The bizarre phenomenon of companies complaining about “labor shortages” amid dropping job applicants, while 9.8 million are “unemployed,” and 16.2 million people claim unemployment benefits.
By Wolf Richter for WOLF STREET.
Employers of all types – companies, governments, and nonprofits – reported that they added only 266,000 workers to their payrolls in April, according to the Bureau of Labor Statistics today. This contrasted with the ADP Employment Report yesterday that found that 742,000 private sector jobs had been created, based on payroll data. The total number of jobs at these establishments, at 144.3 million, was still down by 8.2 million from February 2020 (green line).
Households reported that 328,000 more people were working in April than in March, including self-employed workers, bringing the total number of workers to 151.8 million, according to the BLS’ household surveys, still down by 7.6 million from February 2020 (red line):
Of “labor shortages” and dropping job applications.
According to the BLS today, the number of unemployed rose by 102,000 people in April from March, to 9.8 million people. But wait…
Job openings in April surged 22% since the beginning of the year, hires are up 18%, and job applications plunged 23%, according to the April report by recruiting platform iCIMS, among whose 4,000+ clients are 40% of the Fortune 100 companies.
In the four big states, the number of job applications declined by:
- New York: -25%
- Florida: -22%
- California: -20%
- Texas: -15%
The Federal Reserve in its April Beige Book, said that a “majority of its contacts” in a wide variety of industries, reported “labor shortages” as one of the big headwinds. “Employers in technology, construction, and transportation reported being especially constrained by labor shortages.”
Among the labor shortages listed were information technology staff, skilled technicians, truck drivers, housekeepers, “low-wage workers,” and restaurant workers. Homebuilders struggled with “shortages of specialty trades, such as framers, plumbers, and electricians.”
The Job Openings and Labor Turnover Survey (JOLTS), which lags by two months, reported that in February, there were 7.4 million job openings – more than there had been in February 2020 before the Pandemic. March and April data hasn’t been reported yet, but this was when large swaths of the restaurant industry, gyms, etc. re-opened.
Yet, 16.2 million people still claim unemployment benefits.
According to the Department of Labor yesterday, there are still 16.2 million people who are claiming unemployment benefits under all state and federal programs.
The federal government is paying an extra $300 a week on top of the regular unemployment benefits, which allows many lower-wage people to make more money on unemployment than they would earn if they got a job.
This opens up the issue of pay. Employers have to compete with the additional unemployment benefits, but they’re reluctant to raise pay because it substantially increases what for many companies is their largest expense. Some have raised pay, including Walmart and Amazon. Others are trying one-time hiring bonuses.
Broadly raising pay for workers, especially at the lower half of the income spectrum, would be a great thing for workers (=consumers) and for the overall economy as these folks would spend more. But it would squeeze business profits, and businesses are careful and reluctant when going that route.
Would the “labor shortages” just vanish if companies broadly and substantially raised their pay scales? I suspect that the answer would be “yes,” but it wouldn’t resolve all problems.
Over the past few months there have been numerous surveys, indicating how people are struggling with issues that prevent them from looking for a job. This includes parents who said that they cannot go back to work because schools hadn’t fully reopened.
Then there are the issues of skill mismatches, and changed needs for skills that people cannot quickly learn.
Labor market in disarray.
What to make of this bizarre phenomenon of companies struggling to hire people and complaining about “labor shortages,” while 9.8 million more people are considered unemployed, and while 16.2 million people are still claiming unemployment benefits?
The labor force – people either working or actively looking for a job – in April rose by 430,000 to 161 million people, still down by 3.5 million people from February 2020.
This depressed labor force might indicate that many unemployed people who used to work before the pandemic aren’t actively looking for a job now, and are therefore not deemed to be in the labor force, and are therefore not even deemed to be part of the 9.8 million “unemployed”:
There were big employment gains in the leisure and hospitality industry, other services, and local government education. But there were employment declines in temporary help services and in couriers and messengers, the BLS pointed out.
So restaurants and hotels reopened and tried to hire people back, as Americans went on trips and flocked to restaurants more often, instead of staying home and ordering food via delivery?
Restaurants in San Francisco have been very busy, and eating outside in the 1,200+ “parklets” is a blast. But in turn, delivery drivers and others involved in the online dining experience, so to speak, may have run out of work or returned to their pre-Pandemic jobs working in those establishments that have now reopened. Some of this is a zero-sum game.
The situation of “permanent job losers” hasn’t improved.
Of the unemployed, the number of people on temporary layoff or furlough rose by 88,000 in April to 2.11 million people. But March, at 2.03 million, had been the lowest since February 2020. So this was a small setback after a massive improvement (green columns).
But the number of “permanent job losers” also rose by 97,000 in April, to 3.53 million, the worst since November last year. The situation for these “permanent job losers” has essentially not improved since the peak last summer (red line):
Long-term dismal employment-population ratio.
The employment-population ratio, which compares the number of working people to the working-age population (16+ years old), ticked up to 57.9% but remains dismal. It had been dismal even before the Pandemic, having peaked two decades ago.
It always drops during a recession. But since 2000, the ratio did something new: It never fully recovered before the next recession knocked it down again, starting a trend of lower highs and lower lows.
Much of this two-decade trend has to do with how companies react during recessions: They cut costs by offshoring work to cheap countries, not just manufacturing, but also coding, research, engineering and design (including for the auto industry), healthcare, legal work, and the like:
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It’s some of everything and also location dependent.
Job skillset vs labor skillset.
Covid hot spot causes people to not take jobs in unsafe conditions – if they can continue to get UE payments. Restaurants/retail/manufacturing/slaughterhouses.
Service jobs go unfilled if labor moved out of the area.
Also, there is a great resistance to work unless employers will pay a living wage (area-dependent amount).
Early retirement after pandemic job loss.
It’s also leanFIRE that Mr Moustache manages to make cool with 1.5 million monthly readers and growing. After killing housing, car, and healthcare costs to almost negligible amounts, why take on a shitty job when a fun part-time one will do?
Thanks to remote work, you basically start being subsidized by the NIMBYs who live in the HCOL areas.
in actuality it is because they ALL(low skilled/non skilled) want $25 an hour since XI Biden told them $15 minimum
just saw 16 year old waitress(friend of daughter from church) who HATES her job – ie the PEOPLE whom she serves
they all WANT MANAGEMENT JOBS working from home
of course putting in time to GAIN SUCH SKILLS is another thing
our son is LIKELY GOING INTO MANAGEMENT as he was asked to interview for finance manage(he’s 26)
when he confronted his current boss – BOSS RECOMMENDED HIM
they have BIGGER PLANS for those who WORK and DO NOT COMPLAIN – which is my son to T
gonna make 6 figures before 30
By the time she is 26, in 10 yrs, she may surpass him and he could be stuck in middle/lower management during middle age.
It’s hard to plan out the future 100%.
Congrats? I didn’t know this site was for humblebragging on one’s children.
OMG where were you before the outbreak of the civil war? If only you had been there to tell the slaves that if they didn’t complain their ‘job creator’ would surely give them their freedom with 40 acres and a mule someday…
Or were there to tell all those union workers they don’t need to fight for weekends off and healthcare benefits! Surely their benevolent profit seeking ‘job creator’ would have just given them to them.
Earth to GQP member… not every person making minimum wage has the pedigree to work as a finance manager at 26.
Some of those people are good Christian’s who are trying to raise families and care for their parents… So they cannot afford to take a job that will not cover the cost of child & elder care.
Before you get to high on your horse… Remember you are the minority, and unless the mob has hope for the future of their kids… they always have the option of pulling you down off your high horse and eating…
The top .1% have more wealth than the bottom 50% so when it comes time to pay the piper on who should be contributing more to society to help them out for the sake of ensuring the stability of society… Don’t assume it will be you in the bottom 99% demand it be the .1%.
Wylie-your eloquent reply used to be known to the upper classes/.01% as ‘enlightened self-interest’. Replaced by the doctrine of next-quarter’s share value.
may we all find a better day.
The top 0.1% had as much as the bottom 90% when Bernie was campaigning. NOBODY EVER questioned the accuracy of that statement, just called him a crazy socialist.
It now equals the bottom 92%.
PS: That bragging on your kid just tells everyone more about YOU…I for one don’t mind, at all.
I had a look at his site. Mr. Moustache is Canadian. This means that he got his university completely paid for (almost) free by the taxpayers of his province, meaning he could graduate with no student debt. He then moved to the US, land of low taxes to rake in the cash after that.
He also has a right to return to Canada for free healthcare in his province of choice (though he may have to wait 90 days for coverage to start) should he get really sick and his insurance cancelled in the United States. So another win there as well.
So yes, Mr. Moustache has done well, but it is not something most Americans can duplicate given the above. Health care and education, the two biggies, he essentially can get for free, where as Americans trying to do the same thing he did, cannot.
