This messed-up labor market is finally producing rising wages. But companies are able to pass them on with higher prices: the beginnings of an inflation spiral.
By Wolf Richter for WOLF STREET.
This is just nuts: 15.4 million people are still claiming unemployment benefits under all programs, with many receiving the extra $300 a week in federal top-off benefits, according to the Department of Labor. And 9.3 million people are still considered “unemployed,” according to the Bureau of Labor Statistics.
Yet the number of job openings spiked into the stratosphere as companies complain about “labor shortages,” though there is no shortage of people who could work.
The number of job openings spiked by 1 million from the highest ever record to a new highest ever record, to 9.29 million openings in April, seasonally adjusted, and to 10.0 million not seasonally adjusted, according to the JOLTS report by the Bureau of Labor Statistics today. Something is really messed up:
This comes while the number of jobs with employers of all types – companies, governments, and nonprofits – at 144.9 million in May, was still down by 7.6 million from February 2020 (green line); and while households reported that the number of people who were working, including self-employed workers, at 151.6 million, was still down by 7.1 million from February 2020 (red line):
In the leisure and hospitality sector – about three-quarters of the jobs are in food services and drinking places – unfilled job openings spiked by nearly 400,000 openings, from an all-time high to a new record of 1.59 million in April (seasonally adjusted), and were up 55% from April 2019:
Yet, even as there were 1.59 job openings in the leisure and hospitality sector that companies are clamoring to fill, the number of people working in the sector was still down by 2.54 million compared to April 2019:
In manufacturing, unfilled job openings spiked for the second month in a row, to 851,000, and compared to April 2019 were up by a stunning 83%, or by 388,000 jobs.
Manufacturers have been raising wages, and some have been paying signing bonuses, and they’re complaining that they’re not able to fill orders because they’re having trouble hiring enough people to ramp up production to meet the demand that was stimulated by the trillions of dollars in fiscal and monetary stimulus.
This comes after two decades of complaints that American companies have offshored manufacturing jobs to cheap countries.
The number of people currently working in manufacturing – including the new jobs that manufacturers were actually able fill – has remained roughly flat for four months, at about 12.3 million workers, according to the BLS jobs report last Friday. Compared to the last month of the Good Times, February 2020, this was down by 509,000 workers. And yet there are 851,000 unfilled jobs that manufacturers are clamoring to fill:
In the Arts, Entertainment, and Recreation sector, job openings spiked in a historic manner for the third month in a row, to 248,000 unfilled jobs, more than doubling since April 2019:
In Construction, job openings jumped by 23,000 to the second highest level ever, below only April 2019:
But the number of people working in construction hasn’t moved much this year through May (and in May, fell by 20,000 jobs from April), and is still 225,000 lower than in February 2020:
In the Transportation, Warehousing, and Utilities sectors, job openings ticked down by 18,000 in April from the record spike in March, to 411,000 openings, up by 17% from April 2019:
In the Wholesale Trade sector, job openings spiked by 79,000 in April to a record of 335,000 openings, up by 21% from April 2019:
In the Retail Trade, job openings spiked by 208,000 to nearly 1 million openings, up 27% from April 2019. This sector includes the currently red-hot auto dealers, grocery stores, home improvement stores, and the like, but also the moribund mall stores:
In the Professional and Business Services, job openings rose to a record 1.52 million in April, surpassing the prior record in December 2020 and were up about 25% from multi-year middle of the range.
In Education and Health Services, job openings ticked up to 1.44 million, the second highest ever, after the record in February, and were up 4.3% from April 2019.
In the Information sector, job openings rose to 116,000, in the middle of the multiyear range and down a smidgen from April 2019. The industry shed fewer jobs in 2020 as it was able to switch to working from home.
Job openings in Finance and Insurance jumped back to the upper end of the multiyear range, to 315,000 openings in April. The switch to working from home has allowed this sector to largely maintain employment, and the job openings so far have not shown unusual trends – unlike during the Financial Crisis through December 2009, when they collapsed to near nothing.
