In the current era of Stimulus Good Times, with its huge kinks.
By Wolf Richter for WOLF STREET.
Small businesses are tough. Many disappear quietly. Hiring is an issue. Due to the limited resources, small businesses have trouble competing with large corporations in terms of pay, benefits, glitzy workplaces, and LinkedIn glamor. But in the current era of the Stimulus Good Times with its huge kinks, labor issues hit records – the weird phenomenon of 13 million people claiming unemployment compensation while companies are having trouble hiring.
In addition to a slew of labor issues, small businesses face inventory shortages. And they responded to the challenges where everything costs more – including their labor – by raising prices in record numbers, according to data from the NFIB, the largest trade organization in the US for small businesses.
Of the small businesses, 46% reported that they had job openings in June that couldn’t be filled, the second highest in the NFIB’s data going back to 1986, just below the record in May:
Plans to increase employment over the next three months rose to a new record in June. The employment index tracks the percent of owners who plan to “increase” staff minus those who plan to “decrease” staff over the next three months:
And they have been raising compensation. In June, the compensation index jumped to an all-time high. The index tracks the net of increases minus decreases over the past three months. It shows that small business owners are straining to add and retain staff:
The top problem that owners said their businesses faced was the “quality of labor” they were able to attract.
Over half of the owners said that they get “few or no qualified applicants” for the job openings they have. For small businesses, this issue is always high in hot labor markets, but it’s much less of an issue when then the labor market tanks sending high-quality labor looking for jobs.
The difficulties small businesses have in retaining and adding staff, given the aggressive hiring practices by larger companies that a small business might not be able to compete with, is shown in the index for actual net increases of employment, which has remained slightly negative for the past two months, as these businesses are even having trouble hanging on to their staff:
And small businesses have raised their prices over the “past three months” at a pace that spiked far beyond all prior periods in the data going back to 1986. The survey data doesn’t extend back to the high-inflation days of the late 1970s and early 1980s, so we lack that reference. But this is huge:
And it’s going to get bigger: A record portion of small businesses are still planning to raise their prices over the “next three months”:
Small businesses, more often than not, carry more inventory than they want, and inventory being “too low” is generally not a big issue, according to the NFIB data. But this changed radically in June last year, when this metric began spiking to hit a new all-time record in June this year:
Owners of small businesses are feeling fairly optimistic overall, with the NFIB’s Optimism Index at 102. While down from the peak periods of optimism in the 107 range, it’s up a bunch from 91 during the dark days in April 2020, and from 81 during the low of the Financial Crisis in March 2009.
One of the many economic mindblowers during the pandemic was the spike in new business formations, amid suspicions that fraudsters were creating businesses to obtain PPP loans. But the PPP ended in May. Yet, business applications continued at a red-hot pace. Read... Did People Use their Stimulus to Start a Business? The Spike in New Businesses, one of the Mindblowers of the Pandemic
Enjoy reading WOLF STREET and want to support it? You can donate. I appreciate it immensely. Click on the beer and iced-tea mug to find out how:
Would you like to be notified via email when WOLF STREET publishes a new article? Sign up here.
I think the number of available jobs that gov is reporting is a lie; Steven Van Metre was mentioning that gov might be double counting number of available jobs. Once the unemployment benefits is cut in September, we’ll see the truth about how many jobs are available.
Also, the stimulus payout has made many lazy. That’s what free money does to people. What a shocker!!!
Actually, there is a corollary to Wolf’s comments if you think about it. Small businesses are tough to do, and many will die. But they are like cockroaches, they will always survive and there will always be more of them. ?
See there is a bright side to everything
I object to my small business — the infamous WOLF STREET Media Mogul Empire — being called a cockroach. ?
Sir, you named your business an Empire… by definition, Empire is not a small business or a cockroach.
Hmmmm, WSMME… sounds like you could find a few stocks that fit those alphabets.
