The Second Wave of Layoffs is Here, Now Hitting Well-Paid Jobs

A sort of sector rotation of layoffs, and it’s not a good sign, even as millions of lower-wage workers are being hired back.

By Wolf Richter. This is the transcript of my podcast last Sunday, THE WOLF STREET REPORT. You can listen to it on YouTube or download it at Apple Podcasts and others.

At first the job cuts hit lower-level employees at retailers, hotels, restaurants, gyms, movie theaters, and the like. At retailers alone, over one million people got sacked in April. And then retailers started trimming their corporate jobs. Then airlines, constrained by the bailout package they took under the CARES Act, offered voluntary buyouts and early retirements.

Innumerable companies have quietly laid off workers. Many companies have shut down. And all the suppliers to the industries that were hardest hit were also hit, as the problems spiraled up the supply chains.

By July, after many of these businesses – those that were still around – had already re-opened, there were over 32 million people collecting unemployment insurance.

Early on in the Pandemic, big tech companies said that they would not lay off people for now. But they slowed their hiring or stopped hiring.

So restaurants have been reopening and they’ve hired back some of their staff, though many remain closed, and a portion may never reopen in their prior form. And retailers have reopened some of their stores and rehired staff, but many stores were permanently shuttered. Gyms and movie theaters are trying to reopen under immense difficulties, as are barbers, hair salons, nail salons, and the like.

While millions of these lower-paid employees are now being brought back – and we see that happening everywhere – a whole new wave of layoffs has been building momentum. And now it’s well-paid jobs with decent benefits at big companies, including tech companies, that are being shed. We got a dose of those big-company layoffs over the past few days.

Salesforce confirmed rumors that it was laying off 1,000 employees later this year. Back at the end of March, it had said that it wouldn’t do any layoffs for 90 days. Those 90 days expired about two months ago, and so now, it’s time to cut costs and shed employees.

Not so ironically, the news came the day after Salesforce beat earnings expectations for the quarter, and its shares skyrocketed 26% in just one day. Any layoff news is always welcome on Wall Street – the bigger the better – as a sign of cost cutting and improvements in earnings per share.

On Friday, Coca-Cola Company, which had been hit by a 28%-plunge in second quarter revenues, announced that it would offer voluntary buyouts to about 4,000 employees with some seniority in the US, Puerto Rico, and Canada, and that it would lay off other employees. It also said that it would trim and reorganize its corporate structure by replacing 17 existing business units with just 9 new business units.

Logistics giant and freight broker C.H. Robinson added a new spin to the theme of not-bringing-back furloughed workers: In April it had said it would temporarily furlough 7% of its workforce or about 1,000 people. But now it turns out that it won’t bring back hundreds of them because their jobs had been automated during their absence. And those jobs disappeared permanently, as the company told investors recently, and they would become, as it said “permanent cost savings from our investments in tech.”

Wells Fargo, which has slashed its dividend by 80%, is now trying to cut costs to please its shareholders. Early on in the Pandemic, the bank, like so many other big companies, had announced that it would put a moratorium on job cuts. It has now ended that moratorium.

A spokesperson, in confirming the rumors, told Bloomberg News that starting in early August, the bank “resumed regular job displacement activity.” They didn’t give numbers. But this may ultimately lead to tens of thousands of jobs getting cut over the next many months, sources said. In the statement, the bank told Bloomberg that it expects to reduce the size of the workforce through “attrition, the elimination of open roles, and job displacements.”

There is still a backlog of employees to be cut. Those job cuts were planned before the Pandemic, but then put on hold during the Pandemic. Then there are the additional reductions, the new ones, that include thinning management ranks. The ultimate scope of those cuts has not been decided yet, according to sources.

CEO Charlie Scharf told analysts during the earnings call in July, that “It’s like an onion: The more we do, the clearer the next round will become.” And so I guess these rounds are becoming clearer.

To the theme of temporary furloughs turning into permanent layoffs: On Friday, MGM Resorts, which has gotten hit by the collapse in tourism and the shutdown of casinos and other venues, and whose revenues in the second quarter plunged by 91%, said that it would lay off 18,000 workers in the US who’d been temporarily furloughed in March. That’s over a quarter of its workforce in the US.

Casinos in Nevada were allowed to reopen in early June, but gambling revenues in Las Vegas were still down nearly 40% in July compared to July last year. There are also social distancing requirements and capacity restrictions that make casino operations tougher to pull off. And MGM still hasn’t opened all its casinos.

In early August, NBCUniversal, a unit of Comcast, started cutting up to 10% of its workforce across its broadcast and cable-television divisions, movie studios, and theme parks.

AT&T, which owns the Warner Brothers studio and cable channels HBO, CNN and TBS, has also started slashing its workforce.

Stanley Black & Decker announced at the end of July that it would lay off 1,000 people and make those layoffs permanent, while reversing the furloughs of 9,000 people and bring those people back. The company is benefiting from the home-improvement do-it-yourself craze that has started during the Pandemic. While part of the company’s business was down, the retail end of it, meaning sales in stores, jumped by 50%.  And still, 1,000 permanent layoffs.

Also in July, LinkedIn, which is owned by Microsoft, announced it would lay off about 1,000 employees, as its business has gotten hit by the slowdown in hiring during the pandemic.

In terms of the airlines in the US, they already shed in one way or another many tens of thousands of workers between March and July. And now they’re busy announcing more staff shedding, either through layoffs or some sort of voluntary buyout or early retirement.

For them, October 1 is the big day when they’re free under the bailout package to lay off people involuntarily. Between American Airlines, United Airlines, and Delta, the additional cuts announced so far could amount to more than 55,000 employees.

The difficulties of the airlines business are translating into layoffs at a host of other industries, including manufacturers of aircraft, engines, and components.

Boeing said at the end of July that it is preparing a second round of buyouts this year. The 10% cut of its workforce unveiled in April wasn’t enough, amid a flood of cancellations of its key product, the misbegotten 737 MAX.

Raytheon said at the end of July that it cut 8,000 people in its commercial aviation division, which makes jet engines and airliner systems. General Electric had already announced in May that its aviation unit would cut 13,000 jobs.

Oil-and-gas drillers and oil-field services providers have been cutting jobs in massive numbers, amid a surge of bankruptcy filings, as both demand and prices collapsed. A month ago, Schlumberger, the giant US oil-field services provider, threw another 21,000 job cuts on top of that pile.

So this is now a mix of new job cuts, and temporary furloughs becoming permanent layoffs. Goldman Sachs estimated that nearly a quarter of US workers that were temporarily furloughed probably won’t be called back. That’s millions of people.

Many of these big-company layoff announcements take time to become actual layoffs. An announcement in August may lead to actual layoffs weeks or months later. But other layoffs, especially by smaller companies, come to light when they’re already happening, or they’re just happening quietly.

Outplacement giant Randstad RiseSmart released a survey a few days ago of human resource executives in 20 industries that found that nearly half of US employers who have already furloughed or laid off staff as a result of the Pandemic are considering making additional cuts over the next 12 months.

So now, this is no longer a knee-jerk reaction to a sudden Pandemic, lockdowns, and a collapse in demand. Now it’s methodical, systematic, carefully planned, and calculated. Now companies are looking at data and projections, and they’re going through their workforce with a fine-toothed comb to trim jobs and costs.

And we’re seeing this in the numbers. Over the past four weeks, nearly 7 million people filed initial unemployment claims under state and federal unemployment insurance programs.

This means that over the past four weeks, nearly 7 million people, who were eligible for state or federal unemployment insurance, got newly laid off. That’s a huge and catastrophic number.

And it includes the kind of layoffs I mentioned – well-paid jobs at big companies, in carefully orchestrated and calculated moves, based on projections where their business is heading over the next few years. These companies don’t permanently lay off that number of people just to get over a three-month dry spell. There are now some long-term thinking and projections involved here.

Over the same four-week period, the total number of people on unemployment insurance dropped by 4 million, from 31 million to 27 million. This means that four million more people got their jobs back than were newly laid off.

But many of those people who got their jobs back are working in retail and restaurants and in the lodging industry, in the lower-paid end of the services sector. And at the same time, big manufacturers, tech companies, airlines, companies in the entertainment business, and the like are now slashing jobs in large numbers.

It’s sort of a sector rotation of layoffs, with layoffs rotating into industries with higher pay and decent benefits, hitting many of the people that had been spared in the early months of the Pandemic. And this is another bad twist the Pandemic economy is serving up.

