Investing

[Jim Cowan]

Dumbass Kevin O'Leary ìs Canadian.  You're welcome.

[1984Echoes]

On 12/13/2022 at 9:34 PM, Screwball said:

What?

This has been a talking point for almost a year...

A key inflation issue is that a large segment of those who sat home during the pandemic (mostly unemployed) are unwilling to get back into the work force. At all. The guesstimates have floated to upwards of 6-7 million "refuseniks" (or "pandemic early retirees..." whatever you wanna call them); I don't remember where I saw that... Here's a recent article stating that it's more like 3.5 million (could be earlier number versus more recent number...:

https://www.yahoo.com/news/retirees-one-reason-fed-given-130713985.html

This is one of the causes of wage inflation. It puts pressure on wages missing those workers from the work force. Headhunters that I talk to are specifically stating that (these are white collar accountants, IT, engineers, etc.) workers are jumping companies a LOT as a shortage of workers to fill a specific job opening are going unmet unless one company poaches a worker from another existing company/ same job with higher salary offers, hiring bonuses etc. 

There's no way to stop this salary inflation as those millions of workers staying home and refusing to get back into the work force (I'm talking predominantly late 40's to mid-60's) because they've decided to retire early and can afford it are simply "missing". How do they get replaced? They can't. 

It is also affecting restaurants/ teachers/ health care workers/ etc....

G2 just commented on exactly the same thing:

5 hours ago, gehringer_2 said:

Just read a report today about the Fed deciding to give up on the idea of any of the early retired baby booomers coming back to the labor force post pandemic and so anticipating the need to continue fighting wage pull inflation with higher interest rates. But heaven forbid we let any more people into the country who are pretty desperate for gainful employment to support their families.

 

He was really commenting on something else but the driving force is missing workers driving up wages. And NOT coming back into the workforce by choice.

What you originally quoted SB was my condensed 84-speak of exactly this issue...

[gehringer_2]

30 minutes ago, 1984Echoes said:

There's no way to stop this salary inflation as those millions of workers staying home and refusing to get back into the work force (I'm talking predominantly late 40's to mid-60's) because they've decided to retire early and can afford it are simply "missing". How do they get replaced? They can't. 

 

To be clear, I think wage inflation for the bottom half of American workers is long past overdue and the rest of us can damn well put up with a sligthly crimped entertainment budget (etc) for the sake of a little better wage equality in this country. Of course it won't be that neat, the well educated who are in demand will still pull up even faster than laborers and service workers, but even given that, most of 4yr degreed world, techs,  et al are still not 1%ers so it's still a shift of income in the right direction. 

[mtutiger]

11 hours ago, 1984Echoes said:

This has been a talking point for almost a year...

A key inflation issue is that a large segment of those who sat home during the pandemic (mostly unemployed) are unwilling to get back into the work force. At all. The guesstimates have floated to upwards of 6-7 million "refuseniks" (or "pandemic early retirees..." whatever you wanna call them); I don't remember where I saw that... Here's a recent article stating that it's more like 3.5 million (could be earlier number versus more recent number...:

https://www.yahoo.com/news/retirees-one-reason-fed-given-130713985.html

This is one of the causes of wage inflation. It puts pressure on wages missing those workers from the work force. Headhunters that I talk to are specifically stating that (these are white collar accountants, IT, engineers, etc.) workers are jumping companies a LOT as a shortage of workers to fill a specific job opening are going unmet unless one company poaches a worker from another existing company/ same job with higher salary offers, hiring bonuses etc. 

There's no way to stop this salary inflation as those millions of workers staying home and refusing to get back into the work force (I'm talking predominantly late 40's to mid-60's) because they've decided to retire early and can afford it are simply "missing". How do they get replaced? They can't. 

It is also affecting restaurants/ teachers/ health care workers/ etc....

Really the pandemic was an accelerant. But even without it we also have a relatively stagnant population (declining birth rates; growth rates of the US population declining between 2010-2020 from a combination of lower birth rates and a decline in immigration). All while also getting to the point of whole bunch of boomers retiring as well.

IOW, even without the gap in employment created by the pandemic, a shortage of workers was likely always an inebitability just due to simple demographics. Too many boomers will retire, not enough of younger generations to replace. 