In Mining and Logging, most prominently oil-and-gas drilling, job openings fell in April to 25,000, about in the middle of the wide multiyear range.
Small businesses are having a heck of a problem filling jobs.
A record-high 48% of small-business owners reported unfilled job openings, according to the NFIB Small Business Optimism Index today. “The labor shortage is holding back growth for small businesses across the country. If small business owners could hire more workers to take care of customers, sales would be higher and getting closer to pre-COVID levels,” the NIFB said in the statement.
What does this mean in the larger picture?
The disconnect between the 15 million people still claiming unemployment benefits under all programs and the difficulties by businesses in getting their job openings filled is a sign of a messed-up labor market.
This is already resulting in a mix of things: Finally, higher wages, and that’s a good thing; and higher inflation, as companies are passing their higher labor costs on to the consumer, which is already happening as well, and they’re getting away with it, and that’s not such a good thing. It’s the beginning of one of the mechanisms that fire up an inflationary spiral that is not “temporary.”
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 prefer QUITS to JOLTS. Take this job and shove it is the indicator of choice for true economists everywhere.
lots of job shopping going on right now with employed jumping ship for more hours and better wages/benefits
but all these are for sub $25 an hour
I went up – billing basic at $50 an hour right now(for my workers)
plenty of work for those who can do
sorry no wolk folk allowed
prefer OVER 40 workers
My daughter works for a small engineering firm with 20 employees that services utility industry. She just got a 9% raise without asking for it. Skilled labor market is very tight I guess.
Minutes,
So what did QUITS tell you beyond what you saw in the headline somewhere? What did you get out of the data that you’re so fond of?
Good question Wolf,
I always read that when Yellen was Fed chair she felt Quits was one of the best indicators of overall economic confidence and labor market tightness.
So at 2.7% for the April read it’s the highest its been in a very long time. Obviously people don’t quit their jobs if they feel they don’t have another lined up or can do better….I guess it says to me the labor market is tighter than people think already. I also think the lockdown and drama of the last year has changed people’s perception of acceptable life work balance. WFH and money balance need to work for people to be happy at a job…I don’t think these changes are transitory.
What the QUITS data tells you is that companies are struggling to hire, and they’re poaching aggressively from other companies, and they’re hiring people away from other companies.
Most of the people that quit jobs don’t quit because they’re sick of working. And they don’t quit to get UI benefits (they won’t qualify for UI). They quit with a job offer in their pocket or expecting a job offer; they walk out of one place and walk into another place with better pay or better benefits or better working conditions or better career opportunities or shorter commute or whatever, or a combination.
That’s a side effect of what the JOLTS data is showing — that companies have trouble filling their vacancies and they’re getting aggressive in hiring people that already have jobs elsewhere.
But when a company poaches an employee from another company, it does not fill a job opening. It just shifts the job opening to a different company.
“Take this job and shove it …”
Yeah, that is a good idea if you have another one lined up.
For young workers entering labor force (and who are not lazy or have been taught and believegvmt will take care of you) this is a rare golden time to get in there and move and shake your way to a brighter future.
With millions of potential job-seekers still on the dole, with plentiful job openings in many fields, and wages rising– heaven-sent opportunities.
Carpe diem young grasshoppers.
Yeah, and no matter what wages you get, asset prices, including homes, continue to inflate at a faster rate, such that many people will never be able to afford a basic house.
Heaven indeed.
Please someone kind enough to explain What a Fuck is WTF.
I don’t believe the job openings exist. I think the federal/state loan and grants to businesses are driving the job listing numbers, to justify the money. If you get money to run your business, but can’t find employees, you probably get to pocket the money.
I know a tech guy looking in a hot market for a job for 6 months. He has applied for over a hundred jobs and got one callback. He didn’t have enough experience for that job, but one callback in a hot market is suspicious to me.
Ah yes, the help wanted signs everywhere are fake. Restaurants not running at full schedule is imaginary. Gas stations with one cashier and 20 people waiting in line is just their way of making sure you come back happy. Stores shutting down sections due to lack of staff is just normal. I’m also in tech and get at least ten recruiter emails and calls a day. Your tech guy is probably just not very good.
