The Bizarre Phenomenon of a Screwed-Up Labor Market

Job Openings in Manufacturing, Other Sectors, Spike to Record as Companies Struggle to Hire while 16.2 Million People Still Claim Unemployment Benefits.

By Wolf Richter for WOLF STREET.

The American labor market has been roiled by a bizarre phenomenon: 9.8 million people are deemed to be officially “unemployed,” and 16.2 million people still claim state or federal unemployment compensation, including the extra $300 a week in federal benefits that allow a lot of people to make more money from unemployment compensation than from working. At the same time, there are reports that job applicants have dropped for job openings, that companies are complaining about “labor shortages,” and that, today, unfilled job openings have spiked in a historic manner.

Job openings jumped to the highest level ever, to 8.12 million openings in March, seasonally adjusted – and to 8.24 million openings not seasonally adjusted – the Bureau of Labor Statistics reported today. Compared to March 2019, the last March of the Good Times, job openings were up by 13%:

In manufacturing, unfilled job openings exploded in March amid a widespread chorus among manufacturers that they’re having trouble hiring the people needed to meet the surging demand for their products that has been fired up by stimulus payments.

Manufacturing jobs are not low-wage jobs. And this difficulty to fill jobs comes after two decades of valid complaints that too much manufacturing activity has been offshored to cheap countries.

Job openings in Manufacturing spiked in March by a huge all-time record of 134,00 jobs from February, to a record 706,000 job openings:

Compare the job openings to the number of people currently working in manufacturing – the jobs that manufacturers could actually fill — which dipped in April to 12.2 million people, according to the BLS jobs report. Compared to February 2020, the last month of the Good Times, this was down by 515,000 workers. And yet there are 706,000 unfilled jobs, which, if they were all filled, would push manufacturing employment to highs not seen since 2008:

Job openings in the Leisure and Hospitality sector – about 75% of which are in food services and drinking places – jumped to an all-time high of 1.21 million in March (seasonally adjusted), and were up 18% from March 2019:

Job openings in the Arts, Entertainment, and Recreation sector spiked in a historic manner over the past two months to 215,000 unfilled jobs, more than double the openings in March 2019:

In the Education and Health Services sector, job openings fell in March from the all-time record in February but remained the second highest ever at 1.43 million openings, and up 4.3% from March 2019:

In the Retail Trade sector, job openings jumped to 878,000, but that was down 15% from the peaks in 2018. This includes new and used vehicle auto dealers, whose business is booming, and it includes grocery stores, and other retail segments that are going strong. But the mall retail business, as far as it still exists at all, has been obviated by ecommerce and is struggling to manage the decline, and the Pandemic sped up the process that started many years ago.

Job openings in Construction in March rose to 344,000 openings, about level with March 2019.

In the Professional and Business Services sector, job openings spiked to a record in December, barely edging out the prior record of March 2016, but has ticked down since then to 1.36 million jobs, still among the highest levels ever.

In the Trade, Transportation, and Utilities sector, job openings jumped to 1.47 million, up 12% from March 2019, but remains below the peaks in 2018 (including the record 1.58 million openings in November 2018).

Job openings in Finance and Insurance were at a relatively low level of 262,000 openings in March, down about 25% from the top of the range of 350,000+ openings over the years. These companies have been able to fill their jobs during the Pandemic, and working from home has kept this sector from massively shedding jobs to begin with.

In the Information sector, job openings, at 98,000, hovered at the lower end of the multiyear range, as the sector didn’t shed many jobs and was largely able to fill the job openings as needed.

In Mining and Logging, including oil and gas drilling, job openings jumped to 31,000, from 18,000 openings in February, but remained within the wide range, and down some from March 2019.

Small businesses in particular. Separately, the NFIB Small Business Optimism Index was also released today, and its sub-index of “Current Job Openings” that these small businesses want to fill but “are currently not able to fill,” has spiked for three months in a row to a historic high:

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  193 comments for “The Bizarre Phenomenon of a Screwed-Up Labor Market

  1. Brinda says:

    Biden allegedly put his foot down and told people they need to git off the couch and git a jobbb. Come on, maaan! I’m living off of my savings account right now, and I honestly don’t know if I’ll be working again in the USA. It doesn’t pay. I’m not a minor-ority so I’m at the back of the bus. I’ve never taken one cent of UE, food stamps, etc. I’d love to leave this all behind. Any suggestions? I don’t see much hope here. My grandparents moved half-way ’round the world, why can’t I?

    • Mike Barry says:

      See Ya

    • Sticky says:

      ” My grandparents moved half-way ’round the world, why can’t I?”
      That is an excellent point, too bad there isn’t a second america that still has a constitution to move to.

      • raxadian says:

        The Euro Zone has better labor laws and healthcare that the USA, depending on country. If you don’t mind high taxes the Nordic countries are basically European Canada with way less debt.

        • Joe Saba says:

          don’t forget the mask police and continual lockdowns

        • timbers says:

          I’ll take masks & lockdowns over my taxes going for half a dozen illegal wars and troops in 120 nations.

        • james wordsworth says:

          In Europe and Canada you will also, on average, live longer. You also get more vacations and work less. Work to live not live to work.

        • ThePetabyte says:

          Labor laws? Pfft. That’s for lazy people. Work hard and pay your taxes and the American Dream is just around the corner.

        • Thomas Roberts says:


          That’s partly true, but, the Nordic countries basically prevent foreigners, including Americans, from getting jobs there. This basically means Americans can’t stay there. Some Nordic countries, allow alot of refugees in, but they are otherwise, very closed off to outsiders.

          Americans on pensions or retired with some other form of savings, can live in most of the world without much difficulty. However, more countries than you think will basically prevent Americans (or anyone else) from getting jobs there.

          In the European union, there are hurdles that greatly hinder non European union citizens from getting jobs there. You can get jobs, if you have the right degrees or experience, but otherwise you could be screwed. One of the biggest ways in, is that if you go to university in certain EU countries, you get preferential visa treatment (various other countries do this too).

          Most people can simply not move to another country. In the future, it may become easier for university degree holders from devoloped countries to move to other devoloped countries, but, it’s very likely that it will get more restrictive to everybody else.

        • timbers says:

          Thomas Roberts,

          What you say if precisely one more reason why the US should enact policies similar to these Nordic nations. That will benefit the people instead if the rich and gigantic corporations.

          You may be right we can’t mover there, but we can copy their enlightened and superior policies.

        • Gene says:

          I don’t know why Americans assume they can move to the EU and get work permits. The EU has millions of well qualified people out of work. Why would any employer in the EU risk the ire of his employees by filling a position with someone from abroad? This is not the 1950s or 1960s where the U.S. held a monopoly on “management know-how.” Foreign corporations have learned how to manage very well without relying on American expats.

      • Wil says:

        A constitution in name only.

    • Depth Charge says:

      Why wouldn’t you take advantage of the fact that now is probably the easiest time in your life to get a job? Sitting around, spending your savings because working “doesn’t pay” is like cutting off your nose to spite your face.

      • Brinda says:

        Average CEO pay rose 29% to $15.3M during pandemic while worker wages dropped 2%. These CEOs make 830x more than the workers. Workers pay slashed and workers laid off. Just released on DailyMail. As I said above, It doesn’t pay.

        • Guest says:

          I don’t follow your argument. Because executive pay is broken, you don’t want to work anymore? Or you don’t see a wage that fits what you consider an acceptable wage? Drop 2% so 98% earned compared to previously 100%–is that so much worse than draining your savings?

          As the other person said, it’s not going to get any easier than now to actually negotiate for the future in wage and training opportunities. Once the unemployment leveling field goes away, don’t think you would hold much leverage. Businesses may be short in labor now but they can adapt. Some may close down, others introduce automation earlier than planned and simply deal with reduced human labor.

          You can leave but it’s not like other countries welcome visitors with open arms. If you don’t command a desired technical skill and emigrate legally with work visas, there is no significantly better situation than staying here and working with all the hassle of legality gone. Or move to a low cost of living country assuming you still have enough to live off.

        • RightNYer says:

          Brinda’s argument makes perfect sense. The top has managed to skim a higher and higher percentage of the total salary pool. This, coupled with government policies that reward asset holders, has made assets more expensive than ever.

          So, if you judge worker pay based on what assets it can buy, work DOESN’T pay. When the average house costs 15x income, what exactly is the point?

        • timbers says:

          Guest, Why don’t you get Brinda’s reasoning? She’d explained it twice. Pay is low in the US. That’s backed up by data. And cost of living is exploding.

        • Guest says:


          The whole decision-making is childish. It’s one thing to say, “Gee, I’ll reassess my chances and perhaps make a clean break somewhere else”. Or take some time off to regather. But odds are this person will still have to work in the future somewhere sometime. Is the future any brighter besides hoping for some sort of basic income and draining savings?

          Work and pay sucks, but it can be better. A petty protest is not solving anything. Let’s take out the CEO and say the person applies to a small business: what is offered that generates back the higher wages? What value proposition is offered? They were closed all of last year and struggling, persuade them to allocate more capital to someone new. The argument is there to make, the money is there to earn also.

          If you honestly think the best alternative route is to simply give up on work entirely, I don’t know what to tell you. That might be far more apathetic to people than what I am saying. Go play the homeless shelter lottery, maybe it’s worth living in a garden shed to spite the big bad companies. Decimate all of savings and what then?

        • Dan Romig says:

          Brinda and other commenters,

          CEO “pay” is not always straightforward salary. Skimming a higher percentage of the salary pool, to paraphrase RightNYer, implies that a CEO’s salary comes at the expense of the rest of the employees, but the real money comes from stock options that are vested and exercised.

          Hormel’s CEO, James Snee, brought home $13,304,936 for the fiscal year ending on 25 October 2020. Of that, Salary was $966,360 with a bonus of $300 (yup a whole 3 hundo). Non-equity incentive pay was $5.4M, and exercised stock options was $6.7M. Median employee pay @ Hormel is $44,263.

