in a post-World War II environment. Now, there are world events that radically changed the fabric of a society, and World War II was certainly one of those. It completely upended the world order, and we went from a place in which people spent a lot of their life within 30 miles of the place they were born, to a society where we could cross the Atlantic pretty easily, bringing the world closer together, making it smaller. This is also when we started seeing things like the space race. But a critical component of the social contract that was held by the silent generation — that’s the one that went through World War II — and that they taught to their children — we refer to them as baby boomers — is that if you work, you will be rewarded. And in the aftermath of World War II, this was a very reasonable assumption because the United States was the only manufacturing base left in the entire world. And what were we doing in the 1950s and 60s? Oh, yeah. That’s right. We had the Marshall Plan where we’re rebuilding Europe. And why were we rebuilding Europe? Well, because of the communist threat coming out of Russia. This is the period of time where we have the fall of the Iron Curtain across Europe. This is the time where we’re starting to worry about China and the Chinese revolution’s happening. All of that, of course, lead into the 70s with Vietnam. 

[00:08:40] The idea that if you work hard, you will be rewarded was also part of the societal propaganda that our capitalistic system worked and there was no need for something like a communist revolution here in the United States. We were intensely concerned about this. And for the most part, it really worked. If you worked hard, you would be rewarded. Why? Well, because we were rebuilding the rest of the world. We didn’t have a whole lot of competition. And union representation in a lot of these factories was, at the time, incredibly strong. And so, it made sense. The silent generation, like my grandparents, well, a lot of them retired with pensions from the companies that they worked for. This is when it made sense that you could, in fact, just get outta high school, go down the street to the factory, get a job at the local factory, and on your own income you could support a stay-at-home wife and two kids and still have time to do things like vacations and bowling leagues and all sorts of stuff. That type of contract, ladies and gentlemen, created societies where, that’s where the Rotary Club, that’s where the Moose Lodge, the Elks Club — all of these things arose because people had disposable income with that social contract. And as time went on, that eroded. This has been documented in a book called Bowling Alone, where my grandparents were involved in the Kenosha Ramblers, where there was a camping club and there was a bowling league and my dad went down to the Elks Club and there were all the captains of industry in my little corner of southeastern Wisconsin, that’s where they all went. 

[00:10:10] Well, that was a social contract that the baby boomers were raised in. And the baby boomers became of age in the early 80s. That’s when the social contract, that social contract, the one that their parents came of age in and raised their families in, well, it started to decline. Why? Well, there’s a lot of reasons, and you can point to some of the philosophical leanings of people like Ronald Reagan. And I don’t wanna debate politics on this podcast. However I am going to point to an empirical fact. It was during the 1980s that we started to see a lot of outsourcing and consolidation, where we went from in the early 1900s with Teddy Roosevelt’s trust busting and the idea that a capitalistic society works best when you have solid regulations to grease the skids of capitalism and interstate commerce, we started to see the actual antithesis of that in the 1980s. 

[00:11:03] Corporations prior to the 1980s really looked at themselves as anchors of communities. People took pride in working in their local factories. And those people who own those factories typically lived in the towns in which they were operating. And so, you knew who these guys were. But during the 1980s, that ceased to be true. And corporations stopped thinking of themselves as community members and started thinking of themselves as solely focused on increasing shareholder value, which, of course, from the 1980s until present, has resulted in more and more corporations thinking only of the next quarterly earnings and making shortsighted decisions. Not to say that everything was completely beautiful in the 50s, 60s, and 70s ’cause it wasn’t. I’m pointing out that there was a cultural shift. There was a contractual shift in terms of the social contract. This is the time where you start to see outsourcing and consolidation, companies that are getting bigger. This is when you had the idea of the corporate raider who would do a hostile takeover of another corporation, and then sell off all those assets in order to make back what they spent in buying that corporation in the first place. 

[00:12:11] Baby boomers continued to believe in the social contract that they were taught as children. And they taught that idea of the social contract to their children, which are called millennials, of which I am absolutely one. And that social contract went all the way through the 90s. So many of us that grew up in the 90s, and I graduated high school in 2000, well, I was told repeatedly over and over and over again, if you work hard, keep your head down, you’ll be noticed, rewarded, and promoted. And when I graduated in 2000, I found a world that made no sense in comparison to what I was taught as a kid. Because in the 1990s, a lot of what we started to see occur in the eighties was blunted by the internet revolution but only temporarily.

