Laid-Off Workers Hired Quickly by Other Companies: This Labor Market Is Astonishingly Strong, Fuel for Fed Inflation Worries

It’s already playing a key role in every one of Powell’s press conferences.

By Wolf Richter for WOLF STREET.

Just about every day, there are stories of layoffs, but mostly small-scale layoffs, in the hundreds, 300 people here, 500 people there – of the 153 million employed people. Occasionally, there were layoffs of 1,000 or 2,000 people, and sometimes those are in global operations, with an unknown number in the US. Then there are large companies that are laying off staff in the divisions they’re trimming back, but they’re hiring in their other divisions, and often employees can get hired by another division.

And they just don’t add up to the mass layoffs in the prior recessions, where big companies would make serial announcements of layoffs of 10,000 or 20,000 people at a time per company. In addition, there are massive well-documented staff shortages in some sectors, such as schools (the “teacher shortage”), in healthcare, and others.

And we’re seeing that in the initial claims for unemployment insurance. For the week ended September 24, released today by the US Department of Labor, the initial claims for unemployment insurance fell by 16,000 from the prior week to 193,000 (seasonally adjusted) – near historic lows. This shows that most of the people who are being laid off either already had a new job lined up when they walked out the door, or they’re finding a new job very quickly, before even filing for unemployment insurance: another sign of how strong the labor market still is:

These weekly “initial unemployment claims” are not based on surveys, as other labor market data is, but on actual claims for unemployment compensation, filed by people who’ve lost their job and haven’t found another job yet, and who want to be paid unemployment benefits to tide them over.

Initial unemployment claims are the most immediate measure of the labor market, and they just refuse to show any weakness.

Over the decades, significant and lasting spikes in initial unemployment claims were associated with recessions, and every recession was preceded by them.

Going back to the recessions through 1974, including the nasty “double-dip” recessions in the early 1980s, we can see how today’s initial claims for unemployment insurance still depict a strong labor market.

Before and during recessions, these initial claims for unemployment insurance surge because people who lost their jobs cannot find another job quickly because other companies too have stopped hiring or have started laying off people. This would be a sign in the data that the labor market has started to run into serious trouble. But not yet (purple areas indicate recessions, recession dates from NBER).

The number of people that continued to claim unemployment insurance in the week following the “initial” claim – the “insured unemployment” – fell by 29,000 from the prior week, to 1.347 million, just a hair above the record lows earlier this year and far below the levels of any other healthy labor market, and far far below recessionary levels – another sign of just how strong this labor market still is, and how powerful the labor shortages still are in absorbing people that have gotten laid off:

This confirms other labor market data: Still huge demand for labor and tight supply.

Large-scale surveys of employers have shown that all year through July, the latest month reported, the number of employees who were laid off or discharged has remained near record lows; and the number of job openings, at over 11 million, has remained in the astronomical zone, up by 61% from the same period in 2019; and employees are still quitting jobs in historically large numbers, a sign of massive churn and job hopping as they take advantage of still strong demand for labor to obtain a better job, more pay, or better working conditions.

The labor force is still not back where it had been before the recession – and that is part of the problem with the labor market. Very strong demand for labor meets very tight supply. The result is rising wages – and in terms of just wage increases, this has been the best labor market for workers in decades.

The problem is that inflation is red hot, and is outrunning even those wage increases, and those wage increases provide further fuel for inflation – and here we go: the wage-price spiral.

That’s why labor market data, including today’s initial unemployment claims, are near the top of the Fed’s inflation-worry list. This kind of labor market, by fueling further wage gains and more consumer spending, is a major contributor to the inflation dynamics – and the labor market has been playing a key role in every one of Powell’s more and more hawkish press conferences.

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  145 comments for “Laid-Off Workers Hired Quickly by Other Companies: This Labor Market Is Astonishingly Strong, Fuel for Fed Inflation Worries

  1. Flea says:

    If boards had any common sense they would cut ceo pay,got to be many qualified people available. The real problem is upper management stealing most of the money.then trickle down to workforce .But they forgot who really makes the economy work and it ain’t some pencil pusher

    • Shiloh1 says:

      The Managerial Class needs to run periodic laps through the cube farms to show their worth, hence the ‘back-to-the-office’ mantra.

      • Harrold says:

        Well said. That’s all they do is walk around shmoozing to “make an appearance” and “look busy”.

        I’ve worked at over a dozens tech companies and it’s always the same. Not enough workers at the level that gets things done. Way way too many useless managers who do nothing except meet with each other and plot political intrigue.

        The best managed company I saw, a bank, had a 4×4 organization. The CEO was only 3 levels above the lowest person. Every manager had to have at least 4 direct reports. If there were only 3, a manager had to go and his staff attached to someone else.

    • WA says:

      Some insights of what can going on:
      1. There is a whole generation of business leaders and executives who haven’t seen a major downturn. Their biggest memory is the 2020 pandemic where Fed and Govt printed trillions to revert the downturn in a couple of months.
      2. These leaders have thrives on empire building and boosting revenues with no regard to profitability and sustainability as the free money from ZIRP rewarded this behavior.
      3. The easiest way to boost revenues was to expand operations and add more heads with no regards to efficiency. When all corporations didi that in tandem there was more business with no regards to efficiency.
      4. As these leaders never learned another successful strategy and the previous generation of leaders retired on their big stock values, no one knows how to really navigate QT.
      5. Some look at real Negative interest rates and others think that Fed will Pivot after next elections as there will be no more accountability for 2 more years and electorate can be screwed.
      6. Many leaders have actually abandoned investing in core engineering and instead expanded sales, market operations etc.
      7. There is just too much fat in these companies and few will shape up to survive healthy competition.

      • roddy6667 says:

        Many businesses are not scalable. Maybe most. There is one sweet spot where they make the most money and provide the best products or services. When the economy suffeers a setback and sales/revenues plummet, they are not able to cut back on overhead to match it. They flounder and fail.

    • Apple says:

      CEO pay is to incentivize the managerial class, all of whom think they have a shot at making it to the top.

  2. MiTurn says:

    “and here we go: the wage-price spiral.”

    As having worked as an hourly-wage employee for a good portion of my adult years, it’s nice to see the little guy have some options and maybe a bump in wages. Granted, it’ll fuel inflation, but it sure feels good to bring home a bigger paycheck to the Mrs.

    Enjoy it while it lasts.

    And try to save….

    • David says:

      Here’s the latest thinking in the CB circles: higher rates to crush the peasants (CPI) AND QE to keep inflating the asset bubbles. Brilliant!
      If there was a way to create deflation for the poors and inflation for the master class..

