The Weird Phenomena of “Labor Shortages” While 7.1 Million Fewer People Are Working

The #1 weird phenomenon: The labor force.

By Wolf Richter for WOLF STREET.

Amid reports of hiring bonuses even for jobs at the lower end of the wage scale, and amid reports of companies raising wages to attract workers, and amid widespread complaints about “labor shortages” and difficulties in hiring people, and amid reports of supply chain issues because essential jobs cannot be filled, and amid a historic spike in job openings, there’s the Department of Labor’s tidbit that 14.7 million people are still claiming state or federal unemployment benefits, including 11 million people on federal PUA or PEUC benefits – however marred by an epidemic of fraudulent claims and bad accounting this figure may be.

These benefits were topped off by the extra $300 a week in federal unemployment benefits, which are now being phased out in 26 states, but they were still mostly in effect when the data for today’s jobs report were collected in mid-June.

That’s the weird convoluted backdrop for today’s jobs report from the Bureau of Labor Statistics.

The #1 weird phenomenon as result of all this: The labor force

The labor force consists of people who were working during the survey period or who were actively looking for a job in the prior four weeks. Someone who eventually might want to work but wasn’t actively looking for a job during those four weeks isn’t considered to be in the labor force.

So in June, the labor force grew by 151,000 people, after having fallen in May, and was still down by 3.5 million people from December 2019, with little improvement since last August.

In June, 6.4 million people wanted a job in general terms but didn’t actively look for a job over the past four weeks, or who were unavailable to take a job, according to the BLS. They were therefore not included in the labor force. This was up by 1.4 million from February 2020. They’re on the sidelines of the labor market.

There are numerous reasons why people aren’t going back to work, and are not looking for work, and are therefore not in the labor force. This includes having to take care of kids in areas where schools and daycare centers are not fully open; and it includes what is now called the “retirement boom,” where people have decided it wasn’t worth it anymore, and went for quality of life.

#2 weird phenomenon: Upward pressure on wages during an unemployment crisis.

It’s is rare that there’s upward pressures on wages during an unemployment crisis. But that’s what we’ve got.

The wage pressures employers have been jabbering about, and the wage increases they have been implementing, are starting to show up in the numbers despite the fact that a lot of hiring took place at the low end of the wage scale in the hospitality industry, which pulls down the overall average.

The average hourly earnings for employees on private nonfarm payrolls rose by 10 cents per hour in June, from May, to $30.40, after having risen 13 cents in May and 20 cents in April, for a 43 cent per hour increase in three months, or 5.7% annualized.

In the chart below, note the spike in May 2020. There was no spike in pay. It was a result of many lower-paid workers getting laid off, especially in the hospitality business, while many higher-paid workers kept their jobs and switched to working from home. This caused the average to spike.

Now the opposite is taking place, with lower-paid employees being pulled back into jobs in large numbers, and this should push down average hourly wages. The fact that the average is rising despite the influx of lower-paid workers shows just how much pressure there is on wages.

Employment in the leisure and hospitality industry – food services and drinking places, hotels, casinos, etc. – jumped by 343,000 jobs in June, after having jumped by 306,000 jobs in May, as restaurants, hotels, and casinos are desperately trying to hire workers. Total employment in the sector was sill down by about 2.18 million people, compared to the peak in February 2020, but it’s still a huge improvement of where it was a year ago.

Employment in manufacturing rose by only 15,000 jobs following the increase of 39,000 jobs in May, amid widespread complaints by manufactures that they’re having trouble filling orders because they’re having trouble “finding suitable candidates for current vacancies,” according to the IHS Markit Manufacturing PMI, and that growth was weighed down not only by tangled-up supply chains but also by “labor shortages.”

In June, the number of workers in manufacturing was still down 481,000 or down 3.9% from February 2020:

But manufacturing production in May fully recovered compared to February 2020. During every downturn, manufacturers cut costs by investing in automation and by offshoring production. While employment in the sector peaked in the 1970s and has since fallen by about one third, production, boosted by automation, continued to rise until the end of 2007. During the Great Recession, manufacturers massively offshored production. Adjusted for inflation, production never recovered to the 2007 peak. Then in March 2020, it fell off a cliff.

But by May 2021, manufacturing production was back to February 2020 levels – despite 3.9% fewer jobs in the sector:

Gig workers giving up gigs to become employees?

Employers – companies, governments, and nonprofits – reported that they added 850,000 workers to their payrolls in June, according to the BLS today. This is a big gain in employment. The total number of jobs at these establishments rose to 145.8 million, but that was still down by 6.76 million from February 2020 (green line in the chart below).

Households, however, reported that the total number of people working, including gig work, fell by 18,000 in June to 151.6 million, still down by 7.1 million from February 2020 (red line). And this includes self-employed workers.

Even as employment has increased sharply, according to surveys of establishments, households have been reporting slower improvements since the end of 2020. And the gap between the two has fallen by 2 million workers in six months. This suggests that over the past six months, employers have hired many people that were self-employed.

#3 weird phenomenon: “labor shortages” with so many people not working.

There are plenty of potential workers in the US to fill all those jobs, and there is no shortage of people. There may be a shortage of certain skill sets – and that is always the case, and that’s where training, education, and on-the-job learning come in.

But more significantly, there appears to be a shortage of people willing to work under current wage levels, benefits, and working conditions. This is like a quiet strike.

And this time, over 14.7 million people are still claiming unemployment compensation, including the extra $300 a week from the federal government. In many cases, recipients make more by not working. OK, this 14.7-million figure is marred by an epidemic of fraudulent claims and dubious data. But even with those removed, there would still be a very large number of people receiving unemployment benefits. And in mid-June, employers still had to compete with those unemployment benefits, including that extra $300 a week.

But employers understand that the $300 a week is already being phased out in about half the states and will expire in the rest of the states on September 6, that this will make competition with unemployment benefits easier, and that hiring at the lower levels of the pay scales might become easier as well.

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  348 comments for “The Weird Phenomena of “Labor Shortages” While 7.1 Million Fewer People Are Working

  1. LM says:

    I understand the data but just cannot sync it with price increases, a soaring stock market, an off-the-rails housing market, and the supposed massive turnover of employed people. Nothing makes sense. Where is the money coming from? And where is the actual value in any of it?

    • HQ says:

      I ask the same questions almost every time I read an article here. Homes routinely being bid over asking, new cars selling at jaw-dropping prices, credit card debt being paid down…where is all of this money coming from? It can’t be all stimulus checks and unemployment benefits. I can only hazard a guess that people working from home the past year saved a lot on expenses and socked it away then for a big purchase now.

      Me, I’m having a “low buy” year. There’s pricking in my thumbs…

      • Heinz says:

        “where is all of this money coming from?”

        That is a head-scratcher question that vexes a lot of people who dare to ask it.

        I don’t there is one single cause or answer that will satisfy that question, however, I do think a lot of it stems form the pandemic-induced stimulus (all forms, including stimmie checks to individuals) which now totals around $6 trillion and counting, or roughly 27.1% of the nation’s GDP,

        Stimulus together with debt forbearance schemes (notably rent, mortgage, and student debt payments) are a rocket fuel monetary mixture and sent many people into consumption overdrive. And of course the shortages, panic buying, hoarding, and bidding wars.

        I watched a local TV news story recently about how students were being so oppressed by their student debt obligations. One student bragged about how he had finally managed to amass personal savings since pandemic because he didn’t have to make the usual student debt payments.

        • HQ says:

          I had forgotten about the forbearance schemes, Heinz.

          If any significant portion of the buying frenzy is from people who were spending money they should have been saving to pay their mortgage, rent or student loans, your local TV news station will be able to spotlight more sob stories once the forbearance ends.

        • Outwest says:

          Heinz – best summary I’ve read so for. You nailed it.

        • Max Power says:

          Add to your list a large number of folks who are not having to pay for childcare (quite an expensive item) due to them watching their kids themselves.

        • Michael Gorback says:

          Most people just look at the immediate situation with no thought as to how they’ll deal with the end of forebearance. No foresight at all.

        • historicus says:

          “where is all of this money coming from?”

          Really? This is obvious.

          The Fed buys $120 billion A MONTH! of federal paper.

          That’s 120,000 MILLION!

          That’s 120,000,000 thousand dollars a month. Theoretically, that would pay 120 Million people a thousand dollars a month.

        • Strange says:

          I tell you its strange for sure. And whats stranger is im 59 and lived in the same town my whole life. And i dont know a single person collecting this unemployment or getting this forbearance nor does anybody i know, know anybody getting this free ride. So just who are all these people getting paid more money not to work than those who do work? And where are these people? “This is the strangest life i have ever lived”
          Jim Morrison
          It sure is strange. It’s like a episode of the Twilight Zone

      • Nathan Dumbrowski says:

        Why not assume the credit card debt is being vaporized by these two possible sources a) rolled high debt credit card into refinanced mortgage b) absorbed by one of the large debt consolidation that isn’t considered a CC per se but allows reduced rate lump sum to pay off credit card debt

        What is in your mailbox???

        • Joe Saba says:

          cash back for being deadbeat == interest paid since 1995
          $000,000.00
          you’re just to easy to comment to

      • gametv says:

        This is a combination of people who spend every dollar in their bank account with no care about saving for the future and soaring asset prices that make people feel rich.

        The people who dont save will blow through their stimulus checks or PPP money or unemployment just months after it stops. The asset bubbles are built on ultra-low interest rates, which will rise once the Treasury starts to sell bonds to finance the deficit. So there should be at least some adjustment down in the asset bubbles too.

        My guess is that this all ends very badly.

      • Nicko2 says:

        Those in the top 10%, or the global wealthy investing in safe-haven markets….have the cash to burn. This is globalization in action; there is no shortage of wealth in the world, it will gravitate to safe-havens.

        • Heinz says:

          “Those in the top 10%, or the global wealthy investing in safe-haven markets….have the cash to burn.”

          So why would the ultra rich be spending more a lot more money into economy right now?

          Admittedly their Fed-sponsored Wealth Effect largesse has roared upwards during these unusual times. That would be bubble assets like real estate, stonks, bonds, and crypto.

          However here in the ‘in your face’ economy a filthy rich individual can only eat so much expensive food per day, can only sleep in one house at a time, consume only so many recreational drugs at a time, only find berths for a finite number of yachts, and have only so much space for fine art collections.

          Many of the rich got that way by putting a ceiling on their material desires. That’s the only lesson I would care to learn from people.

        • Eastwind says:

          Reply to Heinz (reply depth limited):

          “So why would the ultra rich be spending more a lot more money into economy right now? ”

          Fear of inflation. Anything you’re going to need or want, there’s no use waiting. The interest you can make on the money you don’t spend is miniscule and way less than the price increases you’ll see by waiting. If you are very lucky in the stock market you can invest at a rate of return higher than current inflation, but on average most cannot. Inflation, properly measured, is actually 6% annual or more, and you have to pay tax on gains, so you need more than that to stay even.

          The stock market has made the top 10% wealthier, and it feels smart to cash out and buy those big ticket items before the market crashes.

          If hyperinflation (not just 6-10% but much higher) is in store, you want to spend now on durable good and assets.

          For the top 10% the stimulus payments are noise. If you simply held your s&p 500 index fund through the covid dip you are up 28% from the pre-covid high in a year and a half. If you had cash before covid and bought in at the bottom you’re up 89% in under 16 months.

          And Biden is talking increased capital gains taxes – so there’s plenty of incentive to cash gains now and buy that yacht, high-end car, or flip your house for a bigger one in a less-dense area.

        • NBay says:

          Between PE and those “Ultra High Net Wealth Funds”, I don’t think anyone has any idea in hell what ultra-rich are doing…..besides buying whatever laws/favors/governments that exist…..that seem worth buying to them.

        • NBay says:

          FWIW, last Credit Suisse High Net Wealth report I could get puts about half of them ($50B and on up) in the US, (about 75-80K of them as of a couple years ago), and the other half scattered in the rest of the world, mostly “developed” countries.

          But that’s only “known assets” that Credit Suisse knew about, or chose to publish.

          Which does, at a minimum, say the US has the safest places to park a rich ass.

      • Auldyin says:

        HQ
        The money comes from deficit spending by the Govt. Look at W’s charts for US Govt debt. Vertical.
        When the Govt spends more than it taxes it means individuals somewhere in the economy are getting more money either by working directly for the Govt or by the Govt buying products of their employer (eg F35’s) or by direct Govt payments to individuals, etc, etc.
        Technically, it need not be problem, if interest rates were allowed to respond to demand for loans but the Govt ‘cheats’ by printing new money via QE and keeps interest rates artificially low, which in turn makes mortgages, etc cheaper and inflates demand for assets of any kind. It’s a racket you would get put in jail for, but US govt is ‘Master of the Universe’ and no-one can control what they do.

    • Joe Saba says:

      guess you tuned out CONSEQUENCES OF ELECTION
      few trillion BORROWED here(ie made out of PITA) and FEW OVER THERE
      and now lets put 3D chess players(chinese) into equation
      limiting exports – ie due to covid and supply chain
      AND BOOM BOOM 30-50-200% increases in things we need
      shortages abound due to CORPORATE STUPIDHOOD called JIT

      and your question was???

      • Raging Texan says:

        Election consequences? Hogwash.
        Trump is a FED loving money printer who cares not for justice & law
        Biden is a FED loving money printer who cares not for justice & law
        Obama is a FED loving money printer who cares not for justice & law
        Ditto for all former presidents (…) since at least 1980. Probably all since 1913 too.
        Trump = Biden = Obama = ….
        The recent election changed NOTHING substantive, only the style of the actors

        • Ron says:

          Wake up presidents don’t run this country corporations do remember meetings at White House with apple Microsoft and others presidents get told what to do

        • gametv says:

          i’m a republican/libertarian/indendent, but in my book the last decent president we had was Carter. That’s right, carter. he actually cut the amount of oil we consumed over his term (because we were reliant on the middle east) and he hired Paul Volcker, the last independent Fed president who wasnt just a pansy for bankers.

          The reason Carter was so loathed is that he did things based on principle, not based on special interest group power.

          Oh, and for those Republicans that love Reagan, he is the guy who said deficits dont matter. He fired Volcker because Volcker was against allowing banks to become investment banks.