Some very wrong information: College and university in Canada is NOT free – tuition is from $6700/ year and up for the multiversity in our province (Alberta). Health care is NOT free – we pay taxes that cover health care for all persons, and it is very fine care at that.
Mr Moustache is a pretty well off person. He’s not living the LeanFire dream on a personal basis.
Wage pressure has to begin having a big effect eventually. I know it is in the low skilled/ entry level positions in the midwest. My son who is in college has had 5 jobs in the past 6 months. His first job paid the state minimum $10 an hour. His current one in Landscaping is paying $17.50. He just keeps trading up , he says it’s the same for almost all his friends scattered across the midwest.
And 30,000,000 baby boomers are now retired.
Don’t think it’s that many (born1946-1964, IIRC), and I don’t think they are all “retired”.
I suspect that an Employment-Population ratio > 60% is only possible when schools and daycares give parents the option to work rather than staying home with kids.
The rising population of older adults who can’t or don’t need to work (retirement, social security, medicare) also brings down the employment/population ratio.
This.. wait till September. Then the stay at home parents will enter the workforce again.
And there is never a worker shortage.. there is only a worker shortage at the price point you are paying.
In our neck of the woods, it’s clearly labor shortage, but I am skeptical about the argument that it is due to overly-generous unemployment benefits. At 5% local unemployment, just about everyone who wants a job has one. We got down to 3% a few years back and performance of new hires at that level was always sure to disappoint.
Here, businesses are just so busy, we are in the position of having to seriously compete for labor for once, and it’s ultimately driving up wages. We just did 4-7% increase to try and get people in here to help us work off a record high backlog. Others are doing similar. No one here is getting rich, but we are are paying over 3x minimum wage… not like it’s a fast food job or something.
I have often heard the argument that inflation won’t happen until wages start to rise… well… maybe we get to test that soon.
Please, what business are you in and where?
It is hard to draw conclusions without that info and impossible to compare to public aggregate stats.
We manufacture transportation equipment in the American Midwest.
Our suppliers and customers are absolutely buried in orders. Lead times are starting to get into 2022, when they are usually 2-10 weeks depending on order size and complexity.
Orders are up 94% YTD 2021 vs 2020, and that’s roughly in line with what our peers are seeing from what I gather. Other industries, against which we compete for local labor, are also going pretty strong.
I realize this is only anecdotal, and certainly some locations are doing better than others, but business is booming here right now. A complete turnaround from the lows of 2020.
I think this is exactly what you’d imagine during a crack-up boom. People buying everything they can now.
Hmm…something like the RV industry might experience a boomlet due to…
1) Extremely low interest rates making huge RV costs “affordable” (harder or easier to foreclose on an RV relative to a house? RV is mobile but homes have more protective laws)
2) If people see the home sale boom ending, the next home might be an RV (Nomadland)
3) Plague year puts premium on bug out gear (RVs are sorta ultimate bug out gear).
easier to foreclose on an RV
really – guess they need my PAID FOR ONE THEN REAL BAD
oh, you mean ID’ts buying on credit
surely UNCLE WILL BAIL THEM OUT
time to go – ribeyes await as we’re doing test run on RV tonight
time to get out of this 100 degree heat
btw SUMMER IS HERE
Given the boost in on-line shopping, and the resulting shortage of transport such as trucking lines and delivery, this may be market-specific.
random guy 62,
For workers who take low skilled/entry jobs, I can definitely say in my average midsized Midwest city that the generous unemployment benefits are preventing many from looking for jobs. Because the unemployment benefits dropped from 600 to 300 a week and many states are now requiring actively searching for jobs, it isn’t nearly as bad as last year.
In my area pre-pandemic an average entry position at most restaurants (fast food) and small stores was paying about 10 an hour, because of the current unemployment benefits, which in most states I think pay about half of your previous pay, those unemployed are effectively getting 12.50 an hour. Few small businesses can afford to pay more than that an hour (they would probably have to pay at least 15 an hour, but that may not be enough to get those not having to work at all, back), especially in the current economic climate, and if they raised their wages for new employees, they’d have to raise everyone’s elses. Imagine trying to take those raises away in a free months. Most businesses are just suffering through being understaffed, with many reducing their hours and/or the owner taking extra shifts.
Despite alot of “unemployed” in my area, open positions at most entry places are going unfilled.
I do wonder if for places that actually check up on your job references, if they will automatically weed out anyone who stayed “unemployed” during this period. It could be a dead giveaway for future employers that you aren’t a hard worker, if they can figure out you were unemployed for most of 2021.
Cas. Thanks for asking question, and my conclusion is similar to yours.
My guess is welders, and 8r/day at that is tough, repetitive, and nasty fume ridden back breaking work. Have a buddy who did it 5 years, and quit to start a roofing career, paying initial dues on the hot roof crew, but finally got to comp, then tile, then working supervisor, then estimator.
Fat Ted (or is it the other similar one, forgot name) that praises welding should try it production line style for a month or two.
Here in U.K., I can clock a shortage of all kinds of people involved in building industry. Tradesmen eg plumbers, tilers, electricians, as well as ordinary labourers. Professional advisors like engineers, surveyors, architects.
I am trying not to milk it too much because lean times must follow, but I get any work for my firm, whatever the fee quote. We provide architectural, structural and party wall services.
All the people I have worked with in the past 30 years, report the same thing. Not just in my principal base, London, but also in East Anglia where we have a reduced operation going on.
I suspect this is playing out differently for different sectors of the economy. My business uses low skill workers. We have been struggling to hire. When stimulus checks go out, the applications for our positions go to zero. Despite offering 40% higher starting wages, we are still having trouble getting applicants. The few who apply, seem to belong to that part of the workforce who lack the basic skills to hold a job. An example would be consistently showing up to work.
We typically pay $30-$40k/year. This dislocation of the work force is going to have an even greater impact than the shutdowns. Add in the leaping costs of materials (and shipping), the resulting price increases are going to end a lot of small businesses. You can only charge what people are willing to pay. They may be willing to continue to pay more for assets, but assets are viewed as an investment, services rarely are.
I look forward to better times (eventually) and hope most can negotiate this road we are on.
Each individual gvt survey is going to have its own survey methodology and there is no guarantee they are consistent – that may be one big reason why we are getting internally inconsistent results (huge number of alleged openings but much, much lower number of actual new filled jobs).
Ditto the ADP vs. BLS chasm (timing difference? Maybe ADP payroll signups are faster/slower than reporting to BLS).
From a purely anecdotal point of view…I get six distinct Indeed “keyword” search emails sent to me every day…four of which are geo focused on Texas.
For the last two months (including alleged million job March) successful search returns were about 10% of normal (including both Covid and pre).
Maybe Indeed has changed its algos or my interaction with Indeed directly has flipped some switch there…I don’t know…but the results were far, far, far from the aggregate numbers for March.
So a huge April miss doesn’t shock me.
If you are talking about Austin, I think that job market there is more hype than reality. No doubt there are good jobs there, but not as many as reported in news stories. The thousands of jobs reported are probably hundreds and mostly senior tech jobs. I actually read a report of a medical facility there closing and laying off over 100 workers, in the middle of a pandemic.
My keyword is Texas, so it pretty much sweeps in everything.
The dramatic fall off started in late January (before I started doing heavy Indeed site searches again…so I don’t *think* Indeed is throttling my email based results).
The Indeed results are often very “lumpy” (driven by time of yr, month, etc) but Texas results via Indeed has been thin gruel since late January…despite what the aggregates at BLS and DepartmentOfNumbers say.
Perhaps workers on unpaid furloughs being recalled hit the payroll survey (BLS) but obviously their jobs never got posted to Indeed.
That *might* account for monthly booms (huge unpaid furlough recalls) and busts (very few true “new” jobs)
Use incognito mode to do searches or any site will start “tailoring” or mannering the user into a box.
Not a bad thought…I had assumed that job sites want maximum readership but they may throttle for specialized reasons.
But…it is the auto-search emailed results that are sputtering out…the actual on site search results appear less affected…but by definition my on site searches are more variant/ad hoc.
Ironically medical jobs can get hit because they might be discretionary. Not all medical procedures are essential. Also several hospitals got themselves in trouble with screwy financing, see Tower Health in PA for example
The big demand in our area is service jobs: retail, burger joints, carpet cleaners, cashiers, etc. Everyone is advertising with signs, radio ads, etc.
Twice minimum wage to start.
What are we working for any more?
It is not about unemployment benefits in my opinion, but sustenance wages vs unemployment benefits vs an alternative.
If housing was affordable, maybe more people would have a goal to work for.
If diverse income streams were affordable, maybe some people would have a goal to work for.
At the end of the day, if it is just labor in and sustenance wage out, why bother.
This is a result of income disparity, and if we plot the two I’d reckon we’d see some sort of correlation.