      • JDBG says:

        “If there was a way to create deflation for the poors and inflation for the master class..”

        David, I think then the master class will think of more ways to evade taxes.

    • Kurtismayfield says:

      I have seen health care inflation all through my lifetime.

      I have seen food inflation all through my lifetime.

      I have seen asset inflation all throughout my lifetime.

      I have seen education inflation all throughout my lifetime.

      I have seen the price of fuel inflate all throughout my lifetime.

      None of this was caused by a wage/price spiral.

      Why all of the sudden are we worried about a wage/price spiral now? (Hint, it’s bull&$#@)

      • Mr. House says:

        So at what point to you stop believing/ listening at all?

        Its the believers that hold everyone back. How many have to fall down the pyramid before they finally empathize with their fellow man?

        • roddy6667 says:

          That happened to me. I was a True Believer in the Eighties. When the decade ended, I made Icarus look like an earthworm. I crashed and burned spectacularly. I developed an understanding and empathy for the masses. I was one of them for a while.

  3. Duke says:

    As long as there is profit, wages can go up and prices can stay the same.

    • Cas127 says:

      Sure, but you can say the same thing about adding corporate debt…so long as brain dead, until-very-recently-ZIRPed banks keep shoveling money out the door (see past 20 years) things *look* fine (hiring! Wages! Stable pricing!) when the reality is that the economic fundamentals have in fact rotted away.

      Once the debt rollover orgy stops, the whole house of cards implodes.

      These companies aren’t waving happily, they’re drowning.

  4. RobertM 700 says:

    Am I starting to smell a soft landing?

    • Wolf Richter says:

      The labor market isn’t landing at all right now. Next year maybe.

      • andy says:

        I don’t beleive the Fed will stand this “re-hiring of laid-off workers” much longer. After all, stable employment is one Fed’s mandates. In that if you get laid off, you stay laid off.

        • roddy6667 says:

          I don’t want to work in a stable. I get enough bullshit from the media.

      • Seen it all before, Bob says:

        I’m having so much fun being a worker these days.

        The Fed are such incompetent party-poopers to try to ruin my fun.

  5. Double Bluff says:

    Workers are getting uppity all around the USA. Nothing massive immigration and a big recession can’t fix.

    • Lynn says:

      Yeah, then you can pay for services to the homeless. Such a deal.

      • Cem says:

        That is such a small portion of any tax dollars. Bet you don’t complain about military spending much do ya?

  6. Lynn says:

    “The problem is that inflation is red hot, and is outrunning even those wage increases,”

    Absolutely. In my area they have a very very hard time finding nurses and teachers for instance because the rentals are so high and hard to find. I think this is probably true through most of California.

    Closer to the SF bay area they can not even find enough house cleaners, gas station attendants, cafe workers or skilled construction workers because they can not afford to live there.

    On the East Coast a family member became a teacher. But she was only able to do so because she got an inheritance that allowed her to buy a condo in the area she wanted to teach in, and she got a roommate to help with the mortgage. Otherwise her student debt would have made it unaffordable. This is a job she really really wanted and luckily she had the means to do it. Other people would have given up.

    Where are these people moving to aside from tents? Are there areas which have very few workers and areas that don’t? It’s extremely hard for people who become homeless to adjust back into the working world – it takes a toll. Then younger people who should be replacing those of us who have retired can not afford to work in some areas. Or, yeah, they can, but it would mean living out of their cars and realistically no working person wants to do that, I don’t care what they say to cover up their embarrassment.

    • Harvey Mushman says:

      In around 2010/2011 my niece graduated from college (4 year degree). She became a teacher and moved from Iowa to Jakarta Indonesia. She has been able to afford a much better lifestyle than if she had stayed in the USA. She has been there ever since. I think she has changed jobs out there once or twice and is now an administrator at a school. My niece comes home to visit my sister once or twice a year. My niece is 34 years old now. My sister doesn’t think her daughter is ever coming back to live in the USA.

      • Lynn says:

        So sad. I mean, maybe she loves Jakarta, but it’s so twisted and sad she and many others moved away from family.

        • drifterprof says:

          These days one can still maintain closeness to family whole living on the other side of the globe.

          It’s not like back in 1974 when I was a Peace Corps volunteer in West Africa. Then, it was two weeks snail-mail turnaround, or travel to some major town to make a very expensive static-filled phone call from some long distance shop.

        • roddy6667 says:

          High quality videochat is free and even the poorest people have it. If a person lives 2 states away and you only see them every 2 years, it’s no different than living on the otheer side of the planet and coming back for a visit every couple of years.

      • Escierto says:

        If more Americans got off the sofa and explored the world they would quickly realize that they are living in a second rate country. Even in the Third World they have functioning mass transit and adequate health care for minimal cost. Americans live like bums.

        • SomethingStinks says:

          I am a first generation immigrant to the USA. Got here in 99, applied for green card in 2003, got green card in 2013, applied for citizenship in 2018, took my oath at 10:30 am on October 24th 2019 @ the paramount theater in Oakland CA. I will do it again if I had to. This is the greatest country in the world… thank your stars you live here.

        • Escierto says:

          @SomethingStinks I got you beat, dude. I came here from Canada in 1976, got my green card in 1977 and became a citizen in 1981. Back then I was proud to be an American and yes, it was the greatest country on earth.

          Since those days, it’s all been downhill especially the last decade. You are living in a sh*thole and you don’t even know it. Compared to the America of my era, this place is a dystopia which is only getting worse.

    • Gen Z says:

      Moderator this is my second comment.

      I can’t speak for America, but there is a drug overdose crisis in Vancouver and Toronto due to high rent and home prices.

      People die silently.

      I’m noticing that the ravines in Toronto are packed with tents. Also noticing on the Kijiji that able-bodied couples are unable to get approved for a rental and have to live in a tent and are desperate to find a place before Winter.

      It’s a dystopian going on right now. Wage inflation might have peaked last year in Toronto.

      • Depth Charge says:

        Sounds like a central banker/globalist wet dream.

      • Escierto says:

        A million dollars in Toronto will buy you a tear down. Instead of having dogs people live in dog houses.

        • Ezra says:

          As someone in their late twenties this scares me a lot. Becoming homeless though I have a job. This is the Toronto nightmare.

          I’ve graduated with a degree, have Co-op experience and work experience but all I ever got was temp agency jobs in Toronto.

          This precariousness in the job market has made me consider how temporary life is, and how tone deaf the politicians are with regards to the homeless encampments and working-class unhoused people.

          I as a young man see no hope for citizens living in Canada.