          But here’s the perk for running the show: New stock options = 205,220 shares (at what price is not published in Star Tribune report).

          So, salary of just under $1M. Total bring home of just over $13M.

          Full disclosure: I have owned HRL for quite a while, but sold @ $48.11 in mid February. Yesterday’s close was $47.22. Pays a 2% or so dividend. Glad to have sold out & did OK owning it.

          Perhaps the CEO is not worth $13M???

      • VintageVNvet says:

        C’mon dc, give it a break!
        Some of us, perhaps many of us know that it is a stone cold fact that the only things certain in life are death and taxes. IOW, YOLO!
        While I was younger and stupider, I too did not work any more than I had to. With no dependents, and lots on my mind,,, sometimes one month of work, full time, double time, whatever, would keep me in beer and grits for as much as three months, and I did not work until the money ran out, or the rent was due next week or some similar cash needed.
        Had no car, and back then hitch hiking was an acceptable mode of transportation beyond walking range, or the bus was a quarter to anywhere in the SF bay area.
        Took advantage of ”Drive A Way” car scheme to travel across USA couple of times, in late model cars including a brand new T-Bird to a budding NBA star who had to fly to work, etc., etc.
        I was ”unhoused” a good part of the time, but sleeping in a sleeping bag on the ground was OK, and with a tarp over could take a pretty good amount of rain or snow.
        I was fairly determined NOT to work for ”the man”,,, and pretty much never did in spite of eventually doing the usual routine with dependents, etc., for the usual time span.
        Spouse has convinced me that the trouble with complaining is that after a while you start to believe it!!

    • josap says:


      • Brinda says:

        Lots of reasoning and education in this post. I’d love to compare stories of our grandparents’ voyages to America and see why my family loves everything America stood for.

        • Old school says:

          We are always going to live in less than utopia. An individual has to figure out how to make it in an imperfect world. Best to grab every opportunity you can when you are young and not waste those years when you have a good mind and body.

    • Gerry says:

      Now, as entitled politicians complain about the $300 a week federal unemployment supplement, I can read the latest news about how Matt Gates as a member of the Florida legislature rewrote the 2014 medical marijuana law so that a friend got one of the first pot distribution state license and is now worth $600 million or how Bill Gates, now the self-appointed world vaccine czar, spent his first Microsoft fortune hiring strippers and whores for pool parties at his Seattle home for years. 50 years ago, a $20 gold double eagle cost about $62.50 and the federal minimum wage was $1.60. And there was only one billionaire, D.K. Ludwig, though Howard Hughes was a close second.

    • GotCollateral says:

      I’m a “minority” (in the us), dad was an immigrant from the carribbean, And I left almost 6 years ago… and not for those other mismanaged can-kicking debt bailoutistan wastelands in the EU either… and not for pooh-bear land or its protectorates…

      Fam and friends keep asking when I’m gonna come back… I told them after things change for the better (which I do not see happening in the near future lol).

      Me and the mrs always ask ourselves: “were do we want to live”, cause we all know things will eventually go to $h1t and forces us to think about the tradeoffs we are willing to make and evaluate which jurisdictions have better long term prospects.

    • Nat says:

      “Any suggestions?”

      That would require you listing some preference of what you are looking for.

      However, if your only preference is to find a place where working for “the man” pays properly according to your definition, then I am afraid the answer is “not on this planet” — at least not at this time.

    • Gene says:

      You might be able to get a work permit in some place such as Cambodia, provided you have a unique skill set. You’d likely have to work at he prevailing wage rate. As for the EU, forget it. The EU doesn’t need Americans competing for what few jobs are available. Same for nearly every other desirable country.

    • SamIam says:

      There must have been a tremendous amount of optimism and hope and a strong amount of ‘just do it’ in our ancestors moving to the USA. Mine were people with basic craftsman or printer skills. I think the USA is okay for those with their own business, either vocational or knowledge-based work, but not so good for average people working for others. But try to get a work permit to enter those countries? Pretty difficult.

  2. 2banana says:

    And usually come with pretty decent benefits too.

    And probably why certain non-woked state governors have already announced that they will stop participating in the federal government’s supplemental pandemic unemployment program.

    “Manufacturing jobs are not low-wage jobs. And this difficulty to fill jobs comes after two decades of valid complaints that too much manufacturing activity has been offshored to cheap countries.”

    • Joe Saba says:

      they do usually require DRUG TESTS
      had one californian say – HE DOUBTED COMPANIES TEST FOR MJ
      some 20% of eligible workers have virtually no viable skills
      yet expect to get paid handsomely for no work

    • timbers says:

      “And usually come with pretty decent benefits too.” You think Medicaid is a pretty decent benefits? Are you working at McDonald’s? You do realize $1200/month is legally defined as poverty?

  3. yxd0018 says:

    So once gov benefit runs its course, people get back to work and everything get back to usual. Then every asset goes up again. Isn’t that beautiful?

  4. J-Pow!!! says:

    See!!! I told you the economy was getting better!!!! I, Jay Powell, say it is true and so it is!!!! Stanley Drunkenmiller is criticizing me in the media!!!! I, Jay Powell, am the savior of the American economy!!!! As leader of the resistance, I demand that Wolf denounce him as a heretic!!!! I am not turning American into a banana republic!!!! I am shopping at banana republic!!!! These jobs will be filled with the inflation I am creating!!!!!!

    • WES says:

      Sorry about the 2 newly unemployed pressitutes I disinvited to my news conferences! Those 2 pests had it coming to them!

      • J-Pow!!! says:

        Now we must get rid of Drunkenmiller!!!! He is going to pop my bubble!!!! Before my term is up!!!! How will that look?????????

  5. DawnsEarlyLight says:

    This is NO WAY to run a socialist government!

    • Wisdom Seeker says:

      On the contrary, it’s perfect. The “job openings” are about as real as political promises.

      Actual hiring (and wages actually paid) is the only time the “employer” has skin in the game, and the hiring and hourly-wages numbers aren’t saying the same thing as the propaganda “job openings” numbers.

      • Wolf Richter says:

        Wisdom Seeker,

        Seems you don’t understand where the data is coming from.

        • Wisdom Seeker says:

          I stand behind my skepticism.

          If in fact the companies with the “openings” were interested in hiring at market prices, we should see more hirings, and more separations as workers hop to better jobs. Not just “job openings”.

          From BLS on the JOLTS methodology:

          They survey employers regarding their “Job Openings”, defined as follows:

          “Job Openings. Job openings include all positions that are open on the last business day of the reference month.

          A job is open only if it meets all three of these conditions:
          * A specific position exists and there is work available for that position. The position can be full-time or part-
          time, and it can be permanent, short-term, or seasonal.
          * The job could start within 30 days, whether or not the employer can find a suitable candidate during that time.
          * The employer is actively recruiting workers from outside the establishment to fill the position. Active
          recruiting means that the establishment is taking steps to fill a position. It may include advertising in
          newspapers, on television, or on the radio; posting Internet notices, posting “help wanted” signs,
          networking or making “word-of-mouth” announcements; accepting applications; interviewing candidates;
          contacting employment agencies; or soliciting employees at job fairs, state or local employment offices, or
          similar sources.”

          Nothing in here commits the employer to actually hiring people for job openings.

          There are many, many real-world stories of “job openings” posted for which no one is ever hired. Sometimes the posting is written with unachievable “requirements”, such as 5y of expertise with a system that has only be in existence for 2y. Then the job is giving to an H1B worker on the grounds “no qualified Americans”.

          Given that JOLTS is a survey, and the US economy is dominated by about 2-dozen giant monopolies, some skepticism of the data is warranted. A small group of very large employers with an incentive to game Congress could easily generate large numbers of “job openings” (with no actual intent to fill them – no penalty). They own the media (either directly or via ad budgets) so they can then scream in all the headlines about how hard it is to get workers.

          A stock-market equivalent would be high-frequency traders spoofing the market with spurious huge bids/offers that are withdrawn before anyone can actually hit them for trades.

          Now, it might actually be hard to get workers but given the employment-population ratio, that’s more a function of wages than workforce availability.

          Anyway, actual hiring, and wages paid, are where the labor market reality sits. JOLTS hiring hasn’t kept up with the “openings” so there is something worth questioning there. Even the headline on the JOLTS report says it: “March job openings reach a series high; hires and total separations little changed”.

    • cas127 says:

      It is actually interesting just how socialist the US is without wanting to admit it.

      And just what a clusterf*ck American socialism-in-practice really is.

      (Looking at you medical industrial complex – infinitely greater funding/subsidies/costs leading to progressively worse measurable outcomes in health status and mortality.)

      Ditto America’s spending-driven/outcome blind PowerPoint war machine.

      Or “non-profit” higher education with hundreds of billions in untaxed endowments and a liberal superiority complex that is fascist adjacent.

      It is funny just how often “public service” ends up lining private pockets.

  6. Seen it all before, Bob says:

    I guess I am a good amateur Financial Advisor/Capitalist.

    If a client came in to ask this question:

    I am unemployed and collecting $300/week more than if I had a job and I don’t have to pay $1000/month in childcare so I am effectively making $2000/month more, would the best financial choice be:

    1) Stay at home and bond with my child while taking online courses to improve myself and earn a college degree to qualify for higher paying jobs?


    2) Take a 2K/month pay cut and go back to work full-time flipping burgers and working over the hot oil vat to make fries?

    As a financial advisor, I would recommend #1. :-)

    It may have nothing to do with laziness. With stimulus and unemployment being so high, or wages very low, it is the smart financial choice to make.

    • Anthony says:

      It’s called the Law of supply and demand….

      • Joe Saba says:

        me thinks many mommies have come to realize that HOME SCHOOLING IS great choice to make
        keeps woke folk theory out of YOUNG MINDS

        • MiTurn says:

          Right on comment!

          And no weirdness. My 3rd-grade granddaughter was propositioned for sex by a 4th-grader and a 5th-grader. The school administration was hands-off on the issue ’cause kids will be kids.

          Now she is being homeschooled and is already a grade level ahead.