Or, we can rationalize working for crypto coins, as an intrinsic motivator.
That’s an interesting take. An existential crisis for the labor market. I’ve had the same feeling. I’m barely a few bucks more an hour than the local pothead milling about at dairy queen and I end up sore and tired on the weekend from my trucking job that also includes lots of manual labor. I think it will crash and I’ll have money to buy land and housing but if it doesn’t and I were to buy the msm line if “markets only go up!” I’d quit, take slightly lower pay and drift about in the Walmart. In my area housing jumps in a week more than I’ll get in annual raises for in 5 years. If you’re short sighted, it’s disheartening. Even if you aren’t it can make you mad.
You must work local, my OTR, drivers are making good money. Last week one guy made $2700.
Not that this might interest you but I know that you’re from the same area as me and its germaine to this post. But the local school districts in the county are advertising for school bus drivers with hiring bonuses.
The lack of will towards building something is definitely a growing problem, one of the major not often fully discussed issues is that; there’s a lot of girls in their 20s and even above in America (and the number is growing) who don’t want kids (or want to push it off, until it’s too late). Because so many girls don’t want kids, alot of guys see no point in marrying and buying a house at all. So if you can get away with not working, many will take that. These guys will take an apartment (and some may even live with the parents), not be tied down by anything and do as they please. This isn’t as common in my area, but this definitely seems to be growing across America. If many girls don’t want to settle down, many guys will stick with an apartment and don’t really have anything to build towards.
This isn’t counting all of the issues with woman divorcing like crazy. That has convinced many guys, now is not a good time to get married and get a house and have kids.
People marry and have children will they can afford it. If they cannot afford to support themselves, why would they have children even if they really, truly want them?
Seldom discussed but very valid. Most wrk has no pensions left. Many are bing priced out of housing. Many work just to stay alive. If I was in their shoes, I’d also flip the bird at most menial jobs. It’s nothing more than a grind with no meaning or purpose.
THIS: “If housing was affordable, maybe more people would have a goal to work for.” Speaking of myself only, getting a house AKA “The American Dream” was a huge motivation for me. I didn’t necessarily like nor hate my job and I frequently had two. But for me a job was never anything but a meens to an end, and the end was all about me and what I wanted. With or without UI, isn’t it doctrine that the “free” market adjusts to equilibrium? So that seems to mean employers shld spend more time raising pay to attract workers and less time complaining. Because how many articles have we all read about employers raising prices and people paying for that?
“It’s called the American Dream because you have to be asleep to believe it.”
– George Carlin
30 years of debt isn’t “The American Dream,” it’s more like “The American Nightmare.” Owning a house free and clear is a good feeling, but even then you get to watch your property taxes explode year after year. And try not paying them – then the county takes your house away and sells it. “The American Dream” is a lie.
Exactly. If you live in/near a city why tie up all that money “paying off” a home when you are forced to “rent” it from the taxing authority. If you live rural with taxes of $500/year paying a home off can make sense.
I can see the argument that people get too much in stimulus and unemployment especially at the bottom end. There’s this poverty thinking that “I’ve got money today I’m fine” and some people just live off what they have right now and work when they have to.
OTOH, I think there’s a distinct lack of motivation. I have a friend who’s a chef- 2 year culinary degree, solid work experience. He has a job but he’s cooking at an institution not a restaurant. Why kill yourself for the same money you were making 20 years ago? I hear that over and over. There’s an invisible cap on wages for people who work with their hands. All the productivity gains in the last 30 years didn’t turn into wage increases
I can second that. There’s this no man’s land for a lot of people where extra income just means extra gadgets and toys, or attempting to save in a broken investment world. Working harder for that doesn’t necessarily feel worth it to many if it means a lot of extra stress. What they really want is a house, but the amount of extra income it would take to responsibly afford one is so much higher that it feels like there’s no point in trying. In a lot of markets there’s been a death of the starter home. You’re either in the apartment dweller class or in the home owner class.
Some good points there.
It’s only a labor shortage for the wages being offered. In Canada, the locally available labor pool for low income jobs is under cut by temporary foreign workers.
The excuse is that they can’t find workers.
At the mid and higher skilled jobs, the local labor pool is undercut by skilled immigrants.
The excuse is also the same. They can’t find skilled workers.
I’m both cases it’s really because the employers are offering lousy wages and terrible perks and benefits. They also don’t want to hire new graduates either.
I’m not sure how this translates to unemployment figures and jobs gains. But I know it’s a lie when companies say they can’t find workers.
They really just can’t find workers at the lows wages and benefits they offer.
Exactly. In the helicopter industry employers were advertising for skill sets and experience no one has. Then, they filed their paperwork and said we have to hire overseas and brought in Kiwis and Germans, etc. That was finally stopped. The Oil Sands were doing the same with trades, and opened training schools for welders in the Philippines. They brought in electricians from Ireland and Croatia. That was also stopped. They saw the shortages and simply wanted to suppress wages. It was the unions who got the abuse shut down that was allowed under the conservative Govt of the time.
Temporary foreign workers are now quite limited in Canada and seems to be focused on farm work. Having said that, long gone are the days when growers could pay dick all and force temps to live in slum trailers. It’s now inspected, etc. Plus, there are firm Covid protocols in place.
Having said that I knew an aviation company owner who contacted the family of a deceased pilot. The pilot died in a plane crash at work. Anyway, the owner tried to get back some of his wages saying he had been overpaid.
Can it be this bad? Yup and double yup. I’ve seen it and worked through it; working for employers who honestly didn’t care if you lived or died. Thankfully most are definitely NOT like this, but when you are young and starting out you begin at the bottom unless someone greases your path.
When the pie starts shrinking….. Most collective agreements have firm ratios of certified trades to apprentices. This is to stop bottom feeding companies hiring apprentices in order to pay lower wages for the same work.
In responding to everyone here who has reiterated your sentiments. Your comments are fair, but also jaded on one side. Let’s be honest. Most companies are not huge conglomerate s. So, why does everyone think there is massive money likes to pay the wages you suggest? The other side of the equation are the customers who must be willing to pay the fair price, not discounted, coupons and sale items. We as customers, aren’t lining up to pay higher prices. I see the comments posted. Biased. We all need to take care of our fellow citizens. We are all part of the problem, as well as the solution. Nothing is free. Whether Canada or Denmark, USA, We are taxed , essentially a confiscation of wealth. Our govt then doles out cash for votes. So why work when you get more in stimulus. I own a small shop, pay is $18.00 hr. My customers certainly don’t offer to pay extra and I’m not swimming in cash. As for the top wage earners, let it be known in the USA that 57% pay all taxes. 43% pay noghing.
As for the top wage earners, let it be known in the USA that 57% pay all taxes. 43% pay noghing.
And the employment rate for the US for working age adults is.. 58%.
So your point is that working people pay taxes. Thank you.
Same situation in Australia.
Remember the labor market was tight before the pandemic. The Fed was pumping the stock market ruthlessly then as well, and the market was at new highs. There were price distortions due to tariffs, and China was recalling shipping containers which were normally backloaded with AG products. World container index bottomed in late 2019. The notion that the Fed would normalize the economy begs the question, to what previously distorted standard do they adhere?
It is not a normalization. It is a few factors:
The fed is doing whatever it can to not let us take a breathe. Is this right or wrong? New people retire and enter the labor force all of the time, so this will and should continue ad infinitum to some degree.
Obviously, the thinking at the fed is less of their being anything related to ‘natural business cycles’ any longer, and more there being a path that we must continuously trek.
This is our present day federal reserve, there is no indication that this current mentality will readapt to past ideologies.
Maybe the old way of thinking is no longer needed. Maybe in this technological age, the workings of the federal reserve are now too ingrained in modern day politics to make independent decisions.
The loudest voices are now the most precinct across broad spectrums of life.
porque, maybe the stick is throwing so much carrot out there that the donkey can barely move?
Haha, that is a great take that I haven’t seen before, on this fairly common place analogy.
The Fed set out to abolish the business cycle years ago. They really have a turn key economy, or think they do. You are correct sound money has nothing to do with their platform (they don’t make policy any longer, other than serving as the feedback loop). I would like to know how central bankers are able to coordinate ?policy? without formal agreements. I sometime imagine what would happen if even one of the top CBs broke ranks. They all read the same books I guess.
That is what the cocktail parties at Davos are about.
And that is why there are CRYPTOs…..
the holders of national currencies have been RAPED by the central bankers….
Yeah sure The labor market was so tight that I retired early in 2014 rather than compete with Honduran kids for 15 dollars an hour I made more money working construction in 1978 than in2014 so why waste my valuable time Glad I got out of Dodge from what I’m seeing online This won’t end well for most Americans
I have been researching retirement for a couple of years now. Lately, most of the information/questions are from people in their 50’s+ who want to know how to retire now because they know the jobs aren’t there for them anymore.