          I applied for an entry level job in my field, and the app showed that 8,000 people applied for the job. The job market in Toronto is TERRIBLE if you aren’t applying for blue collar jobs.

          The reason why America has a labour shortage is because many of the able-bodied blue collar men have died from heroin overdoses, COVID deaths were higher, there are cheaper cities to move and live on unemployment benefits, and they are strict with immigration.

          It’s also not that easy for companies in the USA to hire international students to work full time.

          When I was applying for jobs in Toronto, they plainly told me that they preferred to hire international students to work full time. I reported them to the Ministry of Labour because international students are not allowed to work more than 20 hours a week.

    • Augustus Frost says:

      A housing price crash would solve one aspect of this problem.

      That’s the first thing that needs to happen.

      • Phimbleburg says:

        That solves nothing at all. Private capture of land rents is the loophole which needs to be closed to unlock the supply bottleneck. There is no way solve housing if you allow gains from land holdings.

        • Augustus Frost says:

          There wasn’t a housing affordability problem in the US before deranged monetary policy starting with Greenspan around 9/11.

          There is no shortage of land in the US and whatever landed aristocracy equivalent exists here isn’t close to those which exists elsewhere.

          If housing prices crashed, the hoarding of empty and underutilized residential real estate would decrease drastically.

          Sealing the border and sending those who aren’t here legally packing would also free up millions of low-income housing units. Of course, someone else here would have to do this work.

          Lower rents would also be another reason to reduce rental vouchers, as it wouldn’t be as necessary. It’s also a form of corporate/landlord welfare.

          The reason why housing is so expensive in the US is primarily due to counterproductive US government policy, starting with deranged monetary policy.

        • JeffD says:

          The housing affordabilty problem originated in Congress where they have written dozens of laws making residential real estate the most attractive *investment asset* a speculator can lay their hans on. Before those laws, homes were liabilities.

        • Lynn says:

          Augustus Frost, depends on where you lived. I saw a housing affordability crisis in mid coastal California since the 80’s when I moved here. I owned my own service business and occasionally hired people besides myself. I had no lack of work – 40 to 56 hours pr week and kept customers for many years until I moved. I still had to live in my car some of the time, as did many people I knew, some of whom made twice as much in wages as I did. The other part of the time I had roommates or lived in what was a reconstructed tool shed.

          A great amount of wealth disparity has been around this country for many decades.

        • Phimbleburg says:

          If you try to abstract yourself from the current situation of excessive money creation, I think most people would tend to agree that it’s perfectly reasonable for the state to impose a moderate “inflation tax” now and again on “safe”, passive stores of value, particularly in times of crisis such as wartime or high unemployment. The point is that same tax should be applied equally to other passive, safe stores of value, such as urban land, to avoid creating an arbitrage opportunity.

          States which have property tax rates in the ballpark of the long-run inflation rate have far fewer problems with land use and housing affordability than states that don’t.

          California has had housing affordability problems for many decades, which was part of the impetus for Prop 13, which of course made the situation worse.

        • Mr. House says:

          yes Phimbleburg, alittle theft now and then goes a long way in making society great. Like the one we have now……..

      • Steve says:


      • roddy6667 says:

        A housing price crash is a double-edged sword. If you already own a home, you can quickly end up owing the bank a lot more money than your house is worth. It really sucks. Been there, done that.

    • cobo says:

      I renewed my teaching credentials (multiple, two single) last year. And now that I’ve reached my full retirment age, I’ve also retired. I’ve considered going back to teaching, like the kids, but don’t much like the schools… Or, I might just work part-time at a local hotel, the Starbucks down the street. Who knows, who cares, thank god… I’ve survived so much, this is all cake – but cake is bad for you :- )

      • andy says:

        Thank you for your service, I guess. Why are kids so uneducated these days?

        • PonderingPA says:

          Because their parents are all scrambling at work and career-focused, so they just stick the elementary schoolers watching YoutubeKids and don’t actually inculcate any sense of the importance of school into their high schoolers beyond pushing them to get into a good college. And because the states have dedicated less and less percentage of their budgets to public education, while ratcheting up regulatory assessments and standardized tests that dis-incentivize actual quality teaching or understanding.

          Education (in the sense of inviting students to explore genuine interests and delve into the nuances of the conversations there, or helping make the connection between concepts and applied skills) is just not a priority in our society. In what Wolfstreet calls the ‘education industrial complex’, our system is structured to churn out miserable and stressed test-takers as a substitute for students, and to make instructors put all their energy scrambling to get the reports to look right so they don’t lose their funding rather than actually working on pedagogy.

        • El Katz says:


          IMHO, there may be enough money for education but it’s being misdirected into the increased number of staff dedicated to administration and bypassing the classroom entirely. I’m not talking support people, but “managerial” administration at high salaries.

          My wife taught high school honors English back in the dark ages. The pay sucked even then. She taught in Hinsdale, IL (not a poor area) and she, even out of her meager salary, had to buy supplies for her classroom. Hinsdale, IL is a wealthy enclave and serves Hinsdale and Oak Brook. However, she didn’t choose teaching to get rich.

        • doctorblind says:

          because that is exactly what they want. Their interest is solely in dicking with their stupid phones. I have engineering students at a regional university. Every year is worse than the one before. We (my colleagues and I) are increasingly distressed at the total lack of curiosity and engagement, and covid compounded the problem by an order of magnitude. I am old, ok, so maybe its generational, but my young colleagues feel the same. PonderingPA suggests ‘our system is structured to churn out miserable and stressed test-takers as a substitute for students..’ but that is exactly what the students want to be. Don’t blame the educators. If i try to introduce real-world topics/experience in class I am unmercifully hammered in student reviews or ‘rate your professor’ whiners for being off-topic or disorganized—as if a sophomore who has never had a real job knows more of what is on topic than a phd with 15+ years of industrial experience *before* their grad degree. Argh!

    • cb says:

      sounds like a root problem is that in some areas people that don’t work have a lot more money than those who do. That is a result of a mature economic area, longevity, heavy wealth among a base class, generous pensions, subsidies, welfare, housing allowances, etc.

      and the effects of FED practices and interest rate suppression which supported private equity, created wealth disparity and a rentier class which pounds down the renter.

      or so a theory goes ……………………….

      • cb says:

        people with nothing have to find a balance between wages, rents and opportunities. That can be a tall order if the Boomers got there first. Even teachers and librarians have become real estate moguls or 401K superstars in small towns. A lot of times it is all about relative purchasing power. Cheaply acquired assets, bought first in, grow to give an advantage to first asset holders by turning latecomers into high rent payers —————- serfs.