[00:12:53] And for those of you who know your trade history, you know that NAFTA, the North American Free Trade Agreement, was signed in the nineties. The entire idea behind NAFTA was that it was gonna create this nice free trade zone in North America between Canada, the United States, and Mexico. And how many of us know of places where there’s a hole in the city? Just like in my city, my hometown of Kenosha, Wisconsin, there is a literal hole in the middle of the city where a car engine manufacturing plant used to be. What happened to it? Well, because of NAFTA, they closed the plant, bulldozed the entire thing, and took all those jobs to Mexico. This, of course, is what led to the rise of Trump.

[00:13:32] That was part of the social contract because what they told us when NAFTA was passed is that free trade would only increase GDP and that we would all be better off and, yes, some people would lose jobs, but we would make it up somewhere else. And we all found out that that wasn’t necessarily true. This goes back to what we were talking about a couple weeks ago with GDP. Did our GDP increase? Absolutely. Did corporate profits increase? Absolutely. Was that shared equally across societally? Absolutely not. And so, as a millennial coming of age in 2000, when I was in high school, we debated NAFTA. Whether or not this was even a good thing or we should be even considering it. And coming from a manufacturing town like I did where Jockey International was there and we had, well, it was Chrysler by the time that it closed and other factories around the town. Well, what happened to them? They all went overseas. They were all outsourced or they were sent to Mexico. And, ladies and gentlemen, if I’m gonna be entirely clear, I’m a pretty free trade type of guy. I’m pretty libertarian that way. And it’s impossible for me to not acknowledge the economic and social impacts that that had on my hometown. That’s part of that social contract. If they’re gonna offer us and say, well, yes, we’re gonna close this factory, but you will all end up being better off. And we can see where other people became better off. But ourselves, our town is now poorer because of it. We start to question whether or not that social contract ever made sense in the first place.

[00:15:00] And then, of course, we had September 11th and the recession that followed. We went off to war. And if you were born after September 11th or don’t remember where you were at September 11th, so it’s not that turning point event in your life like it is for me, September 11th shattered a sense of optimism for the future. We didn’t think that we would just be able to grow up in a world of peace and prosperity like we did in the 90s. And September 11th, of course, was seven years before the financial crash of 2008, which really pulled the rug out from underneath us. And now, a lot of millennials who were just entering the job market,were entering the worst job market that had ever been seen in three generations. And on top of that, we’re watching our parents who were in their fifties at the time, lose job after job. Foreclosures abounded. Every single one of us had a story of somebody who was successful, lost their job, and were never able to get back to that income level. Income inequality, the shattering of wealth, the increase of everything that we couldn’t offshore, like, oh, I don’t know, college and healthcare are two that come to mind, and Wall Street bailouts that, of course, missed Main Street are all things that were built into our psyche in the 2000s. And I remember quite vividly. I remember Occupy Wall Street and I remember what those people were saying. I remember everybody who was, who lost their homes, and all the people that I knew that were highly successful one day and the next day, they were absolutely economically destitute.

[00:16:23] Millennials came of age in a world where the apparent social contract that they were taught was clearly broken. And as I entered the job market, ladies and gentlemen, I was told, again, this goes back to that old social contract, if you just work hard and keep your head down, that the corporation will notice that, you’ll get promoted, and you will be better off. And of course, it’s in the early 2000s that HR best practices changed from the idea of promoting from within to promoting from without. Why did they do that? Well, because they didn’t want to have the upstream shuffle as everyone just shuffles upward. If you were to say, a VP retires, then you promote, you know, the manager, and then you promote the senior, and then you have to hire new frontline people. Now, you’ve got four people in new jobs and that’s gonna create a disruption in the company. 

[00:17:09] And I remember in 2000, 2004 is when I graduated from college, and there were all these news articles talking about how millennials just didn’t know how to work because we’d spend two years in a job and then we’d job hop. And I remember entering the job market and seeing all of these articles about how millennials don’t know how to work and they’re constantly job hopping, but that makes rational sense if HR is not gonna promote from within, then the idea of getting into a company and staying there for 30 years is just completely insane because the only way to move up is to job hop. If you spend more than two years at a job, you’re getting underpaid. And the idea that we were somehow gonna have a pension, well, we all saw what happened to our parents’ pension. And all of that, ladies and gentlemen, really didn’t matter in terms of quiet quitting. Because we still had to work hard because it was still a highly competitive job market. Why? Because the population was huge. There were more people coming in than were leaving the workforce. The baby boomers were holding on and clinging to their jobs, especially when they were spooked in 2008. And all of that changed with COVID. 