        • Thomas Roberts says:

          Seen it all before, Bob

          Your numbers don’t add up. Not counting not having to pay child support, with the current 300 extra on top of normal unemployment benefits, very few would make more than 200 over what they used to make. If they were making as little as those numbers suggest, they would be depending on the state to pay for childcare.

          They also would have to take on alot of debt to get an online college degree, online degrees are usually much more expensive (and are often from less reputable private colleges). Odds are they wouldn’t get a good degree either.

          It’s definitely true that many would be better off on unemployment until the extra benefits run out, but that won’t be for very long. The government could easily make the next round of unemployment benefits only pay upto or below what you made when you were actually working.

          A big possible downside to not working right now, is that after all the stimulus programs and enchanced unemployment benefits end, there could be alot of actual unemployment and you possibly used up all your unemployment and are competing with alot of others for lesser paying jobs.

        • Thomas Roberts says:

          I reread your comment, about 600 to 800 a month at the high end a month, for the bulk of the unemployed, is much more realistic. Many are getting much less though.

          I accidentally read your comment as per week.

          The rest of my comment I’m sticking with though.

        • Seen it all before, Bob says:


          Sorry, I had mixed weeks/months units in my post. I stand by my math. :-)

          My point is that employers are saying today that they can’t hire enough employees now. They are offering far less in wages in many cases than someone is earning with unemployment after you factor in childcare costs.

          So far, state and federal unemployment benefits continue to be extended so there is no known end in sight.

          The solutions are:

          1) The employers who are complaining could raise wages to lure the best employees. That will cause other economic ramifications. ie inflation.


          2) The employers could complain enough to the MSM, local politicians, pay lobbyists to end the unemployment benefits and gut the amount paid. Wages won’t go up and inflation will be less.

          It looks like #2 is the goal today. I am not a UBI fan so I partly agree.

          Depending on the job and the state, but our Community Colleges are free here and offer many online courses for an AA degree or a certification. You can make more money with an AA in computer programming, welding, LVN,IT, machine shop, etc than you can with a non-skilled burger flipping job. Most will require you to leave the house to attend classes for practical skills. It is cheaper to get a babysitter a few days a week than to pay $330/week for full-time daycare.

      • yxd0018 says:

        supply and demand takes long time to adjust especially for large illiquid items. Also fiat currency keep losing value.

    • Harrold says:

      You forgot the part about having to deal with insane Karens every day who refuse to wear masks and want to speak to the manager.

    • 2banana says:

      Not paying the rent and pocketing the cash applies to both scenarios.

      But like human nature, most folks thinks a very temporary unsustainable favorable situation will go on for a long term.

      It won’t.

    • Rowen says:

      One thing I learned recently was how common it is for employers to not guarantee shifts for service workers, even after the employee shows up. A local grocery store always overbooks workers, assuming that 10-20% don’t show up. Well, when they all show up, it’s “sorry, we don’t need you right now.”

    • Khowdung Flunghi says:

      “…while taking online courses to improve myself …” – Let me tell you – “learn from home” is the absolute wave of the future. What’s needed is the self-discipline to actually DO IT! I know a couple of people who were laid off early in the pandemic and used the time diligently working on improving their skill-set via on-line learning and are capitalizing in a big way. The cost for access to the training resources was minimal. Sometime soon, folks are gonna figure out you don’t need to go anywhere or pay a lot of money to gain a meaningful education and demonstratable skills. The University Professors no longer have a monopoly on “higher education.” It’s the self-discipline that’s going to be the game-changer!

      • VintageVNvet says:

        CorrectaMundo kdf!!
        Last time I went ”back to work” at age 71, the only reason I did NOT get top salary was my computer skills had aged a bit, and I was totally up front about it.
        Spent extra time each day, including Saturday mornings, updating those skills, and next job got a significant bump, and then was up to speed sufficiently to work from anywhere online with other professionals around the world ”live”, well before the covid zoomers became the thing.
        I really want to encourage anyone who wants to improve their income from work to do their best to update and maintain skills of all sorts, but especially computer skills these days.

        • Khowdung Flunghi says:

          “…update and maintain skills of all sorts…” – Toastmasters is an absolute GEM – with minimal associated costs…BUT, you do have to show up and participate! — Self-discipline!

    • Finster says:

      Yet if everybody did this, we’d all have plenty of money … but nothing to buy with it.

  7. a guy from Toronto says:

    I was thinking how many of these, especially young, people used their COVID cheques and invested in crypto’s or NFT’s. There is a good chance that they had terrific return.

    So, what lesson did they learn from that? I would say in the world where wage growth is depressed for last 3 or 4 decades, and assets growth is underwritten by FED, going to work is the least efficient way to earn money / grow wealth.

    Why would they be motivated to “waste” 8 hours a day on burger flipping or waiting tables? Is that giving them a chance to buy a house or prepare for retirement?

    And I’m not saying that this is sustainable model for someone to finance his or her lifestyle, just that it can be a paradigm shift.

    • Depth Charge says:

      Very few people actually made a fortune in crypto, and it’s pretty much “the usual suspect,” ie Wall St. pigmen.

      • Guest says:

        Easy come, easy go. How many bought at the peak of Gamestop hoping some other sucker buys so they can sell? Or at a peak of crypto or any of the other stocks peddled? When it falls, can they recoup or are they worse off than before?

        There’s really nothing better for people to do than just save this money and pay off debts where it matters. Life can be nicer with potential capital gains but it will definitely suck more when this generational windfall is all wasted away at the casino. On top of whatever consumer ambition was also fulfilled on credit.

    • VintageVNvet says:

      Friends are STILL reporting making up to $50 per hour as ”servers” these days, just as they did pre covid.
      Other than skilled trades folks, seems like fairly decent income if willing to do the physical and social work needed to attract those kinds of tips, eh?
      Seem to remember a lot of folks working their way through college ”slinging hash” as we used to say… ( To be clear, I was usually a ”pearl diver” in those kinds of work places, as it was one of the only jobs that could be done in my spare time sometimes.)

  8. gorbachev says:

    People are smart. They know when something is
    not worth it.

    • rhodium says:

      The western world is desperate for an underclass. Anybody who can avoid it generally tries to.

      Ffs, just give everyone more vacation time so they don’t hate working so much and then take away the unemployment benefits. Does work actually need to be a source of misery for so many people?

      • Harrold says:

        Vacation? Sick leave would be nice.

      • Heinz says:

        “Does work actually need to be a source of misery for so many people?”

        Snowflakes dreaming that the world owes them a good living with little effort on their part (because they are special and have a special degree from Woke U.) are in for a shock when they eventually learn life is hard and uncertain for many ordinary folks. No, life is not fair.

        Just because the authorities went overboard (with stimulus checks, forgiveness, and forbearance) using pandemic as reason does not excuse childish laziness and pouting by workers.

        School of hard knocks can hurt at times. My advice those still waiting to get back in labor force: Get over it and move on with your life to a better place.

        Big brother who gave you this candy can take it away in a heartbeat.

  9. Robert says:

    “Manufacturing jobs are not low-wage jobs”

    Actually they are. I recall reading here that an AUDI assembly line worker in Mexico makes about $2.50 an hour. These jobs were outsourced because presumably they are low skill. (Although I’d say there exist many other reasons as well).

    Now, manufacturers are telling us they can’t find people, but you are assuming these people are making $30/ hr and not $12 /hr with no benefits. You are assuming these people will all work more than 40 hours a week.

    When people see stable work with benefits then they work. When they see crap sub-40 hours, no benefits then they don’t work if they can.

    Even if there exists a skill set the manufacturer can’t find, it can easily do it by training people on the job. But it won’t. This is all more crap from companies that are seeking cheap for-eign labor. And when they have an indentured employee who can’t leave because of his vis-a, suddenly the training program materializes. They want to know their investment can’t just walk away when you ask them to work 70 hours a week and only pay them for 40!

    • Wolf Richter says:


      ” I recall reading here that an AUDI assembly line worker in Mexico makes about $2.50 an hour.”

      This article is about the US, not Mexico.

      In the US, the average pay in motor vehicle manufacturing is over $30 per hour.

      • Depth Charge says:

        Wolf – “average pay” is very misleading. The old guys are the ones making the great wages. The new hires are the ones getting the shaft. I recall reading they turned those into $15 per hour jobs, and took away pensions and other benefits.

        • Wolf Richter says:

          The “old guys” you’re thinking about are long gone.

        • WES says:


          Sadly, you are correct.

        • VintageVNvet says:

          That is probably true dc, but the fact is that when Hyundai was getting to the point of hiring in AL a few years ago, they had about 10 applications for every position.
          And while it may be true re $2.50 for Audi assemblers in meh i co, a steel fabricator told me in fall of 17 that they were paying minimum $15 per hour for their skilled workers at their fab shop in Tiajuana .
          As to Union vehicle workers, a retired friend said he was getting about $75 per hour including all the benefits as late as the middle oughts.

        • John Galt says:

          Okay I’ll bite on this one. I’m a mechanical engineer, but I am also a very skilled Tig welder, and metal worker. Every few months, a bay area big manufacturing firm(won’t say the name here) tries to hire me as a shift welder for around $25/hr. Now in rural Georgia, that might be good. Not in the bay area, as Wolf knows. I eventually told them off kindly, stating that they need to pay highly skilled workers proper wages. They had tried courting me for over 4 years, just a different hiring manager every time. Tig welding took me over two thousand hours of learning before I was comfortable or capable of producing welds for vacuum chambers, or particle accelerator housing components. It’s not a $25/hr job here. Wages have to come up for some of this stuff.

        • Wolf Richter says:

          John Galt,

          Just of out curiosity, what would be the appropriate pay for a top-notch Tig welder in the Bay Area?

        • John Galt says:

          In my current side business, I earn (when I hustle) $80-$120/hr for 12-15 hours/week. Now that is not a 40 hour/week wage. My understanding is that a lot of high end Tig welders in the bay average around $60/hr for 40 hour weeks. It’s not bad for here, but doesn’t compete with tech.

