On this day in economic and business history...
The first official recognition of Mother's Day occurred nearly a century ago, when on May 9, 1914, President Woodrow Wilson proclaimed the second Sunday in May would thereafter be a time to celebrate all things motherly. Dreamed up years earlier, the holiday gained legitimacy after Anna Jarvis mounted a spirited campaign to gain recognition, first as an American holiday and ultimately a global event. Jarvis also helped originate the tradition of giving and wearing carnation flowers on Mother's Day, in honor of the mother she'd lost and hoped to commemorate.
Mother's Day has since grown into one of the most heavily commercialized holidays on the calendar, and this process was so rapid and pronounced that it turned Jarvis herself against her own holiday. In our time, the National Retail Federation estimates that nearly $19 billion will be spent each Mother's Day. Here's where most of that money goes:
- $2.2 billion on flowers
- $1.6 billion on clothing and accessories
- $1.6 billion on electronics (give Mom a tablet this year)
- $3.4 billion on dining out
- $1.8 billion on gift cards
- $1.3 billion on personal services (spa treatments and the like)
Unfortunately, Hallmark is private, but United Online (NASDAQ: UNTD ) , the owner of Florists' Transworld Delivery, might be your best bet for investing in the Mother's Day spending spree. If you really want to give Mom a gift that keeps on giving, look elsewhere -- with the right dividend stock, she'll be able to buy her own flowers each year, but shares of United Online have fallen 20% in the last five years.
The changing roles of mothers
Enovid, a drug originally designed to treat menstrual disorders, was first approved for use as an oral contraceptive by the FDA on May 9, 1961. It was the first time any drug could be prescribed for contraceptive use anywhere in the world. Developed and marketed by G.D. Searle (now a subsidiary of Pfizer (NYSE: PFE ) ), Enovid (a combination of the estrogen compound mestranol and the progestogen compound norethynodrel) would also be approved for contraceptive use in the United Kingdom. The availability of this new drug on the market coincided with the early stirrings of the modern sexual revolution, and became one of the key turning points of the postwar era. Suzanne White Junod, FDA historian, later wrote:
One achievement appears on virtually every list of significant 20th-century accomplishments: the development and release of the contraceptive "Pill." Once hailed as a medical cure-all for social and political ills the world over, the view of the Pill both as medicinal drug and as a social and political panacea now has been tempered. Nonetheless, society's original optimism over the development of a successful oral contraceptive and its subsequent disillusionment have helped generate varying interpretations of the wisdom of the Pill's original approval. Writers have implied that FDA was so swept up by international demand for curbing population growth and was so impressed with data showing that efficacy of an oral contraceptive, that it overlooked or compromised concerns about the safety of the drug. ...
Safety and efficacy were inextricably intertwined in the risk/benefit equation for the Pill. In judging the safety of the first oral contraceptive, regulators were most concerned about its ability to prevent pregnancy because pregnancy and delivery were inherently medically risky. Had the drug been ineffective, or even less effective than mechanical contraceptives already available (condom and diaphragm), then its safety would have been difficult to establish. The Pill met the law's safety requirement precisely because it was so effective.
The impact of the birth control pill is astounding. The average American woman bore 3.65 children in 1960, the year before the pill became available. By 1980, the birth rate had dropped to just 1.84 children, below the level needed to maintain a stable population. This rate has never been above 2.1 (and then only for a single year) since 1971. The only reason why the population of the United States has continued to rise is higher average life expectancies -- from 69.8 years in 1960 to 78.2 years today -- and a far greater number of immigrants, which amounted to 6% of the population in 1960 but make up nearly 14% today. On the other hand, a third of the wage growth enjoyed by women since the 1960s has been the result of widely available birth control, according to Planned Parenthood president Cecile Richards.
That wage growth is not easily discounted, and it's worth noting the discrepancy between market gains in the periods prior to and following the pill's introduction. In the five decades leading up to the pill's approval, the Dow Jones Industrial Average (DJINDICES: ^DJI ) grew at an annualized rate of 4.7%. In the five decades that followed, that growth rate rose to 5.9% per year. Over the same post-pill time frame, the labor force participation rate rose from about 59.5% (where it had been for decades) to 65%, which meant that 17 million more people (nearly all of them women) were in the workforce than would have been under pre-pill participation rates. That's a whole lot of earnings to add to the national product.
The major pharmaceutical companies haven't generated a massive amount of revenue out of all this societal change, though. The American market for oral contraceptives totals accounts for less than $4 billion per year in sales, and only Johnson & Johnson (NYSE: JNJ ) commands significant branded market share through the sales of Ortho-branded contraceptive pills. Since the basic formulations have been around for so long, most oral contraceptives now exist in generic form. That's an opportunity for generic-focused drugmaker Teva Pharmaceuticals (NYSE: TEVA ) , which acquired the women's health subsidiary drugmaker known as Theramex at the start of 2011.
Is bigger really better?
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