Kinda hit on this as well in the discussion about the railroad workers a while back; that's an industry that is facing a pretty steep demographic decline on the horizon, and while the Class I's may see short term gain from not revisiting their time off policies, long term, to discerning prospective Gen-Z workers (not to mention the generations that follow) in an environment where they are given more options, messaging that kind of hostility to even a modicum of sick leave seems counterproductive in attracting future employees to choose a career in that field.

[oblong]

I buy into that theory of early retirees.  The right wingers have turned it into a “people are lazy” trope but that’s not it. It’s their viewers probably. The baby boomers have now reached the point where them majority are past a retirement age. The pandemic hastened it.  People cut back and realized they didn’t miss what they cut out.   
 

The right has a natural grievance philosophy so they have to blame somebody. Their voters need a bad guy.  “Nobody wants to work” is convenient because it goes after fake people. Like the old welfare queens.  “Nobody wants to work for you” is more accurate.  Employers and the boot strap crowd have competition now. They need to compete for customers and employees.  Nobody is entitled to a work force.   

[mtutiger]

6 minutes ago, oblong said:

The right has a natural grievance philosophy so they have to blame somebody. Their voters need a bad guy.  “Nobody wants to work” is convenient because it goes after fake people. Like the old welfare queens.  “Nobody wants to work for you” is more accurate.  Employers and the boot strap crowd have competition now. They need to compete for customers and employees.  Nobody is entitled to a work force.   

It's all very amusing to me because hostility toward immigration (including legal immigration) is a big part of the story as well.

[Insert "hot dog guy" meme here]

Edited December 28, 2022 by mtutiger

[gehringer_2]

12 minutes ago, mtutiger said:

IOW, even without the gap in employment created by the pandemic, a shortage of workers was likely always an inebitability just due to simple demographics. Too many boomers will retire, not enough of younger generations to replace. 

right - but there was always a bit of an unknown around how long boomers would choose to stay in the workforce. The counter arg was that by some measures a lot of them didn't have the resources put aside to retire comfortably and thus would keep working longer than their predecessors. The degree to which people have decided to make do with the retirement income they have was an open question. 

[mtutiger]

4 minutes ago, gehringer_2 said:

right - but there was always a bit of an unknown around how long boomers would choose to stay in the workforce. The counter arg was that by some measures a lot of them didn't have the resources put aside to retire comfortably and thus would keep working longer than their predecessors. The degree to which people have decided to make do with the retirement income they have was an open question. 

Never really bought the counter arg myself. I could see working past retirement being more prevalent in more low skilled environments, particularly in retail or some other service industries, but there are a lot jobs that are unionized or have Cadillac retirement plans (railroads again a great example) or white collar jobs where the likelihood of staying on past retirement is much more remote.

Put another way, to the extent that working past retirement would be an option, it would never have been equally distributed across all workers, it would have been confined to some particular industries or classes of the workforce. So I'm not sure how you avoid the consequences of the mass retirement of boomers under those circumstances.

[1984Echoes]

11 hours ago, gehringer_2 said:

To be clear, I think wage inflation for the bottom half of American workers is long past overdue and the rest of us can damn well put up with a sligthly crimped entertainment budget (etc) for the sake of a little better wage equality in this country. Of course it won't be that neat, the well educated who are in demand will still pull up even faster than laborers and service workers, but even given that, most of 4yr degreed world, techs,  et al are still not 1%ers so it's still a shift of income in the right direction. 

I agree with the bolded part especially and previously have stated as such.

In fact... I have opined that the min wage should not stop at $15, but should be inflation indexed so a COLA could keep the min wage from being static the next 20 years with another "living wage crisis" ensuing. We keep doing that due to businessperson and Republican refusal to touch the subject in its entirety. Inflation has been what the past 40 years? About a 2% annual average? The pandemic is an exceptional circumstance, and the resulting pandemic inflation, that I believe will be a one-off. Once fixed we will be back on a 2% annual rate, IMO. Add in COLA to min wage and business owners can "plan" to handle the annual wage increase if it's at a nominal level. And labor can get small increases that at least attempts to keep their heads above water instead of letting them sink every year (for the next 20-25 before finally addressed again) further behind.

Just my 2 cents on that subject.

[1984Echoes]

22 minutes ago, mtutiger said:

It's all very amusing to me because hostility toward immigration (including legal immigration) is a big part of the story as well...

And another Republican refusal to even attempt to address this issue reasonably. They've refused to address this for the past 12 years so... it's not new.