        • historicus says:

          Raging Texan
          “Trump is a FED loving money printer who cares not for justice & law”
          You got the first part right….but strangely you miss the second part. It is Trump who is against the rioting in the cities…it is Trump who is against the porous borders now in your home state of TX.
          Both stances are pro law enforcement.

        • Swamp Creature says:

          Same with the big Defense and Intel Agencies. I once asked myself who’s running this joint. I said to myself, its these big contractors and system integrators. I was 100% correct. The government managers were just props and facilitators.

        • Apple says:

          He encouraged rioting in Washington DC.

          Have people really forgotten about that?

        • 91B20 1stCav (AUS) says:

          Historicus-it has always appeared to me, long before he realized any political aspirations, that that particular gentleman took a “…those limits are for thee, but not for me…” approach (i.e.: there’s no such thing as ‘white-collar crime’…) in terms of the law.

          may we all find a better day.

        • Auldyin says:

          RT
          There’s always another plonker comes over the hill!

        • Raging Texan says:

          Historicus wake up bro

          Trump SAYS he wants to control the border. To get your vote so he can be closer to the FED and steal your wealth. Proof: What did Trump actually ACCOMPLISH at the border? Zilch!

          Its just choreographed propoganda like pro-wrestling.

          Oh but Trump had people fighting him, right? Not his fault they say? Incorrect he had the power to fire anyone in the exec branch if he’d really wanted to.

          What was Trumps real focus? 1) The Fed 2) himself

          END THE FED AND REQUIRE THE FEDGOV TO ABIDE BY ITS CONSTITUTIONAL LIMITS

        • Raging Texan says:

          gametv

          Carter was a sniveling fed worshiping constitution shredding loser.

          Carter did nothing to end the fed, or end the unconstitutional programs of fedgov including social security, medicare etc

      • Nicko2 says:

        The world will not end if consumers can’t buy cheap plastic Chinese junk.

        • historicus says:

          “The world will not end if consumers can’t buy cheap plastic Chinese junk.”
          how about
          light bulbs, spark plugs, semi conductors, car parts, F22 parts…??

        • Swamp Creature says:

          I went around my house looking for things to donate to the charity pickup. I found a lot of Chinese junk that needed to go. Then I realized it was broken and not fit to donate so it made its way into the dumpster. I’m done buying this crap.

    • DougP says:

      “Where is the money coming from?”

      It is coming from not having to pay for financial obligations anymore. No rent, no loans, lots of spare cash burning a hole.

      End of the year is going to be popcorn time…………..

      • LM says:

        Good point although these benefits are not for classes of individuals who can truly move markets. Perhaps it is more the disassociation of money from anything tangible, as it the volume of trades creating wealth rather than actual underlying value, which seems like a quaint notion. Even so, I agree that this house built of cards will come down, painfully. A lot of strange behavior is driving this while thing, on every level, showing a lack of foundational emotional resilience in a population spun around by a pandemic.

    • RAB says:

      Very little coming from the stimmies as far as buying a house.
      Good chance some big money coming from the stock market if you owned AMZN, APPL. GOOG etc.

      • Mark says:

        Don’t forget a third of the Fed’s asset purchases are going into MBS (or Agency Securities as they now call them).

        To avoid negative rates on Treasuries they are distorting the housing market.

        • historicus says:

          “To avoid negative rates on Treasuries they are distorting the housing market.”

          They certainly are distorting the housing market..
          in 1999 and 2006, when inflation was near, but actually lower, than today, 30yr mortgages were 6%. Now 3%. Why?

          But the threat to rates moving negative is really from the massive “digital minting” by the Fed (by what authority?). M2 up 27% in less than a year….and with the country reopened (restaurants packed, airlines packed, motels packed) there is curiously NO EFFORT to retrieve that 27% injection.
          When did the Fed obtain the authority to be the controlling force in the money supply? That is a Congressional power as noted by the Constitution and thus can NOT be delegated.

      • Flounder says:

        Not so sure. I have seen couples with $2k+ monthly student loan debt payments who were able to buy a house solely based off forbearance.

        Interestingly, student loans are not counted dollar-for-dollar in your Debt to Income ratio. So these buyers are able to qualify for conventional mortgages with already a veritable mortgage of student loans. When the payments resume, their effective DTIs will be 60%+ of gross income.

    • Andrei says:

      Where is the money coming from?
      Aside from what others have mentioned (stimulus, forbearance, etc) probably debt. I don’t see any other explanation. It would be nice if mr Wolf also included charts regarding this (besides credit card debt; debt regarding housing and vehicles is what is needed).

      • Andrei says:

        One more thing I just thought off is inheritance: a lot of people have died because of the pandemic and their children are spending what they inherited or gambling with it in the stock market.

        I read somewhere that before the tulip mania there was a plague outbreak in the Netherlands. A lot of rich merchants died and their sons started gambling their inheritance on tulips because they were bored (there were lockdowns and a lot of the usual entertainment was gone).

        • Heinz says:

          “One more thing I just thought off is inheritance: …”

          As the boomer generation passes from the scene some of the them will leave substantial wealth to their heirs, but most oldsters will die broke or otherwise wealth-less.

          There are many reasons for that sad state of affairs but big ones are inflation wiping out accumulated savings, market crashes (still to come, just wait), and huge medical expenditures for aging bodies and end of life terminal treatment.

          For those lucky well-off elderly that can and want to pass on their dynastic wealth to their scions, I think many of the smarter ones will turn to trusts to keep those hard-earned assets in the family.

        • Janna says:

          I don’t think inheritance played a huge role…yet. Estates can take a while to work out especially if they go through probate. Estate bills must be paid or written off first. Also, during covid last year, many of the courts had limited operational capacity. I admit, I do not know how long trusts take. It is my understanding that it depends on the details of the trust. For example, my husband belongs to a trust where no property can be sold for 5 years. Generally, funerals do cost the family unless people have prepared properly. Although, I believe families can seek reimbursement for covid related funerals from the gov. I suppose people could “double dip” for funeral expenses by also being reimbursed from the estate. It is hard to anticipate what people will do especially when money is involved. Perhaps, some people did leave the workforce in anticipation of their expected inheritance, however, I don’t personally feel that number would be significant.

      • Old School says:

        My understanding. The government is going to run a $3 Trillion deficit this year. That $3T deficit is pushed into the consumer and corporate sector.

        The money was borrowed from our future in hopes of mitigating the damage from covid. In theory the extra debt will cause our future prosperity to be a little lower than it would have been without covid.

        • historicus says:

          OldSchool

          “was borrowed from our future”

          This is why the third mandate of the Fed is perhaps the most important…and always carved out with the “dual mandate” game.
          The third mandate …”promote moderate long term interest rates”
          And this is brilliant and important.
          This third mandate keeps a reasonable balance between lender and borrower
          it prevents, when honored, the emptying out of future generations to “fluff” the present by always keeping a “moderate cost” to borrowing, putting are REAL cost on pulling forward future wealth.
          This Fed has promoted IMMODERTE long term interest rates….
          30yr mortgages 2% under inflation?
          Ten years notes 3.5% below inflation?
          All time lows in long rates are NOT MODERATE by any definition. They are extremely low.
          Moderate means “not extreme”.
          Just as “stable prices” means fixed, unlikely to move.
          J Powell needs a vocabulary lesson….maybe an inquisitive journalist will help him on the journey.

        • Augustus Frost says:

          The reduction in future prosperity is going to be more than just a “little”. The country has been living beyond it’s means for decades.

      • Ron says:

        Easy answer is stock market craziest I’ve seen pump and dump making a killing but in end most people just get killed financially

      • Ron says:

        Easy answer is stock market craziest I’ve seen pump and dump making a killing but in end most people just get killed financially

        • Janna says:

          For long term investors with our retirement tied to stocks, this makes me nervous as heck. It screams instability.

    • Old School says:

      Maybe another way to look at it was that if you add consumer, business and government there was nearly no savings last year. We as a whole spent all we made.

      No savings is ok for a year or two but if it goes on too long we are going to have bigger economic problems.

    • Depth Charge says:

      “Where is the money coming from?”

      Did you miss the trillions the FED just printed?

      • historicus says:

        The would be the Fed who is charged with “promoting maximum employment” but provide the free money to be doled out to discourage employment.

        Only in government…..but perhaps entirely INTENTIONAL.

    • Old School says:

      New stock valuation data is out for the month of June. ‘Investment Advisers’ site has an interesting chart called Crestmont PE10 plotted against inflation for the last 150 years. It’s a scatter plot of monthly valuations.

      Covid hit to GDP took market from very high to highest valuation in history. Now inflation is shoving stock market over to a more extreme level as past market data drops of as inflation gets above 4%.

      There is no time in 150 years we have been this over valued. Not even close.

    • Old School says:

      I remember the last bubble pretty clearly. The hot stock then was First Solar. Green, Global warming and growth. Rocket ship up to close $300. When bubble popped it lost 96% of it’s value and 12 years later is still down 70% from peak. We have a lot of that pumped up junk in the market.

    • MyLadyHumps says:

      “where is the money coming from?” You have quite the sense of humor. I will assume you are being sarcastic.

      Your economy is not complicated (or productive):
      1) your government gets huge sums of currency from the Fed to monetize reckless spending
      2) the government hands out the money to buy votes and receive kick backs from wealthy donors
      3) your citizens spend the currency on products made by productive foreigners
      4) productive foreigners receive no goods in exchange and buy up USA hard assets to get something for their effort
      5) Americans complain that assets are too expensive
      6) the process repeats endlessly until foreigners own your companies, your farm land, your utilities (including water), your infrastructure, your parks and your house.
      7) you are a wage slave

      Enjoy your plastic baubles – aren’t they fun.

      • Phoenix says:

        re: point 6’s hyperbole. You really expect all of that to happen without any reaction? There’s a reason that this country spends so much on the defense budget and it needs to be justified at some point. so they create opportunities for conflict. Point 6 happens and we end up kicking the shit out of whatever poor country thinks they were given the green light to do that. Maybe China, maybe Russia, maybe someone in the Middle East. The US may not be “productive” in your terms but we are the world leader in producing weaponry to inflict pain and misery and keep the military industrial complex chugging along.

  2. QuadQ says:

    Maybe most of the unemployed are attending skool, learning how to build solar cells.

    • Anthony A. says:

      They are on the golf courses around here.

      • Swamp Creature says:

        You need a better speed dialer to get your tee time. Also rotate the duty to others. Get up at 3AM if you have to.

        • Anthony A. says:

          The best tee times we (retirees) could get is after 11:30 AM here and that’s when the temperature is 95 F with 85% humidity. The courses (5 of them around here) are FULL of the WFH crowd. I know this because I have asked several young guys why they aren’t at work….they say they ARE working. LOL

        • Island Teal says:

          And don’t forget the Public Sector people who also have enjoyed the fruits of the WFH process. How many cities and municipalities are still operating under “Emergency Guidelines”. The sheep are getting sheard. ???

      • Fast GT says:

        Yep, woodlands is awesome eh?
        Same thing on the lake Conroe area courses, Bentwater and Walden.
        Used to be, there was no one boating on lake Conroe, Monday through Friday, now it’s hard to distinguish it from the weekend.
        All the lake campgrounds packed with 250k
        Motor homes, complete with a 125 k ski boat next to it .
        I dont know exactly what is coming, or when, but I can tell you with 100% certainty that it will be one for the record books.

    • Joe Saba says:

      your funny – a MIL building something

    • Heinz says:

      And I am sure there are armies of unemployed learning to code as we speak…

      • Flounder says:

        95% of Americans are not smart enough to make good programmers. Maybe 20-25% could be mediocre programmers.

        • NoPrep says:

          About right (humans in general, not just Americans). A lot of the new business coding tech is crazy hard and mind-boggling. Like the Angular stuff for Web UI. 25 years back doing VB6 line of business projects over and over was much more sustainable as a career, for keeping mental sanity. Java as well – a very sleepy vanilla language that worked pretty well for boring large enterprise projects. C# came along, and it was better and more fun than Java – but it’s now a very large and complex language.

  3. Joe Bob says:

    Some of our tenants are a bit funny. “I’m going to ride this assistance out until it’s gone, I’ll worry about a job after that.”

    Or, I have a guy working and making enough money to pay, but he doesn’t pay. He just asks for assistance.

    3 people who live in one unit. Each earns enough to pay the rent, but none of them do. They get assistance — I mean, none of them alone can afford the rent and afford to eat, but they are elegible.

    And, yes, it’s hard to hire people.

    Everyone needs a break now and then — especially me!

    • Kaleberg says:

      During the 2006/7 meltdown, it was the financially “sophisticated” people I knew who simply stopped making mortgage payments when their homes went underwater. They figured the banks wouldn’t be able to foreclose them all at once, so why throw good money after bad.

      • historicus says:

        Kaleberg

        So “financially sophisticated” equated to breaking their word to pay their obligations….
        Are they also waiting for their college debt to be wiped away?
        Where is honesty?

        • roddy6667 says:

          Honesty is for the proles.

        • MyLadyHumps says:

          Those who live in non recourse states did not break their word – they were under no legal or moral obligation to pay back the money.

          Their mortgage contracts stated that the lender had the right to claim title to the house in the event of non payment – nothing more. The lenders signed on to this agreement – it is not the borrower’s fault if the lender never foreclosed.

        • Phoenix says:

          lmaooo good one. Honesty. Wall Street operates on that principle surely

      • Heinz says:

        All these debt forebearances/moratoria are setting a dangerous moral hazard precedence for our muppets.

        It will be all too easy for politicos to enact more such popular debt forgiveness schemes next time economy hits a bump in the road.

        It’s the old idiom of camel’s nose in the tent– that is, something that was okay in a limited way inevitably turns out to take over in a big way (camel forces itself into tent and brings it down).

        These measures will be widely approved as a tool to help people and that simply must be provided.

      • Kenn says:

        Your comment reminds me that there are 2 ways to keep a bank from foreclosing on your house if you have a financial crisis. First, is to own it outright. No loan, No chance of foreclosure. Second is to be mortgaged over the house’s current value. Your mortgage is now toxic to the bank since they will take a loss if they foreclose and sell the house.
        The absolute worst position to be in is to have your house 1/2 or more paid off. If you start missing payments, they will add incredible late fees and penalties to the amount owed, then foreclose as fast as possible, keeping the owed principal, penalties, and all the excessive legal fees they can dream up before giving you a few crumbs left over.