The general advise is downsize and leave the country until you reach retirement. Most can live in a low cost country with local healthcare and just pay taxes on the necessary withdrawals. Then you can return when your full retirement kicks in, if you can.
The number of Boomers and Gen Xers in their 50s who can retire is paltry. 45% of Boomers have ZERO retirement savings. Of the 55% who have some, 28% have less than $100k. So that means 73% of all Boomers have less than $100k in retirement. The math is putrid.
I’d advise them to stay close to family.
I read the median 401k for people over 55 is $64k. The average is something like $260k.
So I would not be surprised if they change the 401k distribution laws to get those who have a lot in retirement saving pay for those who did not save.
It will probably be part of that wealth tax thing.
If they own a home and get social security, $100k will work for them if they enjoy the simple life.
I had a relative that owned small businesses his whole life that never went anywhere. In retirement he had no savings and received only about $10,000 social security per year. He rented a subsidized apartment in Florida for $400/month and made a some pocket change buying and selling junk on EBay. He rode a bicycle for transportation and tended a garden as a hobby. He got by OK.
PETUNIA & DEPTH CHARGE
I wholeheartedly agree being 50+ often makes you unemployable. Age discrimination exists and it’s hard to blame businesses for hiring 2 of me for the price of 1 of me, knowing there will be growing pains with younger hires. I was effectively fired from the 3 “career” jobs I held in my 20’s to age 51 – I am great at results, not so good with rules. ;-)
DC’s cited stats RE Boomers frankly astounded me – but I believe those numbers are pretty accurate.
You do NOT have to move out of the country though. I retired at 51 and live 100% OTG in a 2019 built home (electric = solar, composting toilet & rainwater catchment) in the middle of a nice tourist city in AZ. Near zero carbon footprint and slave to only property taxes. You CAN enjoy a fruitful lifestyle in the USA – just need about a 1/4 acre of dirt to get started. :-)
At 65 years of age, a retiree needs roughly 25 times what his “annual spend” is in income/savings to make it to 90 years old. That if they want to live indoors, eat warm food, and get medical attention when they need it.
That person really has to add in spending for annual taxes if he owns a home and also think about health insurance in addition to Medicare. Medicare alone only covers 80% of the bills, and nothing for dental, eyes and hearing. Big spending bombs like a new A/C unit or a new roof are killers to budgets is unplanned for.
I’m 77 and retired. I saved like crazy for 40 years to do this and own my own home free and clear. I only know of a handful of other retirees who are in my position. I know guys 80+ years old working for Walmart and Costco, and glad to have those jobs that pay very little. Plus, they really need the money. This is not California where one can cash in a high priced home and move to Nevada and live happily ever after.
The “inflation bomb” will be crucifying a lot of retirees as they can’t make enough interest on their savings to cover the high inflation. I see these people worrying on a daily basis. And I am starting to worry about us and also my 40 year old daughter as she has not done well, career wise, but is a wonderful person. I may not be able to leave her much of an inheritance when I move on. She’s not expecting anything but I would like to see that she has something left from me other than her taking care of me when or if I am in need of that.
I have a dental surgery coming up this month that Medicare is not covering. It’s unexpected and will cost about $7 K. Medicare would not cover a portable oxygen machine for my wife and that was $3 K. Other dental bills paid by us over the last 12 years would have bought a new F150.
Hey, a few $K here and a few more $K there and soon we are talking about real money.
@AnthonyA – no, you do not need to have saved 25x retirement spending at age 60.
At age 60 you can buy a lifetime annuity for 20x the desired annual income. Just priced those.
And there are a lot of assets out there which won’t ever show up in a 401K statement, but still count for retirement (either by lowering costs or by generating enough spending cash to get by).
Most of what people think they “need” for income – they don’t.
25xs is way too much.
Average 65 year old won’t make it to 82.
And the full retirement age for Social Security is now 67.
15 years of retirement is what most people can hope for if they are in good health.
Anthony, I’m 38, and reading your post makes me so angry at what our “leaders” have done to this country. It’s absurd that a retiree can no longer get real interest on his savings. It’s also absurd that medical care costs as much as it does so that illegals can get health care for “free.”
Seriously, Millennial. :) You are still young. Technically speaking, you have at least 22 years of earning power ahead of you, and you should be able to do ok as long as things trudge along as they have, and especially if you are moderating your spending like I suspect you are. The problem is that not many in your generation think that way. This is probably an unfair characterization.
heck, you’re reading a blog about economics, that alone puts you in the 0.1 percentile of your generation.
The things that our parents counted on, social security, medicare, etc, we should not expect going forward. If you believe what Gundlach said about $175T of unfunded liability, you would be thinking about how to move out of this country. It is insane how our government over the course of the last twenty years have pulled the wool over our eyes and robbed us blind.
WS, yes, with an SPIA one can generate $5K per month with a $1,000,000 up front for 20 years (or maybe more up front). I preferred to not dump my entire savings into an annuity that has strict constraints. I also like the flexibility of having all my funds available to me in case I NEED them.
Anyway, that’s not the point of the comment I made. The point was related to how much one must have to pull off a comfortable retirement. These folks with $100K in a 401K account at age 50 are essentially screwed if they think they can retire and live out life comfortably with a roof over their head and eating something other than cat food.
RightNYer: Yes it’s absurd what the gov has set in place for us retirees. Now those retirees with several $$million$$ in liquid assets and lots of other semi-liquid assets probably don’t have the worries that us others have. But those really well off ones are not the large percentage of retirees. I’m sure some of those really well off ones are posting here, though.
WS said it’s “easy” as long as you buy an annuity to fund the rest of your life instead of managing your own money, which, of course, is a choice one can make. And that’s as long as the retiree has a $Million$+ at age 60 to fund an annuity that pays $5K/month to 80. But that option is not always desirable for a number of reasons. And you have to have the big nut of cash up front (that you can part with forever) and trust that an insurance company will still be paying you to 80 (but not beyond). And also inflation is something to be concerned about along the way, unless you can afford a COLA’d annuity, which will cost you a bunch more.
No matter how one does it, retirement is not free and is becoming less affordable as we head into increased inflation and out of control government spending.
At 38 year sold and in your shoes, I don’t know what I would do today except save as much money as you can and stay smart and informed.
Apple:”Average 65 year old won’t make it to 82. ”
Actually, per latest U S life table (2018), 51% of 65 year olds will be alive at age 85.
Early in retirement with a 401K and I know there is a lot of redistribution in retirement. Unless you love working I am not sure the goal of having a fat 401K is worth it. Anything over a million is going to get taxed away pretty aggressively. A Roth is good, but who knows for how long.
I never said it was “easy”. Just that the required savings isn’t 25x.
Also, I’d add that if the insurance company can sell you a lifetime annuity at age 60 for 20x income, you as an individual can likely do better. With the do-it-yourself approach you save most of the fees, expenses and profit margins. But you have to have the aptitude to manage your retirement portfolio yourself, and given the well-documented human cognitive biases and their effects on investment returns, not everyone can do that.
I’ve seen people take many different paths, all generally happy (as happy as old age can be, anyway). Some lived frugally and enjoyed friends & family as long as they could. Another worked (and spent) as much as possible until cancer came. Others had a nest egg split between an annuity and a do-it-yourself investment portfolio. The commonality is that they all planned ahead and made the necessary life choices (and sacrifices) they were comfortable with.
“The Federal Reserve in its April Beige Book, said that a “majority of its contacts” in a wide variety of industries, reported “labor shortages” as one of the big headwinds. “Employers in technology,….”
When I hear the Fed talk about labor shortages in technology I suddenly tune out anything else they have to say. They’ve been talking about labor shortages in technology since the 1990s. I doubt highly paid tech people are sitting at home unemployed for their unemployment benefits. This is more of the same‘we need more h1b visa people’ crapola I’ve been hearing for decades.
“Then there are the issues of skill mismatches, and changed needs for skills that people cannot quickly learn.”
When hasn’t this been true? How about training people on the job? They’re not doing that because they view their jobs as Mcjobs.
Amen to that. My consolation is that all those broken systems that can’t spit out unemployment checks, can’t keep a plane in the air, and don’t keep intruders out by design, can be traced back to an H1B.
Methinks you mean: the bosses/managers look on their peons’ jobs as Mcjobs.
And their slogan is: We’re a team, not a family
And they’ll fire you even if you’re doing a great job. For no constructive reason whatsoever.
The stink from Silicon Valley has permeated the corporate workplace far beyond its borders.
I highly recommend Dan Lyons’ book “Lab Rats” for further insight – and possible ways out of the hot mess.
The same idiots that would rather live on the dole than work will wonder why someone won’t hire them in the future once the gravy train leaves the station. You can’t fix stupid.