[00:18:17] COVID saw a couple of things that really altered the landscape in terms of the job market. And I think the biggest is with the entrance of the zoomers. Where millennials were at least taught by their baby boomer parents that if you work hard, you’ll be rewarded, well, the zoomers are the kids of Generation X, and if you know anything about Generation X, they are generally a little more negative leaning in terms of societal outlook. And so, their kids are really no different. Zoomers quit their jobs. And for millennials, we had to kind of figure out that you needed to job hop after we spent three years at a company with no sign of promotion in sight. The zoomers watched us do that, and they walked into the job market with that full understanding. And then when March of 2020 hit, there were mass layoffs. I remember we had a greater drop in employment that had ever been seen in my lifetime, including 2008. That means that all of these companies panicked and just mass laid off everybody only than to have to try to rehire them again a couple months later as COVID supports and things like the Payroll Protection Program went into effect. And if you were a zoomer at one of those entry-level positions, and I use the term “entry-level” loosely, you knew and had experienced just how disposable you were to a company. They would not hesitate for a moment to lay you off at a moment’s notice. And let’s not pretend that it was lost on zoomers that profits went up massively during the pandemic and executive compensation followed suit. 

[00:19:46] Now, all of this is relevant because if you look at the social contract, the social contract was if you worked hard, you would get rewarded. And if you’re a zoomer, it doesn’t quite look that way. And maybe that wouldn’t all matter. Maybe if we had enough people in the job market at this particular point in time that maybe the idea that I need to work really hard here and put myself out there was going to matter. But the other part that nobody really wants to talk about when it comes to quiet quitting is the loss of so many people in the workforce due to COVID. And I’m not talking about deaths. Most of the deaths, if you actually looked at the numbers and statistics, were born by people who were at the end of their working life anyway. But COVID reduced the United States workforce by roughly four to five million people, and I’m gonna break those numbers down. But if you stop and think about it, when your workforce is already only 150 million people strong, losing four to five million people is going to leave a mark.

[00:20:44] And, of course, it’s not just that we lost those people out of the workforce, it’s what places did they occupy. So let’s break that down. That four to five million number gets arrived at when you look at about a million people have not returned to the workplace due to disability due to COVID. At my own place of employment, my wife joined my company that I work for in my professional life, and one of the people in her group got COVID and became permanently disabled. He went from an able-bodied working person to only being able to really concentrate for a couple hours a day. That was a direct effect from COVID. Now, let’s be a hundred percent clear. I am not debating any of the COVID response because let’s just admit that that was all horse shit or that somehow there wasn’t some political fuckery going on because Lord knows there was plenty of it. I’m just reporting the facts. And the facts are that close to one million workers of prime working age dropped out of the workforce due to disability due to the effects of long COVID. And another fact here is, is that we lost a lot of care providers, particularly for children, and that was backfilled by women.

[00:21:54] And so, what makes the COVID recession unique among recessions of the rest of my entire life is that women got hit really hard by the COVID recession. And so, there again, we lost about another one million workers in the form of women who then left the workforce to care for kids. Now, when COVID hit, my wife and I were able to start just working from home, and we brought our kids home with us when the schools all closed, and it still had a pretty big effect on how her and I related to each other, to our jobs, and to our children. But if I didn’t have that option, if for some reason we weren’t able to work from home or our kids were littler, I just kind of hit the sweet spot where I didn’t have to really worry about it too much, maybe my wife wouldn’t be working. And maybe she wouldn’t be able to get back into the workforce because, hey, remember those HR practices? That’s right. If you have a gap on your resume, it’s as if you’re no longer a viable worker. So if you’re a woman who left the workforce and you spent, say, six months out of it, and now you go back to look for it, chances of you being able to get a comparable job back are next to nothing. And that doesn’t even factor in that if you can’t get that higher paying job you might have left, well, then you probably can’t afford the childcare in the first place because it’s astronomically high. And the last factor that really hit this is if you were a successful baby boomer, the COVID hit right at the end of your working years. That’s right, ladies and gentlemen. Baby boomers retired early in droves to the tune of anywhere from two to four million baby boomers exited the workforce during this period of time.

[00:23:28] All said and done, what this has done, ladies and gentlemen, is shift a lot of the power away from employers and back into the hands of employees. When you take it all together and you look at that social contract, and now suddenly the power dynamic has shift, it makes entire sense why we’re suddenly seeing so many unionization efforts. It makes entire sense as why despite the Fed’s best efforts, the labor market is continuing to be strong, and the Fed has even admitted this. That they are raising interest rates at this point to try to do two things: exhaust your savings and destroy the labor market because it’s the only thing that they have in order to bring down inflation. 