        • Wolf Richter says:

          Kenn,

          “The absolute worst position to be in is to have your house 1/2 or more paid off.”

          No, because you have equity in the house, and you can sell the house, pay off the mortgage, and walk away with the remaining cash.

          And if the mortgage is 50% paid off but the house price drops 60%, and you can’t sell, then you’re back at your point #2: mortgaged over the house’s current value, at which point, according to your theory, your bank will leave you alone.

        • Auldyin says:

          K
          “Your mortgage is now toxic to the bank since they will take a loss if they foreclose and sell the house.”
          It is more than likely the issuing bank will roll-up your mortgage Into a risk graded MBS which it will sell on to eg a pension fund, etc. If your mortgage goes bad it is only one of maybe a thousand or more in an MBS. The MBS is rated and insured to reflect the quality of the individual mortgages in it. It’s all very sophisticated, they can chuck in a few triple d’s alongside triple a’s etc to get any risk profile they want to sell on to the buyer. If enough mortgages go bad in an MBS it’s market value could drop but then the Fed could step in and QE it at full face value, hence the failure is ‘nationalised’ to the tax-payer. Later on the Fed could sell the MBS back into the market at true market price which could allow the original owner to get it back without taking a loss. Neat eh?
          Your mortgage is a tradable financial security (a bond) issued by you and secured by your house. If you default the MBS holder can reclaim the security which then becomes another MBS asset which can be sold on to another business that specialises in dealing with foreclosures. On and on it goes, it’s called financialisation of the economy.

        • Old School says:

          Financial life is kind of weird. Here are two examples from what I have read.

          1. IRS can’t seize your home if you have no equity in it.
          2. People usually will not try to put a lien on your home if you have no equity in it.

        • Janna says:

          Old School, I was once told by a tax professional that the IRS has no interest in houses. If you owe back taxes, they will go after your bank account. They will freeze whatever is in there at that time. The state, however, will show up and want your house. Not sure how true all of this is, but that is what I was told.

    • Janna says:

      September and October may be very busy months for hiring. I also have a friend who does not even intend to look for a job until her kids return to school in Sep and she is a single parent.

  4. MonkeyBusiness says:

    Victory of the Proletariat?

  5. Apple says:

    Boomers are fleeing the workforce.

    • OutsideTheBox says:

      It goes overlooked how many in their sixties simply retired when COVID hit.

      Those early retirees could number in the millions.

    • Augustus Frost says:

      Until the financial markets finally crash for real. How many people have planned their futures around permanently insane bubble valuations?

      • Coffee says:

        I wonder that too. All these retired 401k millionaires might quickly become 401k thousandaires when the government can’t contain a market crash. Do they have a plan for that?

    • Phoenix says:

      One can only hope

  6. General Strike says:

    The only “ shortages “ in the labor market are the availability of jobs that pay a living wage and provide health insurance. Exploitation is not a sustainable model and will be met with resistance whenever feasible. Biden lied about supporting a $ 15 minimum wage and the U$A joining the rest of the wealthy nations in providing Socialized Medicine to it’s citizens isn’t happening either. The answer ? My name.

    • Anthony A. says:

      Biden lied? Oh NO!

    • historicus says:

      General
      I find it curious that those who wish a higher wage structure are not INCENSED by a Federal Reserve that promotes inflation.

      This 5% bump in inflation just delivered a 5% pay cut to the American worker….and was retro active if they had any money “saved”.

      And there is more to come…as this Fed is rogue….and will not lift a finger to fight inflation…though they are supposed to. No one seems to care.

      • OutsideTheBox says:

        h

        It’s ok.

        Your caring alone lifts that burden from a multitude of us.

        Keep shaking your fist at that cloud.

    • Heinz says:

      “Exploitation is not a sustainable model and will be met with resistance whenever feasible”

      Say, what about the robust cheap labor market for illegal immigrants?

      That has proven to be a sustainable model for many, many decades. And kept wages low for many Americans. But it has handsomely padded the pockets of businesses large and small at the same time.

    • Apple says:

      Medicare is socialized medicine, with a minimum age of 65.

      • OutsideTheBox says:

        Medicare is NOT socialized medicine.

        The VA IS socialized medicine.

        At the VA the docs and all the rest are employed by the government.

        Docs who accept Medicare are independent business people.

      • Anthony A. says:

        Apparently, you are not on Medicare?

        OTB hit the nail on the head for you. Now go study up rather than spouting off inaccuracies.

    • Augustus Frost says:

      Yes, the country is broke but should now add more open ended entitlements, like medical and child care. That makes a lot of sense. Of course, the estimated cost will prove to be wildly understated again.

      • josap says:

        If you want women to work – there must be child care. There also must be in-home elder care.

    • Trailer Trash says:

      The Reserve Army of Labor may be substantially smaller than we realize:

      1. Two and a half million people in prison, most of them working age.

      2. Millions more on probation/parole. No one will touch them with a ten foot pole.

      3. Millions more have “paid their debt to society” but are still effectively being punished because no one will hire them. Ever.

      4. Millions more who are credit criminals (bankruptcy), or have bad credit scores, or wrote the wrong thing on Twitter, are excluded from some jobs.

      5. Even though cannabis is legal in many places, many employers insist on clean pee. That excludes thousands? Millions?

      6. Society is structured around the policy of Work or Starve but does not allow immigrants to work without the proper papers. Sometimes they are required to wait a year before they are allowed to work. Many immigrants are qualified professionals in their country of origin, but US institutions will not recognize their credentials.

      7. There may be one or two million unable to work due to Long Covid. Some will likely become permanently disabled and greatly expand the ongoing crisis of huge numbers of disabled workers.

      It may be gratifying for some people to growl about lazy unpatriotic bums who won’t work, but putting the screws to people who don’t have a job won’t fix the problem. Although it will make the lives of poor people even worse, which some people would consider a feature, not a bug.

      • Ron N says:

        Thank you for that post. Add that there is $35 Trillion in retirement accounts. Part of that is certainly getting to children and less fortunate sibs.

  7. Micheal Engel says:

    1) Wages are rising because gov jobs are up 188,000. Gov jobs
    are well above the min wage.
    2) The teacher’s union threaten to strike unless every kids will be vaccinated, using a face masks in the classrooms.
    3) The police forces have shrinking in every major city.
    4) The employment rate of 16-19 yrs is up from 9.6% to 9.9%. About 1/4 millions more kids are out of the labor force, with less police, during a summer break in the streets, because Miami beach is out of reach.

    • Ron says:

      At 19 I was working in a packing house decent wage now pays 20$ a hour but our enabled kids were never taught to work but can beat my ass in a video game

      • Old School says:

        One high school friend had a job catching grown chickens in chicken house and stuffing them in crates and stacking on a truck. He said it was tough once you got down to a few chickens. I think he made $2.00 per hour.

        I had a better job cleaning a corporate office and manufacturing facility, but pay was $1.60.

        My grandfather’s first and only job for 53 years was in a cotton mill making 10 cent per hour. Girls got paid 5 cents per hour.

        • OutsideTheBox says:

          Ahhhhh yes!

          All that nostalgia from the late 19th century.

          Next we will hear about walking ten miles to school ( uphill both ways ).

          It’s ok…..I’m a geezer too.

        • Anthony A. says:

          OTB, not only did I have to walk to school 10 miles each way (uphill, both ways), but I didn’t speak English when I got there. I was sent home and told, at 5 years old, to learn English before I came back! It took a while, but I made it.

  8. Mike says:

    Wolf I think the other factor is the number of workers taking early retirement. I’m seeing it where I work. First the market has bounced back bringing retirement balances back up and two they don’t want to return to work onsite after working from home the last year.

    • QuadQ says:

      I did a little more than 2 years ago, retired 3-4 years before I wanted to. Couldn’t handle the new hires work ethics and the sensitivity trainings. The 3 years before I retired I lived on the road on per diem and saved like a fool. Put 66% down on a new house and started collecting SS shortly thereafter. Moved my 401K to a self directed IRA. When I turn 66 I’ll pay off the house from the Roth and some retirement funds. Recently did a refi @ 2.75%, my monthly SS income easily pays all the bills. Out of the 26 homes on this street probably 20 are new retirees.

      • joshn says:

        Nice to hear some good news once in a while! Good for you, escaped the matrix with an intact soul.

        Got a buddy in his early 30s, waiter who doesnt want to get the jab and is still living off of stimmies. Wont work anywhere they force the jab, said he would work under the table doing yard care or construction. Wonder how many are in that same boat?

    • QuadQ says:

      Also, I paid $225K for a 3 bedroom 3 car garage a little more than 2 years ago. Recently someone sold the same style house for $355K. I tell the neighbors if/when it gets to $450K I’ll sell. (doubt I will but it would be tempting)

    • Wolf Richter says:

      Yes, agreed. I mentioned that with the “retirement boom.”

      right above the section heading “#2 weird phenomenon…”

      “and it includes what is now called the “retirement boom,” where people have decided it wasn’t worth it anymore, and went for quality of life.”

      I know a couple of people like that.

      • Cas127 says:

        The retirement boom does bear watching (although talked about *forever*, it was a lot slower coming in reality).

        Post, 90’s tax reform and various asset mkt disasters, a large number of seniors started working well past 65.

        But working past 85 is much less feasible, regardless of financial circumstances.

        So, with a 20 delay, openings for younger workers may be accelerating.

        Wonder how the 25 to 54 employee to Population ratio is looking relative to the wasteland of the last 20 years…

        • Wolf Richter says:

          It’s funny, kinda. We had a retirement boom in 1999. Young-ish folks that made $2-million-plus (quite a bit of money back then) in the stock market were thinking about retiring or actually quit their jobs. They were planning to do day-trading when they felt like it or just doing fun stuff. I did that. I quit in 1995. And from late 1995 to early 1999, I traveled around the world without going home, over 100 countries.

          But then the thing came apart, the Nasdaq plunged 78%, and those retired folks whose dream had gone up in smoke were back out there looking for a job. At least, I’d traveled around the world before that happened :-]

        • Sailorgirl says:

          I had some friends do the same thing in 1997. Sold their house and retired young. They both were in tech. They bought a 46 foot Cat and picked her up in South Africa. Sailed the South Atlantic the Caribbean and eventually the east coast to Maine. Woke up one morning in 99 broke. They had lost everything!

      • Michael Gorback says:

        I retired 2 years early just shy of 68. Just wasn’t fun anymore and I didn’t need the money.

        My main household appliance purchases this year were along the lines of weedeaters, leaf blowers, trimmers, and mulch.

        Fighting weeds can keep you busy. Plus, you can cut, burn, poison, uproot and otherwise destroy weeds. Much more empowerment than dealing with insurance companies, hospital administrators, regulators, and unpleasant patients.

        Plus, once you’re done wreaking devastation people will compliment you. It’s like being in Antifa.

        • VintageVNvet says:

          Good one MG,,, and have to report at least somewhat similar:
          Had the 56 acre ”farmstead” going strong by the time we were able to move there full time at the last crash, late 09, and then due to increased age became less able and willing to mow 10 acres, weed whack about a mile of fences, etc., etc.
          Then elderly parents needed tons of support, so back to near childhood home, with subsequent gardening in late 15…
          Now concentrating on learning to ”graft” mango and other tree foods, learning to grow others from ”cuttings” and, very similarly, very very glad not to have to worry about non performing sub contractors, et alia, as you mention…
          Life is Good for us who are savers and worker bees,,, as long as ya don’t be enticed by the advertising/propaganda,,, so we watch the BB game/other live sports and a movie concurrently while switching away from ads, etc., and enjoying especially the ”’murrican”’ movies from the 60s-80s that are SO obviously aimed at those with elementary grade cognizant ”abilities” that those movies are easy to ”get” with very intermittent viewing,,, LOL

        • Kenn says:

          :-)

          It’s nice to read a happy comment here. It seems too many people are obsessed with what’s going, or could go wrong, and forget all the things that are going right in their lives.

  9. Saltcreep says:

    “But employers understand that the $300 a week is already being phased out in about half the states and will expire in the rest of the states on September 6”

    I’ll take a bet on the stickiness of extant wages. I suspect most employers will not do a u-turn as more employees enter the market, and tell everyone that the wages will be reduced now, even as the effects of higher prices of housing and energy (and salaries…) take over in maintaining inflation measures from the currently (temporarily?) faltering price effects of some other commodities and inputs.

    • Wolf Richter says:

      Agreed. No one is thinking about cutting wages. But it is expected to make hiring easier and candidates more plentiful (or less scarce).

      • MCH says:

        When there is a corresponding rise in prices , why worry about cutting wages.

        It’s like saying you made $50k a year, and an SFH of say 2000 sq ft was $500K. In 20 years, you make $500k a year, that same SFH now costs $5M. So, basically congratulations, nothing changed.

        • OutsideTheBox says:

          MCH

          So increased pay is the same as current pay?

          And your next argument will be a pay cut is the same as current pay ?

        • MCH says:

          If corresponding prices of goods and services decrease by the same percentage, yes.

          Remember, it’s the relative value that counts, your average joe gets a 20% bump in pay, and let’s say the costs raise by the same percentage, what difference is there?

        • OutsideTheBox says:

          Ah there is the flaw in your argument!

          Corresponding !!!

          A percent rise in wages DOES NOT equally correspond to a rise in prices and services.

          Since labor costs are only a portion of all business expenses, cost per good or service rises at a lower rate.

        • MCH says:

          Well, you got me there, the word corresponding shouldn’t have been used. Or should have clarified with pricing in general decrease by the same amount.

          The point is the value of your earning power stays relatively constant over time with respect to pricing.

    • Nathan Dumbrowski says:

      If anything this is going to cause management to have an excuse not to give raises in 2022. Inflation is eating at the bottom line. Take one for the team Timmy. We are really struggling will be the got to line from HR

      Get a better job while you can negotiate. Because in about six months there will be a reckoning

    • Max Power says:

      That’s why many are doing ‘hiring bonuses’ rather than substantial wage increases.

    • Heinz says:

      “I’ll take a bet on the stickiness of extant wages.”

      You betcha. But the result is that wage push inflation now has a higher base to spring from.

      Everything has labor inputs so most consumer goods and services will be much pricier and standard of living will take a beating (sorry, this time GDP growth is not going to come roaring back to outgrow inflation and debt).

    • Augustus Frost says:

      Cutting pay at a large scale is difficult, unless the competition is also doing it if the economy crashes.