Yep. I’ve grown a new level of respect for low-end workers, working crap jobs.
I’ve been tipping substantially higher at restaurants (and I was already a generous tipper), for example.
Hopefully, their managers/owners will remember who showed up to work when their friends were smoking weed and collecting “stimulus.”
I used to tip, albeit grudgingly, 10%. Then I filled in weekends as the only bartender at a friend’s restaurant for a few months. Paid the waitress and busboy staff their share of my tips. Totally changed my viewpoint and the amount I now tip.
Yep. Spoke to a guy a few weeks ago. Came to the country a few years ago, got married and has his Commercial Drivers License. Making 5 grand a month. Happy as a clam. Not crazy about driving all day and sleeping in his cab (no apartment), but making good money. Non stop work.
When he came to this country, he had no construction experience, and got a job doing grunt construction work in 3 days. Grunt as in digging, demo and so on.
You can make it in this country. You got to work and try to learn something. I can’t imagine people sitting around playing vid games, social media, hanging out and not working. I’d lose my mind.
Non stop work and no home? Sounds wonderful.
It’s better than being a slave wage to rent ones whole life. He can work hard for 5-10 years and sock away a nice chunk of change. My cousin did this, then bought a house in Mendicino and got a nursing degree, got married had a kid. There are lots of paths on life.
I asked this question in a related article RE trade imbalance and no one was able to give a viable response.
Q? Why does the US not just rip off the mask and offer Americans (presumably those who can document their citizenship) the occupation of “Consumer?”
You can call it UBI or the “Dole” or whatever you want, but the US has been keeping numerous countries working and even raising their standard of living for several decades, but we (US) pretend we offer something in return (our exports and our USD for goods).
Since we can create as much USD as we want (and pretty much have been doing so), why not shift all goods AND services production to other countries and/or invite foreigners here to the US to “work” since some production must be domestic (restaurants, hotels etc). The majority of US citizens can then simply be paid to “consume.”
Like most, I would probably be bored to death as well, but why can it not be done – or – perhaps – the better question is, since it has been done for several decades already, why can it not continue in perpetuity?
What ever goes up must come down … or in other words there is no free lunch. The opportunity cost for the US pissing away its opportunity to print money since the 1970s since the good standard was removed is unfathomable. We literally have nothing to show for the scores of trillions printed.
We could have built an economy for generations but alas it wasn’t meant to be.
Rising input costs and wage competition against PUA is a double whammy for companies looking for lower wage workers. The result is the existing employees picking up the slack which further degrades moral. Something has got to give eventually and I see this as a battle of attrition for many manufacturers. The manufacturer I work for just cannot grasp the double digit wage increases that seem to be required, YET. Like Wolf said, the result will be more offshoring.
One of those life lessons that has held true (*like many) is that the only way to get a real raise is to change companies. After three years at the last company and one raise I looked and there were many offers for similar positions with more pay. Workforce is shuffling around and companies are losing talent and have to replenish or build up with all the growth. So do yourself a favor and look around and put your hat in the ring for a new position that will give you 10% raise to beat inflation back for a while
Will get worse come July when family children credit kicks in. A young mother with two little ones will collect $600 tax free credit per month. She can quit work and stay home with kids and save money on daycare two.
The money sent is only half the tax credit spread over a few months. Nobody is quitting over that, however, they may be spending a lot more than normal.
Daycare for two little kids, full time, runs about $1.5K a month. Your after tax take home. Figure 10 hrs a day. If you work odd hours it’s higher.
Then add in the cost of going to work, clothes, lunch, etc.
Before or after school care in my area is $18. per hour, per child if it is offered at your child’s school.
In the 1960s we were told that automation and productivity increases would lead to shorter work weeks, few work weeks per year, and earlier retirement.
Now we are told that if a parent has the audacity to raise their own kids at home, they are a slacker who is depriving some parasite boss of the opportunity to profit from the parent’s labor. Even worse, their refusal to do wage work might cause the boss to have to raise wages! Oh The Humanity!!!
We have truly arrived at the point where we are expected to live to work instead of working to live. And everybody who can not do wage work for whatever reason should jump off a bridge.
“We have truly arrived at the point where we are expected to live to work instead of working to live.”
Truer words not spoken!
It will get worse. Americans are rediscovering their love for credit. Why work if you can just take out a loan and wait for a government handout?
My neighbor’s deadbeat, 20-something son told me that he purposely quit his job to collect UI (which apparently is barely considered fraudulent these days).
In my state, with the $300/week federal supplement, if you made less that $15/hour pre-pandemic, you get more from the government to sit in your basement, smoke weed, and play Xbox. Harris/Biden 2024!
No, that plan was also Trumpys plan
Here in Nevada, PUA recipients must make a good faith effort to look for a job in order collect benefits starting May 2nd. I wonder if this will merely annoy employers who will get a surge of applications by those they don’t want to hire anyway.
When I go into stores, I’m always amazed that the stores find a way to keep their stores fully staffed. No long lines at the register, everything is the way it used to be, except for the masks we have to wear. I keep thinking these people would make more money if they stayed home and collected the $300 bonus on top of whatever else they’re entitled to (that’s amount is a minimum of $181).
This willingness to work no matter what is the strongest evidence I see that (CPI) inflation will remain low.
Uhh, CPI inflation has NOT remained low. Why do people keep peddling this?
According to Jeffrey Christian “The BLS has 248 CPI employees, 85 PPI employees, and 39 employees in the division of price statistical methods. It also has approximately 400 economic assistants — “field staff” who collect price information and buying patterns around the country. All of them have been trained in these jobs, and many have been in these positions for years if not decades. What is the statistical probability that they have a better handle on the costs of living faced by people around the country than those who have been railing about inaccurate inflation data from their basements for the past decade or two?”
In my own personal view, Shadowstats and the Chapwood Index are clearly made up inflation gauges. So on what basis should I believe that CPI inflation has not remained low? In the absence of better arguments, I side with Jeffrey Christian on this one.
But it IS low. It’s under 10%. What’s YOUR definition of “low”? ;)
The economy is going through the biggest series of shocks since the 1970s – all manner of systems disrupted, after being “just in timed” to the point of extreme fragility.
There is every reason to expect inflation/deflation to happen all over the place, based on the massive displacements in supply/demand.
I’m actually surprised it hasn’t been a lot crazier.
Recently took a trip to North East, help wanted signs everywhere. Restaurants at service plazas are closed, bathrooms are dirty and no soap at the sinks. It really shows that low paying service jobs no one wants any more. The feds are giving plenty of money for free to unemployed, so why work. Then again, people are fed up with not having enough to pay bills, minimum wage is a joke, can you live on $7.25 an hour? Restaurants are paying $2.13 an hour and shift responsibilities to its customers to pay servers wages with tips. Enen making $20 an hour it’s not enough anymore! Rent, food, services all went up. I just heard people working for dollar tree store all quit because of low paying wages and McDonald’s franchisee is paying $50 for just an interview. It’s that bad out there.
The housing bubble has done extreme damage to the bottom 60% of the workers in the US. Jerome Powell should be facing execution for crimes against humanity.
The 50 dollars for an interview is a con.
There is no shortage at 20 an hour.Big shortage
at 10 an hour.
Yeah, when I look at job postings or talk to people, you’re basically top dog of your socioeconomic class if you make $30 an hour (need to be in the right field first of all). The experience and credentials for that is surprisingly high considering what that buys you in terms of living expenses. I know plenty of other people who are responsible hard workers but less credentialed who struggle to get over $20 an hour. Here in Denver they’re mad that they’re going into their 30s and still need to be part of a two couple (4 income earners, and 3/4 are in supervisory roles) roommate household. House hunting recently left them feeling pretty dejected as it becomes an issue of being secure with the 4 of them, to suddenly financially on the edge if they split. Another friend who got married and split up the roommate brigade now is working two jobs (and this is with a master’s degree necessary for the first job, wife also working) just to get savings to try to get a house. No time and perpetually stressed. I say give it a rest and accept your fate as a low sq. footage apartment dweller. If 2008 happens again you could easily lose the house even though you worked so hard for it. They say stress is one of the number one killers anyway, and isn’t health wealth?
I talked to the owner of Tastee Diner here in Bethesda Maryland this morning. This place is the heartbeat of middle America and celebs visit every so often. They can’t even get their loyal long time employees to come back to work. Reason: Federal UE benefits of $300/week + state UE benefits adds up to more than they would make by coming back to work. And that does not include the cost of transportation, and day care if they have children.
I told them the solution was to end all these welfare payouts and assign each of the 16 mil unemployed a job. They liked the idea.
The $300 unemployment checks are supposed to continue until Sept. 6th.
Amazon may be ten years from fully automated it’s warehouses. The race to invent automated taxis is underway. Self driving mining trucks have been in use for years. Self driving electric farm tractors are available.