Petunia,
Your survey with a sample size of n = 1 (“a tech guy”) is certainly going to explain what is happening in the vast US labor market. Sheesh!
I know lots of companies that are desperately trying to fill jobs. They’re NOT FB kind of jobs, because many of those tech and social media companies never laid people off in the first place.
They’re jobs across the board, from meat packers (an issue my wife has to deal with because meat packers cannot fill orders because they don’t have enough people, particularly specialty orders) to restaurants.
Yeah, I also know a tech guy who can’t find a job. He got aged out at 64. But that’s unrelated to the job market. That’s age discrimination. And I’m certainly not going to use this one example to describe the overall US labor market, which would be just nuts.
I applied for CTO of amazon. Waiting for a callback. Hot job market my arse!
I have been awaiting a job confirmation from my wife as CTO since 2009. She still won’t give me the job. I have all the credentials and experience needed. She just keeps saying “We’ll see.”
Sigh. This is a tough job market. Hiring managers are really picky.
Some aged out, fewer immigrants, half a million covid deaths, many survivors are long haulers, workers who want to change jobs, a job market which is shifting, and an overheated economy.
Not trying to be insensitive, but many of the Covid deaths were not people in the workforce.
Wolf – love seeing the WTF expand to even more topics. Seems like everything these days has me saying WTF.
I DO know a couple of Covid deaths who were people in the workforce. Some people may be scared to go back into risky jobs. I lost my dentist to Covid. Had to change dentist practices because he got it in the building which was shared by construction contractors. No way I’m going back into that building. Got a new Chinese dentist who operates out of his home.
I follow the tech jobs in my area and in a hot market and the same companies have been posting the same jobs forever. Another reason I don’t believe the job listings are real.
While I admit I don’t get out much, everywhere I go is functionally staffed. No problem getting appointments or service in stores that are open. If more businesses by me accepted cash and phone appointments/reservations, they would be a lot busier. I don’t want to download an app to order a pizza or get a haircut.
Ms Swamp’s hairdressor started working from home during the pandemic when her parent hair salon was closed. When they opened they had so many restrictions it made it no fun to go in there. Now that the salon is open, we continue to go frequently to her home. She gets paid in cash. Give us a cash discount. Once she set up her home for this kind of service she’s not going back. The pandemic has created these kind of workforce changes which are not captured by bogus government statistics and surveys. Wolf’s graphs don’t capture this pandemic WFH affect.
If companies advertise for help for a while – don’t remember how long– and cannot find who they want to hire, it enables them to hire people from other countries.
Some of the others might be already here, and need employment to stay here; others, obviously, will be in their home country and on some sort of list of skills, etc., and want to come to USA for any of many reasons.
In spite of all the folks not working in USA for any or many reasons, a lot of them have not kept up to date with their skills and have a very hard time finding work…
Been there done that, and learned to study new tech and software – on my own time,,, and went back to work at age 70 for a while to shore up the leaking bank number due to lack of proper interest paid these days.
Perhaps Wolf, if the CARES Act had been written with the lowly plebe volkin in mind, than any business that needed employees where training was essential, but truly lacked the inhouse funding to do so, got the needed assistance Pronto! .. without the requisite .gov hoops and hurdles .. RATHER than what REALLY transpired – Big ‘AIRES getting the mostest while engaged in the act of receiving their campaign-fund induced fellatio, representitively-like.
But no …. instead, everyone NOT back under the guident lash of BIG BIZ/Big MONOPOLY gets pilloried as being shiftless … and lazy.
The irony is that the inflation being induced, in part, by this nationwide “labor strike” will ultimate kick those very same people in the teeth the hardest. Inflation is tantamount to a regressive consumption tax, and harms those on the lower end of the socio-economic spectrum the most. These folks had better hope they get a massive wage increase when they do decide to re-engage in the job market.
“These folks had better hope they get a massive wage increase when they do decide to re-engage in the job market.”