        • John Galt says:

          Also as an addendum to my above post, every year, there are less and less people like me here. No one to work on high end custom cars, no one knows anybody that can fabricate on a high skill level. Engineers that I work with on a daily basis don’t understand simple metallurgy or have a strong understanding of simple fastener physics. It seems that the bay are is becoming a one trick pony, software or nothing, and it’s weird.

      • cas127 says:


        There is probably a philosophical post in there somewhere about why,

        1) Downward flexibility in wages (in the service of intl competitiveness) is apparently so impossible (Keynes was complaining about it 100 years ago) and

        2) On a massively related note, why housing prices are apparently equally incapable/allowable of downward flexibility in prices (land…they may not be making any more of it, but a huge percentage of it is unoccupied too).

      • Robert says:

        Thanks for the link. But I’m not sure that general welders and other non-auto assembly line folk make as much as the legacy auto -union folk. If that has changed in the last year or so , then I’ll update my opinion.

        My view is that management for many manufacturing firms see their employees in light of those low cost foreign alternatives. They view their employees as unskilled and assign a pay scale that is appropriate.

        I’ve seen this stuff first hand, so my opinions may seem more pointed than most. Maybe it’s changing back right now, but I think it will take a while.

    • 2banana says:

      Where I am working now.

      Mechanical and electrical technicians, many right out of the military in helicopter or tank or radio repair, easily making $100,000/ year with some OT.

      Plus excellent benefits to include three weeks vacation from day 1.

      Yes – that would be a 24 year old with only a high school diploma and a work ethic.

      • Paulo says:

        For 2banana’s comment:

        Needed skills is certainly the key phrase right now, perhaps more than ever.

        It used to be, (when I got out of school in the 70s), that someone willing to work could land a decent job in a mill, logging, fishing, etc and make outstanding wages. I remember working as a carpenter and labourers were paid just $1 per hour less than a tradesman as per collective agreement. Mind you, a hustling labourer that can run forklifts, etc is worth a good wage. But do you want to fetch and carry, or build? Do you want to be in charge, or be told what to do? And now? All those well paid unskilled jobs no longer exist. None of them. Logging is done by machine operators, not chokermen. etc.

        Making coffee, cooking burgers, stocking shelves, whatever, are ENTRY LEVEL jobs, always were….always have been. Unfortunately, if you do not have any skills you you won’t find anything else.

        I don’t blame people for not wanting to work at a mindless crap poorly paid job. I’m sure all of us ‘get it’. But if you want a good job, an interesting job, you have to learn the skills first then demonstrate a good attitude and work ethic every day. You have to show value to your employer and earn your keep.

        The best job I ever had? Flying bush planes in Yukon during the ’80s. My own boss, fished lakes that were untouched, used the equipment for private hunting trips every fall, no one told me what to do or how to do my job, and they paid really really well. Unfortunately, I was married and the job didn’t suit my family. My southern wife didn’t like the north. :-) Choices. Choices.

        The worst jobs? Well, here is some advice. Never work for the son of an owner of any company. That’s been my experience. :-)

        What I see these days in my younger friends, (I call them the blue ribbon generation), is they want/expect the great job, but haven’t earned the right to have one. They expect one to be handed to them, and life doesn’t work that way. Gotta have a plan then learn the skills to make it happen. No one gives you anything, (unless it comes from Daddy….like someone not to be mentioned), and there are no blue ribbons for just being you.


        • JakSiemasz says:

          What I see these days in my younger friends, (I call them the blue ribbon generation), is they want/expect the great job, but haven’t earned the right to have one. They expect one to be handed to them, and life doesn’t work that way. Gotta have a plan then learn the skills to make it happen. No one gives you anything, (unless it comes from Daddy….like someone not to be mentioned), and there are no blue ribbons for just being you.

          Heard this same crap 50 years ago when I was a twenty year old asshole. Everybody is a bum but you and your buddies. You don’t appreciate what I went through, etc. etc. blah, blah, blah. Wash, rinse, repeat. The system is a con where the money moves in one direction…up. Until that changes, don’t expect anything but oppression of the powerless. As someone on NC brilliantly pointed out – they want you to believe it’s the poor and the powerless who are the cause of all problems and not those in control.

      • MiTurn says:

        “Yes – that would be a 24 year old with only a high school diploma and a work ethic.”

        My three sons are all doing very well, making more money than I ever dreamed of making, and none of them are using their college education. All working in fields unrelated to their higher ed fields of study.

        Instead, they self educated in fields of interest…due to focus and work ethic.

        Maybe a university education is a waste of time and money for most folks.

        • Henk says:

          What do they work in? Curious as a younger man myself

        • Heinz says:

          “Maybe a university education is a waste of time and money for most folks.”

          You hit the head on the nail with that pearl of wisdom.

          A fun-filled, largely taxpayer-paid (time will prove that) college career is no guarantee of a successful career in real world.

          College grads are a dime a dozen these days, except for those exceptional few with outstanding academic achievement (and connections) in a rewarding field.

          Technical and trade vocations are a potential path to a great and well-paying career for those with a work ethic and skill sets.

          Side benefit– 4 potential earning years not wasted away in ivory towers of academia (albeit along with lots of great drunken parties).

  10. davie says:

    Is this really that surprising to all these opportunist fingerpointers, when it’s occurring 14 months after the largest spike in unemployment claims since the beginning of mankind?
    If employers didn’t want to have a shortage of employees, they should have thought about that when they fired people in the first place.
    And did they consider this is only predictable following vaccine deployment that was set on the double time?
    The alternative would have been a slow warm up of the economy as localities each separately started to reign in infection levels.

  11. Lets say you lost your manufacturing job in 2000. You went into food service, and now you are some kind of chef. You know your stuff. You might even open your own place, but for the pandemic. Then somebody says, hey we want you back on the assembly line for less money? With the economy ready to takeoff, you want the best seat on the plane, right? Employers looking for skilled workers, don’t like hiring people who are over qualified, or just want to work for six months before they go hiking the Himilayas. Workers are reluctant to go back into that abusive relationship, esp the places where there was no covid prevention measures. We now know it is more like a million deaths.

  12. Petunia says:

    If the employers paid well they could get people to work. But their wages basically don’t cover the cost of coming to work. When the burger places say they are paying a $500 bonus for new hires, I don’t believe them. I want to hear what the offered wage is and what are the conditions to receive the bonus. They never advertise that up front.

    My son had a friend who worked for the biggest burger place for years. The young man made minimum wage the whole time and they weren’t allowed to eat any of the food, even if it was going to be thrown away. Can you imagine working for a burger place that exploits workers to that degree. They would rather throw out food than feed their workers.

    • MonkeyBusiness says:

      Not to mention there’s been documented incidents of customers being nastier than normal times.

      Restaurant “work” is the new slavery.

      What should happen here is the CMBS market should go to hell, so that rent can come down dramatically. That way new restaurant owners will be able to pay decent wages.

      • Mr. House says:

        “What should happen here is the CMBS market should go to hell, so that rent can come down dramatically. That way new restaurant owners will be able to pay decent wages.”

        Ah but that would remove a layer of control and if its not obvious by now that we live under a class of control freaks, then i don’t know what to tell you. Look at the last 40 years of history and tell me where this beautiful creative destruction has occurred? The internet you’ll say, yeah thats super decentralized now. The plan is for you to own nothing and be happy. The banks should have failed in 2008, along with many other unworthy companies, but all we got was more consolidation with control of assets falling into fewer hands. That is what bailouts and QE are about, control. Heck that is what 90% of what 2020 was about. How is this not obvious to people? Maybe they just don’t want to see what they don’t want to see.

    • endeavor says:

      Petunia, I read elsewhere that the $500 bonus is paid if you are still on the job in 6 months. A lot could happen in that time to hellhole that worker out the door before time is up.

    • Dave Kunkel says:

      You’re right, Petunia. People don’t want to work for what these companies are willing to pay.

      • Depth Charge says:

        Not until the gravy runs out at least. No more gravy and they’ll have a flood of new applicants. People have to work to support themselves, other wise it’s living on the street.

        • josap says:

          People are no longer willing to work hard for crap wages while being abused. Maybe the population at the rivers will increase by a lot.

          This is how we want to “get back to normal”???

    • Depth Charge says:

      Starting pay for dishwashers at resorts in Tahoe is sometimes $25 per hour. Problem is there’s nowhere to live on that wage.

      • Rowen says:

        We’ve got that problem here in downtown Charleston. And even more insulting? You’ve got to pay for parking ($20-25 for a shift)…

    • DougP says:

      “If the employers paid well they could get people to work”

      Maybe, but if you make 500 a week sitting at home and if you really did make 600-800 or even more going to work, you are still ahead staying home because while you are making less, it is free and asks nothing of you. No time or effort requested. I think many are standing in that line.

      When the free money really stops, the entire labor market will change big time. Wait until rents need to be paid and see how many sit out .

    • Heinz says:

      “But their wages basically don’t cover the cost of coming to work.”

      If you look more closely, it is really the sole fault of scrooge employers.

      You can more accurately blame grinding consumer price and asset inflation for low-moderate income workers’ plight.

      Inflation is like a silent thief in the night– and working 24/7/365.

      • Heinz says:

        “If you look more closely, it is really the sole fault of scrooge employers.”

        Oops, it should read “If you look more closely, it is really NOT the sole fault of scrooge employers.”

    • Heinz says:

      “If the employers paid well they could get people to work.”

      Fair enough.

      So who decides how well paid these workers should be? How about $20/hr, $30/hr, $40+/hr.

      I’m sure if you ask the workers of these starting level positions requiring little or no training/skills these employees believe they are entitled to an income fit for a cushy middle class life style with a nice home, new cars, plenty of playthings, and of course one or two vacations per year to exotic locales. You know, the world owes them.

  13. Artem says:

    I have two words for you, Wolf:


    • Wolf Richter says:

      Not everyone has little kids.

      • WyleeEconomist says:

        Sure not every unemployed person has ‘little kids’.