      I expect more jobs to be automated out of existence. Already read an article about how it’s being done now in eating establishments due to the labor shortage. I also expect it later because not everyone’s labor productivity will be enough where employers will continue to pay it if they do not have to.

    • Old School says:

      I say they will work to keep payroll cost managed, fewer people, leaner health care plans and finding teenagers to work at lower rate.

  10. davie says:

    It’s almost like there’s a hidden 30% of parents that were otherwise forced into the working part time jobs through desperation, but following a grueling year of zoom school, a hot vaxx summer where they still have to be a parent, a nice child allowance rightfully compensating them for their efforts, and a possible re-orienting on what matters in life, we can’t get the poor saps to show back up to get yelled at by power-tripping middle managers for 7.50 an hour.

    Weird how that works.

    The jobs numbers aren’t as high, when people find better things to do that aren’t jobs.
    The jobs numbers would look just as bad if everyone became autonomous or independently wealthy too, but lets keep wringing our hands, because god forbid that happen.
    The economy needs wage slaves.

    • Dianda says:

      Noticing a lot of high school and even younger age youth soliciting babysitting, dog walking, gardening, “I will do anything” jobs on the Nextdoor data mining platform. They are undercutting immigrants with what they want as well.

      And, this in one of the wealthiest zip codes in the state, Mill Valley.

      I think it’s either a sign of parents tightening allowances, or needing financial help, or less likely, the beginning of a great awakening and generational shift from Grandpa the Stoner, to Mom the “Business Person”, ex-shoulder pads, but now is a caterer, to something completely new.

      • Kaleberg says:

        It might just be an excuse to get out of the house, especially with COVID. When you’re a teenager, it gets tiresome living with the people who pay the rent/mortgage 24/7.

      • Shiloh1 says:

        One ounce of Ag / hour, under the table, works wonders.

        • Phoenix says:

          get real, nobody but zerohedge reading weirdos has physical silver laying around for bartering purposes. people want cash

  11. Petunia says:

    When every stimulus program ends in July, I expect to see a $h**show of humongous proportions.

    There is no labor shortage, the jobs don’t exist. Why take a job when the wage doesn’t cover the expense of coming to work. They are retiring because if you are going to be broke anyway, why work.

    • MonkeyBusiness says:

      Not in California at least, we are flush with money and we’ll be doling out even more free money.

      Best state in the country!!!

      • Petunia says:

        So why are the homeless everywhere and all the shops are closed?

        • MonkeyBusiness says:

          Because the government is flush with money.

        • Shiloh1 says:

          In Chicago the homeless are used as theater props by the politicians and media.

        • In their own cities, in flyover America, the homeless are paid to leave. In Ca there were too many shops in the first place, too many restaurants, (because things were too good?) and now we see the self employed are getting jobs. The economy is transitioning. The state is going to add low income housing to accommodate the poor from somewhere else. Fifth largest economy in the world. In the 1930s they had to turn em back at the border, and they will probably do it again. Immigration used be Americas problem, too many people wanted to come here, and Trump fixed that. Some lower income people leave, until they get a leg up, and they’re back, or they go bust and get a free ticket home.

      • Ron says:

        It’s your money duuuuummy

        • MonkeyBusiness says:

          No it’s our money.

        • Kaleberg says:

          It’s not my money. It says “United States of America” on it. It’s their money, and one of the better government services.

        • QuadQ says:

          US Government…
          What’s mine is mine and what’s yours is mine. (hmmm… that’s what the ex-wife used to say)

    • Old School says:

      Been watching on-line videos of all the major stock crashes on-line. The one where Prime Minister of Great Britain pegged the pound was an example of stupid policy. Cost Britain a great deal.

      Crash in 1987 and flash crash ten years ago shows you market can break down and you can’t execute order when you want in a crash. Not sure we ever got the truth on the flash crash.

      • historicus says:

        Old…
        “The one where Prime Minister of Great Britain pegged the pound was an example of stupid policy. ”

        I believe that’s where Soros made his $$

        • Old School says:

          Yep. G.B. wasted $16 billion trying to support the pound. I think Soros got $1 billion of it.

          I am pretty sure Paul Tudor Jones made out like a bandit during 1987 crash.

          The words you want to hear as a value investor is “sell at any price”, just get me out.”

  12. wkevinw says:

    The dysfunction and willingness not to work is a sign of a very sick mindset.

    A large fraction of Americans are being treated like wage slaves: work and you just get survival without “getting ahead”. Getting ahead means more freedom for yourself- owning something, maybe able to even start a business based on savings and other economic assets (including your own skills, persistence, etc.)

    If you are just a wage slave, you stay home if the price is reasonable. You don’t do that if you have hope for the future.

    People in the ’30’s wanted jobs. They got some: WWII. The contrast is pretty large, no?

    • MCH says:

      Have no fear, we’ll be in the 30s again soon enough, less than a decade away.

      Heck, at the rate things are going, we’ll probably pulls the 30s into the 20s. Except this time, the oceans aren’t going to be any impediment at all.

  13. Paulo says:

    Quiet strike….good one.

    Just my opinion, but labour has been getting screwed since the orchestrated attack on union representation/organising started with Reagan. It has continued on through every admin since as all Govt has bent their knees to the wealth class due to election campaign funding. Toss in globalization and here we are.

    This is the result. If they want the wealth machine to run, they have to fuel up the tank.

    I have been lucky in my work life because my skills are portable and I was always willing to move on if the games started up. Or, I worked away until something better came along. But if you take an average employment situation, add in debt, workers are stuck in chains. People lost their jobs this year and had some breathing room to evaluate their situation. The numbers are speaking loud and clear.

    My sister in law works in retail grocery as a front end manager. Her job is shitty beyond belief. She is paid about 1/2 of what she is worth and what she accomplishes, but she soldiers on hoping it will improve. Grocery is also almost all non union, with the exception of Costco and a few others. She would quit tomorrow, but guess what….she built a new house a few years ago and is stuck stuck stuck at 55. Hopefully, her home will be paid for by the time she wants to retire or she’ll just have to keep working.

    My hope is that Branson and Bezos will run into each other during their upcoming space flights. Maybe their crafts will tumble to the ground and crush Musk. Maybe they’ll hit Davos and help out the World.

    • Cas127 says:

      “My hope is that Branson and Bezos will run into each other during their upcoming space flights. Maybe their crafts will tumble to the ground and crush Musk”

      What is it about the rich that makes them so space horny?

      Personally, I would put my billions into life extension med/consciousness transfer research (closer to their tech wheelhouse than space too…)

      One small comfort regarding most ostensible billionaires…there wealth is usually overwhelmingly stock based and semi frozen in their own companies.

      Once reality intrudes upon the hyper PE ratio hype, those billions can evaporate fast. And they can’t fully extract those billions because share dumps of epic size would crater share prices.

      They are still absurdly rich…but not really as rich as the headline numbers proclaim.

      • California Bob says:

        re: “What is it about the rich that makes them so space horny?

        Personally, I would put my billions into life extension med/consciousness transfer research (closer to their tech wheelhouse than space too…)”

        They already have. The billions for rocket joyrides is just fun money to them (though Branson may be feeling the squeeze, just a bit).

    • joshn says:

      “My hope is that Branson and Bezos will run into each other during their upcoming space flights. Maybe their crafts will tumble to the ground and crush Musk. Maybe they’ll hit Davos and help out the World.”

      Lol. They look around at the fkwits everywhere on this planet and figure out how they can blow this pop stand and just happen to have money to try it unlike the rest of us misanthropes.

    • Heinz says:

      “Maybe their crafts will tumble to the ground and crush Musk.”

      Remember the Tesla Roadster car Musk sent into space a few years back?

      Let’s do it again with Elon at the wheel– I wish him many millions of happy driving miles out there.

    • Auldyin says:

      P
      “My hope–”
      You should make a movie of that, guaranteed box office smash.

  14. 3D Modeler says:

    This little hissy fit that some workers are throwing right now will ultimately come back to bite them in the a$$. Businesses that can take advantage of automation and AI are likely exploring ways to make themselves less vulnerable to these “labor shortages” in the future, as well as less susceptible to mandatory shutdowns in future pandemics.

    • MonkeyBusiness says:

      And yet Amazon is struggling to hire more despite having some of the best AI scientists.

      Why is that?

      Could it be AI is …. overhyped ???? Say it ain’t so.

      • 3D Modeler says:

        Like any other major transformation, it takes time. History is replete with examples.

        • MonkeyBusiness says:

          You spoke of it as if it was going to be soon though. This future of AI has been talked about for 60 years plus. By the way, as an IT guy, I’ve worked with a lot of these tech, from Rules Engine to AI models, and IMHO opinion they are all overhyped. Neural Networks went through a long cycle of “if only we have enough data and computing power” (which happened) to “well perhaps if only we have good data” and still things like self driving cars are either ways off (see Google’s 15 years effort) or they kill their passengers (Tesla).

          Time does not guarantee anything. Remember, we still don’t have a vaccine for flu.

        • 3D Modeler says:

          Wednesday 6/2/21…CEO of McDonald’s claims they’re testing automated drive-thru’s at ten Chicago locations. That same week, a McDonald’s franchise was lamenting they’re needing to offer iPhones in order to attract workers. I’m sure that’s purely coincidental.

        • MonkeyBusiness says:

          No they are not, but you seem like a guy who just reads the headlines. CNBC has the following:

          “CEO Chris Kempczinski said Wednesday. Kempczinski said the technology is about 85% accurate and can take 80% of orders.”

          That’s not good enough, because the other 15% to 20% who got their orders wrong would swarm Twitter with complaints, and then we’ll see what happens with McDonald’s stock price.

          Self Driving cars already run on the road, so what McDonald’s is doing is nothing ground breaking. Google also demoed a voice assistant 2 years ago(?) that was capable of making restaurant reservations for you. It was capable of saying things like “hmmm, ” etc, etc. After that demo though, zip, nothing.

          These tech demos are nothing more than the management class trolling the lower class.

          Why not have an AI that can invent and manage companies? Managers are expensive after all. Or failing that, how about a visa to bring in successful enterpreneurs/managers from 3rd world countries. They’ll do the same job for cheap.

        • 3D Modeler says:

          So what, Monkey Biz…the variability amongst the humans behind the counter at my local Chipotle makes 85% accuracy seem like the gold standard. The Google reviews are abysmal for the online orders. The only way to get what you really want is to stand in line and verbally guide the process along.

        • OutsideTheBox says:

          Oh……you mean like the jetpacks we were promised?

          Also the flying cars ?

          Major transformation……puh-leeze

          Automation speculation is just the ownership class trolling the worker class.

        • 3D Modeler says:

          Hahahaha…what planet are you Luddites living on, OTB & MB??? You crack me up!

        • OutsideTheBox says:

          3D

          No not Luddites.

          Nice try at deflection though.

          Just pointing out the many many failures of technology and their….shall we say….exaggerating technology fan boys. Could I be describing you?

          By the way…..why can you NOT buy a REAL self driving car? After all, they were promised to be operational YEARS AGO.

          Not just a Tesla that runs into things like a techie Mr McGoo.

    • Matt says:

      Yes, they are. I followed a flatbed with eight manufacturing floor robots (no idea what model) strapped to the bed on I-95 a couple weeks ago. My wife and I looked at each other and said, almost simultaneously: “Slightly less of a labor shortage for someone…

      • Seneca’s Cliff says:

        Were they orange, yellow, blue or white?

      • Nathan Dumbrowski says:

        So true. Businesses are using the “labor shortage” as a driver for investing in automation. IA is great but robots that never take a break, sleep, get paid, complain or cause HR debacles. And if you look these are not just work by hand. They are also ‘bots’ in the computer world too. IT in every industry is heavily invested in automating tasks and having them be run via scripts and computer code rather than humans

        • Wolf Richter says:

          Yes. Check the manufacturing employment chart against the manufacturing production chart above. Production has fully recovered to Feb 2020 levels, employment is still way down. That’s where the robots went.

        • 91B20 1stCav (AUS) says:

          Is anyone doing market research on the buying power/habits of robots, yet???

          may we all find a better day.

    • Ron says:

      All stores going to self checkout it sucks

      • Anthony A. says:

        You do self checkout when you buy online so why not in a brick and mortar store?

        • Ron says:

          Easy answer is stock market craziest I’ve seen pump and dump making a killing but in end most people just get killed financially

        • Ron says:

          At least someone has a job picking your groceries

      • Lynn says:

        I don’t use them. On the very 3 occasions I have because the other lines were way backed up I made sure to make a real live human being spend way more time with me than if I had gone through their line. Sabot.

        • 3D Modeler says:

          Do you pump your own gas?

        • Brant Lee says:

          I don’t know about now, but used to Oregon wouldn’t let you pump your own gas.

        • Lynn says:

          3D, yes. I have only ever seen one gas station in California that pumps it for you. The equipment at that station is very very old.

        • Auldyin says:

          3DM
          We have a totally unstaffed gas station in our small town. You stick your credit card in a slot on the pump and it all switches on automatically. If anything goes wrong there is a dedicated onsite phone-line to somewhere. Works great, but scary absence of life apart from yourself especially late at night.

        • Janna says:

          My dad was born in ’42. He used to set pins in a bowling alley. He also said you could go into almost any business right off the street and find work. Boy how times have changed.

        • Swamp Creature says:

          These self checkout machines are just another way to offload work to the customer, like these mobile APS and other Bull S$it. I never use the self checkout unless I have one or two items.

    • OutsideTheBox says:

      No automation.

      Years long chip shortage.

      Remember ?

      • 3D Modeler says:

        Right, almost forgot. Chip Shortage, Labor Shortage, Everything Shortage…Brain Shortage.

  15. Satya Mardelli says:

    When the government pays people to relax its bound to disrupt the workforce. One other thing, this is not an unemployment benefit. It’s a thinly disguised vote-buying scheme by the party in power.

    • leanFIRE_Queen says:

      A lot of us with COVID discovered that we rather have more free time than $. Consuming our time instead of stuff is the right thing to do for the environment as well, a ton of positive externalities.

  16. polecat says:

    Maybe the lowlymokestanis have had enough bs, as pronounced from on high, and have decided to sit this one out …rumple stiltskin-like! Think about it, if enough of the workings class, those that actually, physically DO work .. as opposed to office cubies, said uh uh, NO!, even increasing some in numbers .. imagine the utter panic in the 1%ers (That includes those grifting H$S “leaders” of ours’) and their karen-like toadies – the Professional Managerial Class ..