[gehringer_2]

58 minutes ago, 1984Echoes said:

And another Republican refusal to even attempt to address this issue reasonably. They've refused to address this for the past 12 years so... it's not new.

they have to refuse, they need the issue far more than they want a solution. The issue helps them get elected, a solution would take away the issue - or worse - give them direct ownership of whatever the new status quo turns out to be, which will be less than perfect since all real world situations are. Chalk it up to the basic ignorance of the American voter who doesn't see that the current situation is largely the result of GOP refusal to meaningfully address the issue for those 12 years. But that's how the US political cookie crumbles.

[chasfh]

3 hours ago, oblong said:

Nobody is entitled to a work force.   

This struck me especially because it reminded me that tens of millions of people are descended of a region that believed that they were entitled to a specific kind of workforce, and by the grace of and with blessings from God. See Genesis 9;24-27; Genesis 21:9-10; Exodus 20:10, 17; Ephesians 6:5-8; and Philemon 1:12.

[Screwball]

7 hours ago, 1984Echoes said:

I agree with the bolded part especially and previously have stated as such.

In fact... I have opined that the min wage should not stop at $15, but should be inflation indexed so a COLA could keep the min wage from being static the next 20 years with another "living wage crisis" ensuing. We keep doing that due to businessperson and Republican refusal to touch the subject in its entirety. Inflation has been what the past 40 years? About a 2% annual average? The pandemic is an exceptional circumstance, and the resulting pandemic inflation, that I believe will be a one-off. Once fixed we will be back on a 2% annual rate, IMO. Add in COLA to min wage and business owners can "plan" to handle the annual wage increase if it's at a nominal level. And labor can get small increases that at least attempts to keep their heads above water instead of letting them sink every year (for the next 20-25 before finally addressed again) further behind.

Just my 2 cents on that subject.

Good question. About a 2% annual average? To quote you.

Chart porn:

2% is the narrative we are given by the Fed's mandate, which of course is been proven to be nothing but bullshit since 1913. But I digress...

How's that chart look? That's the last 40 years. Looks to me like we are getting our ass kicked.

Funny too, in all this talk, I didn't see anything about "automation."

Automation doesn't call in sick, smoke cigarettes while on break, care about how many days they get off, or not have a way to get to work.

Automation (in broad terms) just spits out parts so the system continues to feed the consumerism they have nurtured to make the rich richer, and the poor poorer. Three screws on an assembly line can save 3 jobs over 3 shifts - so 3 people lose a job.  Cha-ching!

We are being replaced as a workforce with robots, and of course slave labor all around the world.

Ain't we fucking special?

[oblong]

4 hours ago, chasfh said:

This struck me especially because it reminded me that tens of millions of people are descended of a region that believed that they were entitled to a specific kind of workforce, and by the grace of and with blessings from God. See Genesis 9;24-27; Genesis 21:9-10; Exodus 20:10, 17; Ephesians 6:5-8; and Philemon 1:12.

That plays out when I see people responding to some of the automation we see in retail as a direct response to people “demanding $25 an hour min wage”.  No.  It’s because innovation is a thing and always will be. Nobody lost a job because of a kiosk at Taco Bell. Nobody lost a job because at lowes because of self check out.  Every time I go to those two places, which is often, I see signs asking for help. Yet I can order Taco Bell every Sunday as I do off my app and walk in and pick it from a shelf.  I’m painting my office during the break and have been to lowes 4 times in 2 days. Both times used self check out. I think people don’t like the “extra work” of doing something themselves so they once again yell at a mythical figure.  They want to feel empowered by being able to talk down to a service worker. Some things are beneath them but not other people.   

[gehringer_2]

15 minutes ago, oblong said:

Nobody lost a job because at lowes because of self check out.  Every time I go to those two places, which is often, I see signs asking for help

People do lose jobs, but other people gain other jobs. Automation in today's world is no different that the industrial revolution was in the late 19th century world. You do get upheaval, but total employment does not go down. What industrialization and automation actually do is shift the amount of capital deployed upward for each worker, total production goes up, productivity per worker goes up, the total economy generates more wealth, and the employment profile across the economy changes. The mechanization of agriculture probably put far larger % of the total workforce 'out of jobs' than today's automation but all those workers and more were eventually absorbed by the new industrial economy. Computer based automation will be exactly the same - this time industrial workers (who today are a much smaller % of the workforce than agricultural workers were back in the day) will turn into some other kind of workers with an even higher capital utilization rate. The transition can either be harder or easier depending on government action and policy, but the conventional wisdom idea that total employment disappears, while intuitive, is incorrect.