Be careful what you wish for.
Wage push inflationary pressures are a truly gnarly problem, and non-egalitarian in the sense that some lucky ones get higher wage increases earlier and more often than many others. Those on on low- or fixed incomes get screwed coming and going.
Oh trust me Heinz..I am not a fan of the endless ratcheting action in our economy between wages and consumer prices. Wages go up, then companies pass on those increased costs to consumers in the form of price increases. The resulting increased cost-of-living eventually increases the need for more wage increases, and the vicious cycle just continues ad infinitum. Pretty ridiculous.
Wolf,
Well…mmm.
JOLT openings are not exactly fully consistent with other government employment surveys either (monthly actual establishment payroll adds for one).
Some of that might have to do with natural delay in going from “openings” to “adds”…although the scale of the difference is pretty big.
Some of it might have to do with relative speed with which “openings” vs. “adds” get reported and tabulated. But, again, the scale of the difference is pretty big.
Until somebody does an in depth comparison of JOLTS vs. Establishment Payroll survey methodology, I think there is room to say that the JOLTS survey might be excessively sunny.
Perhaps this is a transient effect of the very recent soaring of JOLTS openings.
And, in the N+1 survey size department, I can also say that my continuous daily Indeed keyword emails (6 job description phrases between two metros) is much more consistent with a slow-to-no openings recovery (last yr actually being *faster* than this yr since January).
Is there any data on schools/day care reopenings? Schools only just reopened here this last semester. In addition, the business mask mandate was only lifted in May in North Carolina. suspect there is a readjustment period going on.
Obviously unemployment payments help people be more cautious about what they do going forward. One restaurant unhappy restaurant owner did comment that she understood why people wouldn’t return for $2.50/hr (tips are calculated to get their wage to the $7.50/hr) . But her response was more of “enough sitting at home! ; rather than why am I paying the same wages we paid 10 years ago in what has been a booming market.
And while some are trying to sort out their child care situation, others are able to reap the rewards.
I know a woman who won’t return to her job, even though there is work and her employer has asked her to return, until the she stops receiving these free monies that keep her home. She is making as much (maybe a little more) by not working than working and has no incentive to return.
Hard to believe unemployment is not a entitlement employer reports her she loses benefits
Those $300/week checks are not taxed so that’s like “Southern Income” . Doesn’t stop them from getting another job working for cash. Sounds like a good option. Better than working in the crime infested Swamp and worrying about getting hosed by some drive by shooter or some maniac driver on drugs, and paying taxes to the tune of 42% on the income after expenses. Something is wrong with this picture.
I’m 57 with many gaps in my resume. I got a new tech job pretty easily a few months ago. I’m not a tech superstar or anything. But I’m on the ball. The things I say I know and can do, I actually do know and can do. You have to show them something in any interview process, to have a good chance.
First you have to get an interview. I’ve cut back my resume to only the last two jobs to try to overcome ageism.
Info Tech is probably an exception because of the WFH “benefit.” I expect the unemployed aren’t all that skilled which makes the helicopter money manna from heaven. Can Biden keep it up? I don’t think so.
I just know that my local supermarkets seem to have no trouble finding willing staff. Yesterday, I walk in and there are two guys ready at the entrance. One offers me a shopping cart while the other is waiting because there’s nothing to do at the moment. Later in the day at Lowes, one of the cashiers has nothing to do, so she closes the register and starts chatting with another employee. The staff shortages I remember are from pre-COVID times.
Orthodox Investor,
Back in the day, I used to work as assistant manager at a Taco Bueno. We had “rushes.” They lasted for about 2 hours: around lunch, around dinner, and just before midnight. In between, there were 2 or 3 hours when we were nearly fully staffed but didn’t have a lot to do. So we cleaned and prepped food, etc. And people stood around waiting for customers. You might stand around during the off-time, and when the rush comes, everyone is going 100 mph, you might be suddenly short a bunch of people. In retail, this is totally normal. This says nothing about a “labor shortage.”