I hired in 2020 during covid
good applicants who WANT TO WORK
glad to have them today
of course we have MORE WORK – but not gonna pay dime more for ifffy labor
Small businesses are like cockroaches? What then do you call corporate dominance over business? Hopefully, we will have a full stock market meltdown to bring on more of these small-time cockroaches. In fact, it may be glorious.
I vaguely remember route 66 in Oklahoma, where the independents were single colorful stops along the way. It was in fact fun to see independent cockroaches competing for your business. How did we get along without the cloned identical blah choices on every interstate exit back then? How did we get along without a few corporate retailers controlling prices and our buying habits? Fond memories.
Big ginormous cockroaches. Unlike the small ones, if you cross one of the big guys, you get squished.
Or May be vampire squid is a better description.
So you are a successful cockroach with many small successful businesses under your belt? No offense.
Maybe a small landlord that can’t collect rent?
Or a food or drink establishment that has to ask to see a vaccination certificate?
Or a business that can’t hire workers but has to pay an “unemployed” worker cash under the table to stay open?
And not worried about the tax increases you see.
Everyone I know, that got by, got by with PPP, EIDL, and grants. Just like the rent, mortgage, and student loan deferrals, a lot of that will come due in time. It’s not over yet.
I get your point. I am thinking the PPPP, EIDL….will not need to be paid back. I was even reading today there is a $25k grant for 1st time home buyers if their parents never owned a home. They can stack it with the new $15k tax credit for 1st time home buyers.
Crazy…..the government certainly wants to keep the housing market from ever crashing.
PPP is forgivable if spent and documented with tax records on worker pay. EIDL will not be forgiven and interest starts as soon as the funds are received. As per SBA. Grants do not need to be paid back. Lots of new paperwork required though.
It helps but it does look like small businesses – and I am talking 1-20 workers here – mostly small service businesses – are being targeted as being too independent for the likes of the crony pseudo-fascist socialists.
Why is it that people get lazy with free money, but corporations don’t? They received waaaaay more money yet not a peep.
I think you may be correct. If you look at Indeed you will see that many of the postings are repeated 4-6 times, but count as unique listings.
Also, if you look at the listings of job openings they are almost (90%) for really large companies. There are very few listings for small companies, like there used to be.
Something is amiss… hmmm.
Wrong. There is no labor shortage, just a wage shortage. Pay a living wage with health insurance and a pension ( union ? ) and watch the labor “ shortage “ disappear overnight.
We are looking at a huge mess in the near future. Many companies are sending out mandatory vaccine notices, even to remote workers. Terminations begin October. Can companies afford to fire 30% of their workers, where will they find replacements? Because those workers will not qualify for unemployment, the true numbers of the unemployed will not be evident. Prepare for massive Hoovervilles.
The other options is to get vaccinated, and lots of people — the fence sitters mostly — are now picking up on it. Just takes some time to get them off the fence. Then of course you have the true believers who will never get vaccinated and would rather lose their job over it.
Wolf, you’ve been hostile to supply side inflation and fingering the outright price gouging by centralized producers for months.
Now that all the stimmies, aside from the child tax credit and the low fed interest rates, have run out, why do you see now as the time to change your tune?
What the heck are you talking about?????????? That I’ve “been hostile to supply side inflation”??? and “…why do you see now as the time to change your tune?””
Sounds like you never read my stuff beyond your interpretation of the first part of my headlines. Sheeesh.
With the infrastructure bill passed and another $1T coming down the pipeline, what will that do to the economy at large?
More treasury issuance = lower yield / higher bond prices?
The amount of actual NEW money in that $1 trillion is relatively small and will get spread over a bunch of years. This bill is not the biggie. The biggies are to come. But they too, if they pass, will be much smaller on a per-years basis than the no-holds-barred stimulus and bailout bonanza in 2020 and 2021.
So in other words what you are saying is the stimulus and bailout of 2020 and 2021 was about the election… Not COVID?