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  181 comments for “The Second Wave of Layoffs is Here, Now Hitting Well-Paid Jobs

  1. 2banana says:

    Wondering when all those who relocated out of big expensive cities to work from home in the suburbs or rural areas will find out when their big expensive city salaries don’t relocate with them.

    • Mike M says:

      I wonder how many who have relocated to the suburbs have had to deal with slow internet & less options?

      • Just Some Random Guy says:

        Is Mike M serious? LOL

        Dude, I live hundreds of miles from the nearest big city and I have 100Mbps for $40/mo. I can get up to 250 mpbs but 100 is fast enough and no need to pay more. I can stream Netflix on 4 TVs simultaneously.

        Some you people really need to get out of the cities sometime and experience the test of the country. You’ll be shocked at what you’ll find. We have electricity, fast internet and some the luckier ones even have running water and air conditioning.

        • Throbert says:

          lol

        • Joe Saba says:

          massive shortage of trade workers
          so many small businesses-concrete,HVAC, builders, service to trade, etc.
          are screaming for WORKERS – starting $20++, $30++ an hour
          lots of UI candidates refuse to seek work and need to be cutoff

        • A demographic study on voters today vs 2016 is very different. More White College educated, (the flipside to the student debt bubble) and more Latino. In internet flyover country Fox news is the dominant source of information. There are islands in rural America, college towns, which is the subtext in Kenosha. In places like IA it is considered a worthy goal for young men to attend college, at say Iowa St. ISU is currently experiencing spiking virus cases, and had to cancel all tickets to this weekends football game which the admin was actively promoting. The notion that you live in the country and you are here, supports the notion that things are changing, and there never was a problem, besides the information divide, and access.

        • VintageVNvet says:

          NO jr, city folks do NOT need to go anywhere, that’s why they live in cities!!
          Unlike the rural folks who have been there a long time and are accustomed to a very very different way of life, city folks who move to the countryside, as opposed to smaller cities to be sure, frequently don’t last long, but sometimes do a lot of damage in the short time they are rural.
          I reference the city folks letting their dogs run and kill sheep, wildlife, and then pooping in the creeks (for some reason I still do not understand) in southern Humboldt County in the early 1970s, when the very old sheep ranches were being broken up and sold off cheap in half and quarter sections that were then broken down to 40 acres and so forth.
          Well meaning folks who didn’t have a clue did tremendous damage to the environment, and certainly made a lot of long time residents very angry. In spite of all the wonderful rhetoric about rural bliss, most city folks have no respect for proper protocols in the countryside.
          Have seen this also in rural countryside of OR, FL, and middle of no where ”flyover.”
          Please folks, do NOT leave your cities!
          Thank you.

        • Just Some Random Guy says:

          Ambrose: next time you post, read it over and make edits as needed, before hitting the Reply button. I have no clue what you said.

        • denis says:

          dem city folk just got no idea what livin outa da city offers

    • Cem says:

      ‘Hey Frank, we heard you’re moving out of the city and you’ll be about 45 min from the office so we’re cutting your pay.’

      Internet is a thing, these people move to a place with internet. They probably have running water and indoor plumbing too believe it or not.

      • 2banana says:

        It is 55 miles from mid town Manhattan to Pennsylvania.

        You don’t get NYC wages in Pennsylvania.

        Same deal with San Francisco and Stockton.

        Cost of living is a huge chunk of wages negotiated between the employer and employee.

        Do you really think this will be just ignored by every HR department?

        • Thomas Roberts says:

          Hopefully, HR departments will be the ones who suffer the most heavy job losses.

        • Ian says:

          No reply available to Thomas below. In 30 years experience and seeing numerous restructurings, I have never seen an HR person being on the list. They are in charge of the list and manage to bamboozle management that they are indispensable.

        • Whatever says:

          > Hopefully, HR departments will be the ones who suffer the most heavy job losses.

          So you don’t want HR departments so that it takes forever to hire people back?

          HR departments have for the most part always been stay at home moms working from home with low wages, and there are like 2 of them for a 1000 person company. Relax.

        • 2GeekRnot2Geek says:

          2banana,

          I live in that part of PA. Two towns in Bucks County, Newtown and Yardley have been suburbs of Manhattan for decades. And yes, they do make the same NYC $ without the NYC wage tax. Grab a train from Trenton or Hamilton station and you’re in Manhattan without traffic. It’s been like that since the 1980’s.

      • Lenz says:

        yeah, but think about the commune cost and breakfast/lunch that you might not need to pay for at a premium. Easily $1000 in savings for most metropolitan jobs. so the wage loss might balance that out .

        wishful thinking =)

  2. Pieter says:

    the median age at my corp with 18K total employees is 51/52ish.

    we have a ton of 40 plus year employees…. when are we going to get the early retirements/buyouts? I think a lot of near retirees are betting on this!

    • Apple says:

      What are they going to do for healthcare?

      This pandemic has shown that healthcare insurance provided by employers is a terrible idea during a major health crisis.

      • two beers says:

        Healthcare insurance provided by employers is a terrible idea, period.

        One obvious reason is that it puts US companies at a serious competitive disadvantage compared to companies in most industrialized countries, where health care is universal, free at the point of care, with the costs spread out among those who can afford it, so that no one has to choose between going bankrupt or dying.

        • JK says:

          As someone that works medical, I agree with you. One problem, the country is broke and determined to be an Empire regardless whose the Big Chief. I’ve been self employed and work part time (I am lucky to make my own schedule in a way), but been paying my own health insurance for last 19 years. What’s the biggest scam of health insurance is you have deductibles. So, $5000 per year. Yeah sure, I can go see the doctor, but pay renegotiated rates. Luckily, I’ve been healhty all along until when? This is a huge issue in our country.

        • Thomas Roberts says:

          The US government actually spends more per capita on healthcare than any other country, despite, not covering everyone. Right now, the current healthcare system is doomed to collapse. We need to ensure that without substantially increasing spending, to create a new free for all citizens healthcare option that replaces all other government covered healthcare, except, those directly dependant on care from US government (they would logically need their own new plan). It would be like Medicare, but, covers more. Right now, for every actual doctor, our healthcare system employs half a dozen or more middle men.

        • Kurtismayfield says:

          “The US government actually spends more per capita on healthcare than any other country, despite, not covering everyone. Right now, the current healthcare system is doomed to collapse”

          No it isn’t, it is going along sucking out profit swimmingly. It’s perfectly aligned with our grifting society.

        • Just Some Random Guy says:

          JK,

          That is how insurance is supposed to work. You pay for the small things. You have insurance for the big things, and you hope you never have to use insurance.

          Expecting Aetna to pay 100% of doctor visits is like expecting Geico to pay for oil changes and brakes.

        • Charles Carver says:

          Is there a country, with government-run health care, that doesn’t have rationing?

        • 91B20 1stCav (AUS) says:

          two-i believe the the term is “…socialize all risk, privatize all profit…”. Hence, the necessity of a healthy society to constantly (and rarely done, now) understand and ‘…follow the money…’ (thank you, as always, Wolf!) in the public AND private sectors. At the moment, the chart at the foot of our bed is not encouraging…

          May we all find a better day.

        • Harrold says:

          “I’d like to get my oil changed please.”

          “That will be $899.”

          “I have GIECO.”

          “That will be $19.99 then.”

          “WAAAAT? Why is my bill $399?”

          “It turns out the mechanic that verified the oil levels via the dipstick was out of network.”

        • No Expert says:

          Not to mention the power imbalance this creates between employer/employee when one controls the health (i.e. life) of the other. Re ‘insurance for big things’ yeah ok you may never have a car crash but most people will run into the health system at some point. Re ‘rationing’ – short answer is yes.

        • Jon says:

          I am not allowed to get AMAC insurance because the State of Washington only allows, I believe, 6 or 8 companies. It’s a racket, to be sure, as it prevents real health care competition.

          Maybe if we allowed companies to behave like companies instead of state sponsored insurance corporatism, we’d have affordable health care and there would be no need for government sponsored health care.

        • Thomas Roberts says:

          The current system is extremely unsustainable and simply cannot last as the number of elderly grows. The only question is how long it can last. It’s a difficult question, but, I don’t see it lasting another 10 years. Also, people with insurance are rationed. And it could still be possible to pay your money for additional treatments or electives if desired. It’s important to remember every other developed country has figured at least something out. My question to all those who doubt America’s ability to do it. Is why do you think America is uniquely crippled and less capable than others? Do you think Americans are less than others? You sound very raciist against Americans. Lack of political will is the only real obstacle.