        But, for at least the last 20 years ‘latch key kids’ is something parents are shamed for. So kids are staying in daycare, to an older age.

        In addition, now that many K-12 schools are going remote, again you need a parent to monitor them to make sure the kids are not going to burn down the house, and do their assignments.

        One of the key issues in America is that we do not call a spade, a spade; Public education is government subsidized Daycare (pre-covid).

        You want to stimulate full employment…

        Make P-12 school optional from 6am to 8pm. With 3 free hot meals served a day (again optional in case you want to provide your kids lunch in a bag, and for the poorest kids they don’t go hungry anymore Mon-Fri).

        Have elective classes, sports, music from 6am-9am and 3-8pm. Teach the core curriculum during mandatory hours of 9am-3pm. This would require hiring more teachers to break up the day, but this would result in the potential for more one on one time for each student. To pay for this, swap school funding from property taxes to the general fund, and have the general fund make up the difference with property taxes.

        Ultimately, we’d give our nation’s children a better opportunity for a college prep level education. While giving their parents the opportunity to work full time & commute without the guilt of leaving them home alone & hungry.

        • 91B20 1stCav (AUS) says:

          Wylie-ref that well-put national aversion to ‘calling a spade a spade’, reprise former Gov. of Texas Ann Richards’ take on the state of the working mother vs. childcare.

          may we all find a better day.

    • Beardawg says:

      Isn’t that one word ?

      • Artem says:

        Sorry, Beardawg, it’s probably one word, but I wouldn’t know since I was home schooled after COVID.

  14. Augusto says:

    People making more sitting at home, with less expenses, than those out working, having to shell out to get to the job (daycare, car, clothes, etc…) Just part of the upside down world we have created. The question is how do you cut people off or cut them back from this free money? There aren’t enough jobs to go around, and my guess is the better ones are already gone. Back to minimum wage or unemployment payouts, or worse welfare, all of which look like a fraction of the money people are getting now? There will be pain, but we keep avoiding the pain, whether its high debts, high interest rates, student loans, rents, mortgage payments, taxes, etc……However, this time, if people don’t go back to work, there’s inflation and a lot of those job openings will be off shored or business close up for lack of staff for good….so are we at the pain point yet….

  15. RobertM700 says:

    Wages at the low end should rise, to keep businesses viable by being able to obtain American labor, and to keep our society viable with decent minimum wages.

    • WES says:

      Open borders ensures this does not happen.

      • Kurtismayfield says:

        Why do you think all these articles are coming out today ght before summer? Cade Cod businesses do this every year! They whine about no employees until they raise temporary visa numbers

      • WyleeEconomist says:

        Agreed, let’s start Jailing and fining… Illegal Employers. You know the people who enrich themselves by paying undocumented laborers to come to the USA, so they can avoid paying American’s fair wages.

        If these illegal employers leeching off society starting seeing their kind perp walked into jail… they’d change their hiring practices that day.

        • VintageVNvet says:

          Not that simple wily:
          Working for a large national company, and helping with recruiting, I found that half the personnel we had hired were not in USA ”legally” although they had passed the E-Verify requirements that the company adhered to strictly.
          Was told by some of them that they had purchased, for about $500.00 all the papers needed just south of the border in meh i co, on their way to USA, usually not their first such trip.
          They knew exactly what they were doing and had to do, to be, or at least pass, for legal. And they were getting good wages, not ”under the table”, and were uniformly good workers here to work.
          These guys were from almost all countries south of USA and also from almost all countries of SE Europe, but all had come in through the SW border area and all had ”legal” papers.

  16. I get the feeling that no one will be in the mood for extending unemployment benefits now, so it seems almost certain that Powell will be proved correct and the spike in inflation will prove to be temporary as the free money runs out and more people return to work. The main doubt I have about The Angry Trade is that it’s just too obvious. It can’t be that easy.

    In parts 1, 2, and 3, I presented The Angry Trade as a way to profit the most from a major selloff in risk assets, but that is likely to be profitable even if risk assets never see a significant downturn. Part 3 is in the comment section of “Intel & TSMC on Chip Shortage…”. In this part 4, I comment on overall portfolio construction.

    Based on historical market patterns, a 5-15% drop in the S&P500 from current levels sometime this year is a probable event. The trough will likely coincide with a short-term trough in long yields, so we want to try to time the trough and sell a portion of treasuries at that point.

    While the 30 year yield looks like it just had a clear break out of a bull flag, the bull flag on the 10 year yield still seems to be in the process of forming while the 10 year yield remains below 1.65%.

    The overall trade is likely to take 1-2 years based on how long it has taken historically to go from peak to trough in long-term yields. The next action to take will be to triple down on the long position by buying more of the September ZB futures contract if it drops to 151’22/32. This roughly corresponds to a 30 year yield of 2.5% (20 year 2.4%). The initial purchase of one ZB contract occurred at a price of 153’22/32 (0.2% lower yield).

    The orthodox view of investing is that what matters is relative performance. Investing is a competition. You need to be more worried about how much the rich have and how you can catch up with them. The reason is that the rich could theoretically buy up all tangible things in the world. Then they’d own everything, and you’d own nothing. As the rich are now getting richer at a faster and faster pace, the only chance to narrow the wealth gap with them is to buy things that they don’t already own. In this limited sense, the cryptocurrency boom is highly rational. You’re not gonna make progress buying unlevered real estate, a diversified stock portfolio, or unlevered fixed income products. The market cap of these investment classes is already large, so if you double your money, so do the wealthy people who are the owners of these assets today. The only real forward progress you can expect to make is to look for overlooked assets or go for broke using leverage.

    Given the brainpower that is being deployed to outsmart everyone else and come out ahead in the game of investing, the most important competitive edge that a little guy can have (unless you have a special talent or special knowledge) is the ability to do nothing. Big money managers are forced to chase performance, or they will lose clients. The little guy can afford to be patient, sitting in cash until an opportunity presents itself.

    The key lesson from financial market history is that various assets become absurdly cheap on a regular basis. There is wisdom in investing in many different things, but as an individual investor, you can afford to wait for good entry points. In late 2020, Jeffrey Gundlach did many interviews in which he suggested a simple portfolio model: invest 25% in cash, 25% in long-dated bonds, 25% in stocks and 25% in gold. Steven Van Metre, who quickly gained popularity on Youtube kept telling his followers that the long bond yield would go down when the 30 year yield was below 1.5%. It’s as if they are trying to lead the lambs to the slaughter. The 30 year yield had just dropped from a cyclical high of 3.5% to 1.5% when Gundlach and Van Metre started recommending 30 year bonds. That’s selling low and buying high.

    The ideal portfolio is close to 0% invested in cash because we were able to buy things cheap and even a sharp selloff wouldn’t affect the profitability of our portfolio positions. Orthodox asset allocation depends entirely on what goes on sale. The market will tell us what to buy.

    The goal of The Angry Trade is to achieve a 100% gain on idle cash in a 2-3 year time period and use the proceeds to buy whatever is cheap at the moment. However, if yields don’t rise enough to warrant a leveraged long position in treasuries, I will make no attempt to force these gains. I’ll take a 5% or 10% gain, if that’s all the market has to offer.

  17. Ernie says:

    If someone works 40 hours a week doing any work that is useful and worth paying for at all, they should be able to pay for all the basic necessities, including but not limited to housing, healthcare, food, education, transportation, utilities, communications, clothing, and so on, at the cost prevailing in the area in which such person lives and works. If they cannot do that, then that demonstrates that an employer is not paying enough. No one should be working for less than what it costs to live where they live, and no employer should be paying less than that.

    • Depth Charge says:

      That is not the case in most areas in the US now. The reason it’s even possible to pay such low raises is because of government programs like EBT, etc. They subsidize Walmart wages.

    • Nathan Dumbrowski says:

      ^ This is not a reality we live in 2020s. It would take some financial wizardry to accomplish all that on a single income. I believe in a time back in the 80’s-90’s that was possible. Maybe I am just thinking about what is known as the great old days. Today jobs and cost of the items dictates you have to get creative and budget some times cut out items.

      • Old School says:

        I find people’s ability to manage spending varies widely. Right now my bare bones spending only on life’s needs is $750 including rent. I usually blow $250 or so on things I want but don’t need so that is $1000. But I am not working and am happy so I don’t spend money to try to buy happiness. I am 65 and have had some nice things, but once you have had them they don’t excite you like they once did.

  18. Rosebud says:

    You used to call me on my cell phone
    You used to… When you need my work
    Late night, when scheduling was tight
    You used to call me on my cell phone…

    Now I don’t know a thing about your jobbing bling –
    need a vaccine Sting?

    You used to call me on my cell phone

  19. LouisDeLaSmart says:

    Hmmm…three thoughts came to my mind reading this article;
    If one would be offered a 60k salary, with a spouse and two kids, would one move and take the risk?
    It would be interesting to see the housing market figures in these areas and compare offered income to rent ratio.
    If we look at chart #3, we can assume there is suffitient skilled labour.

    • Michael Gorback says:

      I’d take the $60,000 and decline the offer of a wife and kids.

      Syntax matters. ;-)

  20. David Hall says:

    A school district does not have enough bus drivers. They raised wages. If that does not work, they may raise wages again. Parents will get upset if the school bus does not arrive. My niece got a job at a daycare center where they let her bring her children free of charge.

    Record job openings and not enough workers is evidence of an economy that may overheat. The devaluation of the dollar has happened before.

  21. Depth Charge says:

    It’s become all to obvious to anybody with a pulse that “trickle-down economics” was a complete lie and a failure, and the hyperinflation in the wealth and assets of the billionaire crowd during this COVID pandemic did not go unnoticed by anybody. Now said billionaire crowd, who own everything that matters, are realizing something’s gotta give because otherwise their heads are gonna be on a pike.

  22. Trucker guy says:

    Amazing how in every financial chart posted, the April dip last year had a reverse bouncy ball effect. Somehow the bounce back went substantially further than the input imo. I don’t see where a few grand stimmies to the serfs and some loans to the big corps who didn’t need it to begin with has caused this incredible once in a lifetime run up.