I once worked at a hamburger joint called Wetsons on Long Island, NY for $1.25/hour. I remember the surges and the droughts. During the slow periods we were told to look busy even though we had nothing to do. I had to wipe the same window over and over. Same with the chairs. The only reason I took the job is to get the free cheeseburgers. After about 3 months on the job I got fired. No reason was given.
Gentlemen, you all are acting like Petunia’s not usually right. Petunia doesn’t need to waste time with charts and stats; they often fluff up and support her theses. We all know she has such a well-honed intuition, a sample size of ONE is a thousand.
She’s from The Bronx you all but knows Wall Street pillow talk and STILL told you why we dames don’t dig long elevator rides in high rises. Petunia is the type of woman who can see a can of tuna, a candle stick holder, an open fire hydrant, a table full of people —and at an instant glance, know who killed whom and where the bodies are buried.
Never ever underestimate Petunia. / Especially when she’s the very first commenter for a change.
Petunia is Divination incarnate, you all.
x
okay, Petunia was the second commenter / not first. i can count to two as of yesterday when it still meant two, but my computer screen had jumped past the first one.
inflation is everywhere, even here.
who knew?
x
She was first for a while, then Wolf stuck that comment in before hers. Maybe his was in moderation?
> We all know she has such a well-honed intuition, a sample size of ONE is a thousand.
Indeed. Took me a second to know this about Petunia. Guess in great part thanks to being female myself.
KL,
I made a living generating BS at BS, so charts and data are just fodder to me, for whatever lie you want to tell.
BTW, I graduated from Lehman College in the Bronx, but I’m not from the Bronx. I’m a city kid, grew up and lived in Manhattan mostly. Other than that, you are mostly correct.
Manhattan back then (ANYTIME before 2001) was waaaaay more exciting interesting funky sophisticated worldy than the Bronx. i’d visit family there in my overalls and straw hanging out my jibaro hillybilly mouth, and everyone acted like Bianca Jagger with white suits and canes or sitting atop horses–forget studio 54; you all were like this just going to the corner stores in Manhattan.
well, it looks like you just added more to the growing Legend and Mystery of Petunia.
x
by the way, Miss Petunia, Corky & Basul and i broke up so i’m an orphan again and will be needing your help as this is the summer i step back out into the world bigger than ever before.
breaking up was kind of a test on me but it hurts like hell even though i apparently passed. my heart is broken but Basul did a lot to build me up so at least i know he’s out there and what is possible.
luckily James also tests ME and made me be sure i wasn’t throwing a perfectly good friendship out. but it is impossible to be in a good friendship with a couple. it’s like a two-headed being with lots of unseen spirits behind the curtain.
anyhow, one cannot be like this (different in ANY way) and do it well, and not end up dead or in jail or under the freeway, without spotters.
you’re like if Bianca Jagger were a mixed martial arts fighter now, too.
x
by the way, Petunia, thanks for being so …CLASSY… about setting me straight. i am ashamed that i didn’t already figure you were from Manhattan, because as i was washing the dishes i suddenly realized: “silly me! of COURSE she’s from Manhattan! what other woman would take vintage couture dresses and cut them down into TUNICS with leggings?”
because Manhattan IS all unwashed post coital brunches on sidewalks in mink boleros paired easily with cheap rhinestone plastic flip flops. people in florida cannot pull that off and that’s our problem now. there is no Manhattan even in Manhattan anymore. everyone’s the same.
plastic flip flops with mink is your version of “you can take the girl outta the city, but you can’t take the city out…” yadda yadda yeah you know how it goes.
i can’t wait to hear how you say WATER!
that’s how i want you to say hi to me when we first meet. i’ve forgotten how it’s SUPPOSED to sound and i could not trick Avotcja here to say it when i met her after her show once.
and to other people here, what you also don’t know is that when Petunia says she is a “city girl” she also means NYC. to anyone from Manhattan NYC=Manhattan. all else are dingleberries (boroughs).
i still say “city” even this far away when i’m talking about Manhattan.
but Manhattan is a food court in an open suburban mall now, isn’t it?