You mean just in time for the recession to really start kicking in due to the inflation that is smacking the economy around and that the unemployment benefits can be further extended into forever?
The J team has to think about this and make the appropriate calculus, (not the math type, the political type), cause on the one hand, people might get pissed that there is another recession, but if those eggs are going to be broken anyway, and we can make a nice omelette out of it in the form of UBI, the J team might be able to benefit tremendously, the real trick is to make sure to pin the blame on the Dumbos. The easiest way might be to let the infrastructure bill fail by pushing for all the demands, and then when the bust hits, blame the dumbos for obstruction and demand the citizens to help the J team take back the country in 22.
Yeah… that could work.
My, my, I ought to be in politics. Missed my calling. I could’ve been right up there with Carville, my idol.
Yo, stupid, it’s the economy!
Sadamm Hussein cured unemployment in IRAQ by assigning everyone a job. Even if they didn’t do much at least they were employed and not on the streets protesting against his government. If they didn’t take the job offered then they got a bullet in the back of the head.
Bullets are expensive (see Chinese). A sword or axe is self-reloading.
Amazon will have other problems soon, since the cargo shipping business and trucking is messed up at the moment…
My friends are getting $3K check/month, plus top rated health insurance for free plus $600 ebt/grocery card. ON top of this, they don’t have to pay rent or mortgage. ON top of this, they got stimulus check. They wanted to start working but looking at the bigger picture they decided to chug along for few more months.
Wait till they have to apply for a job and put this freeloading on their resume. They would lucky to land a job cleaning septic tanks. I wouldn’t hire them to clean dogs$it off my front lawn.
I’ve explained this to some of the production guys at work. I think they will benefit from toughing it out and not having that resume gap. The problem is we all have to bear the inflation tax for the rest of our lives so a few people get extended paid vacations.
Come on, you can do better than that. Why not just make them slaves and let the employers own them? Welfare payouts? The real welfare bums are the corporations. We are way past time for revolution.
In the US, slave labor is cheap and easy to come by. See: convict leasing, Federal Prison Industries, and the 13th Amendment, which explicitly allows slavery as punishment for crime.
No need for employers to actually own slaves and look after them when it is cheaper to lease them from the state.
So much hate and anger
Maybe not hate and anger but sarcasm and the sad truth.
One of the problems I see is that the inflation being created by all the stimulus is basically going to require higher wages just to keep up. Companies cannot expect that people will return to work for the same wages they did before this pandemic when Uncle Sam has told them they deserve another $300+ a month and given it to them for doing nothing.
Do they really think that Genie is going back in the bottle? If you make it so there’s more money for less work people will expect more money at every level.
Wages haven’t kept up with inflation (no matter who calculates it) for decades.
Yeah, so many comments RE: “after September this all ends and everyone who rode out unemployment this whole time will be screwed”- as if the Genie is going back in the bottle…i’m sure it’s comforting to think that way for everyone busting their asses right now, but a practical question to consider: do you really think Manchin is going to be on board with completely eliminating any support to the U-6 unemployed- 20% or so? because I guarantee you that no matter what Wyden and Bernie are saying right now, they will be gauging what Manchin is willing to go along with, and work towards passing that before Labor Day. Manchin is NOT that conservative, he is actually pretty strongly in favor of the very poor getting support indefinitely (he DOES favor axing benefits for those who make lower-middle-class & up wages). I’d hazard to guess that at minimum, something like a $1K/month UBI/UI extension for the bottom 25-40% of these folks being extended in perpetuity.
All these numbers and charts and graphs, they are such a headache, and requires…. THINKING… and may be even *gasp* math, which is r*****, well, let’s just get to the obvious.
It’s obvious that there are some holdover appointee at the BLS from the last administration that is mucking up the numbers and making our wonderful president look bad. But fear not, the J team is on it. They’ll take care of this with more stimulus and money printing. The problem will go away, and meanwhile, Wray will go and root out the white s******* that are screwing things up in the BLS and making the numbers look awful.
Or, may be… another thought, the numbers were so bad, that even the BLS couldn’t fiddle their way into a million jobs, and 200K is all they could come up with.
Which is it I wonder.
Seriously though, Wolf, thanks for the nuanced views here, the problem is not just a one off associated with lazy people who doesn’t want to work because of more generous unemployment. Although there is no doubt that is a contributing factor here. The problem is more systematic and has been structural in nature, where the origins of the issue went back to the 90s.
The large skills mismatch I think can be traced back again to the decay in educational system that easily went all the way back to No Child Left Behind, and possibly even before that. Education reform has been a dismal failure in this country. Perhaps that is by design, but whatever the case, the real result shows.
What a trainwreck of a fiscal policy.
All those trillions and nothing to show for it?
Keynesians please speak up.
The real loss was the disappearance of on-the-job and apprentice training. Corps now demand to hire employees with fluency in exactly the skill that is needed at the moment. Then they wonder why turnover is so high for those folks.
I’ve bin doin’ some work today…
Take a piece of paper, or on the computer, draw a Triangle.
Write in each apex, Labour, Censorship, Taper
Overarching the diagram, title it Moral Hazard
Awesome comment! Except instead of a triangle with apexes, I think the 3 Moral Hazards should be drawn as circles – 3 giant holes all coming together in a giant pit in the middle – with the diggers now trapped deep inside.
It’s a pity we threw out the moral and ethical foundations; there was a time even within my lifetime when sensible majorities opposed and prevented labor exploitation, censorship and excess credit.
Because in their lifetimes they had seen the consequences of all 3.
You guys need to stop with all the math analogies… the vertex, the apex, the hypotenuse, the radius, etc, it’s driving someone like me with a limited vocabulary especially when it comes to this math thing, crazy.
We should just use simple words like morale hazard, or better yet, call it what it is: Equity, and equality.
That has a much nicer ring to it. I also think the picture should be simpler, a smiling stick figure child playing on a field of grass under the sunshine.
I think you meant moral hazard, as in what is being done through easy credit money. But I really like “morale hazard.” All this chicanery is producing a tremendous loss of morale in the bottom 80%.
Oops, you’re right about the typo… also morale hazard seems more aligned with what I see today when houses in the east bay of the SF Bay Area are purportedly going near $1M above asking price.
Especially in areas like Oakland and Berkeley, where more of what you hear is how liberal and how dangerous certain parts of both are. The real thing is all about how rich some of those neighborhoods in the hill are.
I would be curious how much of the drop in the labor participation rate is the result of younger boomers retiring a little earlier rather than sticking around another 2-5 years. Also there are stories in the news of Bitcoin bros and the like, who having gotten rich off the market are now “retired” at the ripe age of 30
Anecdotally, there is some of that.
Another factor, probably not that significant in the grand scheme of things is the number of people who have decided during the pandemic to retire earlier than previously planned.
I read an article that the past year has made a lot of people decide to move somewhere more affordable and retire. It doesn’t hurt that they have seen both the value of their homes and their retirement savings increase substantially giving them more options.
Lastly, we also have at least 10s if not 100s of thousands of workers who have lost their lives over the past year.
Yeah, well, if they’re retiring on the value of their portfolio without taking profits, that’s a risky endeavor.
Also, most of the COVID deaths were older people. I’d be shocked if the deaths were anywhere close to 100,000 of people in the workforce.
The CDC has all those numbers. I did the math for another forum earlier today, 125K to 150K working age people died of covid.
No figures on people who were off work ill for several months or who continue to be long haulers. There must also be some small percentage who became disabled.
Working age people = 16 years and older with no upper limit. There is no forced retirement at 62 or at 65. People work way past that, including many people on this forum.
Looks like Wallstreet is loving these numbers released today. All time high again, guess this is more good news for the FED to pour more fuel to fast infinity QE fire. Total disconnect of a world we live in, massive permanent job loss and record high real estate and stock market.
Honestly and seriously taking an alternate look at that comment. What IF after all the rocket fuel they FED has given to the world economy they people in charge took a look and realized the wheels are not coming off. The train is still on the track. So maybe we need to go faster, higher and wider. Just a thought that MAYBE they got this dialed in just right and we can’t see it. People around my ring of friends/co-workers are all employed, most own newish houses and 401ks are bonkers crazy. Worst thing is the kids can’t get that graphic card the parents would pay unlimitiatium for
Yeah there’s some good points there. Perhaps FED has perfected this game and knows that there no price to pay and all the upper middle class and upper class are feeling richer than ever. As much as I hate to believe it, part of me do feel like this new paradigm is being created right in front of our nose. The rule of gravity don’t apply if the playing field is no longer earth…catch my drift?
They have not perfected the game any more than a person can “perfect” defying the laws of gravity. All they’ve done is created a monster confidence game while simultaneously devaluing the currency. It’s that simple. And it only works because right now, foreigners are still willing to give us their stuff for this printed money.