    It would be a sight to behold.

  17. AlamedaRenter says:

    Halal Guys in Oakland on Broadway has a sign out…hiring at $18/hr.

    I got my 2nd shot this week and walked around Old Town and up Broadway. I think every single restaurant had a hiring sign.

    Yet rents are moving up and housing is unaffordable.

    • leanFIRE_Queen says:

      > Yet rents are moving up and housing is unaffordable.

      Instead of healthcare, employers should start offering housing as the benefit.

      • Lynn says:

        It works and it’s needed. One of the hotel/bars around here offered a $1K bonus to anyone working more than x length of time, plus free housing as part of the compensation. A friend of mine may be doing a news story on it to inspire others.

        • Yancey Ward says:

          Free housing is taxed at value.

        • Lynn says:

          Oh, also, I forgot. One of the pot companies here bought up a fairly nice motel as worker housing. I would guess starting wages are minimum of $20 pr hour, basic labor or clerk. They train.

      • MonkeyBusiness says:

        Company provided housing used to be a benefit in Japan. Heck they might still have it.

        • Anthony A. says:

          I was raised from birth to about 3 years old in a “coal company” house in eastern Pennsylvania in the early 1940’s when my Dad was at war. The coal company owned the house. He was a coal miner and went to fight the Japs because it was safer than the mines. When he got back, we moved to Connecticut for him to find work as the mines were shut down.

          That very small house had a well for sink water, an outhouse, and no heat (coal stove in the kitchen kept the place above freezing during winter). Such fun, no internet, video games, Fakebook, etc.

        • AlamedaRenter says:

          It still out there…the town of Scotia in Humboldt is entirely a company town for the mill workers and forestry staff.

          Same with the town of Moccasin, its owned by the SFPUC and folks that maintain the Hetch Hetchy water lines and dams live there.

        • Sailorgirl says:

          The leading character in Nomad was a women whose husband worked the Gypsum mines in Empire, Nevada. They lived in a company house. He got cancer, HB1 killed the town. He died they lost everything and she moved into her van. I think even more people are living in vans and trailers then imaginable. A lot of these single early retirees seem to be headed in the same direction. Inflation is killing them from all sides.

        • Lynn says:

          AlamedaRenter, Scotia’s housing, or much of it, has been sold to private buyers. The mill hasn’t been fully operational for years. Those houses are very nice and roomy for the most part.

  18. Matt says:

    Thank you, Wolf.

  19. David Hall says:

    In recent years the post WWII baby boom “boomers” have been retiring. The baby boom produced a demographic bulge as the fertility rate was higher after WWII depleted the population. Fearing COVID many retired early in 2020. The 65+ segment of the population has grown from about 8% of total population in 1950 to nearly 16% today. These retirees are less likely to get hired, yet they may be able to purchase goods and services.

    • cas127 says:

      “Fearing COVID many retired early in 2020.”

      The youngest Boomers were 74 in 2020…that isn’t retiring early.

      Your broader point is well taken, but the “retirement train” long foretold, has be a long, slow time actually getting here.

      • RightNYer says:

        No, the oldest boomers were 74 in 2020. The youngest were 56.

        • Cas127 says:

          Arghh.

          Right you are.

          The oldest Boomers are 74.

          But my point still holds…the Boomers have delayed rather than accelerated retirement, delaying (by a considerable amount) the long anticipated “retirement wave” that is expected to hit the job and housing mkts.

          But the Boomers can’t delay it forever.

        • RightNYer says:

          Cas, I think we have to separate Boomers into two groups, those who have substantial stocks (or paid off houses in places like San Jose or Mountainview) and those who don’t. Those in the former category feel “rich” and that they can retire a few years before.

          Those who don’t have a lot of assets have to delay retirement, as they see inflation eating away at their savings.

      • 728huey says:

        Your math is wrong. The oldest Boomers turned 74 last year. The youngest ones were only 56 years old in 2020, so assuming anyone born in 1960 thru 1964 retired last year, it was an early retirement.

        • Cas127 says:

          You are correct, I reversed youngest/oldest.

          But a look at FRED data indicates that starting in the 90’s (after tax reform lowered the Social Security tax penalties for working), a rapidly increasing number of 65+’ers continued to work.

          This delayed the long foretold “retirement tsunami”…but it is 20 yrs later and in the nature of such things, retirement cannot be delayed forever (despite various stock mkt disasters…)

      • David Hall says:

        Someone born in 1959 would be 62 and able to retire early before the 66 yrs 10 months full retirement age. People born 1946-1964 are boomers. To get the largest Social Security check, one needs to wait until the age of 70 to start drawing benefits.

        One in four retirees get 90% of their income from Social Security (Center on Budget and Policy Priorities).

      • 91B20 1stCav (AUS) says:

        cas/right-dammit you two, first i’m pleased to find i’m no longer a Boomer (which confirms my personal run at life’s trajectory), then crestfallen to find i’m still firmly embedded in that demographic…

        Back to weedwhacking the firebreaks…

        may we all find a better day.

    • Lynn says:

      The Jones generation aren’t quite Boomers socially or financially. quote;

      “Generation Jones is the social cohort of the latter half of the Baby Boomer Generation to the first years of Generation X. The term Generation Jones was first coined by the cultural commentator Jonathan Pontell, who identified the cohort as those born from 1954 to 1965 in the U.S. who came of age during the oil crisis, stagflation, and the Carter presidency, rather than during the 1960s, but slightly before Gen X. (…) The name “Generation Jones” has several connotations, including a large anonymous generation, a “keeping up with the Joneses” competitiveness and the slang word “jones” or “jonesing”, meaning a yearning or craving.[14][15][16] It is believed that Jonesers inherited an optimistic outlook as children in the 1960s, but were then confronted with a different reality as they came of age during the shift from a manufacturing to a service economy, which ushered in a long period of mass unemployment, and de-industrialization arrived full force in the mid-late 1970s and 1980s, leaving them with a certain unrequited “jonesing” quality for the more prosperous days of the past.

      Generation Jones is noted for coming of age after a huge swath of their older brothers and sisters in the earlier portion of the Baby Boomer population had come immediately preceding them; thus, many complain that there was a paucity of resources and privileges available to them that were seemingly abundant to older Boomers. Therefore, there is a certain level of bitterness and “jonesing” for the level of freedom and affluence granted to older Boomers but denied to them.”

      • Shiloh1 says:

        Was a teen in the 70s and twenties in the 80s. If I could buy a DeLorean with a flux capacitor I wouldn’t hesitate to go back if given the chance.

        • Lynn says:

          Sholoh1 I agree. Each generation since has had less and less opportunities. Rent was cheap as a percentage of wages then. It started to go up quite a bit in the early eighties.

        • Petunia says:

          I knew a guy who bought one of the first DeLoreans in NYC and anywhere. It broke down the first week and for the first year was in the shop. I don’t know if it ever ran after that. Nice looking car but a total brick.

        • Wolf Richter says:

          Petunia,

          During the development phase of the DeLorean, I was excited about it. A new competitor, I thought. Then he couldn’t figure out how to design and build his own engine and instead went with a Peugeot V-6. That was the death knell. Back then, engine tech was key, and Peugeot didn’t have it and was building under-powered duds. An exotic high-$ car needs to have an exotic high-powered engine. If I’d want a Peugeot, I’d buy a Peugeot.

        • BuySome says:

          Forget it McFly, you Irish bug! All you get is the Toyota 4×4 with a 22R, hefty payments, and a less-hot replacement girlfriend. No hoverboards either. Read my fax McFly, “You’re fired!”.

        • Jos Oskam says:

          @Wolf,

          That engine used in the DeLorean was known as the PRV-Douvrin engine, jointly developed by Peugeot, Renault and Volvo, hence the PRV.
          Originally they wanted to do a V8, with the usual 90deg cylinder bank angle. At the last moment it was decided to cut off 2 cylinders but keeping the rest, thus ending up with a 90deg V6 instead of the technically ideal 60deg V6.
          This kludge never ran as smoothly as a real 60deg V6. Although versions of this engine have been used in an enormous variety of EU cars at the time, it has never been loved by true petrolheads.

      • drifterprof says:

        Interesting description of Jones generation, Lynn. By age, I’m a boomer born 1951. But I was set back a few years (drugs and associated mental problems), so my experience is actually that of a Joneser. As an idealistic boomer teen, I couldn’t hold down a job because the world was too freaky, and my antiwar activism / counterculture radicalism arrested my maturity development.

        Becoming a competent human involved realizing that “straight” society was more supportive and useful than the culture of my old “friends.”

        I don’t have any great stories about navigating the career world, vaulting up to stratospheric income levels, like many of my generation. Right up until retirement, I’ve always had anxiety about being employed, partly because my smart-ass question authority attitude tended to me fired. Through it all, my attitude was that if I lost everything, I would just start off at the lowest rung again and I was efficient, thrifty and organized enough to do well.

        My philosophy has always been that it seems like real needs are very minimal. I view most “needs” (especially American needs) from a Buddhism perspective: illusion — desire is basically a trap. It seemed like a rich country could provide basic income to every individual that would cover their basic, real needs. But health needs throw a monkey wrench into that principle. Because health is pretty strongly associated with personal behavior.

        With quite a bit of luck I got through it all in one piece.

        • Lynn says:

          Drifterprof, That wasn’t mine. I didn’t think I could link to it and wasn’t sure I could mention it. Easy to google part of a quote though.

          Yeah, I don’t know how people without support or a support system survive now.

        • Michael Gorback says:

          That’s one of the biggest lessons I ever learned. Before making any kind of significant purchase I always ask myself “What problem am I solving?”

        • 91B20 1stCav (AUS) says:

          Drifter/Lynn-thank you both, Lynn for the ‘Jones’-generation background and Drifter for recounting your experiences-found each highly resonant…

          may we all find a better day.

    • Kaleberg says:

      The government pays for old people to sit on their asses. It’s called Social Security. I don’t recommend retiring at 62, but if you have a job that is physically killing you and you were born in 1959 or earlier, you should consider it.

      • Old School says:

        Don’t forget that was part of the deal of being in the labor market. You had your check docked so you could retire in your 60’s. It was a forced deal, but don’t take the carrot away now that you are ready to eat it.

        • Apple says:

          What was SS tax back in the day? 1%, 2%??

        • Old school says:

          Apple,
          SS withholding taxes have been 6.2%,plus 6.2% employee match for 31 years. You have me confused with my grandfather.

          I saw the numbers for someone my age and it’s was an average real return of around 1%. But like any ponzi first ones in got treated the best of

        • MyLadyHumps says:

          Millennials and Zoomers were not invited to the bargaining table when that Social Security deal was made and they never agreed to pay old people to be idle for 30 years.

          No one wants to to hear it, but those are the facts. Younger workers can change the agreement whenever they outnumber older people who are not working. I don’t know if that will happen but I don’t doubt it.

          You made an agreement with people who are dead, I would say that was not a wise agreement.

      • historicus says:

        Kaleberg

        “The government pays for old people to sit on their asses.”

        Only in a situation where that “old” person didnt pay into the Soc Sec scheme. You should make that distinction.
        I would gladly take a lump sum of what I paid in over the decades, with the compounding…and call it even.

        • roddy6667 says:

          I paid into Social Security since 1962. I don’t feel guilty about taking that check. If I had put it into virtually anything else, it would be a lot bigger.

        • Anthony A. says:

          “I paid into Social Security since 1962. I don’t feel guilty about taking that check. If I had put it into virtually anything else, it would be a lot bigger.”

          Same here….started working in 1961. Ended a couple of years ago and paid in all the way along.

        • Apple says:

          What was SS tax back in the day?

          1%, 2%??

    • Michael Gorback says:

      The local businesses around here love hiring seniors. Something to do with “work ethic”.

      • Anthony A. says:

        Those two words are not part of the “new teachings” in the schools these days.

      • Phoenix says:

        These types of comments are so annoying. I worked at UPS during college supervising the twilight shift. Any seniors we got were placed in the easiest jobs like small sort because they were slow and frail. They also had a hell of a time figuring out the scanner system. They were interesting to talk to and could excel at suitable tasks which was fine. The hardest physical workers on my belt were always high-school or college-aged. I’ve found there are slackers and there are hard workers represented in every generation. Only fools generalize

      • Coffee says:

        …and when Gen X retires, the same thing will be said about their hard work ethic…
        …and when Millennials retire, the same thing will be said about their hard work ethic…
        …and when Gen Z retires, the same thing will be said about their hard work ethic…

        Young generations are always thought of as lazy by the outgoing generations, but they eventually pick up the slack.

    • Ron says:

      At least someone has a job picking your groceries

  20. Onionpatchkid says:

    Part of it may be that some people just don’t want to work anymore. I’m one of them. In 2018 I had a great year and I paid a little over $90K in taxes. A chunk of it was property taxes (I owned several properties at the time) but most of it was income taxes. I started to question what the heck I was doing. I’d always worked since the age of 12. I’d always made good choices, decisions, lived below my means, and invested. It was almost like I was being penalized so that I could pay for people that didn’t make good choices. In the meantime, I was driving to work on crappy roads and my kids were going to crappy public schools. It just wasn’t worth it anymore. I didn’t have any debt at all so I decided just to become a stay at home Dad and become poor on purpose. I was 48 when I quit and now I’m 50. My wife still works and she has family health insurance and her meager salary is enough to pay for the utilities, food, and other misc bills. I’ve never been happier. I’m embarrassed to say that we did get stimulus checks and I wanted to send them back and tell the Government to apply all the funds toward the National Debt but I figured they wouldn’t and would just blow it on something else. I never spent a dime of it. I put it in the bank and figured I’ll just use it to compensate for the future depreciation of my savings that I had worked so hard to accumulate. My neighbors though bought swimming pools, Teslas, new TV’s etc. I still have plenty of life in me to go back to work but I’d rather just be the “house manager” which I really enjoy. I’ve been on a buyers strike, I clip coupons, I shop at the thrift store, I only buy things on sale, etc. I can afford to buy anything I want but I don’t. It’s all just a game to me. Minimizing and maximizing is my job now. I actually get to cook and eat meals with my family now. When I was working I had never had breakfast and driven my kids to school. I do now and I love it. I missed all the pumpkin patch trips, zoo trips, beach trips, etc. When I did go, I wasn’t really there if you know what I mean. I can’t get those days back but I can do something about today and tomorrow. My family has never been happier. My wife loves me at home because when she comes home from work, everything is done.