Not at all what I was saying. Stimulus and bailouts were thought to be necessary to deal with the pandemic.
But elections did play a role. Without an election coming up, the Republicans might have remembered the debt and deficit. They controlled the WH and the Senate at the time and could have stopped it. But they’re into vote-buying just as much as Democrats.
@Wolf I know I was just teasing you. Both parties are terribly guilty of vote buying.
What is it that they say, democracies only last for 200 years? How much time do we have left?
I think the gist of your message is it sucks to be a small business. While the ones in charge keep whining about how big businesses are wrong and victimize workers, their policies in turn further victimizes the workers by pushing on smaller business that might otherwise compete.
It’s kind of like Audacity of Hope railing against too big to fail banks and in turn making banks impossible too fail through the same similar policies. And oddly if you look at the composition of the government, it’s more or less the same, the jackasses control the main levers of power.
This is both hilarious and ironic. It’s like they tell you they are here to save you, but then stick a knife in your ribs, and people are too uneducated to realize this.
BTW, I also believe that if the dumbos were in charge, they would do the exact same stupid things, just in a different way.
Wolf, I submit that you should change Wolfstreet to the Cassandra blog, it seems to fit here.
Consumer and business confidence are always related to what is happening at that moment in time, it is not a forward-looking measurement. Alot of this confidence is based on stock and real estate bubbles. There is still a ton of extra money sloshing around. Wait for that to run out and for taxes to rise and the stock market to fall
Biden is in alot of trouble. When your approval ratings are sinking at a time when you have just handed out the huge amount of free money that they gave out, you have nowhere to go but downhill from there. My guess is that by the end of his term (after economic downside plays out), he might be wishing for Trump’s approval ratings.
“When your approval ratings are sinking at a time when…”
Biden’s approval rating in June was 50%. That is a heck of a lot higher than Trump’s approval rating 6 months into his term, which was 35%, down from 45% when he started out. Trump never ever reached 50%. According to Gallup, which you can easily google. An approval rating of 50% in the US is pretty good. It might still go to 35% or 25% or whatever, for example, when there is 8% inflation, but not yet.
Yeah, well that’s what happens when you have a large percentage of the population whose approval is based on whether someone is “nice.”
Disclaimer, I detest both of those guys.
I am nice, I tell you what you want to hear, give you free money. Just vote for me, you damned ingrate.
Come on, man, you can do it.
Polls aside, none of the so called leaders should be trusted.
Everyone likes the guy who gives him free stuff. Eventually, as Margaret Thatcher said, you run out.
You forgot to mention that Biden had a 100% favorable media coverage for the entire 6 months. Trump had negative coverage from the day he took office. That’s a big omission. And I don’t believe these polls anyway. When this phony economy collapses with Stagflation which it will, the media will turn on him. He will go down worse than Jimmy Carter.
Yes, I didn’t mention any reasons for that, just the percentages. And your point about the media coverage is well taken.
Depends on the medium. Fox is crushing CNN and MSNBC in ratings and are not exactly DNC cheerleaders, and Newsmax is more stidently oppositional. Hard to imagine any president of either party doing much better than 50% approval short od a popular war.
Seriously, Fox, CNN, MSNBC, what’s the difference between any of them. They are just a bunch of money grubbing (excuse me, eyeball grubbing) a******s whose sole purpose can be summed up as building a giant echo chamber to polarize people, and then cash in. Feed the outrage machine.
One side happens to have more media channel than the other, but fundamentally, there is no difference once you get past the wording.
The reason Fox is crushing CNN and such is because the liberal networks are split into basically five channels compared to Fox, which was smart enough to consolidate all of their viewers into a single channel. Watch what happens if suddenly ABC, CBS turn Dumbo permanently.
I absolutely don’t think Biden is in trouble. He is fine as long as he is sending free money to people and printing money.