Last time i was there, IN THE CITY, my life was ending as i knew it, and my childhood best friend and i had a dramatic fight inside and outside the bowling alley at 2am and when we left and we’re sobbing (okay i was sobbing), and we’re BOTH screaming, and i’ve got snot running down my face because man… we’re in our 40s and we’re STILL like THIS???…
and a panhandling guy in a wheelchair just watched us and a brother came up to me on the median between a light, and handed me tissues and walked on.
I LOVE NEW YORK.
it was the only place left in america where you could have anything other than a happy zoned out form of bliss frozen on your face while simultaneously acting like an anti-social sociopath.
in california i get the cops called on me for DANCING. imagine if i were emoting publicly with snot running down my face??? there’s no BLM at my back, no matter how many braids i put in my hair. i’m an embarrassment.
sorry i went off. i’m about to write and blow up my life as i know it. and Corky and Basul’s.
this is foreplay before i cross myself and take off…
i would’ve cc’d you, Petunia, if i had your email. for now… suffice it to say, i came of age in The Bronx. to the rest of you all, that means: i’m wearing the rhinestone plastic flip flops, but the rhinestones on my left foot came off 3 years ago and i replaced it with a plastic flower i found in the street and i’m wearing a slightly matted fake fur jacket with cracked vinyl collar because i got too high one day and put it in the dryer with everything else i wash in hot water and save quarters.
Petunia is being nice by simply acknowledging me.
That’s someone who knows to tip the lady in the bathroom with the towels, powder, and hairpins.
i don’t tip. i’m bewildered such a job even exists and end up asking her if they’re hiring.
yes. to whomever didn’t get that “spanish” people think so differently among other spanish people, hell yeah. and i hate latin hispanic and all the words they keep telling me to say so i’ve reverted back to words i grew up with like spanish people with a small “s” to connote folks who’re at least SUPPOSED to speak Spanish with a capital “s.”
i don’t speak spanish.
i’ve gotta go before i get 86’d. i said this was foreplay. i’m a girl. foreplay can go on for a decade. and it has. things are about to get good because i’m usually a lot faster than this. i’m like a guy that way because oprah said (straight) women think emptying the dishwasher is foreplay. i think hello is foreplay if i’m into the person.
Manhattan people wait til the 10th one night stand before they go on a first date with someone they’ll considering marrying.
talk about sophisticated.
now people try it and the new new yorkers go insane because they don’t realize the original NY paradigm where saying “hey, screw you!” is actually, “hey! I LOVE YOU!”
when you miss THAT, the world is topsy turvy. so blame the downfall of america on people like Petunia leaving.
back to gentrification and why music and everything sucks now.
gotta go.
x
x
i know anti-social sociopath is redundant. this is about inflation and redundancies everywhere. i even gave two Xs last time.
three this time because i’ve been soooo damn good even though i BEGGED Wolf to revoke my pass here. i hate when people are confident in me to watch myself.
(smile)
XXX
there. take that! (every little bit helps)
and thanks for explaining that Petunia WAS initially first. every little bit helps regarding me not thinking i’m forgetting and seeing things wrong now.
oh yeah, before Wolf revokes my pass, when i said i “came of age” in the Bronx, i think she knows it means that i’m about to set the proverbial car on fire.
in Manhattan, women sue. and WIN.
but in The Bronx, we just set each other’s cars on fire and try to stay together for the kids.
(smile)
so i’m about to do my new improved more interesting unknown version of setting the car on fire. now i do it as a frustrated artist actress dramatist and yet… teacher.
capitalism says never waste a good crisis. i say never waste a break up.
We are a mom & pop business. Raised our rates, extended turn around times, reduced hours in the field. And the calls keep coming, the wait list grows longer. We keep our sanity. If the right person walks through the door we will hire.
I have friends who own bars & restaurants, they are beyond the burnout point. And the supply chain is worse now than it was a month ago.
I’m not sure if most of this country understands the food inflation that is still to come.