    • WES says:

      Onionpatchkid:

      I was forced to retire at 47 due to job loss. I did what you are doing except now I am 67. My kids 25 and 21 have no memory of me working, only that of being at home and feeding them. We spent our summers at the family cottage. I have no regrets.

      • Onionpatchkid says:

        You got to experience more than I did. Luckily my wife was able to stay home with them until they entered school. I missed a lot of that precious time but I was doing what I had to do. I was supporting the family financially. My boys are 15 and 16 now and I made them get summer jobs so they can buy their own school clothes. They’re both working in restaurants and they love it! They have grown so much just in the last month. They are so proud to be making money. They do remember the “old me” and they like the “new me” so much more! I’m actually available for them. I never really planned for this and I’m learning as I go now. Really weird for me because I’ve always been a planner.

    • Anthony A. says:

      “My family has never been happier.” Congratulations, you are living your life well.

      • Heinz says:

        “My family has never been happier.”

        Around here we call that winning at the game of life.

    • Old School says:

      I got out at about your age. It worked well as my health was going down the tubes working a corporate job. I think what you are doing is really valuable because it’s tough to run a tight ship if both of you are are working full time. You can save a lot being a homemaker, home accountant and your own home maintenance person.

      • Onionpatchkid says:

        That’s exactly what I do! I was in construction so I know how to use my own hands and I can fix almost anything. I save a ton of money just by doing everything myself. My house is in “tip top” shape and I enjoy it because I actually have time now. I did it all before too but it’s more fun when your not working 60+ hours a week plus trying to fix up your house. I do get bored though because I run out of things to do.

        • Old School says:

          If you are getting bored and are good with your hands maybe find a good restoration project. I see a lot of people on-line restoring old Honda trail 90’s or super cubs. Supposedly you can find for non running ones for around $300 and lots of parts available. There’s kind of a hot market for them when restored. You can get about $2500 – $4500 depending on how good you do on restoration.

        • Lynn says:

          The old toyota 4×4 station wagons sell for quite a bit rebuilt. Funny thing, I wonder if there is more of a market for them used than there was new. I’d love a small suv or station wagon that had true 4WD. The new Honda Passports are supposed to have AWD that is better than before. Supposedly, for whatever it’s worth, almost as good as 4WD. I would never buy one new, nor would I buy the first year of anything, so I guess I’ll be waiting a while. By then we’ll know if they’re good.

  21. John Vermeer says:

    So, is this how full-out Socialism and Guaranteed Basic Income gets its foot in the door? Did we turn a corner which we can now blame on the pandemic? No telling where this will go but it sounds like we ain’t goin
    back to where we were.
    Personally, I don’t blame folks in under-paid,
    unrewarding jobs for considering their quality of life first, some work places make life hell for their employees and for no good reason. Has divine justice finally arrived?

    • Nathan Dumbrowski says:

      IF you are the United States President I believe one of the secret oaths is to spend more in office than previous administration. And boy are they holding true to this odd oath. Seriously though it is as if they can’t control the purse strings. And things have gone so out of kilter that this is the new normal.

      Helping hand is good. Government assistance is welcome. However there seems to be a lot of hands out

      • historicus says:

        “spend more in office than previous administration.”

        Well, some of that is “baked in” as base line budgeting has roughly a 6% increase built into the “cake”.

        “However there seems to be a lot of hands out”
        I suspect most have no problem with helping those who need help..
        but the government, especially in the hands of Democrats, seem to rejoice in spilling money..

    • historicus says:

      “So, is this how full-out Socialism and Guaranteed Basic Income gets its foot in the door? ”

      The cost of getting the money and giving it out is zero. The money doesnt actually originate from the Treasury anymore…that raised from taxation is long gone….it is provided by the Federal Reserve. Thatcher said Socialism eventually “runs out of other People’s money”. She never envisioned the machinations of today’s central bankers….because such machinations were UNTHINKABLE not too long ago.
      DeToqueville also noted the danger of massive dispensing of money from the government, and of course he too had no concept of the damage today’s central banker could do.
      “”A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.”

      • historicus says:

        and lets not forget Cloward and Piven who championed the reset of the nation via irresponsible fiscal policies….
        and we have it in spades now…
        $20 Trillion of new debt in a decade…with it more to come.

    • Lynn says:

      We’ll probably have to have UBI at some point or descend into a complete hell hole. I think the corner coming up at some point is automation. It may be delayed by the chip shortage but it’s already making a dent in jobs in grocery stores and tech.

      Seriously, at some point in terms of production of the human species, if we had a working model of global birth control there could be far less labor for the same results without killing people off or incarcerating them which ends up costing more money. Some jobs’ purpose are just to create a job in the long run. Like much of bureaucracy and some prison security.

      • 91B20 1stCav (AUS) says:

        Lynn-well said, ref: my tongue not-so-firmly-cheek question above about current market research on the buying habits of robots…

        may we all find a better day.

  22. Bigbopperoo says:

    Onionpatch, Good for you!
    Don’t forget Craigslist for people selling what you might want, or just giving it away for free.

    Plus you can sell on it free.

    Same with a newer outfit Nextdoor neighbors, lots of free stuff, cheap stuff, but you’ll be giving away your privacy, home address and subjecting yourself to the most banal political correctness on the planet.

    • Michael Gorback says:

      I can’t stand Nextdoor. Great place to go for lost pets, bug or snake identification (shortcut: any picture you post of a brown or black snake wil be 50-50 rat snake or cotton mouth), bad recommendations for just about any service (doctors, vets, housekeepers, roofers,landscapers) , or to ask for prayers. Nextdoor has no problem with open prayers but lots of problems with suggesting alternatives such “call your doctor”. So freedom of religion but not freedom from religion.

      If I post something useful like a warning about the Delta variant or bitcoin miners moving here and stressing our power grid two things happen.

      First, the tin foil hat crowd comes out. Now I’ve noticed something interesting about these folks. If it’s a covid warning they start a chorus of “I don’t believe the government”. But if it’s bitcoin mining and I suggest that our politicians aren’t even raising one word about it because there could be some back room hanky panky suddenly I’m an anarchist.

      Then it just deteriorates and then the moderators – who I refer to as the Nextdoor Notsies – take down the entire post. No warning, no explanation, just a star chamber.

      • Island Teal says:

        Good comment. 100% agree. Everyone has to act nice and follow the local mantras ??

      • Phoenix says:

        Nextdoor is an absolute cesspool

        • Daniela says:

          It’s somewhat useful to find lost cats and ask “what was that airplane” or other things like that. However, there’s been a string of burglaries and one home invasion based on NextNoseys posting they need some one to feed their cat, or water their plants, while they are away.
          Trip was canceled, woman woke up with burglars in her bedroom. Also, they do facial recognition on people’s smiling faces and sell the algorithm, along with your interests, your address, your pattern of likes and dislikes, a perfect panopticon without the jail cell.

      • josap says:

        I checked out NextDoor twice. The first time was awful. The second time was horrendously worse.

        Didn’t ever post. Reading was a huge waste of brain cells.

      • Swamp Creature says:

        Michael G or any medical professional can chime in

        What’s your recommendation for a family member in the high vulnerability group who just got over a bad Covid-19 experience which required 4 days in the hospital. He’s OK now.

        Should he take one dose of the vaccine ?

        When should he get it?

        Or should he just rely on natural immunity and skip the vaccines altogether. His spouse also got infected without symptoms.

        They are part of the anti vaccine crowd. I’m trying to give him some good advice.

        NBay
        Jul 3, 2021 at 10:13 pm
        Come on MG, dispense some more “wisdom”.

  23. Lynn says:

    Some of the gig workers weren’t really gig workers. For instance, some RE agents claimed self employment as they work on commision, even though they work through a company. Got more stimulus that way. Probably true for other sales. Now that they’re back to work some of them are counted differently.

  24. SOL says:

    I was thinking about getting a third job because it would put me so close to the home ownership.

  25. Kaleberg says:

    Some years back the National Lampoon had an issue imagining what would have happened if JFK hadn’t been shot. (Jacky took the bullet.) They had R.Crumb doing artwork for the Federal Spare Change Program that let young Americans bum around the country on Uncle Sam’s nickle. Hey, why not?

    There are so many nonsense jobs, and the important jobs pay peanuts and treat workers like garbage. Get rid of the minimum wage and go for agriculture-like support prices instead. Pass out the spare change until employers come up with a job that’s worth hiring someone to fill. If it leads to automation or eliminating a pseudo-job, even better. It can drive up the productivity figures and free up even more spare change.

  26. MCH says:

    Wolf,

    you realize that this should be a different variant of your WTF chart, right?

    Except, these days, it feels like the whole world has gone into the twilight zone. You could technically find a WTF chart if you look carefully enough at everything.

    Strange, no?

    • Wolf Richter says:

      Yes, everything has become strange these days. My head is spinning.

      • Cas127 says:

        Wolf,

        A bit off topic, but that “higher productivity with fewer workers” in manufacturing bit was a very good catch and telling/sorta depressing (although automation *should* make mankind better off…).

        Kudos.

    • historicus says:

      Head spinning…?

      The great “spinner” is the Federal Reserve….

      But a deeper issue is why such an entity can openly shirk, opening operate in a fashion diametrically opposite to their stated mandates/instructions/agreements to their existence…..and not a word.

      The Fed promotes inflation ….while it is charged with a stable prices mandate.
      The Fed feeds the federal govt money who then in turn uses those funds to dole out and thus discourage a return to the workforce…while the Fed is charged with promoting max employment…
      The Fed promotes all time lows in long interest rates….while they are charged with promoting moderate (not too high or low) interest rates.

      It is almost as if the FED and other central banks have been hijacked by oligarchs who then use the powers of these institutions to fluff their investments. One can only conclude that those who are pulling the strings have no regard for the mission statement of the Fed. I have suggestions as to who hijacked the Fed.

      • Bobber says:

        Yes, it is very strange. Home prices rising 12% in one year across the country. Stock prices moving like a chips on a Black Jack table. Speculation running wild. Big Tech replacing the federal government. Federal deficits equal to 10-20% of GDP. Top 1% paying little or no income or wealth tax. Manufacturing has left the country. Wealth concentration at all-time highs and rising.

        Everybody feels this can’t last, yet the anomalies seem to grow more pronounced with government intrusion in markets, and the lies. It seems there is no end game. Everybody living and governing for today, with no regard for the future.

        • MCH says:

          Really? Tech has become far more aligned with the government now than before. At least one side of government, it’s only being thrown under the bus a little bit because of a few outliers on both sides that has been drinking the kool-aid instead of serving it out. And also, the guys in control really needed a few scapegoats and they hadn’t settled on which one yet.

          One side decided to pick on China first, and then the other started on big tech before realizing that China is a better target. They are not in perfect alignment, but they are getting there.

          Remember, there has always been a 1% and a 0.1% in this world. No matter the form of governance. The faces and the forms change, the math doesn’t. In the US, before Bezos and Zuck and Buffet, there was Carnegie, Rockerfeller, and Vanderbilt, and whoever came in between. In Soviet Union, it was Stalin, Kruschev, Brezhnev, and now Putin.

          The only aberrations are odd balls like Sanders, Paul (Rand) who believe a little too much in their own talking points. And sometime, they get a loud enough megaphone to attract attention, at that point, it’s up to the Bushes, the Bidens, the Pelosis, and the Cheneys of the world to slap them down and restore order. (yes, you can slip in different names in there, but the situation remain the same)

          The bottom line is no one can save you, except you. Relying on the charity of others, whether its government (dumbos or jackasses) or individuals is pretty much like surrender and ceding control to someone else.

        • Old School says:

          If you look at a 200 year history of stocks and draw a trend line you can see when the Fed was created. Stock prices didn’t have the great boom and bust episodes until the Fed was created.

        • Swamp Creature says:

          Sounds like 1929

      • MCH says:

        The Fed has always been a tool of the government, it’s effects today are just as pronounced as before.

        Ultimately, it’s about control, just that the tool kit has gotten a bit larger and a little more advanced, and the effects are more noticeable now because the changes have caught up with our perception.

        Think about it. If inflation is running 1% to 2% annually, it’s hard to notice, periodic increase in income will mask that a little bit. Basically it’s the slow boiled frog idea.

        The reason it’s suddenly more noticeable is that the boil has gotten a little out of whack, and then Covid accelerated things. Why do you think there is this demand in the last decade for increased minimum wage. The operative word there is MINIMUM, it’s not because the people in charge cares. It’s because they realize that the rate of boil has increased to a point where it is noticeable. They are seeking to adjust that rate to below that pain threshold.

        The only difference is that the people in charge suddenly have competition. In the form of China. Why do you think China is suddenly the focal point after basically about two decades of neglect. And you notice, the jackasses didn’t walk back Trump’s efforts, if anything the focus is more intense. Because China is now a viable competitor for control and the people in charge realize they aren’t on the same team any more.

        We should be all terrified if the Chinese government and the western governments are truly aligned

        By the way, Chinese government is ahead on the control aspect thanks to the internet. They are the first to roll out a government backed digital currency possibly with an expiration feature. Their version of social media is more aligned with government. In other words, their effort is more a fast boil and readily noticed, but the majority doesn’t mind as much, because their pain threshold has been raised by decades of experience.

        • Sam Lowry says:

          MHC wrote: “ If inflation is running 1% to 2% annually, it’s hard to notice, periodic increase in income will mask that a little bit.”

          Inflation used to be defined as the expansion of the money supply. One of the consequences is that prices are higher than they otherwise would have been. (See any dictionary before about 1980.)

          Inflation has been redefined as rising prices, but notably in a way the government gets to define. (See “owner’s equivalent rent,” and “hedonic regression,” among other details.) This is how they get away with pretending that ‘inflation’ is “1% to 2% annually.”

          Inflation (properly defined) is a transfer of wealth to those who get to spend the freshly-printed money first (the government and the oligarchy), from those who are forced to use that money as money (the rest of us).

          Yes, they worry about the frog jumping out of the pot, but conflating ‘inflation’ with ‘rising prices’ is the most devious trick they use to keep the frog complacent.