        • Thomas Roberts says:

          10

          The current system is extremely unsustainable and simply cannot last as the number of elderly grows. The only question is how long it can last. It’s a difficult question, but, I don’t see it lasting another 10 years. Also, people with insurance are rationed. And it could still be possible to pay your money for additional treatments or electives if desired. It’s important to remember every other developed country has figured at least something out. My question to all those who doubt America’s ability to do it. Is why do you think America is uniquely crippled and less capable than others? Do you think Americans are less than others? You sound very raciist against Americans. Lack of political will is the only real obstacle.

  3. Bobby Dents says:

    Lets note, after a pop in credit creation in the spring, it’s been flat for 4 months now. The lags

  4. bobby says:

    Lower paid service jobs that have come back earlier this summer, although they are back, many of these businesses are still on hard times. A segment of the population still don’t feel comfortable going into restaurants, bars, movie theaters, gyms.. Its hard not to see another wave lower of job losses in the service sector now that the summer season is coming to an end.

    • Paulo says:

      Control the virus, willingly by citizens, and the economy returns as well as real freedoms. Today I had to take my dog to the vet, masks mandatory. Also stopped in at two stores, one auto parts and one for groceries . Everyone wearing masks as it is mandated by store owners, not by the Govt. Infection rate with our recent summer rise is 2%. It was .8% 2 months ago.

      WA State wants us to open the border. Their infection rate per capita is 13X higher than ours, and sadly, one of the lowest rates in the US.

      Until citizens show some resolve to lower Covid spread, look for a continued declining economy and another massive infection wave as schools reopen. As for past layoffs, you ain’t seen nothin’ yet as this unfolds.

      Leadership. Priceless.

      • RightNYer says:

        I have to agree. This pandemic has revealed some very ugly truths about the American people. It’s very unsettling to me how little people belong in shared sacrifice.

        • Thomas Roberts says:

          No large country has really handled the pandemic well. Small countries like South Korea and Taiwan did, but, CCP-19 wasn’t spread widely across their countries when it was revealed to be as bad as it was. Many countries are suppressing their death tolls or count them differently or lack the ability to even register them. Americas response looked really bad, but was comparable in magnitude to pretty much every one else. Countries which receive fewer people from China were less effected for obvious reasons. Just like the others there was a lot that could have been done differently. America, because, of its large population and it’s hugely dispersed population was in a worse position than many, despite, some advantages like most people having personal cars.

        • SwissBrit says:

          Thomas,
          Most populations aren’t pictured in the media on a seemingly daily basis having public melt downs about being asked to wear masks or becoming physically violent. Supposed individual freedom appears to outweigh even the slightest consideration for anyone else’s health and wellbeing for far too many people, it seems.
          This is what I believe RightNYer was getting at, rather than the country’s pandemic response.
          Also, whilst I’m sure that conspiracy theorists are present in many societies, for some reason the US appears to have way more than its fair share, but they also seem to be given far more credit and attention than would be the case elsewhere.

        • Xabier says:

          Not even so much as sacrifice: simple courtesy and consideration should suffice.

          Ah, now what’s the word? Decency.

        • RightNYer says:

          SwissBrit, yes, you read me correctly.

          I am a strong believer in individual rights, but I am also a believer in the idea that “the right to swing your fist ends where the other guy’s nose begins.”

          To me, going out in public stores without masks is the equivalent of randomly swinging your fist around, hoping you don’t hit someone.

        • VintageVNvet says:

          Rnyr,
          Agree with pandemic showing SO very clearly some truths re USA that have been around a long time.
          #1 IMO, is the devastating result of the incredible brainwashing via TV and now internet and so called ”social media” such as Facehook et alia.
          #2 Is the unbelievable dumbing down of the vast majority of the population, to the point of many of the really idiotic behaviours seen recently at all levels of guv mint down to the last well off.
          #3 Is the apparent acceptance of the brainwashing with no critical thinking able to differentiate between fantasy and facts.
          #4 Is the diminution of clean, clearI and unbiased dissemination of facts, replaced by the very carefully selected opinionating and editorializing parading as fact from many formerly responsible sources.
          ”Clean House, Senate Too.” Until we get folks at all levels of guv mint who will actually work for the best interests of the people they represent, rather than the rich folks currently pulling the strings of their politician puppets.

        • Thomas Roberts says:

          To be clear I merely think that every large country failed miserably, America’s fails though, were not necessarily worse, but, much more embarrassing. Many other counties had much the same responses, but, didn’t televise it. Alot of people outside America still think it’s all a hoax somehow.

          It was going to be very difficult to manage by the time we realized what was happening even in January. We don’t know for sure, but, CCP-19 could have been circulating for several months at that point. Based on satellite photos of all the hospitals in Wuhan, it could have been an epidemic there by August of last year, possibly earlier, meaning that some countries like America could have had CCP-19 spread dispersed throughout the country before the end of last year (though total infections would have been low, it would have already been very difficult to contain). The single biggest failures are places like NYC very delayed, but, then extreme reactions, and trying to blame young people for spreading CCP-19, while, allowing things like the Sturgis motorcycle rally and the “protests”.

          The fact that the WHO was corrupted definitely didn’t help.

        • Paul says:

          Yo Thomas- Thailand had huge numbers of Chinese tourists, and was the first place outside China hit by the virus.

          It is now over 100 days since the last documented local transmission.

          It came with a price in freedoms that Americans would not tolerate, but it worked.

      • Old School says:

        More research is coming out all the time. Just saw one article that said talking increases virus load in the air by 10 times. That might be more effective than wearing a mask and being a chatty Cathy. Anyway combining wearing a mask and not talking sounds like a winner in close situations like a haircut where chatting is the norm.

      • Old School says:

        We all should be responsible and learn as much as we can to make a good decision. I am 64 and generally healthy, but my age is a risk factor I have to consider. My parents are in their early 90’s so I have to be mindful of all my interactions.

        I remember an engineer wrote a book saying there are no accidents, there are only risks that we have to determine how to manage. Kind of makes sense. We all need to do a personal risk assessment and if we get the virus it’s generally because we were not careful enough.

      • Happy1 says:

        Not sure Canada is doing well because of leadership per se, it’s more about a population that has respect for rule of law and better societal cohesion than the US. I say this with sadness.

        • td says:

          Generally, the leadership in Canada didn’t get in the way too much, wasn’t prone to conspiracy theories and tried to let the medical professionals lead the effort. This process was far from perfect and the long-term care facilities had the same spate of deaths as Sweden, being an unanticipated weak point.

          Where I live east of Toronto, there are about 740,000 people in the region and we’ve had some weeks with only a couple of active cases. Testing was never easy to get but the people basically are behaving sensibly. Have universal health care not dependent on having a job matters in a pandemic. Again, an imperfect system but better than some.

          In Ontario, we never had the same kind of complete shutdown as seen in some other places. Manufacturing and most service and retail businesses continued to function within certain parameters. For example, I’ve always been able to get anything I needed from retailers, but had to wear a mask to buy food and take delivery at the store door for cat food. The result is less pressure on many workers.

          Finally, most of the big government subsidies have gone to individuals and not to big business. The safety net was stretched but not broken. The unemployment insurance system is federal and was able to handle the extra load, though with some delays measured in weeks. You can make a case that some of the relief was too generous, but I would rather err on that side than to throw millions out on the street to prove a point.

      • Lee says:

        Responsible citizens – priceless; responsible state and local government: even more priceless; and freedom of speech – something rarely found anywhere – even here.

  5. 91B20 1stCav (AUS) says:

    Behold more people, with less remunerative employment than ever before. Beware non-vanishing populations who feel they have naught less to lose, for therein lie the ghostly whispers of vanished empires, the approaching rumble of tumbrel wheels on the cobbles…

    May we all find a better day.

    • Tony22 says:

      That might work for alcoholics, but the real quote was “Give them a whiff of grapeshot.”.

      Grapeshot was chains, broken bottles, nails and other junk stuffed into a cannon to blast toward a crowd of rioters, saving the cannon balls for real battles.
      The French dude was Napoleon.

      • two beers says:

        I’ll give 2banana the benefit of the doubt that he knows what the quote means. In which case, he was probably trying to say he is cool with state security force massacres of the impoverished, dispossessed, and desperate people that 91B20 1stCav suggests might soon make life uncomfortable for the elites.