    Trump and his cronies poured gasoline on a tire fire. After the steady recovery under Obama and co, we should have seen either slower growth or a bit of a leveling off. But now Biden and J-pow are going down the same path. I guess it rings true, it’s the economy stupid. Trump couldn’t have a bust because that was 90% of his platform. Biden and his people don’t want to be the bag holders for Trump’s garbage. Nothing can be done at this point that doesn’t postpone the inevitable which will only make the crisis worse.

    • Seen it all before, Bob says:

      It seems like investors, politicians and the FED only think quarterly GDP and quarterly profits.

      Is anyone looking far enough ahead to see the HUGE cliff ahead N number of quarters down the road as everyone demands more speed.

      I think everyone is demanding more speed when we are already going 90MPH. House and stock prices. Asset prices. More, More, More!

      My car blows up at 100MPH. I know that so I don’t ever reach that speed, despite what my over-exuberant passengers demand. Who is driving this car and do they know that?

  23. Random guy 62 says:

    I hate the government freebies as much as anyone, but I don’t want to hear one more big company manager whine about worker shortages. Pay a market wage or STFU.

    If a few stimmy bucks is what separates you from happy employees versus unfilled job listings, your business model sucks. You’re just exploiting desperation and it only took a few hundred bucks a month to expose it.

    • 2banana says:

      Spoken by a person who never started a business, ran a business or had to meet a payroll.

      • Lune says:

        I’ve started multiple businesses, run them successfully, and have to meet payroll every 2 weeks. I’ll still second what Random guy 62 says.

        What goes around comes around. Companies that cut their workers anytime their profits dip 10% or treat their workers like crap when they can get away with it (i.e. when unemployment is high), shouldn’t be surprised that people are telling them to take their job and shove it.

        I’m a small business with just a handful of employees. During covid, I didn’t fire a single worker, even when business went down (it was down ~1/4 to 1/3). The PPP covered less than half of the shortfall. Instead, we just figured out what we can do together to get through the tough times and share the pain (I didn’t take a salary for several months). As a result, now, when business is growing again, no one is leaving, or even asking for a raise.

        Another colleague in a similar situation, had a few of his staff temporarily go on unemployment benefits for a couple of months because it indeed paid almost as much as he could afford, but with a clear plan that they would be rehired in 3 months (and sooner if the UE benefits expired quicker). So yes, they gamed the system a little bit, but he never fired his employees either, and took a big salary cut himself. And now, if anything, his staff are even more loyal to him than they were before because he showed his true colors when it really mattered: sacrificing his own financial security to make sure his employees were protected.

        Meeting payroll isn’t just a number unless your company is so pathological that it doesn’t remember that there is a person who depends on that payroll every month, and probably 2-5 people behind him/her who depend on it as well. If you make payroll calculations purely on cold, rational, economic reasons, then don’t be surprised when your employees do the same.

    • Guest says:

      It’s an artificial boosting of unemployment benefits by the government with laxed rules and no pressure to find work unlike other times. It’s not some new market norm lasting far into the future. Take this situation for what it is: a temporary windfall during a pandemic. See what happens when evictions start kicking in and back rent is due. See when unemployment ends in September or sooner. Try tossing in an application amidst the millions looking for work and desperate too. What did you do the last year and a half?

      Take advantage of it, whatever, but don’t think anyone previously filling low-wage labor suddenly improved their prospects by asking for more. If too many jobs were pointless, now is when they are cut permanently.

  24. Beardawg says:


    That was a long read, and I vaguely recall your prior 3 step Angry Investor trade discussion.

    You posit in Step 4:

    “…The only real forward progress you can expect to make is to look for overlooked assets or go for broke using leverage…”

    This is something a Reg Joe can relate to. The 25/25/25/25% allocation recomnended by Jeffrey Gundlach does not work in a QE to infinity economy.

    Richies can sit in Treasuries cuz 1.5% of $10M is enough to pay basic living expenses without eating your seed corn.

    Da Restofus gotta try to catch up (as you correctly state) via leverage and irrational investing (cryptos mainly). There is no other option.

    Go for broke, and if you go broke, go for UBI or whatever scraps are offered to you.

  25. Micheal Engel says:

    1) Small businesses RIP.
    2) Those who survived because they are lucky and smart and those who pledged loyalty to their workers have no shortages or overextended wages. Their workers appreciate their sacrifices. They save the business, a place to work.
    3) Athletes with face recognition or wall street big shots, who invested in small business or a restaurant, deserve to get hit. Those deep pockets invested millions to complain.
    4) They complain about employees, 15% commission to Doordash, higher capex for low capacity, empty bars and rising commodities, own a business to get sympathy from their rich friends, because their total losses ==> is how they gain .
    5) Cold blooded MBAs who run businesses, fired and hire,
    put and call employees every cycle
    7) Grandpa Biden is a real savior.

  26. Abomb says:

    Not that all of these jobs can be automated, but you have to think this adds to the incentive to automate those that can.

    Like many other have posted and postulated here and elsewhere I wonder if this is the beginning of UBI and some concerted effort by the government to force wage inflation. I’m not sure it’s being coordinated that directly between all the parties, but man these are crazy times.

    I’m all for pouring the gasoline on the fire now. Bring on the inflation and higher rates. I need to buy a house.

  27. Jdog says:

    It is not rocket science. If you reward people to do the wrong thing, that is exactly what they will do.
    This Administration has been a Class A train wreck. From the fake unemployment problem, to the rampant inflation, to the literal invasion of our borders, it is clear that this ass clown does not have a clue. He even comes out in public and denies that there is a connection between paying people more to be on unemployment than to work, and the labor shortage. Really? I mean either these people are doing this on purpose, or they are stupid on a whole new scale. A few more years of this and we will be able to open our borders and not have to worry about anyone coming because it will be a full blown disaster.

    • Old School says:

      Very true. The country is in real trouble. You don’t run interest rates below inflation for 12 years, print up $7 trillion and blow government debt out to $28 trillion because things are good. There is a big illusion of prosperity in this country, but I suspect living standard for average American is not going to get better the next 20 years.

  28. vinyl1 says:

    A lot of baby boomers retired suddenly because of Covid. The market for skilled labor was already tight, but employers could have managed the transition over 5 or 6 years – but not over 18 months.

    The unemployed people are probably a mismatch for a many of the open jobs. Unemployed waiters and receptionists in California are of little use to factories in the Midwest looking for welders and truck drivers.

  29. MCH says:

    This has got to be one of the most entertaining conundrums ever. If the stimulus gets cut, then demand drops, and ergo the need for labor drops. Suddenly, no jobs.

    But the problem there is now suddenly people want to work. Cause no free government money. But there is no longer stimulus driven demand for that labor. So, no jobs for them.

    The only real choice is to keep the stimulus train rolling, but that creates its own set of problems.

    Awwww… Mannnn

    Or May be suffering succotash.


    • Nathan Dumbrowski says:

      Agree. With all the stimulus we got to avoid the penalty phase or the market cycle known as a recession or depression. Best pandemic ever. So now we have the market turned on and ready to go FULL STEAM but no workers to fill the spots. Such a conundrum. Can’t turn off the valve to free money. Maybe taper is the answer. And you are right that what do we do with all these people that are required to pay the rent/mortgage

      Said it before. The government really did go an WTF it up. Because we all know uncle J has more money in his bank account (*unlimited he said). An addict will bleed his family dry he knows they have 5 cents left that he can “borrow”

      • Abomb says:

        I think this just goes to show as we all know there’s no such thing as a free lunch. Can’t have the good times without the bad and if you try you’ll ultimately make the bad times worse.

        Everything has gotten too political and the Fed can’t make decisions based on what’s in the best long term interest of the nation.

        • Depth Charge says:

          The FED does not exist to serve the nation’s best interests, they exist to serve themselves, the bankers. That’s why the FED needs to be abolished. They are a scourge upon society, and they are destroying the country.

        • Dan Romig says:

          So true Depth Charge.

    • GotCollateral says:


      This is what we call a “Corner”.

      FRBNY, K-street, and TBTF felonious banks have some hard descisions to make…

      Cause I suspect the distraction shitck where they try to convince people to fly/boat overseas and “kill those people over there” (Blame all our woes on Russia, China, “Global Warming”, everyone/everything else but ourselves) wont quite work this time… but who knows, a sucker is born minute but that math is changing with structural aging populations with declining birthrates :P

      • MCH says:

        Don’t worry, we got plenty of opposition teed up.

        China (can’t go hot, cause economy, stupid)
        Russia (can’t go hot, because nukes, stupid)
        Iran (can’t go hot, because oil, stupid)
        North Korea (can’t go hot, because nukes and economy, stupid)

        Hey remember, Ayman Al Zawahiri, AKA porky pig? He is still alive, need a come back, or may be another ISIS insurgency, the Taliban is always a good target.

        So, whew, relax now, plenty of troubles for the people to focus their fury on

    • Petunia says:

      As long as they keep sending me money, I am happy to keep spending it. I even have a list.

  30. Auldyin says:

    If govt deficits are deferred taxes.
    That must mean that people on stimmies are getting tax that they will have to pay someday, handed to them now, so that they can spend it, before they then have to pay it in future. So the stimmy is really just a loan from Joe.
    Whereas people in work, pay tax now to reduce what the deficit would have been, if they were not in work.
    I can see why it’s difficult for people to work out whether or not it’s better to work.
    Here’s an idea, why not just give up paying tax altogether and then it becomes a simple case of everybody adding equally to the deficit but you also get to keep any money you go out and earn by work. Simple choice then, no?
    Just trying to help!

    • MCH says:

      Wait wait, don’t tell me.

      Did you just call Uncle Joe a ??.

      That’s mean.

    • Old School says:

      History teaches us that printing wealth can’t be done so you need an anchor like gold or a computer program that prevents governments from taking the easy way out and using conjured out of thin air money.

      It’s like having a rich dad that you know will always bail you out if you don’t really want to be responsible.