        • historicus says:

          MCH
          “The Fed has always been a tool of the government”

          Nope. Not in the early 1980s

          30yr treasuries went to 16%

      • Sam Lowry says:

        historicus wrote: “It is almost as if the FED and other central banks have been hijacked by oligarchs who then use the powers of these institutions to fluff their investments.”

        The oligarchs didn’t hijack the FED. The oligarchs were responsible for its creation in the first place. The mandates were merely a cover story.

        A bank note used to be a piece of paper ostensibly redeemable in specie. I say ‘ostensibly,’ because banks, throughout history, have issued more of these pieces of paper than there was specie it represented claims to. It used to be called fraud. Now it’s called fractional-reserve banking.

        When people’s confidence in the ability of a given bank to redeem bank notes fell, the bank would suffer a bank run. This forced banks to either compete with each other for the confidence of the depositors, or, seek some form of government privilege forcing people to use their particular brand of bank notes as money.

        The Fed was nothing more than the creation of a government-enforced monopoly on bank notes on a national scale, thus cartelizing the banking industry on a national scale. The government does this in exchange for a source of revenue that doesn’t involve explicit taxation.

        Of course the creation of the Fed led to the biggest bank run in the history of the United States, but we’re not supposed to make that connection. And now the Fed creates money out of nothing to buy the soured assets of the investment banks (like mortgage-backed securities) outright. It’s called “quantitative easing.” But we’re told this is for the good of the economy.

        • historicus says:

          The hijacking is more pronounced now.
          Never has there been 0% fed funds and 5% inflation.
          Never has the Fed supported the mortgage market by buying MBSs 2% below the inflation rate.
          Never has a Fed expanded the money supply 27% in less than a year.
          Never has a Fed PROMOTED inflation.
          Never has a Fed ignored inflation to this degree.
          Never has a Fed “partnered up” with an outside entity.
          Never has a Fed dealt in non federally backed securities…(before 2008)

          I get what you are saying, but the brazenness, the total disregard for the mission statement of the Fed, the constant expansion of influence and the self authoring of new powers and mandates has never been so outlandish.
          And never has the criticism been so muted.

      • Dazed And Confused says:

        historicus,

        Mortgage rates below inflation are very unusual but they seem to have happened at least once before:

        In 1974, inflation was 11.05% but mortgage rates were 9.2%

        (sources BLS and Freddie Mac).

        • Dazed And Confused says:

          Also in 1975:

          Date Fed Funds Rate Inflation
          Feb. 19 1975 6.0% 11.2%

          So the fed funds rate was 5% below inflation for at least one month in 1975.

        • Dazed And Confused says:

          In Feb 1951:

          Inflation rate 9.3% (source BLS)
          Mortgage rate 4.08% (source NBER)

  27. DawnsEarlyLight says:

    How about the other side of the ‘coin’. What if ‘help wanted’ is broadly advertised, but none of these businesses are truly hiring?

    • DawnsEarlyLight says:

      What I mean is, mid-level and higher jobs are not hiring, due to not enough experience/education. What’s left is lower paying jobs, which many are not even thinking about filling. We are truly seeing supply capacity being caved by not fulfilling demand. We are being hollowed from the inside out.

  28. KZBFF ELF says:

    No better time to start a business really, especially with automated production and/or service. A lot of people have great buying power now.

  29. Micheal Engel says:

    1) Employment 16 – 19 yrs : (-) 228K.
    2) Employment 20 – 24 yrs : + 242K.
    3) Employment 25 – 34 yrs : (-) 122K.
    4) Total Employment 16 – 34 yrs : (-) 108K
    5) Yet, total leisure & hospitality employment that employ the young and the old : + 343K. Something is wrong :
    6) The young and the old are not employed.
    7) The last standing restaurants do whatever it take to cut service.
    8) The cause : it’s too risky to reinstate full capacity on the cusp of recession.
    9) Health services up this month : +59K, but last month down : (-) 225K. The total : (-) 165K.

  30. Winston says:

    “Upward pressure on wages during an unemployment crisis”

    Which, as I have said, is the stealth minimum wage increase effect intended by the Dems.

    “So far, 25 Republican governors have set an end date to their states’ participation in the federal supplemental unemployment benefits program, established under the American Rescue Plan.”

    The wages paid won’t drop after the shortage is over, at least for those already hired.

    • Petunia says:

      Louisiana, a democrat state and one of the poorest states, has also dropped the federal unemployment programs as of July 31. Just in case you didn’t notice.

      • It’s historically a D state, but it hasn’t voted nationally for D president since Clinton in ’96, and it’s pretty much now a solid red state, current (moderate to center-right) Dem governor notwithstanding.

  31. historicus says:

    Why such generous federal enhanced unemployment benefits?
    Where does the money come from, and at what cost?

    The cost of getting the money to dole out to the potentially employed is zero…..courtesy of interest rates 5% below inflation…..
    IF rates were REAL, the cost of such largesse would be prohibitive. The program would not exist, and workers would rush back to work.

    1. Who and what provides this low cost money to the federal government to discourage the workers to return?

    2. Who and what is charged with “promoting maximum employment”?

    Same answer….remarkably. And only in the realm of government (quasi agency machinations) could this dichotomy exist….
    Answer: THE FEDERAL RESERVE.

    • RightNYer says:

      Yes, and that’s the problem with the idea that you can print money to “inflate the debt away.” You never can, as printing money and keeping rates artificially low encourages even more spending. And spend even more the politicians will. So any portion of the debt that is “inflated away” is countered by even more that is created in that period of time.

      It will never work until the dollar is destroyed. Personally, I think we’re in the final stages of a crack-up boom. I don’t even know if it can be stopped at this point.

      • historicus says:

        Right…
        Agreed. The Crypto craze is proof of the chance of a complete fiat currency crash. It is the ultimate criticism of the central banker by those who are tired of being mistreated.
        Savers penalized….desperation investing, yield chasing, all on purpose by the central bankers.

      • MCH says:

        Crack-up boom?

      • MyLadyHumps says:

        Correct

        Janet Yellen is running around squawking that the government needs to run even higher deficits because interest rates are low (what interest rates – the Fed is charging 0%)d.

        So what yellin Yellen is saying is the Fed will never raise interest rates and money will always be free. The flip side of Yellen’s argument is inflation will run forever out of control.

        • historicus says:

          Interesting and of note…
          those pushing for inflation….check to see if they have an inflation protected pension…or several.
          Then ignore what they say…for they are insulated from the ill effects of that which they push on the rest of us.
          Bernanke, Yellen, Powell, Kashkari, all on the govt “wagon”….what worry they of savings and inflation? They are to be taken care of handsomely to the grave. But what of us?

    • OutsideTheBox says:

      h

      Look !!!

      It’s a cloud!!!

      Start yelling !!!!!

  32. twinkytwonk says:

    If you have ever teased an animal then you will know that after a while it just gives up and wanders off. We are at the same point with humans. Everything is more expensive and along with falling wages means that people , just like that dog, give up and do something else.

    I gave up work last year at 49 and i also stopped buying anything but essential items, well apart from a dog and a fishing rod :). I’m not going to lie, it’s bloody great.

    I’m sure that a lot of people all across the world are doing exactly the same.

    • Tom Pfotzer says:

      A dog and a fishing rod. Great choices. Enjoy!

    • Paulo says:

      Well done twink.

      I packed formal work in at age 57 (8.5 years ago). I relied on three factors to make this decision. One, I would have enough cash coming in to be fine, two…the days cannot be reclaimed so enjoy what you have while healthy, and three….. I would not need more money after age 75 than what I currently spend. The last point is hotly contested by my friends still working who plan on extensive travels and vacations. Really? Okay, here we have universal medical coverage so that isn’t a worry, but my dad died at age 72 of cancer and I currently look after the finances, housing, and well being of my friend who just turned 81. Trust me, he doesn’t need more money and isn’t planning travel holidays. I tell him often to make sure he leaves nothing on the table when he goes. (he has no family other than my wife and I).

      Back to your teasing analogy. Many of my friends still working seem to be afraid. They constantly worry they will run out of money even though they have very good pensions and have everything paid for. They have it all but are afraid to let go….they talk about working part time if they run low. They are always concerned that their plans won’t work. My buddy kept working long long after he could retire. He finally pulled the pin and his wife lasted about a year before cancer took over her life. This was a tough year for him as he had to regroup and carry on during Covid. Very hard to see.

      There is no formula or right decision. But it is nice to have a choice in the matter. Nice to see people choosing to run their own affairs which is what the stats reflect, imho.

      cheers

      • David Hall says:

        People lost their health in old age. Hospitals may bill more than double what Medicare allows. Medical debt collectors may go to court to sue you and put a lien on your house, if you have one. They may get a court to garnish your bank account and/or brokerage account. That allows them to withdraw money from your accounts without your permission. An ambulance ride to the hospital and subsequent stay bankrupted some families.

    • Old School says:

      I read an article thirty years ago regarding some young Japanese doing the same thing when their bubble burst. Of course government wants just the opposite work and consume to you drop.

      I have come to realize I am a policy taker not a policy maker and just try to figure what is best long term choice for my situation.

    • MyLadyHumps says:

      Yup, that’s what I did.

      Except for the dog, never pay for something you can get for free.

  33. Micheal Engel says:

    1) Since Aug, USD is in a trading range.
    2) Since Aug, King George is losing billions.
    3) Since Aug, buyback are drying. Wages are up, but executive perks are down. The markets became useless for CEOs income. Wall street whales reduce their holdings in a stealthy distribution.
    4) Since Aug, Amazon is in a TR. Bill Gates is milking cows, because he is US largest farm land owner.
    5) Equal weight RE positive bias is encouraged by bank’s CEO’s. RE is bank’s largest assets.
    6) If US RE plunge, it will start a new pandemic.
    7) In order to save RE world mortgage rates will have to be lower.
    8) Since currently US 10Y is < 1.5%, in the next downturn, 10Y might be NR, the 3M @ zero, and mortgage rates between : zero and 1.5%. That's in the quarter finals.
    9) JP will jump to stop the coming ball, but it will be too late. US 10Y will spin inside the upper corners, straight to the net.
    10) Min 33, the Fed 0:1 Deflation. EFFR < 0. US 10Y inversion underwater.
    11) The Fed defenders will move to the opponent 18 yard box to score.
    12) After a quick counter attack, the Fed 0 : 2 Deflation. The Fed will double down. Min 78, the Fed 0:3 Deflation. EFFR deeper NR, US 10Y inversion grow.
    13) The Fed will be eliminated in the quarter final. What a shock.

    • historicus says:

      No one has seen deflation….since 1930s.
      Down ticks in the rate of inflation is not deflation.

  34. Micheal Engel says:

    14) The Fed global domination will be over.
    15) US treasury will have to recharge Fed assets, like 100Y ago, after
    WWI.

  35. historicus says:

    Phenomena def: cause or explanation is in question.

    I think there is no question. People are choosing checks from the govt over going to work. I dont blame the People. I blame the free cost of doing so and the obvious vote buying schemes of Pelosi and Schummer.

    • Wolf Richter says:

      Per my trusty Random House Websters:

      Phenomenon, pl. -na

      1. a fact, occurrence, or circumstance observed or observable: to study the phenomena of nature.
      2. something that is impressive or extraordinary.
      3. a remarkable or exceptional person; prodigy; wonder.
      4. Philos.
      a. an appearance or immediate object of awareness in experience.
      b. Kantianism. a thing as it appears to and is constructed by the mind, as distinguished from a noumenon, or thing-in-itself.

  36. HR01 says:

    Wolf,

    Thanks for the summary.

    Regarding:
    “#2 weird phenomenon: Upward pressure on wages during an unemployment crisis”

    Actually not weird at all, given the circumstances. Tens of millions at the lower end of the wage scale have been removed from the calculation. They’re sitting home on the dole. So that should skew the average hourly number higher, correct?

    Note that even with this artificial boost to average wages, they’re still not keeping pace with inflation.

    We won’t have any clue about what ‘normal’ is until the pols stop kicking the can. Who knows when that might be. Here in CA, eviction moratoriums have been extended to Sep 30.

    • Wolf Richter says:

      Check the chart of the hospitality industry — mostly low-wage workers. Quite a bit of hiring. Nearly half the jobs created over the past two months in the overall economy were in the hospitality industry. As I pointed out, that influx should push DOWN the average wage. But it didn’t because they’re hired in at higher wages.

      • Micheal Engel says:

        Because the gov hired 180,000 people and the hospitality workers
        are getting higher wages.

        But employment between 16 – 34 yrs is down 108,000 and the
        boomers are retiring. Something is wrong.

        • Wolf Richter says:

          Micheal Engel,

          All this data is seasonally adjusted. In the 16-34-year bracket, there are the summer jobs and internships, lots of them, and so the seasonal adjustments in this category are huge every year during the summer. If they’re off just a little, it whacks them hard.

          We have run into numerous problems with seasonal adjustments during the pandemic because the normal seasonality was totally upended. In this case, summer jobs and internships.

          So I’m not going to worry about the 16-34 bracket yet. There will probably be a big jump when seasonal adjustments are out of whack in the other direction – that’s what they do, first out of whack in this direction, then a few months later, out of whack in the other direction. Over time, it balances out. That’s my guess.

  37. CreditGB says:

    Paying people not to work more than they get by working, you get;
    More people on the unemployment dole.
    More job openings going unfilled.
    States reducing unemployment, see more job openings being filled.

    How is any of this confusing?

  38. Micheal Engel says:

    CA rent eviction victims are against Newsom eviction.

  39. Micheal Engel says:

    1) Nixon did what was unthinkable for the previous 100Y. He divorced gold, because of LBJ “misbehavior”.
    2) In order to stay in the gold standard the Fed raised interest rates
    in 1930. Thereafter high quality bonds and gov bonds outperformed stocks & RE.
    3) After a great victory Roman rulers rewarded their generals with
    a sack full of gold coins. Two thousands years later they are still around, because they are useless for day to day expenses.
    4) Without buybacks stocks are useless for executives perks and wages.
    5) Few hundreds millions in buyback investment, at low rates, lifted
    market caps in the billions. CEO’s most important lever is mostly gone.
    6) Countries that forbid buybacks, their stock market lag behind SPX.