        The FED and its manufactured inflation distorts everything and builds intergenerational resentment.

        They are scum. and should never be trusted. or supported.

    • rojogrande says:

      Speaking of nurses and California, they should just move a little further away to places where the cost of living is cheaper. For example, I have a cousin who is a nurse practitioner at San Francisco General and lives in Portugal. She got her nursing degree from UCSF, but is also a German citizen and can live anywhere in the EU. She “commutes” to SF from Europe. She works ridiculous shifts for 2 weeks, and returns to Portugal for 5 weeks. Her family enjoys the low cost lifestyle in Portugal. It seems unsustainable to me, but if you need nurses…

      Reading Harvey Mushman’s comment, the situation really is crazy.

    • Old Ghost says:

      LYNN wrote: “Are there areas which have very few workers and areas that don’t?”

      This morning, here in NE Wisconsin, I have been getting spam calls and texts about “Job Summaries”.

      Being in my 8th decade, I have no idea why these people would want to hire me. The most laughable offer was $20 hour (not bad for this area). But I need to prep machinery for painting, and able to lift at least 50 LBs.

      There are a growing number of SFH’s with “for sale” signs on them. Some have been out for sale at least 3 months now. But I doubt that anyone making $20 hour could afford one.

      In the 3 years I have lived here, the only time an apartment opened up was after someone died. The land lord has a waiting list, and did not even have to advertise the opening.

      So any worker bees wanting to relocate here could have difficulty finding a place to live. We have already had a number of frosts, so living in a tent/car would be out of the question in the near future.

      I live in a smaller Metro Area, one that Wolf never mentions. I do not follow the RE listings. But there are more SFH with “for sale” on them than last year.

  7. Earl says:

    For the most part, boomers have left the job market, never to return. Both political parties have done nothing about immigration reform, a situation almost as ridiculous as EU’s fuel crisis (no to Russian LP), as US is getting desperate for labor. Wage inflation is just catching up to systemic inflation according to Wharton economic emeritus. We will see how it all plays out

    • Augustus Frost says:

      The boomers will be attempting to return to the job market in mass once the asset mania is confirmed as over and their retirement portfolios collapse. Problem is when they do, there will be far fewer jobs.

      Obviously, having millions of working age adults attempting to live off fake “wealth” in mass from the asset mania is going to create an inflationary problem by both distorting demand and the supply of labor.

      There is no need for mass immigration, as current immigration policy is turning the US into a Tower of Babel equivalent or a worse version of Yugoslavia. Importing millions who won’t and don’t integrate so that corporations can have cheap labor and inflate GDP is insane.

      The labor shortage is substantially if not entirely artificial. The economy isn’t booming from organic demand, but from a government spending and monetary inflation crack-up boom. This is the source of all “growth” since 2008, as the economy has been mostly or entirely fake the entire time.

      Reduce the federal government deficit to the same proportion of GDP as pre-GFC and “normalize” monetary policy back to pre-GFC or pre 9/11 and watch the labor shortage disappear as the economy falls into an economic depression.

    • Apple says:

      I thought for sure the slide in the stock market would drive retirees back into the workforce, but that seems to not be happening.

      • JeffD says:

        Or maybe employers don’t like the medical costs?

      • Augustus Frost says:

        It probably hasn’t lasted long enough, not even one year. They still expect it to recover or hope at least.

        Anecdotally, I have spoken to one friend and one co-worker who indicate they are postponing their retirement due to the recent decline.

        A lot more of that to come, if they can keep their job.

        • Seen it all before, Bob says:

          In my company, “Older” workers are considering retirement. ie they cashed out their 6000% BTC gains and are now sitting in cash or conservative investments. They are safe multi-millionaires with a paid-off house and 5 million in cash or safe investments. I keep bringing up 9.6% IBond yields and 4.2% 2 year Treasury Yield. With a 5M portfolio,, I hope most of us can live happily with a 200K-500K yearly retirement income with safe Treasuries.

          I am waiting for 7+% 10 and 30 year yields. Then my co-workers can safely retire on a 350K+ yearly retirement.
          No risk at all. Other than the US collapsing in a heap of ruin. The Fed is helping my co-workers into retirement.

    • Justin says:

      Desperate for cheap labor. Now it’s time for the working class to claw back the trillions stolen by the 0.1 percent.

  8. Danno says:

    People in the past working 1 job are now usually working 2, especially the hourly wage earners to make due.

    I’m surprised at the number who are trying to work 3 in my area as well to try to stay ahead of inflation.

    No worries locating a job, just one that pays enough and is stable enough for the upcoming downturn.

    Best wishes everyone!

    • LK says:

      People touting being job creators are so quick to mention the number of jobs they create and not the quality of those jobs.

      • andy says:

        You can become quality-job creator. Go for it. What’s stopping you?

        • LK says:

          An absence of bootstraps.

          What a stupid, ignorant comment to post, andy.

        • LD says:

          Andy, what’s stopping you from creating a quality comment? I think people enjoy coming here because it is unique in that the muck is typically left out.

        • roddy6667 says:

          That sounds like a line from an MLM.

  9. Wisdom Seeker says:

    How big was the Hurricane Katrina impact on the economy, back in the day? I’m wondering about Ian and Florida + South Carolina here.

    On the one hand, Hurricane + Insurance Payouts = Reconstruction boom in Florida. On the other hand, lots of businesses won’t be earning much income until they’re rebuilt, and they won’t be employing so many people in the meantime either.

    • Wolf Richter says:

      During the hurricane itself and in the immediate aftermath, there is some decline in regional economic activity. But then the re-buying and re-building efforts boost the economy, funded by insurance payouts and government programs.

      • MarkinSF says:

        I think more than a few of those insurance companies will go under and FEMA will end up covering the losses. Not sure how well that’s going to go.

      • SocalJimObjects says:

        Sounds like the broken window fallacy. Also insurance companies will probably increase their premiums.

        • Wolf Richter says:

          The “broken window fallacy” is a purposeful two-step economic process: 1. you break the window on purpose so that you can fix it and boost economic growth; 2. you fix it and boost economic growth.

          A hurricane is the force of nature; it wreaks havoc that no one wants. Afterwards, you have to rebuild. That’s a different category from the “broken window fallacy.”