    • Yertrippin says:

      A beautifully written, horrifying truth. Amazingly, most people think it doesn’t apply to them personally. The loss of a notion of society at a personal level – and not just flag waving – is the death of the society once widespread.

      It appears widespread in the U.S.

  6. Seneca’s Cliff says:

    This is very grim news. This next tier of job losses will hurt the economy and our society much worse than the first tier of service workers. While we have been fixated on the dynamics of the change to work from home, maybe we should have been focused on the bigger problem of work from nowhere.

    • Apple says:

      These jobs losses may be permanent.

      Many of those 50+ may never find employment.

      • Anthony A. says:

        A new group of “early retirees”. Health care under the ACA will be very expensive for that age group until they hit Medicare. Sure hope those affected planned for something like this, or had a exit plan…but probably very few have.

        • roddy6667 says:

          My sister-in-law is retired and has Obamacare. She pays $750 a month with a $7000 deductible. She is on Enbrel, which costs about $16000 a year. She could go on SSDI, but that will only stay in effect for a couple of years, then Medicare kicks in. Medicare Part D has a $6000 deductible and a stiff co-pay for that med, so she’s screwed any way she turns. Good thing she lives in the country with the best health care system in the world.
          /sarc tag unnecessary?

        • Anon1970 says:

          My old employer used to provide qualified early retirees (age 55+ and 10 years of service) health insurance at employee rates. Starting in 1993, early retirees leaving after1/1/93 received only a fixed monthly $ subsidy depending on their years of employment until Medicare kicked in at age 65. Over time, this meant that these retirees faced growing health insurance costs until Medicare kicked in. Employees hired after 1/1/93 received no early retiree health insurance benefits.

        • Old School says:

          I am a low user of health care and always buy a high deductible plan. Before ACA it was around $200 / month. Never made a claim for about six years. ACA is structured as a tax. With tax planning and selecting a high deductible plan my premium cost is zero and I have still yet to make a claim. I have probably paid out of pocket $750 total out of pockets for minute clinic visits. There is so much cost shifting in health care, I just try to not participate in the system unless necessary.

        • Harrold says:

          Its funny. Healthy people don’t need health insurance.

          As long as you can count on always being healthy, you are golden.

        • SS and Medicare are on life support today.

    • Old School says:

      The virus is a shock to the economy which the Feds have tried to borrow from the future to stabilize. Big fight right now in my opinion is that one side is focused on limiting damage to the private economy and one side is focused on getting an extra trillion to protect public employees. It’s a huge fight over who is going to get bailed out now and next battle is who is going to pay for it, but that will happen next year.

  7. Brant Lee says:

    How messed up is this job market and economy when lay-offs mean profits for Wall St. I’m sure that dropping the minimum wage and even fewer benefits are around the corner to “At least give Americans some form of income”.

    • 2banana says:

      Stocks rising due to a large layoff at a company had been happening for at least 40 years.

      • Brant Lee says:

        Yes, but now lay-offs are going into overdrive by Fed and government-backed banks and corporations for profit, no need for thriving commerce. We didn’t get the V recovery so it’s plan B for the rich as clearly seen by the stock market. In the real world, stocks should have tanked and stayed tanked until real recovery began and job stabilization was sufficient.

    • Old School says:

      As cruel as it sounds, a business doesn’t exist for it’s employees. Utilizing the right number and right skill level of employees is huge part of running a business. If sales revenue permanently falls, the number of employees is going to have to fall or the business shuts down and everyone has to look for a job.

      • AlamedaRenter says:

        If that were true then business bailouts should be illegal and government should only be able to give money directly to the citizens.

        • Old School says:

          I guess the Feds are trying to prevent a total collapse because virus was a shock and they thought there would be permanent damage to the economy, but not sure if their solution was the right one.

        • Harrold says:

          The money was all appropriated for the top in the hopes that it would trickle down to the needy.

          Mr. Hoover didn’t know that money trickled up.

          Give it to the people at the bottom and the people at the top will have it before night, anyhow.

          But it will at least have passed through the poor fellows hands

          –Will Rogers

      • Bobber says:

        This is exactly why we need limits on consolidation. Why hasn’t US anti-trust been more active? I heard the FAANGS are now valued higher than Europe.

      • Anthony A. says:

        Very true, business either provides a service or product to its clients. Employees are just tools the business needs to create/deliver the goods to the client.

      • OutsideTheBox says:

        As cruel as it sounds, perhaps citizens ( employees ) should revoke the priviliges of business. You know….eliminate limited liability for c-suiters and stockholders, eliminate patents and copyrights, raise capital gains taxes to the rates paid by people who work for wages, eliminate corporations legal structures so all business can be either a partnership or sole proprietorship….to name a few.

        The citizens of the USA granted business these privileges so that business in turn would provide for employees ( citizens ).

      • Duke says:

        Cooperative business structures by their nature balance the needs of employees and customers. See Mondragon in Spain.

      • simmerjet says:

        ……”A business doesn’t exist for it’s employees.”

        No a business exists BECAUSE of it’s employees.

        I owned a painting company for 30 yrs. I can sell jobs all day long, but without the people to do the work, Im just selling a suggestion. You quickly find out that you exist because of your employees.

  8. The Rage says:

    Cares inflation caused the initial rebound, now it’s mutual funds. I suspect a large decrease in QE is coming in November. China is going to move on the US in 2021. They want reserve status. Something only fiscal over shoot could cause.

    • 2banana says:

      China wants reserve currency status?

      Maybe they should start with removing capital controls and stop pegging their currency to the dollar.

    • Thomas Roberts says:

      The Rage,

      China’s economy is screwed, the Yuan isn’t going to get reserve status period. Right now, there is unprecedented capital flight from China, and China is considering switching to a fully digital currency so that they can prevent money from leaving the country. This is not exactly the behavior of a country whose currency is going to get reserve status.

      • Happy1 says:

        This. Chinese people with money have zero trust in the government or the currency and will do anything possible to move assets out of the country.

    • Old School says:

      I check a lot of the valuation models the first of every month. Most now say the stock market is the highest it’s ever been even including peak before great depression and 2000 tech bubble. Stock market lost 89% during great depression and tech stocks lost similar amount in tech crash. It’s going to happen again, probably when some big institution implodes.

      • steve says:

        October 2020 may make October 1986 look like childs play. Then again with an Uncle Fed needle in the arm who knows. Just keep the $ drug coming.

  9. Trinacria says:

    If the well paying jobs are next on the chopping block how will these folks fare? Some thoughts in this regard:
    1. I assume this group – generally speaking – lives “higher on the hog” and therefore have a bigger monthly nut to crack; so how will they do on unemployment benefits ?
    2. If this group indeed has a larger monthly overhead, how much in the way of emergency savings are available to fill the gap which will be much larger of course.
    3. What will the better paid but now unemployed group give up to make “ends meet”.

    This will drag on for years. Will be more entertaining than kabuki theater.

    • w.c.l. says:

      Do you think they even know what “emergency savings” are?

    • Ed C says:

      I made it to retirement but I sweated many layoffs here in Arizona which has the stingiest unemployment insurance payments in the nation. I was working for an aerospace company. People need to consider that when they move here in their working years.

    • Old School says:

      From my looking around, many middle class people are spending about all they make, but are contributing to their 401k at a good clip. I think they see that as a lifeline they can get to if push comes to shove and they need to use it to survive. Not necessarily a good idea, but it is an option.

      • Weary Patience says:

        The problem with investments (IRA,401k) as a lifeline is if you need to draw on them due to the economy… they’re usually in the process of shrinking at the same time.

    • tom20 says:

      That this is entertaining to you……

      • Trinacria says:

        I guess I have to spell it out….sarcasm….(I guess I will need to put that in parenthesis in the future as some people take things literally and just can’t wait to jump ).

      • Weary Patience says:

        Let the ants finally eat some of the grasshoppers – it’s the circle of debt!

  10. Skara says:

    At some point these layoffs have to mean demand destruction, and that has to be reflected in corporate profits and eventually the market (ie, revert to mean trading multiples), no matter how much QE + ZIRP the Fed throws at it.

    Or am I missing something?

    • Consumer demand destruction. Since 9/11 America hasn’t been spending enough on defense (not military) Expect major shifts in economic “demand”, resulting in greater security measures. Albeit the focus is terrorism, pandemics, and cyber hacking of elections by foreign powers. More and better jobs, less fun and games.

    • ru82 says:

      The answer will be MMT?