But you won’t get a warning when foreigners are tired of filling our gullets with free stuff. And the crash will be painful.
Lots of my wall street buddies are going to retire much earlier than they planned to. This trend has just started. They see the proposed income tax rates, the proposed long term capital gains rate, and the proposed estate tax rates, and they throw in the towel. Why would high income people bother to work? Just retire. Why work just so the govt can redistribute your earnings to people that did not earn it? Waste of time.
I know someone who works in the drug industry and he said the same thing is happenning with high income technical people in their 50s.
This is going to hurt America.
Nah, not going to hurt “America.” Just some folks. When your Wall Street buddies retire, that’s good for the economy. Their work doesn’t contribute to the economy (extracting fees for shifting money around), but when they retire and just focus on spending their money, that would be great for the economy :-]
Wolf, there is no shortage of real estate brokers so no one will be hurt. Just a few young wives will leave the tennis courts and get back into the RE game to make some fun money. I saw it happen in California when I lived there in the 1980’s!
And there are an army of MBAs waiting to take their place, even with lower net compensation.
And there is always offshore bitcoin.
I understand there are 1 million people calling themselves “financial planners”
Now what are they doing for God and country?
I’ll tell you. NOTHING!!!! other than moving money around and extracting commissions. Let them all retire permanently. I couldn;t care less.
What Wolf said. The arrogance of Wall Street to really think they are doing “God’s work” is astounding.
The guy who has owned a pizzeria for 30 years and throws in the towel because the government drove him out of business is doing more harm to the economy than some Wall Street parasites are by “retiring.”
Just wondering- would growth in the underground/gig economy be impacting the figures we’re seeing? My guess is it’s growing and I hypothesize that a bunch of it is never reported either for the purpose of measuring unemployment or wages.
The underground economy is booming. I had three large dead trees removed and hired some Guatemalans to do the job for 1/3 of the cost of a commercial tree company. No contract, just a shoulder bump handshake. They did a fantastic job. Took all the debris away and left the place spotless. A white envelope was all that was needed to close the deal.
Let me add, f$ck the government. They never gave me my Dec $1,200 EIP nor my $1,400 stimulus payment. They probably sent it to one of your freeloader friends. And they never got me my vaccine even though I registered 3 months ago. I had to drive 240 miles round trip to a CVS on the Pennsylvania border to get my first shot, and had to drive back under the influence of an opiod like side effects from the vaccine.
Funny. I had 3 trees removed last year by Spanish speaking crew. They had all the latest equipment. Paid with envelope of 50s. About 1/3 of the quotes from 2 arborist firms. Nuff said.
Also paid 2 6-packs of Modello after work. But that was on me. Nice folks.
The way CONgress set up these UE benefits was rotten to the core. Not only did they waive the requirement for people to seek employment, they allowed people to get the benefits while stiffing the landlord. That’s despicable. It should have also been a requirement that if you were collecting then you needed to pay rent. Instead, they have created millions of leeches who are gaming the system.
My nephew, a college grad who is working, has told me numerous stories of acquaintances he knows who have been collecting the whole time, playing around on Robinhood, and have no intention of looking for a job until after it all runs out.
Jeez, I’d swear you just gave the most apt description of the entire corporate-military-industrial complex working its’ evil ways since the day Ike warned us about them! Why blame this crop of kids for doing exactly what they’ve been trained for? They’re only following what was taught by example. Now, you’d better hope they don’t wake up to real numbers as it would only take about 20 million with one rifle and 35 rounds less than five hours to bring this population back down to the levels around the early days of the Federalist era. You think they’d give a sh*t about people whining over how hard it was to make a living before all this? They know what “re-boot” means-the technocrats have learned them all up.
I’m paying college kids 15 an hour to work for the summer. Otherwise they won’t show up. We are a summer heavy cyclical business. But we only pay full time 17 an hour. This is warehouse work. Pulling, packing, and shipping. Something is wrong with that statement.
In SW Florida it’s pretty weird. A local restaurant posted a job for $13 p/h just to wash dishes and several McDonald’s locations have upped their starting wage to $11 p/h. What’s even weirder is that all the McDonalds in my area have just the drive thru running. You would figure they wouldn’t need a whole lot of help. Crazy times.
Cause and effect. Gee what do you think will happen if we pay people more money to sit on their asses than to work? Do you think they will actually stop working? If they stop working, do you think that will cause disruptions, and shortages of goods? Do you think those shortages will be exploited and prices will increase exponentially?
Naw, none of that could ever happen……. Could it?
Funenjoyment is too appealing.
Oh, and wait… why will congress have to raise min wage to $15? An inflated economy will make it $20. Only now you need to make $100/hr to afford a house here in Bend, Overagain
A lot of people have never had it better. Making close to $50,000 per year for sitting home on the couch, stiffing the landlord on their monthly rent while playing crypto millionaire through a Robinhood app with the free money is like a dream come true. But this cannot and will not last, and I’d bet there is a grim future for many of these people.
Have you considered working for the Bureau of Statistics? Your whoppers are as ingenious as theirs.
Have you even bothered to look at a state by state comparison of the UE benefits? I’d guess not. In some places like MA they can get over $63,000 per year, and that’s with the $400 per week PUA. It used to be $74,000 when the extra was $600 per week – for doing NOTHING. Add in stiffing the landlord and these people are living high on the hog. That’s like another gift of $15k-$30k per year. Open your eyes.
I’m not disagreeing…I don’t know the MA rules…but could you step us through how you got that $64k figure…I assume that is only for the highest earners.
Any stats for median earners’ unemployment comp?
And stiffing the landlord…won’t that simply create a liability (if anybody has insight into how gvt grant programs will affect accrued rent…let us know…I don’t think I’ve heard about forgiveness programs yet).
The added unemployment benefits and the stimulus payments have allowed people who have perhaps worked low wage jobs their entire lives and struggled paycheck to paycheck to now have options. Most folks don’t realize what being able to pay off debt & have a cash cushion means to people who literally never had that in their life. Now they have the choice and luxury of time, not being broke, to perhaps look for a better job, not waiting tables of nor working at Walmart. The jig is up. The stimulus payments and added UI have changed the employment landscape for some time. Employers are going to have to pay people way more than what they’ve been paying just to stay in business. There may be no increase in the federal minimum wage, but people are not even thinking about taking jobs that don’t pay north of $15 and hour, so the minimum wage has been made irrelevant in most places.
In the end we will have a way better economy, as starvation wages are forced to disappear and people are getting paid a livable wage, which at this stage is probably like $20 and hour and more money to spend. Tipped jobs are something no one seems to want because such a job cannot guarantee even minimum wage at times – the jig is up on those.
If any employer cannot ‘afford’ to pay their employees a livable wage, they will end up going out of business, no matter how much they whine…
The costs just get passed along to the consumer which means they may lose customers
I grabbed some lunch at my favorite little deli early this week. A wrap, an orange cream soda and a tiny bag of chips + tip is now $20. It was $16 last year. I don’t eat out often, and will eat out even less at these prices. That’s just reality.
Tipping is an unworthy practice for both payer and recipient.
Welcome to the $15 Big Mac and $6 small fries. Coming to your hometown soon.
Hasn’t been the same delicious dead-animal sandwich since the introduction of meat cabinets, microwaves and those nasty new defrost-to-serve buns, so who cares? I doubt even the McDonald brothers or Ray himself would want to swallow that cardboard crap, and they cleaned toilets. Thank God something may bring an end to our “Taco Bell” future before it all comes true. Now pass the kraut…I’ve got some dogs to nuke!
A lot of these jobs have really shitty working conditions, it’s not jus the wages. If you have a choice of earning a little less or breaking your back with an abusive boss most people are gonna choose the former. These companies have to look at the way they treat their workers. A decent amount of breaks. Treat the workers with some respect. Period.
“What to make of this bizarre phenomenon of companies struggling to hire people and complaining about “labor shortages,” while 9.8 million more people are considered unemployed, and while 16.2 million people are still claiming unemployment benefits?”
The problem is simple: Interest rates haven’t been low enough long enough and we’re not printing enough money.
At least that’s the impression you’d get from the Fed’s policy rationalizations.
As long as American corporations can easily export jobs to foreign labor markets for cheap, they’ll continue to do so. Meanwhile Americans will continue to be passed over for those same jobs and the US Senate will continue to block minimum wage bills, health care reform, infrastructure, etc. After all, this is a government for capital owners, not the working class. To that end, labor market globalization is like a pipe which connects two 55 gallon oil drums together. Eventually the contents of drums levels out.
One drum is 55 gallons (hitherto developed “western” world), and the other drum if 500 gallons (everyone else).
When the oil in them two drums levels off, if will have fallen by 9/10ths in the 55 gallon one.
That is the future thanks to globalisation.