  40. ft says:

    Some people collecting unemployment for the past year have actually been at work every day, taking no salary, all proceeds going towards paying the rent and struggling to keep the doors to their small, crippled businesses open.

    • Old School says:

      Unfortunately when economy does poorly government feels need to do something. Sometimes that is when huge policy mistakes are made as government tries to do something. Too much printed money, price controls, capital controls and new taxes

      • historicus says:

        Today’s central banker has decided that cycles are bad, and they attempt to iron them out.
        But cycles and corrections are important, they are part of a free enterprise system. The healthy remain, the poorly run or poorly financed disappear. That’s why they call them “corrections”. Excesses are flushed.
        But because of this attitude by central bankers who “know better than the market”, excesses build. And when the event does happen, the reactions is magnified, sometimes systemic threatening. Enter the central banker who then “rescues”, accrues more power, expands their scope. Maybe all be design.

    • historicus says:

      People working their a$$es off and just breaking even….then witness those who are riding the stock market to new highs each day…..
      not a good situation.
      And the Fed who keeps rates low, they say, to help main street, is a diversion. It is to pump asset prices. Period. Right J Powell?
      If rates went to 2%, it wouldnt hurt main street businesses, but it sure would hurt asset prices. But 2% might give savers some interest income, heaven forbid /s.

  41. The Real Tony says:

    No wage inflation in Canada. In about 60 percent of the country there’s jobs but no one can afford to work them because they don’t cover residential rent. The companies eventually go out of business or relocate to other cities or other provinces. The Chinese are in the process of turning a good part of Canada in nothing but ghost cities and ghost towns. The Chinese bid the price of homes into the stratosphere and rent goes higher than the average worker makes. The Chinese can all afford to leave their second, third, hundredth, thousandth property empty so companies pack up and leave as residential rents never fall from lack of supply. The vacant homes tax does nothing to correct things.

    • historicus says:

      Chinese money laundering…with the housing games in Canada

      I dont hear people say “trade deficits dont matter” anymore…..
      as China ascends and those with trade deficits decline.

      The Canadian housing situation in proof that when your obligations (currency) is in the hands of others, there are consequences. Can Canadians buy housing in China? guessin no.

    • Lynn says:

      Happening here too. Most of it now seems to be on the quiet or through investing in investment companies. We also have our politicians and big tech involved in it but it’s not always traceable- goes through llcs in Nevada Delaware and offshore.

      Haven’t checked lately, but before Covid there were large condo buildings etc in NYC, LA and smaller ones in SF that the units or smaller buildings were sold but empty.

  42. RedRaider says:

    re: retirement boom

    62 is retirement age. But your SS check increases every year you delay retiring up to 67. Now imagine the pandemic lockdown caused everyone 55+ to retire.

    Retire at 55, you say. Who does that? I did. One of my brothers did. The other brother took the 67 route. Even he gave up at 65. I think lots of people do it. I’m not saying I actually believe everyone 55+ has retired. But how many would it take to cause a weird phenom like this article addresses?

    Don’t forget the boomers were the first generation to believe they wouldn’t get SS checks. It’s still an open question.

    • RedRaider says:

      PS

      If its true everyone hates there job why wouldn’t they remain on UI as long as they can?

    • Wolf Richter says:

      RedRaider,

      “…boomers were the first generation to believe they wouldn’t get SS checks.”

      That is incorrect on several levels.

      1. The dad of my high school sweetheart – an accountant – told me when I was 18 that Social Security was a scam and that he would never get it and that I would never get it either. He was “silent generation” (born in the 1930s).

      2. He ended up collecting SS during his entire retirement until he passed away, and then his wife collected survivor benefits, no problem.

      3. I’m a boomer, and I have never once doubted that I would collect my SS if I lived long enough. I’m now old enough to collect, and it’s there for me, though I will wait to max out the payments. And it’s there for my wife as survivor benefits, in case I check out.

      So some people always believed that it was a scam, and in the end they all collected SS, or will collect when old enough. Some people never doubted that they would collect, and they too ended up collecting SS, or will eventually collect when old enough.

      Has nothing to do with generation but with attitude.

      • RedRaider says:

        If I was married I would have waited until 67 also. But I’m a life long bachelor. I figured the best policy was to get as much SS as possible before the system failed.

        Part of the confusion is over generation. For me the core boomer generation is dated 1936-1955. The extended generation is 1926-1965. I realize how nonstandard these dates are but if you consider the matter from a normal bell distribution you might see my point. I did not mean to imply the entire boomer generation believed they wouldn’t get SS; only that some in the generation believed it. Before that generation no one believed it simply because SS didn’t exist.

        You decided to wait for 67. I started drawing SS at 62 believing it was a ponzi scheme.. Ten years later and it’s starting to look like you are right and I’m wrong. I’ll concede defeat regarding the core generation but we’ll have to wait on the extended generation.

        And there still is the matter of me being 5 years ahead in payments.

        I really don’t think there’s that much difference between you and me. You’re just a better writer than me.

        • RedRaider says:

          PS

          If by survivors benefits you mean collecting 50% of the spouses benefits upon death of the spouse I think you made the right choice especially if your wife worked. My brother set it up that way for him and his wife. When he died 10 years ago and she started collecting SS survivors benefits it was a godsend. Grieving is hard enough without worrying about finances. She never stops commenting on this.

        • Island Teal says:

          Re SS benefit math.
          Wife collecting $10 per month.
          Husband collecting $20 per month.
          Husband dies.
          Wife now collecting $20 per month.
          Household still short $10 /month.
          No winning numbers there ??

        • Wolf Richter says:

          Island Teal,

          You forgot what “husband dies” means: it means that there is one person less in the household! The number of people in the household may have dropped by 50%. So consumption goes down, and so do expenditures.

        • 91B20 1stCav (AUS) says:

          Wolf-sadly, have in-laws who hadn’t paid off their mortgage before a death happened (not a young couple, either), choosing to use their house as an ATM in the runup to the GFC. Have the feeling that they (well, the widow, anyway), aren’t the only ones…

          may we all find a better day.

  43. Yort says:

    The pandemic created massive spending shifts due to “YOLO” (you only live once and future pandemics could be much worse), inheritances pulled forward (money given and not earned gets spent more frivolously), govt “free money” programs out the wazoo and still being enacted (eg- kid tax credit starts July 15th at $250/$300 per child, per month, for the next six months). And to top it off the Fed has now created a individual and company purchase FOMO, basically a fear of buy it now or you might end up paying much more or not even be able to find it later (which gets confirmed and thus creates a perpetual psychological reinforcement inflation generation cycle)…

    Yet no matter how elegantly our village idiot Fed spins the happy talk of Fed induced inflation is good for society, there will be costly “treading water” societal consequences that will somehow be shocking due to the “nobody could have seen that coming” govt leader responsibly disclaimer mantra…

    Per Bloomberg:

    “As a company, you’re going to have to pay up to hire. But the cost of living is going up pretty rapidly. So really at this stage, you’re allowing people to tread water at the very best.”

    Bloomberg Wage vs Inflation chart (PCI YOY vs hourly earnings YOY):

    https://assets.bwbx.io/images/users/iqjWHBFdfxIU/itIh4jRqzpuA/v2/pidjEfPlU1QWZop3vfGKsrX.ke8XuWirGYh1PKgEw44kE/919x-1.png

    Happy 4th of July weekend!

    Yort

    • historicus says:

      PCE allows the substitution OUT of items that rise “too much” in price.
      It is a terrible metric…..designed as such, low reading biased.
      IMO

  44. Micheal Engel says:

    Guramrit Hanspal didn’t pay mortgage since 1998, but he
    still lives in his long Island house.

  45. Ron N says:

    Dear Wolf,

    WaPo just did a similar analysis but had a slightly different conclusion than you have.

    1# Retirement numbers and people changing careers are quite high as are numbers leaving the workforce for forced caregiver roles. This was already a growing labor problem. The pandemic caused a premature jump.

    2# I am amused by those who think supply and demand is weird.

    3# Many red states have already ceased their unemployment bonus. That has not reduced the missing workers rates in these states. The data does not support your conjectures in the article.

    The federal and state governments threw most poorer and many middle class workers out of their jobs. Few of us could pivot at a moments notice if our income streams were terminated. A $0.10/hr wage increase is meaningless to that reality. Nobody can pivot on a dime.

    Blaming the shiftless lazy for rampant unemployment fraud is easy for us wealthy but it is a canard. A whopping $0.10/hr extra won’t motivate the waitress earning $3.87/hr to abandon her kids who she now has to homeschool, especially when we wouldn’t tip her because she wouldn’t t unmask in the pandemic. Who in their right mind would ever consider returning to such a job? And possibly her parents died from covid and she can afford to stay at home until she can send the kids safely back to school. And maybe she won’t let her kids do part-time jobs unvaccinated in a pandemic. The numbers you show don’t measure these new realities.

    These shitty underpaid jobs are now far shittier and far more underpaid than before. That is capitalism at work. No surprise there is no demand. See my point #2.

    Prior to the pandemic, many businesses did not have a sustainable labor model from the get go. You have been the leading expert in pointing this out. From restaurants, to Amazon, to Walmart to UPS to all homebuilders, they all depend on tax subsidies for property taxes, healthcare, housing, schooling, buildings, infrastructure, operations, utilities and the like. Many others only function with undocumented labor. You hav pointed out for years the multi-Trilion ‘frauds’ occurring with stock buybacks, QE, etc. We are so NOT an efficient market that prices the real costs of everything.

    Businesses have outsourced real labor costs to the government from the 80’s on. We shouldn’t be too surprised that markets are catching up with that externalities and tax policy will eventually catch up with the con we’ve all pulled on the country. It will be ugly, oh so ugly. However, I don’t think blaming folks who won’t do our shit work for shit wages is the answer.

    • Wolf Richter says:

      Ron N,

      READ MY ARTICLE BEFORE POSTING GARBAGE ABOUT MY ARTICLE.

      Your #1: I covered the “retirement boom,” as I call it – go find it in the article.

      your #3: “Many red states have already ceased their unemployment bonus. That has not reduced the missing workers rates in these states. The data does not support your conjectures in the article.”

      What unadulterated BS.

      WHAT DID I SAY ABOUT THIS IN MY ARTICLE??????????

      Duh. The employment surveys were taken in mid-June. The effective date by the first 4 states to let the $300 a week in benefits laps was June 12. All other states came later. This had zero impact on the June jobs data. We’ll see the first impact in the July data.

      Your #3 is where I stopped reading. This was just too much garbage to swallow in one sitting.

      And for crying out loud, at least look at the manufacturing employment chart, with employment still down; and at the manufacturing production chart, with production fully recovered with lower employment. You see – automation. I talked a bunch about that.

      • Steppenwolf says:

        It’s simple: people hate their jobs and will quit when they can, sometimes even when they can’t.

    • Swamp Creature says:

      Ron N

      “WaPo just did a similar analysis but had a slightly different conclusion than you have.”

      This WaPo newspaper is the most worthless rag ever to populate the printed media. Why would you quote anything out of there without checking it out.

      • OutsideTheBox says:

        WaPo newspaper

        Owned by Jeff Bezos

        Now why would that fine businessman own a “…. most worthless rag ” ?

        He’s sooooo rich…..doesn’t that mean he is upstanding and moral ?

        /s

  46. Auldyin says:

    I’ve heard it said that in various countries there is a ‘disturbing’ increase in the number of people deemed unable to work due to ‘disability’. It is speculated this could be related to long-Covid effects or worse still, some other unknown factors. It’s one of these wait and see stats.

  47. Yort says:

    Perhaps the labor shortage could be as simple as fear of death while making minimum wage???

    Per Marketwatch:

    Amid a record number of job openings, Americans are taking their time looking for work, with only about 10% of job seekers actively searching for a new gig.

    And the top reason unemployed people are hesitant to join the workforce is fear of contracting COVID-19. Some also say a financial cushion has bought them the gift of time in their job search.

    That’s according to a survey of 5,000 U.S. adults conducted May 26 through June 3 by the job-listing website Indeed. The survey included both unemployed people and people who have a job.

    The survey comes as more than 9 million jobs sit unfilled in the U.S., and a record number of workers are quitting, according to the most recent figures from the Bureau of Labor Statistics.

    “Among the unemployed, concern about COVID-19 is the most commonly cited reason for a lack of urgency in looking for work,” wrote Nick Bunker, the economic research director for North America at the Indeed Hiring Lab, in a blog post on the survey results. Some 23% of unemployed people said fear of the virus was keeping their job search “non-urgent.”

    • Heinz says:

      “Some 23% of unemployed people said fear of the virus was keeping their job search “non-urgent.”

      Apparently these people also have no fear of becoming indigent or penniless despite not wanting to work.

      Clearly, something wrong here.

      • OutsideTheBox says:

        Heinz

        “…indigent or penniless ”

        You mean like when they were working for low low low wages ?

        Neither the employer nor customer is entitled to low cost labor.

  48. Micheal Engel says:

    Colleges are down, summer jobs and internships are down, no
    internship on zoom for college students.

  49. Micheal Engel says:

    HR don’t fly. Some recruit the best students on zoom. Dad
    buy his college kid a new car.

  50. Swamp Creature says:

    Even our Governor of Maryland, in a heavily Democratic state, is getting rid of that $300/week Fed unemployment benefit program. There are labor shortages here and jobs all over the place being advertised.

    We worked our frickin a$ses off through the whole pandemic and didn’t even need the money. We were considered essential workers.

    I’m sick of hearing from all these whining dogs about their excuses for not going back to work. They can all get lost and find someone else to complain to as far as I’m concerned.

    • OutsideTheBox says:

      SC

      Jealous much ?

      By the way, just now, YOU were complaining.

      The rest of us are tired of that.

    • tom20 says:

      My BIL has been riding the gravy train for months.
      No intention of going back. Believes they will continue with
      UBI. This is what he voted for.

  51. David Hall says:

    The Chinese Import-Export Bank clears transactions for China’s Belt and Road deals. China built a port in Sri Lanka. Sri Lanka did not have enough money to make the payments. China seized a 99 year lease of the Sri Lankan port and thousands of acres of nearby land.

    In Montenegro the Chinese built a road that Montenegro could not pay for. China may seize prime real estate to pay for the road .

    Buy now pay later has trapped countries doing business with China. China wins.

    • 91B20 1stCav (AUS) says:

      DH-now, why didn’t WE think of that???

      may we all find a better day.

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