      Talking to a friend who works at a small bank. It has assets of about 1 billion and saving account have increased cash by $100 million since March 1.

      Where are all the savings coming from? Forbearance?

      I also read Credit Card delinquencies are down and so is the amount of revolving debt. Maybe cash out refinancing to pay off debt? Maybe a lot of small businesses who really did not need PPT put this cash into saving accounts.

      • Old School says:

        I think in general there is not so smart, but natural human behavior of increasing risk as the economic cycle grows old (more margin buying of stocks, upgrading of home, new car) and then when recession hits people generally start trying to squirrel money away as they realize they might need it to make it thru.

        I feel like we are in a bit of a mess in that Fed policy had created this asset inflation that they can’t allow to unwind. Logically if the valuation of the stock market is at all time extreme then real 20 year returns from this point can’t be higher than nominal growth rate of 3% or so unless they just keep blowing asset bubble bigger which would be incredibly stupid.

      • Petunia says:

        I haven’t checked on the bail in rules since they were instituted in Dodd Frank. But recently heard the bail ins only apply to banks with over 50B in assets. This would make regional/smaller banks safer for depositors. That could be why there’s a shift going on.

    • Roger says:

      As long as the denominator of the Present value calculation for a stock (i.e. interest rates) is low and moving lower, it compensates for lowered profits as the nominator. Next step will be Yield Curve Control in order to make sure the long-end is behaving according to plan. FED doesn’t care about consequences of depriving the market from another price setting mechanism. Economic impact? zero, as the companies care about the nominator (earnings), not the denominator, ergo more layoffs ahead.

      • Old School says:

        That’s the way the formula works, but Hussman has scatter plots that show that it is an incorrect assumption. Basically you get better correlation if you ignore interest rate on future overall stock market performance. The reason is interest rates are basically a market predictor of future economic growth and if interest rates are low, then future growth is going to be low. So right now interest rates tell us long term nominal future growth is going to be super low and it’s probably wrong to give market a high PE or high PS multiple even though interest rates are near zero.

        • Yes but correlation is not causation. Interest rates are low because we put them there, (ostensibly). The Fed is dead wrong when they correlate interest rates and inflation inversely. I think they even said as much. Fed is a government agency and promoted (shamelessly) the decades long expansion of government debt, which is considered the benchmark for all corporate debt. Stock valuation is based on earnings. A cycle of declining earnings tends to reinforce itself especially when earnings are based on debt accrued at ultra low (historically) interest rates and margins contract. The massive build out in the money supply, with deflationary pressure from offshore manufacturing, pumped the asset bubble. While companies find themselves in a devaluation cycle, the Fed moves the goal posts. Companies shrink their float, and all is well until as someone said of the SPY. This thing trades like a penny stock. Volatility destroys the safe haven value of stocks not earnings.

  11. Tony22 says:

    With few exceptions, these layoffs are human tragedies that will ruin families and the lives of children. I hope that people laid off don’t become depressed and or self destructive in any manner. If they channel their anger and energy toward reforming the system, there might be real change.

    For example, the 50 million now without health insurance may realize that they should have voted for a candidate who endorsed Medicare For All ages.

    • 2banana says:

      or, just maybe, they just find a new job.

      I mean, it has kinda happened before.

      Without all the drama.

      • Trinacria says:

        Isn’t the availability of these types of jobs shrinking and will continue to shrink as layoffs increase ?

      • Harrold says:

        Old Economy Steve.

      • ocop says:

        Considering that the closest analogue to the current situation is the Great Depression, the “has kind of happened before” comparison brings with it quite a lot of “drama”. Tent cities, dust bowl, New Deal, facism (the real deal not the whining about Trump kind), WWII…

        …we ain’t seen nothin’ yet.

    • Lee says:

      “Medicare For All ages”

      Is that the Democrat’s new plan for being a ‘slave for all ages’ to the Federal government?

      • Tony22 says:

        Better to die with an easily operable tumor, rotten teeth and lack of essential medicine that you can’t afford to pay for, rather than be a slave and get some of your taxes back.

        After all, insurance CEOs need their private jets and second homes, plus the pentagon needs its new weapons systems. Obey slave, keep repeating those Libertarian mantras as you dig your grave with your mouth.

      • OutsideTheBox says:

        Lee

        As opposed to being a financial captive of soulless corporations ?

        Also a ” slave for all ages ” to corporate insurance companies, corporate medical facilities, corporate pharmaceutical companies and corporate doctors…..all for maximum profit for those living saints…..the stockholders.

        THIS is the world you prefer ???

    • Frederick says:

      Many of these people who are most likely very self centered and spoiled will turn to opioids and alcohol to escape their reality Some will accept a lower standard of living and find happiness in their new reality It’s been coming for decades, I wondered about the sustainability of the US economy since 1980 or so I’m still amazed at how long it’s gone on for

      • Old School says:

        Even though the long term median income in USA has been very slightly higher, we have a bad trend that income is made up of more and more government transfer payments. I think now it’s getting to around 25%. That’s a lot of people riding in the wagon.

      • TimTim says:

        Interesting post, Frederick, thank you.

        Although, I wonder if there may be more to alcohol and substance misuse than being self-centered and spoiled.

        Both could be considered forms of psychological anaesthetic. Bit like delusions in some circumstances.

      • Lisa_Hooker says:

        @Frederick – yup, began in 1981.

    • Anthony A. says:

      50 million without health care? Our past administration fixed that situation with the ACA, correct? All these 50 million need to do is buy a health insurance plan. Plus, “they can get to keep their doctor”!

      • David G LÁ says:

        @Anhony A.
        I believe many states elected to not offer or implement the AÇA.

        • Anthony A. says:

          David, correct but those states had to offer an insurance exchange and/or expand Medicaid. I know there are some states that did not expand Medicaid (I live in one) and you are also screwed if the state did not offer the ACA AND did not expand Medicaid. In those states, if you make under the federal poverty level, you could not qualify for Medicaid or get subsidies from an insurance exchange plan.

          What those folks do is just go to any emergency room and get treated free gratis. I see that happening here.

      • OutsideTheBox says:

        Anthony

        So you just go to the ER and they treat your Stage 3 cancer ?

        Really ??? For free ?

      • Tony22 says:

        Great alternative. Some people are paying over $1,300 a month in Obamacare premiums. If you go on MediCal, all of your monthly premiums and the costs of whatever care you get from then on are clawed back from your estate. Just another way to hand our wealth to the insurance mafia.

        M4A is the only way to avoid that, and help prevent and treat the next pandemic.

  12. Pieter says:

    for most economists it must be the smell of Output Gap in Spades. I mean what are we looking at here right now for the demographics of every major western nation….. lots of old people and whole populations getting old. what is the average age of woman for each nation…. USA 39 years old. Damn near getting to that menopause stage. Even third world countries are not that young and people are not having kids. Who needs all of this stuff when you already have tons of stuff in storage, in your garage and when your parents die….all of their stuff. Being in my 40’s I see everyone my age saying WTF with their folks, their siblings, and themselves with tons of stuff. But few kids to hand it down to. We are a nation of five or six of everything. We don’t need to make or buy anything for a decade. OUT PUT GAP is coming. All of this stuff lasts a very long time. Trend is DOWN without credit, capital, or need of production to justify production itself. We are leveraged to the hilt as GDP falls. what is that saying…. it starts slowly and then all of a sudden.

    • 91B20 1stCav (AUS) says:

      Pieter-in my case it’s been here for awhile. After being stabbed in the back for the last time in corporate in the late ’80’s, i left that life, paid off the ranch, and worked on improving my manual/practical and rural community chops ever since. Have acquired much useful ‘stuff’ (some ‘banked’ up to reduce trips to town-i can’t make steel, for instance), but the amazing thing to me is how much of it has been/is perfectly functional (or easily repairable/repurposed) yet discarded and acquired for free. In terms of ‘stuff’, we have lived comfortably on relatively little $ outlay ever since. Not an easy or available path for many, I know, but in the crazy chaos of our modern economic world, making and effecting the decision to learn how to do more for yourself without opening your wallet, or putting it on credit, the better off you’ll be.

      Good luck, stay well, and may we all find a better day.

      • Bart says:

        I just acquired some usable stuff. A complete set of used Craftsman made in USA wrenches. I figure a good tool kit can make and save me a few bucks. Satisfying to not call the repair person.