    • rick m says:

      I live where Katrina hit. For the unknowledgeable, it wasn’t New Orleans. They got brushed by nature, and trashed/flooded by the Army Corps of Engineers. We got the wind and the storm surge. After the several weeks/months of curfew and national guard checkpoints and Red Cross food trucks and out-of-state gas runs, the federal money started to roll in.
      Disasters are opportunities for the opportunistic. And some virtuous people become prosperous behind them too. Storm reconstruction is lucrative in economically depressed areas. I saw the same thing after the deepwater horizon spill. BP and the platform operators and their subcontractors were desperate to outrun public opinion, and threw money at anybody with a pirogue or skiff to mop up the mess. They also bought and abandoned boats and outboard motors and enriched many in plaquemines parish. Same thing as the not-for-resale FEMA RVs and Katrina cottages that disappeared into hunting camps in the Delta. Every major hurricane and even just a big rainfall event causes problems today that dwarf the past economic impacts of weather. Ian is a disaster, and will necessitate large government spending for the rest of the decade. Some will come out better than they were. And everyone will rebuild and it will end up being more crowded than before. Because when Nature breaks America’s stuff, Americans look to Government to refix their lives. Geographic responsibility is not a thing anymore. Granted that Florida is a peninsular nightmare to evacuate. Didn’t hear anything about implementing contraflow on the interstates like we do, but prepositioning the utility restoration teams may have made that unworkable. And it sounds like a good many people stayed. It’s a critical choice whether to stay or run. Availability of ready money to run with, someplace to run to and the near-certainty of being denied re-entry for days to the affected areas all determines the decision while survivability is taken for granted by the inexperienced. Your thinking changes after your friends get drowned because they miscalculated Mother Nature’s insistence on primacy and figured a Pass Christian beachfront inn built in the 1860’s wasn’t going anywhere. Seventeen years on and the Pass is thriving on government money yet.
      There was also large animosity between the states who believed that each other received legislative preference for aid money because of committee seniority in Congress. All grist to the politician’s mills.

  10. Harvey Mushman says:

    My sister is 65, she retired about 2 years ago. My brother just turned 64, he is retiring now. I’m 59 and god willing, I am planning on working full time until I’m 67. I have a feeling my “Baby Boomer” brothers and sisters are now retiring in very large numbers and this will have a profound effect on the job market.

  11. Gen Z says:

    Job market is bad in Toronto. Lots of tent cities these days. I wonder what the government did in Canada.

    • Lynn says:

      Same as here- let the ultra wealthy the world over “invest” in housing and leave which should be kept for it’s own citizens.

      Maybe the squatters’ organization “Homes not Jails” will become popular again..

      • Lynn says:

        *and not leave it to be kept for it’s own citizens

      • Cytotoxic says:

        That has absolutely nothing to do with the housing shortage. There is a housing shortage because we aren’t allowed to build housing. That’s it. Homeless people are generally homeless because we aren’t allowed to build SROs and motels are forbidden from housing them.

        • Escierto says:

          There is no housing shortage. In San Antonio many houses are owned by Mexicans who are laundering money or parking cash. In my condo complex 25 of the 105 units are vacant which is typical.

        • roddy6667 says:

          Most homeless people are in their situation because of addictions and mental illness. They had a place to live and they got kicked out. they either abused the property or they spent their rent money on their addictions. All the fleabag hotels and cheap boarding houses were torn down. The large state and city mental hospitals were closed. The residents were turned over to the for-profit group home system. It doesn’t work because the patients can walk away at any time. When they do that they go off their meds. A large messy situation is with us now and I can’t see any desirable way out. I predict civil unrest and gulags being built for dissidents and homeless.

  12. Yort says:

    The Fed is attempting to control inflation by destroying jobs, yet a substantial amount of the inflation is due to the last forty year monopolization of corporations, and the subsequence exponential rise in profit margins that have occurred.

    Today average corporate profit margins are 15.48%, yet most of the last few decades corporate profit margins have fluctuated between 2% to 12%….with 8% being typical.

    For a visual search Aug 25, 2022 Bloomberg article “US Corporate Profits Soar With Margins at Widest Since 1950” for the 1950-2022 historic chart of corporate profits margins.

    Per Bloomberg:

    A measure of US profit margins has reached its widest since 1950, suggesting that the prices charged by businesses are outpacing their increased costs for production and labor.

    After-tax profits as a share of gross value added for non-financial corporations, a measure of aggregate profit margins, improved in the second quarter to 15.5% — the most since 1950 — from 14% in the first quarter, according to Commerce Department figures published Thursday.

    The surge in profits during the pandemic era has fueled a debate about whether price-gouging companies carry a share of the blame for high inflation…

    • Cytotoxic says:

      “a substantial amount of the inflation is due to the last forty year monopolization of corporations, and the subsequence exponential rise in profit margins that have occurred.”

      Utter nonsensical gibberish. Amazon and company have done nothing but reduce inflation. The transient increase in profit margins doesn’t fuel inflation anymore than wet sidewalks cause rain.

      • Apple says:

        All industries have been consolidating.

        Four companies control 90% of the baby formula market ( Abbott, Johnson, Nestle, Perrio).

        Four airlines control 62% of the domestic market ( AA, Delta, Southwest, United ).

        Three cellular carriers control 98% of the domestic market ( Verizon, AT&T, T-Mobile).

        Very few markets have more than a handful of players any more.

        • JeffD says:

          Amen! I’ve been preaching this for years but no one wants to listen.

          There are so many horrible problems today that Congress and local governments could fix within a two year time frame, but campaign contributions seem to interfere with their ability to see the simple solutions.

    • Steve says:

      They do. Lots of companies have increased their profit margins from the pandemic inflation. But most of them, imho, will be looking at bankruptcy shortly because of their greed and the wrong mindset. In a global depression, you dont think about making money. It’s about survival. Low prices to keep a cash flow, and expect to burn savings as everybody fails. Upcycles are when you make and save money. The greedy now will be getting waxed.

      • LK says:

        Upcycles are when you make money and do stock buybacks to maximize shareholder value, since the capital gains from stocks is taxed at a lower rate than distributing dividends to shareholders. It also maximizes CEO compensation.

        Downcycles are when you look to the government and your buddies within it who want to protect their portfolios to bail you out while your smaller competitors are crushed underneath the weight of your enterprise.

        Great gig if you can manage to set it up.

    • Flea says:

      Quit buying every new I phone ,I have a 6 works great. But common sense is a forgotten theory

  13. Max Power says:

    Fed has no choice but to try and bring the labor market into some sort of manageable equilibrium or it risks a perpetual price-wage spiral.

    As such, folks who think a pivot is imminent are hallucinating. The Fed is already on a set QT path and even if it stops raising short term rates in the next few months, it’s not likely to reverse them until the economy churns through the huge sink of job vacancies that has been created during the pandemic.