The super hot areas are hourly workers – restaurant, hospitality, casinos and the like. I know several restaurants that are closed a couple days of the week simply due to lack of staffing – demand is there. The days they are open, lines out the door.
That being said I work in tech and demand is very strong. I looked for months and months for a new opening to no success. Luckily the engineer leaving changed his mind due to a local girl, so decided not to relocate, but I still gave a raise and title promotion. Otherwise I would have an opening with little chance to fill. This is super obscure tech, so we were willing to train newbies, but even new college graduates were ghosting me during the interview process when FANG types dropped huge offers. So I tried old guys (like me) I knew in tech since the 90s, but they are all retiring early, said they could coast on what they had, were not interested in working, even when I offered 100% remote indefinitely.
I have limited experience with an employee under the skilled foreign worker program. Like most rules written by government the main thing is generating the required paperwork to demonstrate an American worker is not available to do the job. This includes advertising the position if I am not mistaken.
Anyway probably is more than average corruption out there right now, but where I am there is definitely a shortage of workers in the $10 – $20 wage range.
As always, the unintended consequences take time to ripple through the economy. When gasoline goes up by another $1/gal, people will notice, and spending on other items will be reduced.
I wonder if the windfall profits tax will come back. The economy will really be stifled if this sequence of events, or similar happens.
The 2020s version of stagflation… not the same but it rhymes with history.
I’d like to hear some explanation that makes sense of all this. The 15 million people getting stimulus money doesn’t support the official unemployment figures. People laid off get employment somewhere else, if they can. Why would they go back to their former employer, who laid them off? Raising wages would help, but employers are most interested in how much profit they make–not how much their employees make. If they can’t sell what they make, then the price goes down. And so do profits. And so do wages if the employer can force them down, Good luck with that. I am skeptical that incomes will rise enough to support these prices
There was an opening for “slapper of French presidents” but that filled quickly.
A
Did you see that!
I’ve wanted to do that myself for ages.
Le Cockareile Francais!
Oops I’ll maybe get done for an offence against La Republique
A few Decembers ago I substituted for a friend to tend bar at a Christmas party of a wealthy family located South Shore of Boston area. At such parties the tips can be quite generous, usually paid by the folks giving the party. Ever since I’ve been on the email list of the company that catered the party. I and many others received this email a few days ago from the owner of the this high end caterer:
“Hey everyone!! I hope all is well! This last year has been a challenge for everyone and I hope you are all getting through it. I’m reaching out today for help. We are very short staffed and need many shifts filled. I would love to hear from each of you as to what you need to come back to work and work more. This week alone we are short over 10 staff. I’m happy to look at each individual case and make it work. Please feel free to email text or email! If I don’t hear from you I will reach out as well. Thank you all in advance!”
This was my reply:
“Car prices today are about twice what I paid cash for a new Prius 6 years ago. During the same period, wages rose about 2% a year. Should I next explain what happened with housing inflation? No, I don’t think so. If you adjust that 2% a year for inflation, wages declined. You generally serve a wealthy even very wealthy clientele. I trust you can figure out what to do.”
Timbers, LOL. I hope you post their reply.
I have two anecdotes that moved on from the industry once COVID cut their jobs. The restauranteurs are going to have trouble filling in personell when it’s essentially a temp job at this point.. flex scheduling and little pay from the employer.
What drives me nuts is when there are protests manned by young adults, and even teens…..here it is about logging. Okay, the kids should be in school, and the adults should be working. However, they are obviously too busy manning blockades to hold down a job, or go to school, including those who chain themselves to equipment and protest high up in the trees. The RCMP arrest them and they return…..just like mice. Yesterday I picked up some materials from my friend who has his own bandsaw sawmill. He works 5 days per week as a faller, and then cuts wood in the afternoons and on weekends for custom orders. Actually, he has 3 different mills with a partner who is also faller. If they are shut down for snow or heat, they just crank up their mills.