  13. Nick says:

    I work in entertainment/tech.. and just based on these past half a year experience, We saw restaurants closing in February and the obvious lower paid service jobs that got effected. Our company push it as far as they could, until the local gov “recommended” they close the office too, and in march we were practically all working remote. After a few months, the layoffs started. and have these feeling that the current projects were stretched as far as humanly possible. Almost as if our management had the Fed’s mandate of maximum employment in mind =). Very gracious of them. But i believe you are right Wolf. If the economy continues in this path, more layoffs will be necessary. There’s just not enough work to excuse the salaries, especially tech salaries in the six figures.

    How many families during these times have had to dip into their savings?
    I’m curious what you think about maybe a double dip. Even if the stimulus works to restart the economy, i would imagine people will be in savings mode for some time to come, refilling their depleted savings and maybe scared from another Covid wave. If that happens, consumption would not be picking up.

    • Tony22 says:

      Nick, It’s not just the big earners, often they are paid well but are of little social value. Jobs that produce needed things in our society like guarding health, life safety, producing utilitarian objects and transportation are what really matters. When these jobs disappear, or no longer can support a family, let along that ratcheted step-down compromise, “pay a liveable wage”, the nation suffers.

      Over the last few decades there have flourished a huge number of low pay, or commission stopgap and placeholder until-something-better-comes-along bullshitMcjobs out there.
      Corporate massage & yoga, affirmative action compliance officer, wellness, “life coach,” organizer, declutterer, mobile dog grooming,a favorite of divorcees with credit to buy a Sprinter, Facebook or Google ad placement cold callers, search result optimization, plus all the multi-level marketing scams like Equinox, Herbalife and smarphone apps business kits to turn productive human beings into cold callers and hucksters, at their own expense.

      Those are now yesterday’s economic delusions and society can live without them. Servicing the needs of the elite, is what’s left for the healthy and attractive unemployed via Taskrabbit, dog walking, manicuregardening, private chef, PJpilot and hair styling.

      Study the system and learn where your money goes. Never give one cent to “them” if you can help it. Make connections locally, patronize small businesses exclusively, if possible, and pay cash.
      Ignore all advertising.

      Savings? Hard without income. Use the ever more desperate system against itself. i.e. credit cards that pay points back, special offers, transfer money back and forth. Be debt free, or, if you know that you will never be of value to employers or society, incur as much debt as you possibly can accumlate to live simply.

      • Nick says:

        I’ve read Wolf-street for many years now on a almost daily basis, and thank you for the recommendations but i’m already ahead of the curve so to speak when it comes to savings. In fact, one of the primary reasons i read this website is to anticipate where to put that savings to work. Even though the more time passes by, the more i think we are in the realm of ideology and not so much in the practical here.

        I understand the difference between a gig-worker and a real career.
        But, maybe what we find as fundamentals are not as clear cut as we’d like to believe. For example, if 100 years ago, most of the working population was involved in agriculture, and these days only a single digit percentage of us is involved in food production “excluding the seasonal immigrant workers”. What will such a big part of society do with their lives?
        Since i work in entertainment/tech, and have been involved in tv shows/movies etc.. I used to think we were just pushing pixels per say, and a job that is irrelevant to the necessities of life. But since what we produce is actually consumed, even if its just to dull society in a quiet existence. Is it irrelevant? The main parts of the american economy that have grown in the past decades have been financials and service sectors after all.

        I used to believe in Harry Dent’s theory of the demographic cliff, but one thing he doesn’t really anticipate, is the reaction of the government and people in charge. Morality aside, immigration can fill the gap somewhat. Would any of you have believed the reaction the Trump administration had to the virus? $1200/ freebie checks and PPP loans with a $10k gift for even single LLC freelancers, the equivalent of 2-3 months unemployment masquerade as a business loan?

        @Petunia
        anyway, my point is that even though we might know what should be right, if the goal post shifts, should we also shift? Because i’m assuming just like a lot of you, i’m mostly in cash, but am taking a hard look at that position these days.

        sorry for the rant =)

        • Lisa_Hooker says:

          @Nick – good rant (I hold an IATSE card so I know what you’re going through). FYI, 25 years ago a “gig-worker” was called a “consultant.” ;-)

    • Petunia says:

      Nick,

      You weren’t specific about what kind of entertainment you support, but here is my advice. Find the oldest people in your field you can find, age 60+ if they exist. Ask them how they survived in the early days, and try to replicate it. Take their advice, go off the “grid” as much as you can, you will have no competition if you go back to basics.

      • Petunia says:

        Nick,

        Now that I know you are in film tech my advice still holds, but for a different reason. Most American made content really sucks, which is why everybody is cutting the cord. I haven’t seen any good content made in America in 15 years. The old producers at least knew how to make entertaining films.

        You need to go where the content produced is in a growth phase. I watch more foreign content than any other type. Mexico and Bollywood are still producing content with a widening audience. American talent would be welcomed in these places.

        • 728huey says:

          I hate to break it to you, but much of the content of Bollywood is quite inferior to American content. However, their current movies are similar to American movies made in the 1940’s and 1950’s, so I guess you could say it’s generally more wholesome than American movies right now. But what happens when Bollywood decides to loosen their restrictions? And as far as American movies go, if you think our movies are bad because of the massive amounts of CGI and reliance on tent pole movies like the Marvel MCU, Star Wars, or the Fast and Furious franchise, foreigners are eating these movies up left and right. In fact, there are some action movies which are created to be subtly aimed at overseas audiences, particularly Asian audiences, which may flop here in the USA but become massive huge in Asia, thus warranting sequels which no one here expected.

        • Petunia says:

          728,

          It’s not about the quality of the content in the market, it’s about how the content is received in the market.

          All the PC BS in American films, makes them unwatchable to Americans. China may love them now, but they will eventually make more of their own commie films at home.

          Bollywood can be silly but it is refreshing to be able to watch a nice clean movie. There are no good stories being produced in America anymore. Tired of all the sex, tatoos, alternative dysfunctional BS and the fashion is better too.

        • VintageVNvet says:

          Pet,
          We too do not care for the vast majority of current films, but have watched a couple of very satisfying ones lately;
          ”The Peanut Butter Falcon” and ”Spare Parts” ”Instant Family” and several more that memory does not immediately bring up the names of, with solid morals, all apparently based on some sort or slice of real life/lives.
          Other than that, I can testify that one of the wonderful benefits of becoming elderly is being able to watch movies again with little memory of the endings, etc., and the same goes for books.

        • Nick says:

          @Petunia,

          In terms of tech. The visual effects and the technology behind them is probably the most advanced in the west.

          If you mean the content and story? Well, there’s a very simple explanation for that. If movies have to be international, they need to lose all the nuances that made them relatable to a single culture and are traded for simpler more general ones. Its just a simplification of story, less conversation, more explosions. But lets be honest, when you were a teenager, would you go watch Transformers for the story, how about the new Baywatch?
          Anyway, if you look closely, its the golden age of TV & streaming, not so much features.

          Also, i think mexico might be left out of the digital push this decade, maybe its how they negotiated NAFTA 2.0, most of the post production these last 10 years was pushed up in Canada thanks to tax breaks and subsidies. Something had to prime that Vancouver Real Estate =)

        • sierra7 says:

          Nick:
          How ironic!
          Grandson named Nick in the “entertainment, stage, tech” field. Was steady working in Chicago. When Covid landed most of those employed in that field were laid off. He is home in CA now working independent contract “gigs” as he can land and still loves his work. He is lucky he can live at home and is not in the streets. A good lad and still has hope for the system but is now very guarded.

        • Frederick says:

          Huey some of my favs were from the late 30s ie Gone with the wind, Wizard of Oz

  14. roddy6667 says:

    Back early in this century there was a website called F**kedcompanyDotCom

    It’s time to bring it back.

    • Nick says:

      You mean dailyjobcutsDOTcom ??

    • Zantetsu says:

      Yeah I used to read that site in the 2000 time frame with a lot of schadenfreude. I hated the dot com boom while it was happening, and I worked/work in tech. Seeing millionaires get minted just for making dumb web sites was very irritating and there was just a bit of glee in watching those companies fail one by one.

    • Entropia says:

      Because you cannot be a slave to a corporation, ofc.

  15. Lee says:

    Why would you want a ‘hot’ war with China? If you want to hit China, you can do it with economics and trade and get a better outcome with a cheaper cost.

    If you want a ‘hot’ war you have to be able to start one with a country that:

    1. You can beat.

    2. It has to be close enough to you so that logistics aren’t a problem.

    3. It has to have a reasonable similar type of economic outlook and democratic traditions so that once the war is ‘over’ they don’t start blowing themselves up and you in the process.