  14. Bob E says:

    The current employment/unemployment stats are puzzling. I have to wonder how many of these new hires are people being forced to take a second job to compensate for inflation.

  15. Poor like you says:

    Astonishingly strong labor conditions? Now is the time for collective action and unions. “The Management” has proven that they can’t be trusted, and should be managed themselves. By labor.

  16. Edward Jones says:

    The problem is that we are missing 7,000,000 workers but we have all the gdp we should have. If you look at job trajectory in the 15 years prior to covid and the years since that is the missing number. Getting back to where we were prior to covid is not an accomplishment. Conservatives in DC assume that these people are skirking something only the investor class can get away with. The reality is that we have about 1million working age dead, about 4 million who have long covid and cannot work and we are missing about 2 million immigrants. Raising rates will not resolve this. We need to invest to improve productivity and more immigrants to break the spell.

    • JeffD says:

      Both employers and customers treated employees like dirt during Covid, and the effects still linger. Government as a whole was responsible for the situation. No thanks, I’ll pass.

    • cb says:

      Why this myth that we need immigrants to fill jobs.

    • Phil says:

      Thank you, was waiting for this comment. It’s so absurd when people look at these trends through the lens of economic theory without accounting for what’s happening in the real world. Add accelerating boomer retirement to your list, and also consider how the housing market may react in the medium to long term as this generation downsizes and dies off.

      • Wolf Richter says:


        “It’s so absurd when people look at these trends through the lens of economic theory…”

        BS. RTGDFA. This wasn’t about “theory” but about actual applications for unemployment insurance by people who’d been laid off, which are at historic lows. Can’t you people read ANYTHING?

  17. Nick Kelly says:

    This is old news but Cramer is losing it. A few days ago he was haranguing ‘so called pros’ for selling on weakness. Now he has some advice on what the Fed has to do before the Second Coming of The Pivot:

    “They’re beating inflation in so many places. Unfortunately, they’re not winning on food, they’re not winning on housing, and they’re not winning on wages and they need to hit that trifecta before this will end,” he said.

    In other words: especially re: housing, no time soon. So don’t listen to any of CNBC’s ‘buy the dip’ even when it’s the very same Cramer talking.

    Not as familiar a name, but worth a listen, is David Rosenberg who thinks this market will bottom in 2 years. He advises thinking ‘Dotcom or GFC’ for a time estimate. Sometime after the recession that obviously has to happen before the Fed ‘hits the trifecta’.

    • Wolf Richter says:

      Nick Kelly,

      “He advises thinking ‘Dotcom or GFC’ for a time estimate.”

      So far, the parallels — including timing — to the dotcom bust have been spooky.

      • Mark says:

        Rosenberg recently quoted the s&p bottom @3100
        He Said it won’t bottom until after the last RATE CUT

    • Richie says:

      Speculation based on past records is a narrow minded action, bad idea in general. History repeat itself from time to time, but the timing of the market has never been the same. You want to time the market? Join the insider club like Nancy Pelosi, or be its executives like Jerome Powell.

    • Shiloh1 says:

      Cramer would be more credible doing reviews of Midtown gentleman’s clubs.

    • cb says:

      Cramer has been a circus clown since day 1. A caricature of a buffoon.

  18. SocalJimObjects says:

    So many people have left the labor force due to various reasons. Long Covid probably played a big role in reducing the available labor force as well. The question is, if the labor force gets smaller and smaller, say 20% smaller from now, what kind of interest rate will we be seeing? 30%?

  19. Yort says:

    Wolf – how are wages per corporate revenue changing with respect to the last few decade trends of ever decreasing wages and ever increasing shareholder profits? It has to be improving, correct?

    At least corporate America hasn’t talked the government into another round of trillion dollar “Trickle Down” tax breaks, which is wrecking the UK as I speak. Tax and spend policy is a complete dumpster fire in the UK versus the US. Nice to see America is not the most ignorantly greedy…

    Did you see the corporate and elite gravy the new PM is trickling down? Bankers have feelings too and deserve no-cap bonuses, right…LOL

    Per CNBC:

    Cancellation of a planned rise in corporation tax to 25%, keeping it at 19%, the lowest rate in the G-20.

    Scrapping of the 45% tax paid on incomes over £150,000 ($166,770), taking the top rate to 40%.

    Scrapping of an increase in tax rates on various alcohols.

    Scrapping of a cap on bankers’ bonuses.

    • Richie says:

      The ultra rich couldn’t care less about tax increase as they have their own trust funds, charities, and NGOs to avoid contributing anything back to the public. However it will certainly keep the high midclass in line to maintain the hierarchy for them.

      • Bobber says:

        If that were the case, why does the wealthy class lobby so hard against tax rate increases? Use critical thinking.

        • Richie says:

          My critical thinking tells me it’s to get people like you thinking they care, so no one pays attension to their trust /charity funds and NGOs, where they actually operate their money.

  20. Steve says:

    This economy is tumbling just slowly because the insane gains in housing are still stimulating but this wreck has just begun because housing will fall farther than people imagine. Layoffs are going to accelerate rapidly next six months. Global depression very much in the cards now from what I see. What do I see? I see CarMax today but I’m not surprised. As a used dealer, I lowered my prices thousands months ago to have the lowest prices by thousands over these greedy selfish pandemic rip offs. Still very slow! Their doubled profit margins are hard to let go. Can anyone say goodbye Carvana, Vroom etc. Even CarMax got tough sledding ahead now. Lots and lots and lots of people holding assets that will be repriced 50-75% lower. I don’t see how this stays orderly with all the margin calls. Big liquidity squeezes coming all around. Hope you’re not levered.

    • Augustus Frost says:

      Depending upon the time horizon, try 90%+ at least in price adjusted terms.

      Asset over valuation has never been worse and the fundamentals are actually mediocre to terrible.

  21. JeffD says:

    The labor force problem is structural. There are simply not enough young workers in the demographic pipeline to service the needs of the growing population. Unless companies are willing to start hiring people over 50, expect the “available work to available workers” ratio to be severely unbalanced.

    • JeffD says:

      To help understan the structural nature of the problem, in the year 2000, one in eight people was over 65. In 2019, one in six people was over 65. The birth rate is below the population replacement rate anf falling, so without immigration, the “over 65” ratio will accelerate from here. Maybe 20 years from now, it will be one to four. So much more work to bear but less people to bear the work, in proportion.

      • Apple says:

        Robots are the solution.

        • SocalJimObjects says:

          Go Google Cruise San Francisco. Their self driving cars have been making the headlines for the wrong reasons for the past 2 weeks or so.