Edited December 29, 2022 by gehringer_2

[1984Echoes]

Cute chart.

But I prefer a simple calculator, because the chart's appearance can be deceiving. Sort of like an optical illusion.

Your chart, per calculation (I'm not going to use your chart which starts in 1960 and includes over a decade of 1970's rampant stagflation, and through today, when we currently have a bout of pandemic/ Russian invasion inflation) =

 

$1 in 1982 is equivalent in purchasing power to about $2.49 in 2021, an increase of $1.49 over 40 years. The dollar had an average inflation rate of 2.57% per year between 1982 and 2021, producing a cumulative price increase of 149.10%.

So... 2.6% instead of 2%. Annual. Which does compound annually and makes your chart look uglier than it actually (reality) is.

[gehringer_2]

23 minutes ago, 1984Echoes said:

Cute chart.

But I prefer a simple calculator, because the chart's appearance can be deceiving. Sort of like an optical illusion.

Your chart, per calculation (I'm not going to use your chart which starts in 1960 and includes over a decade of 1970's rampant stagflation, and through today, when we currently have a bout of pandemic/ Russian invasion inflation) =

 

$1 in 1982 is equivalent in purchasing power to about $2.49 in 2021, an increase of $1.49 over 40 years. The dollar had an average inflation rate of 2.57% per year between 1982 and 2021, producing a cumulative price increase of 149.10%.

So... 2.6% instead of 2%. Annual. Which does compound annually and makes your chart look uglier than it actually (reality) is.

chart the data like this and you have your description

Note that in 2009 and again in 2015 inflation rates bounced to zero. Conventional wisdom is that deflation can be unstable/self-accelerating so the prevailing theory is that it's safer to stay an average where bounces don't go below zero - thus the ~2% FED target. That may or not be the best economic science but that is the rationale they have been using for a few decades.

Edited December 29, 2022 by gehringer_2

[1984Echoes]

A much more accurate chart... thank you.

[mtutiger]

3.7% unemployment rate and help wanted signs everywhere.

Not exactly a recipe for long discussions about automation.

[CMRivdogs]

I will guarantee that robots would still probably get my order wrong at Wendy's

[gehringer_2]

2 hours ago, CMRivdogs said:

I will guarantee that robots would still probably get my order wrong at Wendy's

LOL - I don't know if they have gone downhill everywhere or just locally - Wendy's used to have regional franchises so maybe it's just the group here, but the one I used to hit for lunch just got progressively worse about misfiling orders to where I stopped going, then it just closed. When they first appeared, the stores with the taco/salad bars were the best. Been a long slow decline from there!

[ewsieg]

18 minutes ago, gehringer_2 said:

LOL - I don't know if they have gone downhill everywhere or just locally - Wendy's used to have regional franchises so maybe it's just the group here, but the one I used to hit for lunch just got progressively worse about misfiling orders to where I stopped going, then it just closed. When they first appeared, the stores with the taco/salad bars were the best. Been a long slow decline from there!

My wife and kids still like Wendy's for some reason.  I don't even bother checking the bag anymore.  If you send me there, I'll come back with what they gave me.  You get what you get and you don't throw a fit.

[Motor City Sonics]

I got 50 FTT tokens for my birthday !!!!!!!!!!!

 

Oh, wait.............

[Screwball]

7 hours ago, mtutiger said:

3.7% unemployment rate and help wanted signs everywhere.

Not exactly a recipe for long discussions about automation.

Today's Jobless claims from the BLS

Quote

In the week ending December 24, the advance figure for seasonally adjusted initial claims was 225,000, an increase of 9,000 from the previous week's unrevised level of 216,000. The 4-week moving average was 221,000, a decrease of 250 from the previous week's revised average. The previous week's average was revised down by 500 from 221,750 to 221,250

Discussions about automation?  It's part of our life, and growing. It is deflationary, but also cost jobs - which is the intent.  I've been a part of it as I spent 35 years in engineering/product design/manufacturing.  It' not going away anytime soon.  Ever heard of a robot?

Maybe you should get out more.

[mtutiger]

2 hours ago, Screwball said:

Today's Jobless claims from the BLS

When I get out, I see a bunch of retailers with help wanted signs in their door. And in my industry, we have a shortage of qualified labor which makes it hard to fill requisitions. We've been dealing with this for a while.

Sorry that my experience differs with yours I guess.

Edited December 29, 2022 by mtutiger