You are over estimating the intelligence of average people. They have no idea what is happening. They are average normal folk trying to live and enjoy life. Whoever gives them freebies, they like it.
What a terrible world in which we’re all forced to live among the ‘average’ (or is it the median? the mean? the nice?).
may we all find a better day.
One of the few advantages small businesses have over the insider connected big corporations is the ability to barter with customers and suppliers.
Untraceable and untaxable.
Will become more and more common with higher levels of inflation.
partially true…..we can barter with customers, but suppliers??
Not really, unless they are small time owners like myself. So, my suppliers fall into the big corporation category. No barter there. Here is the price, take it or leave it.
I work in Management consulting… For the last 5 years everyone’s mantra has been IT is the competitive engine of your business! You must transition to Agile methodology or die! For your FAANG and their heirs… this is fine good advice.
The problem is, FAANG and startups are paying Dev-ops, Pre-sales Architects, and Sales People high salaries with stock options… So there is very little actual talent at the Small & Medium size business side of the talent pool. This demographic of business is forced to settle for outsourcing or highly paid consulting firms to help them even try to compete, in the realms of development or sales.
Those not trying to compete are the Zombie companies Wolf has talked about… they have cut their IT to a skeleton crew, they are living off cheap money from Wall st, getting lean enough to *appear* profitable… in the prayer someone like HPE will buy them out for obscene amount despite being zombie dinosaur *cough* Zerto *Cough* Terradici *Cough*…
Microsoft, Amazon, and Google will be running the internet in a few years. Not sure if you notice that AT&T threw in the towel. They sold their whole 5G engineering team to Microsoft and will now let Microsoft run their 5G infrastructure.
So AT&T will just own the customers and store and Microsoft do the IT side.
I noticed Verizon and TMobile is close to doing the same thing with AWS. As of now they are keeping their engineers but letting 5G run on AWS. I would not be surprised they do the same thing as AT&T. This is not the only industries letting Microsoft, Amazon, and Google run their IT.
It will be hard to compete and scale against these big 3 in the future.
Those three need to be broken up.
No, actually, it’ll be really tough, because the innovation that has been driven in some of these cases make it impossible for the parts to be as effective as the sum.
For reference, I attached a link to a Youtube video here in my name. It is literally fascinating what Amazon has accomplished, no small business can achieve this. It’s not practicable at any scale. Could you break this up now? Absolutely, but then you can stop expecting innovation in warehouse logistics, because now, all of those parts that aren’t Amazon become a cost center.
By the way, watching this video make a few things stand out, specifically the people. It goes back a few days to another article Wolf wrote about how there is not enough employees. Well, necessity is the mother of invention, that much I can tell you. Amazon had no need to invent all of this logistics technology, that they did is why they’re able to scale like no one else…. ever. For them, necessity was efficiency, when necessity becomes survival, you can bet places like McDonalds will adapt automation faster than you can blink an eye.
It is beyond tough to operate a small business. Having said that I know many small business owners who have done extremely well by knowing their niche, valuing their customers, and supporting their staff. If they know that another company might provide a better particular service for their customer they will so recommend knowing full well the customer will return. They also understand their staff makes it all happen and rewards them accordingly.
But I always wince at the term small business. What is the definition, anything under 500 employees? That’s crazy. Plus there are vital and needed services and at the opposite end….. fluff businesses that were dubious from day one. There is a marked difference between a company that offers service for vital industries, and a gift shop. What’s more crucial where I live, the HD rebuild shop for logging equipment or the candle and spice shop in the plaza?
500 employees is a medium-size business. The NFIB represents businesses that typically only have a few employees.
I’d consider Paulo that not all successful adults who have money to spend in the local and global marketplaces are men and woman like you and yours, and your peers. There’s a very large market for fluff. Sensitive new agey guys with their man buns and their partners, setting up their little love nest nicely – aroma and spice, yoga mats, and everything nice and spiritual.