          Also who’s going to fix the robots? Other robots? Then who needs human beings?

      • cb says:

        people over 65 don’t live forever …………..

        There is a lot of existing wealth is this country and the youngsters are going to end up with it …………….. perhaps partially through higher wages for their labor and perhaps through inheritance

      • Pauper says:

        Wrong – see Japan.
        Worse demographics less immigration more ZIRP/NIRP and QE and no or low inflation.

      • Augustus Frost says:

        It doesn’t take that much of the population to produce the goods and services any society actually needs.

        Demographics is just another excuse to increase immigration to promote “growth” and inflate GDP, as if that should ever be an end-all-be-all of any society.

        The US population is already large enough. No need for any increase, at all.

        End the government created fake economy and the labor shortage will resolve itself.

  22. HR01 says:

    Yes, this recession will be unlike any other.

    Unemployment remains benign for a long while. Excess deaths and disability claims guarantee this. Employers know this…so they will be loathe to part with such a scarce critical resource.

    Labor has the upper hand…which guarantees service inflation remains elevated…

    If the U.S. stays in recession or merely flat lines while unemployment remains subdued the Fed doesn’t have to cut rates at all…until inflation is back in the ballpark of its target range. Of course they may move the goalposts in determining that target range.

    • Augustus Frost says:

      The idea that there will be (mostly) full employment recession is a complete myth.

      As credit conditions continue to tighten and asset prices decline a lot further, millions of pink slips will be issued. Job openings will collapse.

      Without all the fake wealth from the asset bubble, most Americans are broke. Without the loosest credit conditions in history, state budget surpluses turn to deficits and many corporate profits turn into losses or bankruptcy. The USG is already borrowing huge amounts even during supposed good times.

      • Davinsky says:

        Augustus, it is risky to use “normal” or “historical” metrics such as Unemployment Claims to gauge the strength of the U.S. economy on September 30, 2022. There are so many distortions, especially in such vital and growing industries as healthcare where exposure to mutating viruses is an ever danger, that one has to be creative in looking at what the labor market says about the health of the U.S. economy.

        Worker productivity is not strong, partially due to the ability to job hop, for now, and the work-from-home phenomenon. More hours expended to product the same level of goods and services? That is inflationary in itself. I agree with you that the 10,000 to 20,000 count company layoff announcements are just around the corner. From the graphs, it appears that labor market stats can turn on a dime.

        Total employment today in many industries has yet to get back to the well-established trends that blew up in say March, 2020.

        And this “very strong labor market” is part of the reason that the bankers at the U.S. Fed have two feet on the economic brakes. A two-edged sword with labor costs seeing some of the biggest year-to-year increases in decades, as a matter of necessity for the poor workers out there that can’t make ends meet.

        There will be intense pressure on the BLS to sugar coat the GDP stats going into the mid-term elections. Ask the men and women on the street how thing are goings, not the bureaucrats. Look at the unprecedented disparities between the Household and Establishment Employment surveys, something nasty this way cometh or already here.

  23. JeffD says:

    How many jobs contain 100% precision manufactured parts that a robot can put together, end to end? Not many. Most jobs are in services that usually require a human element to work through the context of the problem. I’ve almost never went through a phone tree that could take care of the problem I am calling about.

  24. Valerie from Australia says:

    If we have a labor shortage in the U.S. (and Australia for that matter), is it possible to have a recession, even a deep recession, with interest rates going up and the stock market and housing going down? I know that the classic definition of a recession is job losses and higher unemployment but I don’t see that happening as this article and many of the comments confirm.

    As for housing – that is a really hard one. We want affordable housing but now there are so many people who took the leap, thinking now or never, there are now going to be so many middle and working class people in over their heads. It is hard to be happy when so many people are going to suffer. I remember a friend in WA state during the 2008/2009 crash. He had a divorce and tried to hold onto his house. He spent something like 2/3 of his income on the mortgage and insurance. When I visited him, he wasn’t even spending much on food and nothing on luxuries. He kept trying to refinance and restructure his loan with the money Obama gave the banks that was supposed to trickle down to ordinary people but it never panned out and he lost the house along with his 20% down-payment. It was really heartbreaking to watch a good person who played by all the rules loose everything. I suspect we are going to be seeing a lot of that kind of thing in the coming months. It’s easy to mock the FOMO crowd but many of those people are like my friend, they just want a foothold into the market so they can own rather than rent the rest of their lives.

    When I lived in Berlin twenty years ago, I lived in a small apartment with a separate kitchenette and bathroom and a way to block off a sleeping area – so it was a sort-of one bedroom. There were lots of singles and young couples living in apartments like mine. I am wondering if this will be what we will need to provide in order to make housing affordable – and young people starting out will need to lower their expectations in order to get a foothold into the market. Just an idea – and considering my beginner status in these matters, I am happy to be educated/corrected by others with more experience.

    • cb says:

      It is horrible policy that makes housing unaffordable.

      Too much favor of Landowner’s and Landlords. Too little regard for citizens at large.

      Tax policy, easy money, immigration, etc.

  25. Kunal says:

    Employment will remain strong and money printing will resume shortly, just be patient. Inflation is not gonna stop because inflation is great for rich and corporations – it writes off their debts (interest rates are a third of inflation), and inflates everything including both income and cost (no no net harm).

    Chicken Bank of England just made a U-turn. As soon as US financial systems start to break apart, Fed will chicken out too and start printing press again. All this QT is just a sham to fool the sheeps. Let us just wait for something important break apart and Fed will back off. So far all valuations are still in bubble territory. RE prices, Stocks, Assets everything is still 20-40% higher than pre pandemic levels. And Fed QT and sale of MBS has not really ramped up (lies). It will be fun to see when Fed shits in pants, matter of few weeks/months.

    • Wolf Richter says:

      This is just hilarious. I’m laughing all the way to the bed.

      • Augustus Frost says:

        It’s another fantasy post of his, especially believing that those who are actually the most influential will trash the currency in exchange for fake paper wealth.

        • cb says:

          The currency has been continuously trashed for decades now. This has done under the nose of, and perhaps at the bequest of, the influential. A lot of wealth has been made by being close to those trashing the dollar.

        • cb says:

          What do you consider fake paper wealth?

      • cb says:

        @ Wolf-

        I sincerely hope you are laughing just as hard one year from now.

    • Pauper says:

      US stocks are now just 5% above pre pandemic levels, international stocks and many tech stocks are below 2019 levels as are many bonds. Crypto and houses are still holding on to big pandemic gains for now.

      • Augustus Frost says:

        Many international markets are again back below the 2007 and even 1999 peaks.