    In any event, the people in the USA that would be needed to fight in a war are too fat, too lazy, too doped up, and really too stupid to be drafted and as a result it would help the econmic situation in the USA.

    • Frederick says:

      Ahh yes War Are we really that psychopathic Let’s kill and injure millions Gee What a super idea Please people Stop already This is why I prefer my dog to most humans

    • trailer park boy says:

      Ok, Canada it is then! Let’s roll!!

  16. TimTim says:

    Some of the reduction in higher paid, white collar roles, has been coming for several years. There is at least one comment above about automation-related job losses at a blue-collar level above, white collar jobs losses are simply taking a little more planning, I would guess.

    But once they are gone, they’re gone for the main part.

    If anyone is interested, please read the book by Prof Susskind and his son from a few years back on the future of professions.

    The hollowing out of the middle class occupations and the professions started years ago. The present situation is only increasing it’s velocity.

  17. Tom Jackson says:

    Health care will not be free and will be limited. I am not by any means defending our current system. However, those who advocate universal care must be honest about who pays and what is paid for.

    • Adrian Jowett says:

      For that self-selected group sensible enough to reading this website, the answer is that you are the one’s who are to pay.

      (I include myself in that)

      • sierra7 says:

        Adrian Jowett and others:
        NOTHING is “FREE”!
        We, those of us who pay the taxes pay.
        The indication of a “progressive” society is how those taxes are allocated.
        At the present major corporations own this country. It wasn’t always this bad.
        Now it is terminal.
        So it is up to the people to form those groups of resistance to corporate power that did exist en earlier decades and fought so hard for the social and labor amenities that many of the “middle class” enjoyed.
        All that takes enormous energy and perseverance, and yes, in the streets.
        Too many are lacking the historical memory on how we can resist and make things better.
        All this corporate power must be overthrown.
        Then maybe we can have a more serious political/economic system that will be more inclusive than exclusive.
        It’s not that hard to obtain decent healthcare for all citizens.
        It’s a matter of making the politicians fear us more than we fear what they are doing.
        Remember Nixon and Kissinger embattled behind a ring of empty school buses during his administration?
        Nixon to Kissinger: “Henry, do you think they will come for us?” That’s the position we want our politicians to be in. Without that we will have no meaningful progressive change.
        We will certainly be doomed.
        Study history…..and do it some more.

        • 91B20 1stCav (AUS) says:

          Sierra-outstanding! Thank you!

          Stay well, and may we all find a better day.

    • roddy6667 says:

      In Canada, nobody pays out of pocket. It is all funded by your taxes. The total spent on health care in Canada is 2/3 what is paid in America, with better outcomes. It is cheaper, not more expensive. Nobody loses their life savings or home because they got sick or hurt. 34 countries now have national health care.

      • Paulo says:

        Beat me to it. I’m 65 with a damn active life and all the injuries that goes along with it. Not once have I ever received a bill for a hospital visit, surgery procedure, exam, splints, MRI/CT, consult, whatever. Still healthy and not on any medication, whatsoever.

        I know many people in the Canadian medical system and have noticed lately professionals returning home from the States. Many had gone down for money, but now they have returned to avoid the insurance system nightmare.

        • Frederick says:

          That insurance nightmare has been going on for decades My friend and neighbor, who is a pediatrician had a sign on his desk “ Blue Cross, blue shield the evil empire” true story He hated how they delegated to him what tests he was allowed to order Granted he was an outlier but a brilliant one

      • Anthony A. says:

        Kind of interesting, but we have a pretty good size neighborhood in The Woodlands, Texas made up mostly Canadian retirees (professionals) who moved here several years ago.

        One lady is my wife’s best friend and she says they moved here to get their U.S. citizenship and for the healthcare options (she has severe heart problems). Her husband has a very successful engineering consulting practice here also.

        So I guess not everyone in Canada sees it as a “healthcare utopia”. But national healthcare would certainly fix a lot of the problems here in the U.S., although it would develop a new set of challenges.

    • Tony22 says:

      An immediate 1/3 savings in the money spent on heath care and an increase in efficiency. My daugher pays Medicare tax withheld year to date, about 600 bucks. Her policy statement from United Health Care, $750 Per month, $10,000 yr., Before deductibles and copays. No dental nor vision. No MediCal because she earns too much, and is a U.S. citizen.

      As of 2017, the U.S. was spending about $3.24 trillion on personal health care. 19 percent of GDP. https://www.peri.umass.edu/publication/item/1127-economic-analysis-of-medicare-for-all

      Look around you. It’s an expensive failed system obviously. If you like the current system, please explain why to the 50 million plus recently unemployed, and more to come, who no longer have employer provided private ‘insurance.’

      They now get to chose between starving to death, living in their car or buying Cobra ‘coverage’ until they are kicked off it.

      If we had we Medicare For All, the pandemic supplies wouldn’t have been just-in-timed for profits and anyone would have gotten tested and treated before it became a pandemic and depression.
      Every worker has been paying into it since the 1960s. If no national healthcare, then please refund our taxes back to those too young to be covered, or, cover every citizen and yes, even illegal aliens, for disease prevention purposes.

      You can always pay cash or buy private insurance for liposuction, breast implants or cosmetic surgery, which is not part of healthcare.

      • Anthony A. says:

        Tony, as I stated above, those 50 million can buy an ACA plan after Cobra. Remember…..Obamacare? (You can even keep your doctor)

        With low earnings, they will have very low premiums, however, they may have very high deductibles. If they make less than the poverty level, they will get FREE Medicaid (in most states).

        Or, they can find a new job.

    • Petunia says:

      The healthcare is already limited, this is a hollow argument. I have had “good” insurance for years and still can’t use it. We used it two years ago for an emergency room visit which cost us ~$2k. That’s a lot of money to us and we were lucky it wasn’t even worse.

      • VintageVNvet says:

        Friend went to ER via EMT with extremely low BP, was there approximately 18 hours and bill was $88,000.00
        Had actually good insurance, some kind of Medicare + via that old folks org that starts sending solicitations when ya hit 50.
        (I can’t remember back that far, so not 100% sure.)
        Ended up paying about $18.00 out of pocket.
        She and her husband are big users of MDs and the whole allopathic model of medical services delivery. They spent some serious time studying all the options available to them when they hit 65, and were eventually able to understand their best choices in spite of all the gobbledygook.

        • Anthony A. says:

          VVN: Their best choice is (probably was) Medicare plus a supplement plan (called Medigap) that covers all deductibles. That Plan is Supplemental Plan F.

          That’s what we have (both over 70) and my OOP cost for two hip replacements has been $0.00 and for my wife’s heart valve replacement it was $0.00. Plus, we get to pick our doctors/surgeons.

          But our premiums are $134.00/month each for Medicare A & B (hospital and doctors) and about $300/month each for Supplement Plan F.

          It’s not free over 65, but not killer expensive.

  18. Old School says:

    Corporations captured government policy and therefore corporate profits have been at all time highs getting close to 11%. Supposedly this is unnatural and will mean revert back to a lower number as people get fed up with the wealth inequality and put pressure on Congress. Some might say our current president got in because he promised to stop offshoring jobs and importing cheap labor, but which support corporate profits.

  19. MiTurn says:

    ‘ And those jobs disappeared permanently, as the company told investors recently, and they would become, as it said “permanent cost savings from our investments in tech.” ‘

    This is going to be an enduring challenge to the next generation of workers, competing against the machine.

    Employees can be a pain — get a robot! I hear that they’re virus-resistant too.

  20. Island teal says:

    Went to barber yesterday, regional chain, my cutter said business is off min of 50%. No back to school and when you are WFH no cleaning required. Amazing how the Public sector continues on a spending path to no end. Are all of the administrator still necessary in school districts? The ex Royal’s got a reported $100M deal from Nutflakes so all is well 😂😂

    • Paulo says:

      @ Island,

      re: Are all of the administrator still necessary in school districts?

      Of course not if you want to actually give teachers autonomy to do their job as they see fit. But if you want to micro-manage all the way from Washington DC to parent’s living rooms, it takes administration and lots of it. Strangely enough in countries that don’t impose top down direction on teachers, learning outcomes and test evaluations are far higher than the US system produces. I am referring to Finland and Canada for just two examples.

      Look up PISA results for further information.