Wasting your time working a low paid job is for suckers. Just buy meme stocks and Dogecoin with stimmies is the way to go. Millennials and Gen-Z have figured this out now. Things won’t go back to normal until this house of cards crashes.
The problem I have with the libertarians crowing to the sky that UI is causing labor shortages – besides that it’s simply not true – is that profits as a % of the economy have been at record shattering levels for decades now, and far far higher than what many said we “absolute maximum” long ago. Conversely, wages are at a historically low % of the economy. And articles abound of business raising prices.
It’s time for wages to rise. A lot.
Or better yet: a bit of actual deflation
As a business manager, I like low production costs (wages). But as a decent human I don’t like slavery or unnecessary hardship when there is plenty to go around.
It’s time low-end wages rise in America. My main problem with it is wide open borders. It will just send more jobs overseas even faster.
Our company is struggling to compete with foreign competition whose primary competitive advantage is paying the low required wages of foreign workers.
In that same vein, American employers being forced the bear the majority of the cost of the healthcare system is a similar problem. Our foreign competitors don’t have that same cost. It is huge and growing.
I am experiencing a labor shortage of BMW dealers willing to sell me a 750i for $20k. Could it be the money I’m offering?
To be an employed technology worker, at least one of these has to be true:
1. Actually know and be trained in the technology in demand..or
2. Want, or at least not hate the idea, of getting back into it, if you saved money over the years and realized life was happier and more fun not working the code and dealing with the managers any more..or
3. Not deeply burnt out or majorly messed up mentally by whatever – where you can no longer focus and do the work you once did. There is some of that. Sometimes a tech guy or gal suffers a bad divorce or breakup, or got into the pills and booze because of whatever life and relationship troubles came about (circumstances often worsened by the pandemic) and he/she just can’t mentally function any more.
Yup, it was #2 that got me out. Memories of management’s frivolous meetings has kept me out.
I have a friend who has a son who graduated from college a year ago and wants a job in editing. But then COVID hit and there were no jobs in hollywood, but lucky for the kid, he had worked at Disney as a park employee over the past summer and as an intern during college, so he qualified for unemployment benefits. So instead of living with mom and dad he moves in with friends in an apartment and is living off his unemployment checks.
So then Disney calls him up a week ago and says that they have spaces available for work. But the kid decides not to go back to work because he would have to work 30 hours to make the same as unemployment, so why work for the money, when he can spend his time looking for a editing job?
I dont blame the kid, he wants a professional job in video editing, which is what he studied in college, but in the meantime, he is sucking up free money and instead of saving it up so he can launch a better life once he gets a job, he is spending that money paying for rent and other expenses, which is good for our economy, but how long does it last? What happens once the unemployment runs out? Is he doing everything he can to get work in his chosen profession, or is he spending a little more time playing videogames?
At some level, it seems like COVID is really not that dangerous anymore to MOST people and yet, we are still having the economy “shut down”. Does this make any sense? Or is this all really just a crisis that has been used to get people accustomed to the idea of universal income paid by the government?
And what has happened to the Republican party and their views on the dangers of the massive government debt? Have they decided it does not matter, or are they playing a long game where they allow it to grow so unsustainably large that the markets wreck havoc on our economy and then the Republicans can truly institute massive government cuts to bail out the economy? Of course, the rich will always be protected and the working middle class will be the losers.
I really do not understand why an unemployed person who is offered a job by their previous employer and refuses that offer is not taken off the unemployment rolls? Isn’t there a reporting mechanism? Can this country be so screwed up that there are no consequences for (basically) lying.
Almost two years ago, I somehow found myself in a discussion with my boss about interest rates. He must have been fishing to see if I had a mortgage or something. I think he was saying something about interest rates being so low. I said something like “Yeah, maybe forever.” That was the topic of discussion here at WS and it was going around the traps. He immediately fired up and angrily pronounced that interest rates only stay low for a period then they rise again. There must have been a doubtful look on my face, but I just nodded before he strode out of the room. That is the opinion of a captain of industry. I often wonder if he remembers that incident nearly two years ago.
Spring 19’ peak employment, peak ski season I overheard a ski instructor ‘lessons aren’t coming in so my shifts are just covering housing (prob direct), looking for second job and borrowing from family’ A couple months later walking into big box store, guy walks out on phone ‘I just quit because there was only 2 shifts available last week, 9 hours isn’t enough’ Right in front of the hiring sign.
Just a glimpse into the reality. Corporations and government in lockstep. These hiring scheme must have worked out great for PPP payouts. Non livable wage slaves for payout; Fraud cattle.
right now in real life there is a shortage of both hard working people and a shortage of working people.
But more overall there is a shortage of qualified companies including top 100 rank corporations that hire us hard workers.
Does this assume all job openings are for true jobs? How many are companies “seeing who is available”. The company I work for runs numerous ads with no expectation of hiring someone. Maybe this is not just about people but companies placing more ads hen they have jobs. For a company it is not a bad srategy.
Announce 5 clear policy changes:
1. No more stimulus money, it is ended.
2. Unemployment benefits end at the same length of time prior to Covid.
3. Social Security will required annual reappraisal of all disability benefits.
4. Proof of citizenship is required for hiring.
5. You must repay your college loans in full and on time.
Within 6 months the labor shortage will be replaced by job opening shortages. Guaranteed.
Our economic system requires the ultimate furious exploitation of all resources, natural and artificial. The most exploitation must be of the human population itself.
Greed is the operative word.
Benevolence is nowhere to be found.
Organized labor contributed mightily to development of the middle classes and the hierarchy of the same entity helped destroy it.
Globalization means a leveling of the labor playing field.
Until that is achieved we are in a whole new world (of hurt).
And in this system there is no place for “The Commons”.
If change for the good of humanity is to come it will come through great revolt against this kind of society.
We are not yet at that point.
Too much “God#### free money” out there…..yet.
Good luck to a better future from a 90 year old.
the exploitation of human resources is arguably more sustainable than the exploitation of the natural resources.
once it becomes unprofitable to have an AI managed megafarm, we will have new megafarms worked by the functional equivalent of slaves.
reverting to the mean and whatnot.
The people who promised UI and MMT won, after a fashion. it’s rational to wait and see what they hand out, and it’s temporarily/semi-permanently subsidized anyway. Enough other people getting rich off esoteric imaginary accounting entities to shake anyone’s self-confidence in traditional values and valuations. It’s taken character and strength of conviction to withstand the fear mongers and their opprobrium. And as Hugh le Depenser said, “Jesus, yet more trouble” as things get even tougher this year people are running short of the emotional elasticity to cope with relatively insignificant conflict. See it in the behavior, tense and hair-triggerish, or excessively polite to the point of cautiousness, an easy answer would be nice, but i’m trying to remember the last time I wasn’t lied to about anything. Been a while.
Happy Mother’s Day!mine’s 90, she got flowers and a card personally delivered at dawn. Gotta beat the siblings
Here in New Mexico, a state near the bottom of the wage scale, our Democratic governor just caved to restaurant owners who are complaining that they can’t get enough help at the wages they’re willing to pay (typically the state’s minimum). She gave the 83,000 on unemployment 24 hours notice that she was getting rid of the work search waiver and work searches are required to certify for each weekly benefit.
The trouble is that most of these low-wage jobs only offer part-time hours while scheduling the worker so that taking a second job is difficult if not impossible. We’re not a well to do state, and I’m imagining 83K people suddenly competing for 15 hour work weeks at $10.50 an hour. Some due to COVID or childcare concerns won’t be able to search at all and will be completely cut off.
I’m not saying people shouldn’t be out working, but the least she could have done was give people some warning and look for another lifeline. I think even the guy in Florida is allowing the waiver through the end of May.
16.2 million people claiming unemployment benefit is a modern day tragedy in a country like USA which had Mankind’s best ever chance to become a land, so productive that ‘EVERYBODY’ could be comfortable and prosperous. Because your leaders are so imbued with the 19th century concept of ‘wage slavery’ as the only way of life for humans, you have ended up with all the prizes of output hopelessly skewed towards the few and away from the many to a worse extent than Victorian England. Unemployment is used as a guilt trip punishment to drive people into a life of drudgery, in many cases, to feed the myth of work being ‘good and necessary’ for society. No living without working. It maybe used to be so, but your industry could have been so productive by now, that the wealth could have been shared to make everybody comfortable. Not Socialism, just more equitable payment for hours spent watching the machines buzz on useful stuff.
It looks as if you are blowing everything big-time with your oligarchs and billionaires and military spending. Probably some Asian country will now become the first humans to create a truly egalitarian automated industrial society where people lounge around golfing on a universal one day week.
we learned from our real bosses, eventually. the empire upon which the sun never sets has, one would hope, a limit.
Many are finally waking up to the pointless reality of working hard for the the prosperity of corporations or 1%.
Successful corporate wage suppression means we NO LONGER reward hard work and many are downgrading aspirations accordingly.