        Look at Hong Kong. It’s about where it was when China took over back in 1997. Slightly higher but not much.

        The US has been an outlier valuation wise since at least the GFC.

  26. Michael Engel says:

    1) !GAAPSPX – SPX largest corp profit – was up from 128 in Mar 31 2021
    to 197,84 in Dec 31 2021. Since then corp profit stalled.
    2) Since Jan 2022 DXY was rising from 94 to 115 this week, hitting resistance. DXY is red with a large selling tail, a weekly trigger. It might close under Aug 8 2022 low.
    3) Productivity is sharply down.
    4) The golden week, next week. After shutting down major cities in China it’s time for vacation. People fearing being locked down will cut spending. SSEC have reached the danger zone. The gov increased liquidity, but spending might tank.
    5) With zero rates ceo’s borrowed $500M for buybacks to boost market cap by $3B-$5B. With higher interest rates borrowing for buybacks, options, bonuses and executive perks are prohibited.
    6) Ukraine, risk off.

  27. roddy6667 says:

    I see a lot of charts and graphs every day that “prove” that the economy is strong. Why are over 60% of Americans living from paycheck to paycheck? Bankrate did a survey recently that found that only 44% of Americans had $1000 saved to cover an unexpected bill.
    Sounds like outside the world of charts and graphs and statistics, the economy sucks.
    I retired in 2013, and I’m glad that I’m not part of the rat race any more.

    • cb says:

      a “strong economy” reflects how many rats are on the rat wheel and how fast they are running. Rising rents force a stronger run. Wage slavery forces a stronger run. Indebtedness forces a stronger run. At some point you have rats at maximum effort trying to maintain their spot in the rat race. Rentiers benefit from this. Renters not so much. A wageslave / debtslave economy is good for keeping a plentiful supply of willing servants. When workers can’t get ahead other than by indenturing themselves, that is what you have.
      If the rats get tired or can’t/won’t keep up, bring in more rats.

  28. Debt Ceiling is Imaginary says:

    In San Francisco, an income of more than $116,000 per year is needed to afford a one-bedroom rental, though the average renting household there makes around $93,303 per year. Labor cost for service industry must be approaching $30/hr in Cali. The Fight or Flight recession of the century is just getting warmed up. Labor was short before pandemic, $YOLO mindset has spread like wildfire. The Feds will never get close to killing the labor market IMO. Even the wealthiest must have services to live.

  29. Motorcycle Guy says:

    Lynn and Harvey,

    After my divorce I rented a room in various homes in Port Saint Lucie FL. This was back in 2010 after the subprime housing crash and I was able to rent for four to five hundred per month. By 2015 I bought a Nissan NV 2500 step up truck and lived in that until last year. I’m now in South Est Asia living in a nice home that cost me $20k to build.
    I sold all my possessions in the USA and I will only go back every few years for special reasons.

  30. JoshWx says:

    It certainly is remarkable to see this hot job market persisting with such fervor. “Back in my day” graduating college in the post ’08 disaster, you had to have at least a 4-year degree, multiple internships (Both of mine were unpaid) at least a 3.5 GPA, and a flawless interview to have any chance at landing an office job in your field choice. Many graduates often had to wait several months or in some cases a year or two to land a job out of college. Fast forward to 2022, and pretty much anyone with a heartbeat and some form of social skills can land a decent paying gig. Numerous tech companies are even hiring “new collar” workers for high tech jobs with no college degree whatsoever. A lot can change in 10-15 years…

    • Pauper says:

      That reminds me of lending megabucks to any strawberry picker who could fog a mirror in last housing bubble. It’s a sign of extreme unsustainability. Employment bubble needs t burst ASAP.

    • Proots says:

      Easy come, easy go. A decade of skills or just junk titles? What is the career outlook of a social media manager when no one is buying? Even programmers know the hell of needing to keep up with the newest fad. Easy for the young and eager, not so much for the older and more occupied. A fast decade of free money and growth at no cost, hope people saved instead of spent and cashed out when they could instead of waiting now. I hope for the former but suspect it’s more spending, more holding than anything in hand.

  31. PonderingPA says:

    I don’t know squat about economics, but I think the wage increases for the vast majority should not be seen as the inflationary problem — but that the crazy increases and bonuses for the top earners (CEOs, university presidents, etc) that should be blamed for the ‘wage increase’ part of service/wage inflation.

    Across our society, the inequality between the leaders/owners and the workers in the trenches is just ridiculous. At the university I left, the President, COO, CFO and Basketball coach types were all making 500K yr and sometimes even provided housing, while the adjunct instructors were making 3K a class so maybe 25K/yr if they ran themselves ragged teaching a zillion sections across multiple local colleges, with no benefits, unable to pay rent. I was actually in a decently privileged position (“tenure-track” professor) but it was still not really feasible to live on 50K/yr (or after they did the covid budget cuts, 48K/yr). But I was one of the ‘lucky’ ones being paid that much, unlike most the lecturers and adjuncts being payed $30/yr or less. Meanwhile, of course they wanted to hire more buisinessmen as high-salary administrators, and regularly spent millions of dollars hiring business contractors to come up with new marketing plans (the most recent one, which cost the university god knows how much, was some ridiculously generic and dumb tag-line like “We are student-centered”)…. and then they did another round of layoffs on the lecturers and adjuncts for budget reasons. I was glad to leave and sort of hope these places perpetuating such inequalities burn down.

    Anyways, my point is that “Wages” and “labor” are not a monolithic force driving inflation. Surely, it is specifically the rich tycoons at the top of every industry, it seems, who are most raking in the big cash, most contributing to the social problems like the financialization of housing via ‘investments,’ and of course spending, spending, spending. They like to talk about ‘wage increases’ with worried tones as though it is just a generic wave threatening the institution or the economy, to be held at bay. But the fat cats are doing just fine and have no problem giving themselves 400K salaries and bonuses to boot!

    • cb says:

      Much of higher education has become a racket. Suck government money out of it, and the course might be improved.

    • Bobber says:

      There should always be a sizeable gap between those who focus on producing and those who focus on consuming. But wealth concentration should stay in check with proper government polices such as anti-trust, progressiveness of tax rates, and budget control. However, neither party cares about the longevity and sustainability of government anymore. It’s all about rewarding voters and avoiding hard decisions.

      It’s a great time for a third party. A two-party system apparently doesn’t get it done and pits one half the country against the other, like a bad marriage.

  32. Arya Stark says:

    Cracks are forming. Tech firms are starting slow hiring big time. A Big 4 tech consulting firm has frozen hiring for the next 6 months. Winter is coming.

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