      • Harrold says:

        I think recent history since 1972 has shown you can print wealth.

        And then there’s dogecoin.

        • Heinz says:

          You can’t print real wealth (that is, an organic increase in standard of living with more goods and services), but you can devilishly print inflation of assets and prices of existing goods and services.

  31. David Shea says:

    I am vacationing in Long Boat Key FL and to the shock of all the lodgers, the resort restaurant is closed for dinner Monday thru Thursday because they cannot get enough staff to cover an evening shift. Per the locals at the Lazy Lobster this scenario is being repeated all over the Sarasota area. Beware all you vacationers that are about to unleash your inner animal spirits this summer because the food and lodging industry is understaffed, not telling anyone and charging premium prices for what will be below average service. Only once the irresistible force of summer vacation expectations meets the immoveable reality of an understaffed food/lodging industry will the media start to acknowledge the labor problem.

    • josap says:

      If you are paying premium prices the hotel can afford premium wages, to provide you with the services you expect.

    • Petunia says:

      The labor problem in the Keys has existed for many years and is based on the cost of housing. I knew of many jobs there that went unfilled because housing is exorbitant.

    • Old School says:

      Saw my neighbor home from work early. Works for the biggest boat dealers in the state. He got sent home early because they can’t get parts in. Normally they are booming this time of year.

    • VintageVNvet says:

      Just walk down Broadway to the Mar Vista DS.
      I have to imagine they and some of the other long time restaurants on LBK will be doing well these days, especially those locally owned who have taken care of their workers.

      • Old school says:

        Restaurants are going to be an interesting case. No one has to eat out. There are several alternatives. It’s a tough business and there is a pretty steep drop off in demand as prices go higher.

    • Robert Hughes says:

      Thank you for comment. A good reminder for travel planning this summer, fall. Perhaps Wolf or other contributor could do article on this and other effects on travel.

  32. Sir Eduard R. Dingleberry III says:

    Are they trying to make employers raise wages by keeping the dole artificially high? Don’t think that will work.

    • Seen it all before, Bob says:

      I think employers will have to raise wages lure employees until the generous unemployment runs out and stops being extended.

      Otherwise, it doesn’t make sense for an employee to take a job if it means a decrease in income.

      Some employers may raise wages to lure employees in order to stay in business.

      Other employers have managed to keep loyal employees on their payroll during Covid as noted above. I think they will do the best during this recovery.

  33. MarketMissing says:

    I think a lot of older folks aren’t aware of how much the conditions of many entry level jobs have degraded. I worked a lot of them as a student in the 90’s to early 2000’s. Back then places would work around class schedules or other jobs. The clopen thing was just hitting. I had some schedules where I closed at 2am and had to be back at 6am but not as a regular thing. The work pace was fast but not burn out in 3-6 months fast.
    After getting a degree and a more normal middle class life I had a car accident and a head injury that rendered my professional skills useless overnight so had to take entry level jobs again around 2018. The difference is HUGE. The pace is insane, a lot of places won’t do any sort of set hours or schedules but want you on call 24/7 and want to be able to send you home early from scheduled shifts. Some weeks you might get 29 hours, some weeks you might get 5. You won’t know ahead of time and no one can live like that. It’s easy to get fired for not showing up on-call and a firing can mean no one else will hire you. Each month there is no way to know if you can cobble together enough hours to pay basic bills or not. Can you imagine a parent that schedules and pays for childcare, goes to work and gets sent home after an hour or two because business is slow? Can you imagine having that repeat on the regular? Even if single and childless this isn’t functional.
    I managed to climb out again due healing up a bit and a very versatile and unusual skill set as well the sheer luck of being in the right place at the right time. Entry wages are low. I looked up a production line worker for GM and it starts at $16.76 per hour. That wage isn’t worth much to start but is pointless if the job you are doing might get you hurt. Hospital bills are paid out of after tax wages or else put on high interest credit cards in many cases and can cost you far more than you are paid. It is tough out there. I don’t blame anyone for staying home and collecting reliable gov’t checks over being ground down under these impossible job conditions.

    • Lune says:

      Yeah, I think this right here is underappreciated by the older crowd.

      I remember reading several years ago about WalMart moving to “dynamic” scheduling: you don’t have a set schedule but instead need to be available 24/7 for a schedule you might not know until the night before or morning of. For people juggling 2 or 3 jobs, how are you supposed to do that? And forget about child care or any other obligations. Basically, they expect you to be waiting at the phone day and night and be available to go in as soon as they call you.

      It generated a lot of outrage when it was first introduced (I think WalMart even had to back away from some of the most egregious aspects), but now, it seems to be the norm. All those crusty Boomers saying “Well, back in my day, I used to work 2 jobs!” yeah, 2 jobs with set hours so you could schedule them easily (like a day job and an evening part-time job). I don’t deny working 2 jobs is hard work no matter how it’s scheduled, but these moves to dynamic scheduling and just-in-time labor (As if people are just like parts for a car) are pure and simple abusive. The fact that people had no choice but to take them just shows how desperate times were before (during the so-called good times), not how lazy they supposedly are now.

      • Harrold says:

        It is indeed impossible to work 2 part time jobs when one of them has “dynamic scheduling”.

    • Petunia says:

      Thanks for sharing your story. Most of the well off crowd here have no idea how bad things are on the bottom of the income scale. These stories also help steer the consumer side away from these businesses. I don’t shop at Walmart or eat at McDonalds because of how they treat their workers.

    • Sierra7 says:

      Market Missing:
      Best comment so far.

    • Auldyin says:

      I’m mega-old but I like to think I absolutely get what you are talking about and have total sympathy with this plight.
      In UK they call it ‘Zero-hours contracts’ and historical ‘labour unions’ deplore it, as a loss of everything they fought for over hundreds of years . Neo-libs say it gives people freedom to control their ‘personal’ work preferences.
      Young folks are a puzzle to me, but I can’t see how bosses can sleep at night if they are knowingly screwing their fellow humans and no amount of money can make that a rewarding life.
      I can cop out and leave it for yourselves to sort.

  34. YacosModernLife says:

    From the first chart, clear 2 year stall at 6000 mark 2016-17. Which seems to rollover then unnatural steep jump that follows in mid/end of 2017. Similar but less pronounced correction in 2014 at 4000 mark. Almost like someone is mashing control-P right before the drops gains momentum.

    Its stagnant! Paddles! Clear! WTF land ad infintum!

  35. Brent says:

    “While other girls attend their favorite
    cocktail bar
    Sipping Martinis, munching caviar
    There’s a girl who’s really putting
    them to shame
    Rosie is her name

    All the day long whether rain or shine
    She’s a part of the assembly line
    She’s making history,
    working for Victory
    Rosie the Riveter”

    The following article is 10 years old,so add $1 to the mighty $15 quoted there and you’ll get the modern picture.

    BMW gets skilled workers for less:

    Mr.Richter quoted above $30 per hour,it is UAW rates.GM,Ford,Chrysler have two tier systems,UAW guy (of the remaining few) gets $30,non-UAW guy hired thru temp agency as an independent contractor,doing the same job, gets $16.

    I am sure GM closed Lordstown plant in Warren,OH and re-opened it recently as Lordstown Motor Company with the sole purpose of getting rid of those $30 per hour UAW pests ☺

    Another manufacturing plants pay even less.At the Glock factory in Smyrna,GA assembly workers pay is $12 per hour,turnover is huge…

    British autoworkers dont luxuriate either.I looked up assembly workers wages at the most efficient auto plant in the world – Nissan Sunderland plant,5000 workers making 500,000 cars every year.£14 per hour.

    Japanese manufacturing wages slowly decline by about 0.5% every year since 1990 when Nikkei reached all time high of 38,000.

    Yet,there is more dignity to working at the auto plant than doing split shifts at some pathetic eatery.

    • Auldyin says:

      You write a lot of clever stuff for a 3rd gen K.
      First, thanks for noting that Nis(UK) is THE most efficient car plant in the World. (you can’t beat the Brits when we try)
      Second, I drive a USA built 24 year old Beamer Z3 which I love, and for which they got massive ‘incentives’ to bring employment to one of your troubled areas last century. So I did well out of that!
      What can you say, other than that relentless global competition drives down every aspect of the price of goods, and ‘labour’ is a big component. I bet there was nothing about wage rates in the contract when BMW signed up to build a new plant in USA. Politicians will do anything for job numbers but very little for higher wages.
      Electric will be much worse because Asia has massive economy of scale advantages.
      You’re a clever guy , tell us how to solve it.

  36. 91B20 1stCav (AUS) says:

    Probably impossible to correlate, but is there any reliable view of geographic distribution of the unemployed and their skillsets vs. the distribution of jobs ‘going begging’? Given the current cost increase of housing nationwide that we’ve seen here, it seems a bit presumptuous to think the U.S. labor force would migrate to that work in the same numbers or with the same enthusiasm as in previous years…

    may we all find a better day.

  37. Bobber says:

    People not wanting to work is a product of the Fed’s moral hazard policy. If you a laborer to do nothing, he will do nothing. If you pay 1000x that much to a CEO for doing nothing, he will do nothing as well.

    • Swamp Creature says:

      The underground economy is booming. A lot of people are sucking all these double unemployment benefits (State & Federal) while working for “Southern Income”. They’ve invented a new term called “Triple Dipping”. Some are even bragging about it and laughing all the way to the bank.

      • Auldyin says:

        It’s the way of the World!
        Everywhere and always, when legal means become absurd, people turn to ‘illegal’ means. When ‘black market’ becomes the ‘norm’, the state collapses and has to start again on a ‘rational’ basis.
        When not if.

  38. CRV says:

    This gives a whole new meaning to: “government will create jobs”.

  39. Work Horse says:

    Jobs go unfilled, but people go blaming H1B for job losses. What’s your excuse now?

    • Wolf Richter says:

      The absolutely LAST thing the labor market needs now — as screwed up as it is — is more foreign workers to be brought in. Consumer price inflation is blowing out. What needs to happen is that wages need to rise. And bringing in more H1-B visa holders is just part of the wage repression system in the US.