Global competitors to these local fluff stores are numerous and include Gaiam, and Gwyneth Paltrow’s infamous and much hated Goop. Amazon of course offers up significant fluff as well. Fluff is worth billions. Many of the rules for all of them, to make them succeed, would be similar to the ruies for your non-fluff places. Know your customer, know your suppliers, top service, play business hardball when needed, and work very very hard at it.
No other industrialized country but the US ties one’s health insurance coverage to their employer. We should also figure out a way to break that dependency (note that I am not necessarily advocating a single-payer system; there are a lot of different universal coverage models out there to choose from). Doing this will help small business to concentrate on their business, rather than having to mess around with health insurance coverage for their employees. All other countries have figured this out but the US.
We need a single payer system and we need to expand medicare to cover vision and dental. It’s a disgrace that seniors have to pay thousands of dollars to repair their teeth or lose them, and there’s no preventive care either. As for vision, it must be comforting to know our seniors are out there driving with old prescription glasses they can’t afford to update.
Funny how people who aren’t supposed to be here get all those things for free.
Is your point that someone who can’t afford glasses (I can get them retail with corrective lens for as low as $99) but somehow can afford the cost, inspection, maintenance, gas and insurance of car should, somehow, get stuff for free?
When you are on a fixed income, usually around poverty level for SS beneficiaries, $99 is a lot of money. In most of America you need a car to get anywhere, especially to buy food, since there is zero transportation available.
Medicare is not free, it cost money every month, and it isn’t comprehensive enough. Also this benefit was earned with payroll deductions during a lifetime of work. Nothing in America is free for Americans. Only boarder crossers get free stuff.
Petunia, most people have not come close to paying for what they take out.
It’s a nice refrain that people have “earned” their SS and Medicare, but the numbers don’t bear it out.
The biggest problem with the system is too many SS beneficiaries never put a dime into the system in the first place. All the people who didn’t pay into it and aren’t dependents of beneficiaries, should be on another program paid for by taxpayers for that purpose. They shouldn’t be on SS or medicare. If that were the case, most SS beneficiaries would probably get higher payouts and not be on the poverty level.
@Petunia – What do you mean by “too many SS beneficiaries never put a dime into the system in the first place…”?
This might be news to you, but you have to pay into Social Security (for at least 10 years) to be eligible for benefits.
People on SSI and disability have not necessarily paid into the system. Only retirees and their dependents are paid in recipients.
Every society has the same problems. It’s how they deal with them that makes them 1’st or 3’rd world.
Personally, I prefer some layabouts getting “free stuff” to the whirlwinds of diseased beggars one is accosted by in India!
My eyes are still good at 77, but my teeth have had big problems from advanced age and old dental work falling apart. I have spent about $40 K on implants, crowns, root canals, and gum surgery in the last 5 years. I’m good now, but it was a long process.
I could use hearing aids as I have asymmetric hearing loss. But at $6 K for them, I can still hear OK.
Medicare would have been nice to help, even if it was for a partial chunk of it. Fortunately, after working for 53 continuous years, the last 20 in my own small and successful business, I could afford the cost of the dental work. Not very many seniors could do that.
“Who will pay” is just part of the problem.
The obscure pricing of medical services, lack of competition in medical services are contributing to the unaffordability.
It’s nice that you can afford the dental work you need, but most seniors have to have their teeth pulled at their own expense. Then have a bad time eating normally.
I forgot to mention the hearing benefit should be included as well, since most seniors probably wouldn’t even bother trying to get hearing devices, considering the cost. And they are already so many medical items they can’t afford.
Medicare is already broke and insolvent. Expanding benefits will only make it go broke faster. Get real.
Medicare should be expanded to include everybody that wants to pay into it. The young would join and they don’t use as much medical care as the seniors, this would keep the system solvent for sometime, and allow to expand services for everybody.
This is totally unworkable. Anyone working is already “paying into it.” So are you saying that younger people would pay senior risk “premiums” for coverage they statistically won’t need?