      By the way, a US administrator in the public system earns more than 2 times what an experienced teacher does. Sometimes far more. In Canada admin earn about 20% more. But when one looks at the added time worked by admin for required meetings, which are usually a big waste of time as in meetings for the sake of meetings because they are scheduled, the pay is about the same.

      • VintageVNvet says:

        Wolf,
        You don’t have to look else where to find a perfectly functioning public school system,,, just else when here in USA.
        2 high schools attended in late 1950s era had no admins besides the principle and their assistant, none.
        IF one earned a diploma at either HS, one was ready for a job, and if chose to, could combine HS and OJT their senior year, which many did; and many of those who did retired very well off, having pursued their trade or whatever, learning early and thoroughly what it took to succeed with nothing more than a HS diploma.
        If one chose to go the college prep route, and many did, they would at least be able to spell and do basic arithmetic, and write at least a ”fair” sentence in case college did not suit them.

  21. Just Some Random Guy says:

    Wolf,

    Salesforce went on a shopping spree recently, the biggest purchase being Tableau which it bought for $15B last year. It makes sense that there would be layoffs as it integrated those purchases into its core business.

    • Wolf Richter says:

      During the Good Times, big Tech companies bought little ones to (1) get their employees and (2) to get the tech. There is often a third reason not mentioned: to get rid of a potential competitor. But Tableau isn’t a competitor of Salesforce, so that reason doesn’t apply. Leaves 1 & 2.

      • Just Some Random Guy says:

        When two behemoths like Salesforce and Tableau merge there will always be layoffs in admin positions. You don’t need twice the HR, twice the accountants, twice the marketing people, etc.

      • MonkeyBusiness says:

        They got rid of a ton of people from the ExactTarget acquisition. I know this from a friend who works at Salesforce. That actually makes more sense. In case anyone does not know this, ExactTarget is a software suite that allows companies to manage email marketing campaigns.

  22. Michael Storch says:

    There are folks are standing on the deck of the Titanic, explaining that the giant hole ripped in the aggregate demand side of the ship does not matter very much because the ship is not listing yet. Good luck with that.

  23. Chris says:

    Wolf, how are your shorts doing? You had shorted the S&P a few weeks back. The market might go a lot higher. Will you be covering the shorts

    • Wolf Richter says:

      Haven’t covered yet. Looks like I was a little early, which is often the case, including last time.

      • Keith says:

        Well, it seems if you don’t like the market, just wait five minutes (like the weather). It appears down over 800 points a day after being up over 400. I guess par for the course, at this point.

    • Bobber says:

      I exited my TSLA short position unscathed, by accident. The stock rose 12% a few days ago (the 3rd WTF peak), and my original short position, which had been in place for a while, was down 100% on paper, so I decided to double down on the short position. While entering the order, my fat finger got in the way and I actually shorted 30x the number of shares as intended. Luckily, the relentless stock price rise reversed and I recovered my original losses VERY quickly. Then I closed the entire short.

      Good thing I kept the original short position small, so that my emotions were kept in check and I had plenty of room to double down a couple times at least.

      Interestingly, my accidental order may have helped end the TSLA stock price rise a few days ago. My short sell order was quite large, and it may have spooked the Robin Hood traders. Immediately after my accidental short was entered, the stock started dropping.

      • Zantetsu says:

        What are you, a billionaire or something? You accidentally created a short so large that you think it affected TSLAs stock price?

        What were you going to do if your accident led you to hold 30x more shorted position than you wanted and TSLA kept going up?

  24. lenert says:

    The current share price for TSLA is 420.

  25. Anon1970 says:

    Look for a lot of state and local governments to announce forced unpaid days off on employees during the financial emergency.

  26. gorbachev says:

    Americans don.t do anything for free.Pay them to

    wear a mask and it will save the state trillions.

    • Old School says:

      I am seeing more research on aerosol nature of particles being able to stay suspended in air for several hours which is why being indoors is so risky. I am suspicious that for employees who work in establishments for 40 hours per week the current guidelines of any face covering is going to be proven insufficient. They probably need certified masks that are rated like N95 although I find wearing a mask for more than a few minutes uncomfortable. For dashing into the store 15 minutes per week maybe general face covering ok.

  27. Jack Geraldin says:

    This was just not a matter of if but when. I had my last full time job in 2010. It was a decent full time salary of $47,000 a year and had not the best benefits but $2,500 a year towards medical, health.

    Today, I work an extra 5 to 7 hours a week, 55 hours a week total and doing many delivery jobs part-time 2 to some times 3 in total. My pay is about 30% higher with only about 11%-13% more hours. I am making from $1,200 to $1,250 a week since 2010.

    My decent severance and buyout package and saved up IRA over the working years left me with $275,000 to take care of. All I do with this money in my spare time is trade U.S. long term treasuries and have had total 95% gains but only 19% of losses, simple 76% but it really adds up to 108% after compounded net overall over the last 10.5 years net of fees, costs.

    All and all my total U.S. treasuries are in the $573,000 range today as I am riding the lower interest rates game the U.S. Fed and other central banks are so hell bent on doing over and over. The corona virus has just made this even more cemented in this central bank manipulation game having interest rates higher for short time periods probably 20% to 25% of the time but 75% to 80% even lower and lower interest rates.

    I keep track everyday to see where U.S. treasury rates are but they are the most liquid, less volatile bonds I have seen in the last 10.5 years. I don’t think I can replicate my 7.238% per year simple return like the last 10.5 years. However, a 3.80% to 4.28% simple, 40% to 45% simple, 48% to 55% total compound return over the next 10.5 years is a real outcome with my trading of U.S. long bond treasuries or if interest rates get back to a 2.25% to 2.75% level.

    • Old School says:

      That’s very good. The only thing I will say is probably most of us feel pretty good about our investment decisions because if you have been an investor the last decade you have been paddling with the current and all assets have outperformed. If you believe in long term reversion to mean valuations then the real return on nearly every investment is going to be zero or less the next decade or two. Or in other words all risk and no reward is current setup. I am personally not sure what to do but try to run a very conservative portfolio and try to wait it out.

  28. Just Some Random Guy says:

    Wolf why did you not publish my post showing today’s UE claims are the lowest since March?

    • Wolf Richter says:

      Because you quoted “seasonally adjusted” initial claims without saying what caused that drop: a huge adjustment to how the Labor Department figures that data.

      I discussed this change a week ago when it was announced. Today, this change in seasonal adjustment calculations was all over the news, and you saw it too because it was mentioned in the headlines even, and you chose not to say what caused that drop in seasonally adjusted initial state claims. Instead you pretended it was a sign of the strength in the labor market. You were trying hard to misinform readers here.

      The “not seasonally adjusted” initial claims ROSE today, and continued claims jumped by 2.2 million to 29.2 million, worst since August 1. This was a horrible setback for the labor market. My report is coming shortly.

  29. PIETER says:

    If I can give anyone any advise on what to become.. Become a serious problem solver regardless of field. The value to hand off a problem from a VP down to someone who will bulldog and fix that problem is always a person of value. When you get a reputation of problem solver it will be a value add. I am the break glass in case of emergency/panic/we screwed up and need your help person in my field.

  30. Scott Cordier says:

    Hey Jack Geraldin, I have been doing the same with provincial strip bonds here in Canada. I made some decent returns with interest and capital gains as well. My highest return was a 18.9% over 5 years and my lowest return was a 4.77% over 6 years.

    I have averaged about 6% a year by just buying these compound interest provincial strip bonds and selling them. I did this with only 30% of my total bonds portfolio as the rest 70% are all in long term 25 to 30 year provincial bonds paying 4% to 5% yields to maturity as I need it for income in retirement for 6 years now.

    I don’t own ant stocks or mutual funds since 2008, sold them all at pretty high levels and will not go back in. I did get in touch with some foreign bond brokers and at looking at possibly getting some foreign bonds from Brazil, Malaysia, Indonesia, Colombia, India, Mexico, Philippines, Romania at 3.20% to 7.30% interest rates. This will be my anti fed low interest rate policy part of my new investments.

  31. sarah says:

    and then they will moan people have stopped spending and blame the consumer for the downfall of the economy.

  32. HR01 says:

    Wolf,

    Many thanks for the detailed commentary. Just take exception with one bit near the end:

    “…the total number of people on unemployment insurance dropped by 4 million, from 31 million to 27 million. This means that four million more people got their jobs back…”

    Not entirely true. Of the 4 million drop, we don’t know how many simply had their eligibility run out. Many of those 4 million may still be unemployed but they’re no longer collecting insurance.

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