    • Seen it all before, Bob says:

      If you flood a market with workers, wages will remain suppressed. Companies can either scream they can’t hire anyone for the wages they are paying and need H1Bs or a flood of illegal immigrants and solve the supply, or take the demand route and raise wages to attract more workers.

      Based on a couple of observations, wages and inflation form a positive feedback loop.

      When I was a young engineer in the early 80’s, inflation was rampant (almost 15%). Every employee would receive a COLA (Cost of Living) wage increase to offset the inflation. Since it was a labor intensive product, it caused inflation to increase by at least that amount since the COLA was rolled into the product cost. It was a positive feedback loop raising wages, raised inflation, which then raised wages.
      The losers were the fixed income people and the people who did not receive COLA.

      One fix was to taper COLA to get inflation under control.

      The book “When Money Dies” talks about the hyperinflation during the Weimar Republic. The unions had enough clout to obtain COLA wage increases. Everyone else starved.

      Minimum wage hasn’t tracked inflation so the floor today is too low.
      Companies will pay minimum wage if they can based on worker supply. I think raising the minimum wage floor and then letting all other wages float and adjust above it, will solve the inflation problem. The higher wages will not go up much but there won’t be as big a gap between the lower wages and the higher wages. Inflation will increase due to lower wages rising but will eventually equalize.

      Flooding the market with masses of cheap workers is not the solution unless the US wants to be a third world country with increasing wealth disparity. People will have to live down-by-the-river or pack multiple families into a small rental apartment with the current low minimum wage. And they do today.

  40. YacosModernLife says:

    ‘Bizarre phenomenon’? This is cause and affect! 13 years of MOAR can kicking for shady finance. 10 years into the mess an affliction point to correct but instead we get a reality star telling J-pow ‘don’t you dare stop the music’ Now we are exponentially deeper in the hole. While governments ballooned the private sector swallowed by corporate, as policy.

    All is done to prop the beast. Wall streets directives for infinite profit products regardless of the cost to us or the environment (it’s made somewhere else), to clear out manufacturing, and to marginalize labor to lowest possible depths. Technology valued above life, privacy, and social cohesion. Social media for surveillance and censorship. Markets loading with massive debt machines, dreamland evaluations, monopolies and zero anti trust enforcement. Buyouts all the while. Markets sucked dry of value and then assets duplicated Ad infinitum: paper gold, crypto, stock splits, re-branding , re-inflating toxic zombies…All while your worth less than 40 years ago. Your time devalued to nothing, while the value of paper with a number on it or an empty building for demo is held sky high!

    Middle class gutting. Everyone was told to pursue higher ed and did (at cost) and wages went nowhere! Opportunities minimized by all spoken above. Now we hear no has any skills, there’s no labor, there‘s no hard workers. GTFO!

    Just like don’t go outside you’ll kill your grandparents while they make it law to shuffle the virus into nursing homes across the country. And then they refuse to give you those numbers!

  41. Degobah Smith says:

    Wolf is right. Manufacturers have been struggling to find qualified employees since at least the early 1980’s when I was in that business. Big problem is the dearth of “Shop Classes” at the High School level and the misguided belief that every child is college material. This lack of manufacturing technicians caused/is causing yet another distortion in our economy.

    Manufacturing is a relatively high-paying job with lots of opportunities for advancement if you have the knack. But you have to get your hands dirty sometimes. Eeek.

    • YacosModernLife says:

      Go manufacture pharmaceuticals for 15$ bucks an hour so you can watch your own society turn into psycho, suicidal, sedentary soup. Go build planes that fall out of the sky, so they fill parking lots. Cars and trucks now with same fate, hmmm? Go live in Fresno for 15$ build 60k compact cars (300% inflation for society overnight) and get hype pressured into free overtime so your boss can pump dogecoin. Or last and possible least go build manikins in Detroit and live in perpetual Halloween, because management screwed society decade after decade. Is that what you mean by get your hands dirty?

      Manufacturing lines have been halted on and off for years now. Supply destruction over the next media hype or just another strike on the regular and now lab grown super flu. Remember the trade war, constrain, release, repeat for how many months, years. FYI, We went from there to covid. What about cash for clunkers, endless resources squandered. Now the domestic supply is back to mostly full size truck at 50k, prob most qualify, LMFAO. Send em out for 10k gov rebate, resell em for double 10 years later. (200% inflation) you got to love these schemes we pay for over and over.

      There is no shortage of shop classes in America, please! Bigger forces have been in play causing anti-work mentality. Open your eyes cattle your on the UBI truck to gov meat packing.

  42. Winston says:

    So much for the UBI crap due to this easily predictable result of paying people to NOT work? EVERYONE in the “Welfare Trap” where your benefits decrease as income from employment increases?

    • Lune says:

      No, this is not UBI. With a UBI, you get your basic income *regardless* of whether you work or not. Everyone gets it, even the CEO and Elon Musk. Hence why it’s “universal”. What we have right now are unemployment benefits, which disappear when you get a job. That’s why people don’t work with generous UE benefits.

      With a UBI, people would get their monthly payments which would be enough for basic food and shelter, and are free to get a job to increase their salary. So if you’re collecting $300 weekly checks, you still have an incentive to get a job and make more money, so it would be on top of your UBI.

      The goal of a UBI is actually quite a conservative one: get rid of the entire government infrastructure around public housing, food stamps, etc. by simply giving people enough to buy those things themselves in the private market. And then, they’re free to get whatever job they want if they want to live better than the basic necessities provided by the UBI.

      • Winston says:

        And for those, as in what we are currently experiencing, who find THE DOLE (UBI) adequate and prefer to sit at home rather than work? And does UBI go up with the number of babies produced while sitting at home?

        • Lune says:

          Then they get to sit at home. What, you don’t like people being able to choose not to work? Maybe we should whip those 75 year olds off SS and into factories lifting 100lb concrete bags too.

          Look, if $1200/month ($15k/yr) is enough to keep you happy, then you don’t have to work *right now*. Forget unemployment, you can go on welfare.

          But for most people, this isn’t enough. It barely pays for (crappy) food, (minimal) shelter (in a bad neighborhood), and, if you’re lucky, a beat up old car. Even most people on welfare want more money than they get with welfare. But the problem is welfare creates a massive hill to clear. You can’t start by going part-time at a low-end job making maybe a few hundred bucks a week, with steady progress to a full-time job, all while acquiring on-the-job skills that get you a promotion or two until you’re making $20k. Nope. The minute you start that, your welfare benefits (including health care, housing, child care, and a whole host of other stuff besides the direct cash payments) start dropping rapidly. Which means either you start right away at $20k, or sit at home on $15k. There is no gradual entry into the labor force. This is the moral hazard of welfare and UE schemes.

          UBI alleviates this. If you’re the type that’s happy with the lifestyle that $12-15k affords you, then you’re already not working. But on top of that, we have an entire govt administration with FHA, WIC, TANF, etc. that needs to be funded to keep you from starving. With a UBI, you simply get the cash, and it’s up to you to find a place to live and food to eat. That’s cheaper for the govt, and better for the person who doesn’t have to live by federal public housing dictates or whatever.

          And if you want more than that (which most people do), then even getting part-time job at McDonalds will give you tangible benefits since your UBI doesn’t go away.

          As for whether it goes up with babies, that’s entirely up to how the UBI is structured. Nothing that says UBI *has* to cover that, or that it shouldn’t.

        • Winston says:

          What you are suggesting fundamentally is WELFARE for EVERYONE. PERIOD. And we know how well THAT will work out.

          “As for whether it goes up with babies, that’s entirely up to how the UBI is structured. Nothing that says UBI *has* to cover that, or that it shouldn’t.”

          Right, and you know it eventually WILL because of “those poor moms living on just the UBI for a single person” AND because it will be one of the umpteenth “buying votes with other people’s money” schemes.

          Your comments are long, but on a fundament basis are fatally flawed, just like socialism itself.

      • Auldyin says:

        You’ve absolutely got it.
        Modern industry is so fabulously productive that it is actually impossible to give everybody a job.
        Unless we can work this out sensibly, there will be riots, and fights and strife for years to come.
        Why is it that some people just can’t see that people being free to use their own time on Earth is actually a ‘good’thing and it’s what we should ‘all’ be striving for?

  43. Mr. House says:

    Everyone here should review 2020 policies and ask themselves, were we fighting a plague or were we fighting deflation?

  44. billytrip says:

    It’s amazing to me how “businessmen” understand the law of supply and demand just fine when it pertains to selling their product or buying a commodity or supplies, but fail to get it when it comes to employees.

    Can’t find people? You are not offering a market deal.

  45. BigAl says:

    Is nobody else a little skeptical about that “Job Openings, Total” graph?

    I’m not doubting Wolf here….I’m sure those are the “official” figures (or produced from the same) but…

    Those figures suggest that the # of Job Opening during the worst part of the Pandemic-induced job losses were actually *HIGHER* than in, say, 2014.

    That seems odd.

    • Wolf Richter says:


      The thing is lots of companies laid off lots of people last spring — the most ever. And now they have to hire them back, and so they have job openings that they advertise, but the laid-off workers are busy doing other things, have moved on, have retired, or are getting enough money from their bitcoin investments or unemployment benefits that they don’t want to work those jobs anymore, and so the job openings aren’t getting filled. I’ve been getting a TON of boots-on-the-ground confirmation of this situation.

  46. It’s truly bizarre how the guy with a PhD in Western Philosophy and is out of job won’t walk over and get one as a machinist. What does he think this is? A republic?

    • 91B20 1stCav (AUS) says:

      Mrs. D.- with all due respect, what is YOUR OWN experience as a machinist??? Would i have confidence in the fit and finish of any of your work product after you ‘walk across the street’ (you do have CAD-CAM skills, yes?, subsequent to having learned concept and practice of verniers and measuring devices/drill press/lathe/mill/bandsaw/grinder/etc…..)?

      may we all find a better day.

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