I think medicare should become a single payer system open to all who want to pay into it.
It’s not true that everybody working pays into a better system. I know plenty of young people who work and don’t buy medical insurance, because they can’t afford it on a low salary.
And by the way, statistically younger people just don’t use much medical care, but most buy it anyway, if they can afford it.
May be what the young need is a clean break from the old. Let’s say starting this year, anyone 18 years or younger will not longer need to pay into the social security or medicare system. The government goes in debt enough to take care of the unfunded liabilities.
Then anyone 18 or younger is on their own, but they also don’t have to pay SS and medicare taxes.
You know what that means right?
Ha ha, a bonanza for Amazon and every other retailer, cause suddenly there is a few more percentage points of dollars to be squeezed out of the uneducated suckers who can’t see beyond next week.
Boy, I have my cynicism dialed up to 27 today.
“It helped us honor our promise of life, liberty and pursuit of happiness to the American people. Life — a healthier life. Liberty to pursue their happiness, individual happiness because they could not—they wouldn’t be job-locked, stay in a job because someone in the family had preexisting medical condition or that they did themselves.”
“And just think, that you could be a photographer or writer, start your own business, be self-employed, as well as change jobs or start a business and not have to be constrained by whether you had affordable and accessible quality health care.”
Nancy Pelosi on the third anniversary of thr Affordable Care Act (March 2013)
We probably in the ninth ending of expanding social benefits. US can’t afford what is promised therefore all the printing and financial repression.
Really???? You have to be kidding.
I think you are right. It explains why many corporations engage in age discrimination. They want to chuck their older employees before they get socked with big medical cost liabilities. Of course they don’t want to hire an old person with potential medical cost liabilities either. Been there and done that — not as an employer but as an employee in Aerospace. All this talk about treating your employees well might apply to small businesses. It certainly doesn’t apply to big bad heartless corporations.
Yes this is a major factor. Few will admit it for legality reasons but there is a lot truth to it IMO.
Older folks carry a much higher risk of health expense. You can’t blame employers for making it a leading employment consideration.
The system is set up for companies to maximize shareholder value, and often that means shedding overly expensive employees.
In China, workers get their health insurance through their jobs, but health care is affordable.
partially true…..we can barter with customers, but suppliers??
Not really, unless they are small time owners like myself. So, my suppliers fall into the big corporation category. No barter there. Here is the price, take it or leave it.
The big price increases will eventually cool consumer demand on everything. The million dollar question is what price level will suffocate demand.
Everytime, I think house prices have reached the demand killing level, they seem to find some way to move higher. Same with durable good prices.
Your only option is some diversification. It is OK to have an oversize housing bet, as long as the remainder of your capital is diversified away from that. That is how I am playing this …
A utuber did a video walking around a rich CA town, pointing out homes for sale, their prices, and the mortgage cost per month. It was instructive to put it mildly. These homes were nice with ocean views but not opulent by any means. Anywhere else they would be upper middle class housing.
One house was selling for $20M+, with 20% down, he estimated the monthly mortgage would be $100K per month. Another was a duplex, one side was selling for $6M, with 20% down, he estimated the mortgage to be $30K per month. His estimate did not include real estate taxes.
These numbers are so ridiculous it’s mind numbing that deals like this are even possible. The utuber simply pointed out the insanity of American real estate. No normal house, regardless of the view, is worth $30K-$100K per month, and what morons are paying this much.
So don’t buy that $20M house. Problem Solved.
Back to the topic of small business;
I’ve worked for businesses of all sizes, and I definitely prefer small to mid-size businesses IF they are well run. Sadly, many weren’t. People will prefer to work for larger companies for the security of a stable work environment with written policies, better benefits, especially health insurance, and a potential career path for the ambitious.
As a direct hire I prefer a small or midsize company. As a consultant I prefer to have a mega corporation as a client, an endless billing stream.
