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20 June 2016

How did we get here? Effects of the economy on membership, MythBusters edition

Among the things that have been blamed for declining membership is the economy. By the time I was elected to the Institute board, membership had already fallen about fifteen percent from its peak in the late '90s, and it continued to decline. As we'll see in a moment, my term of service on the board happened to coincide roughly with the Great Recession of 2007-2009. Membership did decline during that recession, though not as much as you might think. It's more significant that in the years leading up to that recession, the economy was good, yet membership was declining.

When I was on the board, and many times since, I have heard members attribute the loss of members to the economy. While I accept that as a possibility, it seems to me that if the economy does have an impact on membership, we should regain lost members when the economy improves. I didn't think that was happening, so I decided to do look at the numbers. Please note that I am not an economic or financial analyst of any sort, but what I found does seem reasonable. And what did I find? That the economy has had little impact on CSI membership.
When writing previous articles about the history of CSI, I gleaned information about the number of members and the number of chapters from a variety of sources, which I used to produce a number of graphs. Some of those graphs were published along with articles, and though there were acknowledged problems some of the numbers, no one has objected to the overall picture I presented, so I will accept the information as reasonably accurate.

For information about the economy, I went to FRED Economic Data as published by the Federal Reserve Bank of St. Louis. On the FRED website, I found a graph of "Civilian Unemployment Rate" the range of which conveniently coincides with CSI's lifespan, 1948 through 2016. I thought the economic information made more sense if it showed employment, rather than unemployment, so I inverted the graph, then superimposed on it a graph showing our membership and the number of CSI chapters. (I am not certain that is entirely valid, but I think it's reasonably good for my purposes.) Finally, to make the image easier to read, I removed gridlines, scales, and labels.

As noted, the graph begins in 1948 and extends to the present. The health of the economy, as represented by the number of employed, is shown by a dark gray line. Recessions are indicated by light gray vertical bars. CSI's membership is shown by a blue line, and the number of chapters is shown by a red line.

With all that information in one place, what can we deduce about the effect of the economy on membership?

CSI's first year ended in the beginning of the Recession of 1949, which lasted a year. As a new organization, with little but some great ideas to offer, I doubt the economy had any effect on membership, which rose a bit and then remained stable through a strong economy and the Recession of 1953.

That was followed by a period of strong, uninterrupted growth of membership, beginning in 1955. During the first part of that period, we had the Recessions of 1958 and 1960-61, neither of which had any apparent effect on membership.

As you can see, growth slowed down in the late '60s - during a good economy - but was relatively steady through 1979. During this period, we experienced the Recessions of 1969-70 and 1973-75, as well as a recovering economy between those recessions. Again, membership continued to grow at about the same pace regardless of what the economy was doing.

An interesting period began about 1979. Membership grew at a remarkable rate for the next four years, at about 1,000 per year. And yet, during those years, we had the Recession of 1980 followed immediately by the Recession of the Early 1980s (no, I don't understand why those are separate recessions), a total of two years. At the end of those two years, we saw unemployment peak at 10.2 percent, the highest level between 1948 and today.

Since then, we have had the recession of the early 1990s, the recession of the early 2000s, and, most recently, the Great Recession of 2007-09. Other than a slightly steeper decline during the Great Recession, there is no apparent correlation between membership and the economy.

And so, for all of the MythBusters fans, I'd say the idea that the economy affects membership is effectively

Now for some homework. Go back to last month's article, and see if you can determine what CSI did that might have affected membership, and we'll compare notes next month.

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