[00:24:07] So when you suddenly realize all of that, if you were a zoomer, why would you do anything more than your job description? And I’m not making a stance as to whether or not this is a good thing or a bad thing, and I’m gonna get to that in a second. But to put it in perspective, you created a social contract between you and a corporation. Here’s my job description and here’s my pay. Okay, I agree to exchange my time to do that job description for that amount of pay. When I worked in public accounting, we all knew that that was bullshit. We were told, oh, yeah, you’re gonna have good work-life balance. We knew that was a lie. But the whole idea there, part of the social contract for working for the Big Four in public accounting was that I’m gonna work really hard, my clients will see that, and now, I’m gonna have really good exit opportunities. And that really held true for me. And it’s held true for a lot of people I knew in public accounting. People like to hire Big Four accountants because of the reputation of those firms and because they know that we know how to work in that type of way, so they know they’re going to get a lot out of us. That’s a social contract in and of itself. 

[00:25:10] But what if that’s suddenly broken? What if you suddenly have more power in the workplace? What if there aren’t as many, in my case, accountants to go around because a lot of the CPAs that were senior CPAs retired during COVID? Well, now suddenly maybe I don’t have to work hundred-hour weeks. Maybe I can just do my job description and then my employer is gonna be happy to have me because I’m really hard to replace. It’s an acknowledgement I think on the part of zoomers specifically but millennials as well that the social contract that we were all told was in force is actually broken, and that hard work will not get you noticed and promoted. You have to take control of that yourself. This goes right back to the entire idea of HR having a policy of, or best practice of you promote from without rather than from within. Because this makes job hopping the norm. You’re not gonna get promoted within a company typically, unless you really put yourself out there and network within that company or you switch jobs. Therefore, the incentive, if you’re with that mindset or you’re looking around at the economy and that’s what all your friends are experiencing, too, the mindset is just do the job well enough to not get fired. And once you got two years, well, then you’re gonna job hop anyway. So there was no sense in actually killing yourself with this company that would lay you off at the drop of a hat when you’re gonna be leaving in two to three years anyway or if you’re in a job where, hey, this is just where I’m gonna be for the rest of my career. They’re just gonna coast. 

[00:26:36] And again, I’m not making a statement as to whether or not this is a great mentality. I am trying to explain quiet quitting to the best of my knowledge. This is how the thinking goes. And given the skyrocketing cost of living, the inability to get ahead in this economy, given inflation, given corporate greed, given the astronomical prices of owning a home or even just renting an apartment, and this growing sense that the economy is rigged against them, can you really blame them? If that’s been your entire experience, would you believe a social contract that states, hey, kill yourself on my behalf for my profit, and you’ll get rewarded. 

[00:27:11] Because this goes right back to what we were talking about with GDP. If we are 10 guys at a table and there’s one cookie — and that cookie is the GDP, the gross domestic product, the national income — and it’s evenly divided among those 10 people, everyone gets a tenth of a cookie. And if we all work really hard collectively, and we make a bunch of agreements and a couple of us end up unemployed and now, we suddenly have 10 cookies, but one person controls nine of them, has all of our average number of cookies gone up? Well, yeah. ‘Cause on average we all have one cookie. But in reality, we all have one-ninth of a cookie. Did our situation improve? Sure, but it really starts to look like the game was rigged against us because somebody else ended up with nine whole cookies. And I can speak for myself that at least in my lifetime, watching what my parents went through, watching what happened to my hometown, it certainly makes me question whether or not that social contract was ever real in the first place. 

[00:28:06] So that brings us to an inherent question here. Is quiet quitting a good idea? Ladies and gentlemen, my professional opinion is I have no clue. I don’t know. But if you’re acting with full understanding of what you’re doing and intentionality, I have to believe it’s better than killing yourself for somebody else’s profit with no benefit to you. If the agreement is that they’re gonna do better, so that you’re gonna do better, and that actually happens, then quiet quitting makes absolutely no sense. But if that’s not what’s actually occurring for you, well, then maybe you have to figure out something else. 

[00:28:36] And this, ladies and gentlemen, is a big reason why Fiscally Savage even exists. The whole premise of what I’m doing with Fiscally Savage is to help you take control of your financial life and live free. Because at the end of the day, it’s all about the intentionality that we bring to everything we do because we’re the only ones that will truly look out for us with a social contract that I believe that we’re working under today. And my job is to give and provide to you the value so that you can act with intentionality in the current economy and be successful and make your goals come to life.

[00:29:14] And, ladies and gentlemen, this is so perfectly timed because if you come in and listen to next Tuesday, we’re gonna be discussing intentionality in depth. And I don’t want you to miss that one because it’s everything that you’re gonna need to take control of your financial life and live free. So ladies and gentlemen, thanks for listening today. I’m trying to get my Instagram following up to 200 members. Please go over there, give me a follow. If you got a question, comment, concern, or worry on today’s show, I’d love to hear from you. So go over an Instagram @fiscallysavage and send me a message. Give me some feedback. I’d love to know where you want us to go. And until next time, ladies and gentlemen, go out there, take control of your financial life, and live free.

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