That would be lowering lending standards, artificially suppressing interest rates and the government guaranteeing nearly all mortgages.
Or, another way to put it.
How much do you think houses would be selling for with 20% down, 9% interest rates and banks eating their bad loans?
Everytime, I think house prices have reached the “demand killing level, they seem to find some way to move higher.”
There is a demand killing level, it’s a big fat zero… as in zero humans courtesy of a big gigantic asteroid.
Remember, the value is ultimately in the land, the one thing they aren’t making any more of.
When it’s raining and cold outside most of the value is the house.
Interesting to note. Wolf has mention there has been no resistance for the most part on price increases. This means the customers are willing to pay! That has always been an issue with higher wages, translating to higher retail price, where until recently there was blowback from the customers. Wanting coupons, sales, discounts, etc.
I know we all like a bargain, but we can’t mandate health care costs to employers, higher wages , without the customers feeling the pinch as well.
We as customers must be willing to support our fellow workers. Maybe now, the field will be leveled.
Imagine a medieval king. There are small towns around not under your control. A huge famine and wide spread problems are troubling every one of those towns. Now, king has a huge treasury, grains and soldiers sitting without jobs. Big business almost wiped out mom and pop business all around. Now, every crises is an opportunity to expand the empire.
CP, it’s always been like that. Read the history of the Roman Empire. The big fish eats the little fish until there are no more little fish. Then the big fish eat each other.
1) Surviving small business are paying more for rent, wages, insurance,
taxes, covid fixtures….
2) They are under capitalized to buy new inventory. Low inventory, less to sell.
3) They cut o/h and payroll to the bones, but that isn’t good enough them.
4) They survived so far thanks to Trump, but covid keep bleeding
small businesses, forcing them down to their knees. Unfortunately many will not survive Q1 2022.
5) With unemployment expiration and more for rent, employees will compete for a place to work, wages will become elastic, stochastic.
Current inventory net too low frog cooking is WS most important chart on this blog.
It’s not due to shortages, it’s about running out of money.
The three biggest problem will filling the hospitality and service jobs in my area (SC coast)
1. Housing costs are absolutely bonkers. Probably need 80K job to rent within 20 miles of area with greatest need.
2. Transportation costs. Price of cars, duh. But really terrible public transportation.
3. Can’t import the normal supply of really cheap seasonal guest workers because of Covid.
The companies that limited layoffs in the pandemic are looking pretty smart now!
Hiring MUCH harder than firing…
Always is easier to destroy than build.
I think, being a Wolf Street Beer mug guy, that the cockroach comparison is appropriate. Wolf Street Media Mogal Empire is not a cockroach, but the comparison is great because:
1. The cockroach has been on earth about 280 Million years – survivability and resilience.
2. It can live w/o a head for 1 week – so time for a relaxing vacation
3. it can run 3 miles in only 1 hour – wow, Olympic gold
4. They become adults in only 36 days – compared to Millennials??
5. In only 1 day they can run as fast as their parents.
6. They like alcohol – cheers/Prost
7. There are 4000 species – diversity
8. They can go w/o food for 1 month – same as humans
LoL that was pretty funny, nicely done
Cockroaches are one of the one the only species that can survive a nuclear war. After the strike in Hiroshima they were alive and well.
Nice job Brett, but can they change shape and size and become politicians?
The Federal Reserve has …
provided near free money to the Federal Govt to pay people, under the guise of COVID related compensations, in such a fashion as to discourage participation in the workforce.
Record Job Openings….
If borrowing costs for the govt was in the realm of reality, such programs would have been cost prohibitive….remember that phrase? “COST PROHIBITIVE?
Then the Federal Reserve PROMOTED an inflation…though they are instructed to “stable prices”.
So the double whammy on small businesses…
Higher cost of good sold…
Higher employment costs.,
Both intentionally brought to you by the Federal Reserve of the United States.
And the Chairman still stands at the podium and states the Fed is holding to “stable prices” and keeping rates at zero to “promote employment”.
They are actually promoting just the opposite in BOTH INSTANCES.
Just maybe this was their plan all along. Drag the minimum wage up through these policies. My parents made pennies on the dollar of what I expect to earn. My parents bought houses for $50k. So perhaps these big brains figured they would outsmart the coyote and force through gentle nudges the price increase, labor disruption and ultimate wage increases necessary to notch up all players.
Many years ago I was shocked that a coffee and croissant in Australia was $15. But they also paid employees higher there than in the States
Just a note. I found the local chain grocery stores here are running out of essential items worse that during the height of the pandemic. Of the 15 essential items I normally buy, they were out of half of them. I talked to the management about these missing items and he said they are having severe supply chain issues. The warehouses are nearly empty and cannot deliver the items. It goes back to the shortage of truckers. Here it is 16 months into this pandemic and they still cannot get their act together. What the hell is going on????
Read about the “bullwhip effect”. Seems to be what is happening in supply chains.
IMO, the shutdowns were too heavy handed and the stimulus was as well. Still feeling the effects of those.
Might get yelled at for being heartless for saying it this way, but we are facing a 2/10 pandemic. We shut down the economy like it was a 4/10. And we printed money like it was 8/10.
In our business right now it’s a shortage of materials and labor. Record demand for goods. We are not alone.
Certain areas of our economy are already running near full capacity in a normal year. You can’t goose demand across multiple industries and expect the people and resources they all depend on to magically appear overnight.
Its all transitory….havent you heard? /s
In Murica You Are On Your Own.
– Brad Pitt
Killing Them Softly. GFC was the background of that movie. Apropos.
An NPR podcast (Planet Money: “Mobile Home Parked”) describes how many small business mobile home park owners are selling their business to big money investors with billions of dollars.
The big money corps, who quickly raise the lot rents and other fees, are often assisted by Fannie and Freddie, which are supposed to be helping people get into home ownership. Some people are stuck in the lots because their mobile home is too old and immovable.
Higher income from the raising rent/fees increases asset value of a mobile home lot business, allowing the big money corps better leverage to get more Fannie / Freddie loans and buy out more small business owners.
Sharks and sardines. I always considered paying rent to live on a mobile home lot a bad investment. Now big money is putting an extra squeeze on those people.
Government won’t do anything about it. That’s America.
True that dp, and that’s just the start:
Once they own the MHP outright, these big boys start evicting everyone if the location is in an area that has grown up commercial around the park, or near the beach, etc.
Nothing the tenants, no matter how long there, how old, etc., etc., can do about it.
Then the big boys build a new condo with new commercial, etc.
The big boys saw what happened on the SE coast of FL a while back, when the 20 folks who owned the ocean front land under their trailers were bought out with the option of a cool million — back when a million was real money — or they could have one of the new condos…
Suggest anyone considering moving to a MHP anywhere in FL should make damn sure they own their land and an interest in the common lands pf the entire facility.
“The weird phenomenon of 13 million people claiming unemployment compensation while companies are having trouble hiring” deserves a deeper dive. Is it people with long-term covid, older people who got laid off and don’t/can’t work available jobs because of physical limitations, caregivers who don’t have what they perceive to be viable alternatives, folks who can’t readily move to where jobs are, or people taking advantage of the current situation? Is it weird, or something predictable?
It would be helpful to understand who these folks are in order to better understand their effects on short vs. long-term inflation.
Another sign of inflation. I was at a restaurant recently and the cc slip had “suggested” tips starting at 18% and going up into the mid 20’s. Maybe I’m just a cheap SOB but 15% is quite a chunk of change, especially on an already inflated food bill. After recovering from the covid lock-in, I don’t see folks keeping on eating out due to to these inflated costs. I suspect that a lot of mid-tier restaurants won’t make it long term.