I have seen bozos protest supposed old growth logging when the trees are obviously no more than 60 years old. They wouldn’t know an old growth forest if it fell on them. But there they are in their dreads and sandals…..drumming and playing at Ghandi, going limp when they are picked up in a clamshell sling and hauled off to the paddy wagon.
I’m beginning to think the world is made up of two kinds of people….those with a work ethic and want to get ahead, and those who are deadbeats and simply don’t want to work at all. It just pisses me off. I’m 65, been retired now for 8 years, and still choose to work at building. Every day I give thanks my kids also have a good work ethic, including my son in law. And guess what? they are also getting ahead financially and planning their futures.
I think that if people just don’t want to work, they should not receive social assistance or supplements. Unemployment Insurance in Canada is paid for by both employer and employee contributions. It does not come out of the tax kitty. When it is abused the abusers are simply stealing from their co workers and from those who pay wages. Those on social assistance receive money from tax payers. It comes from income tax. Abuse of either program should not be tolerated. The same for US. There are citizens who do need help and should be helped to get a leg up when misfortune strikes. But deadbeats? No soup for you. Save it for those who are in need.
Okay, my redneck rant is over. Bye. Good article.
“The RCMP arrest them and they return…..just like mice”. Obviously, they don’t get to stay in jail very long. A 6 month stint may change their tune.
Paulo, get with the 21st century. The resource extraction industries in BC are shrinking more all the time. The trees are worth more left in their natural habitat.
The best part of Paulo’s commenta is that they function as a time warp into the era of Boomerdom. If only gnokgnoh’s friend’s employees would pull harder on their bootstraps, they would be rich too.
It is fascinating how many people seem to think that the economy two decades into the 21st century is identical to the economy 30, 40, or 50 years ago, because they happen to know someone who is doing well. My best friend from childhood is a partner at a firm making bank, therefore the kids who were in special ed should be just fine and dandy in an economy that demands more and more intelligence/savvy every year, and if those on the bottom can’t keep up, devil take the hindmost.
/s obviously
Some of us here are older than Paulo and have forgotten all that “old day’s” stuff. Once Paulo gets a bit older, he will forget it too. We have no choice in this eventually happening. If we don’t completely forget it, we typically get it so mixed up it makes no sense at all.
You younger folks will get there someday. LOL
Instead of cutting more trees given global warming, we should shift to stop extending the longevity of humans more than what nature dictates.
From water scarcity to lack of enough housing, the signs are clear that fewer humans are needed. Healthcare spending where it has high ROI like kids under 5 and pregnant women is excellent, but the insane waste the US puts into the last 6 months of life is disgusting. As old homeowners die, their homes become available for younger families and fewer trees need to be cut.
Eliminating all vaccinations, which are unnaturally extending human longevity, will go a long way to bringing our species back to its originally intended lifespan.
/s
Not the first time you’ve posted this line of thought. So I guess you haven’t followed your own advice yet, have you?
Top mark Jeff????
Pontificating and talking into the wind is a human pastime.
I guess the time will come for the Queen to test her own medicine ???
Because western world is selling off the farm one acre at a time people have plenty of leisure time while still getting to consume. Once you are down to one acre you got to got to work or stop eating.
They have been printing and throwing money around like confetti, with massive price rises as a result.
And now, after having paid people more to sit on their ass than they previously made in employment, now they are expecting people to come back to work for slave wages? HAHAHA! No way! Massive price-wage spiral coming.
I said “hahaha!” but it is not funny. I wish this was just a movie or something.
What would happen when all the ue benefits and stimulus end?
It is ending on couple of months for sure
That is going to be very interesting to watch. I would expect either a significant bust or a lot of wage inflation.
You may be right wage inflation to get workers back to work!
1) Gov constriction cont. Overcapacity = 15.4M. // Demand = 9.3M.
2) Workers of all colors : (US population + illegals) = 145M : (331M + 20M) = 41.5%. Great !
3) In July the plumber will unclog the overcapacity. Due to a slight delay, more small businesses will rest in heaven, with no fault of their own.
4) Muscular Bezus will pay them a visit in his space ship.
5) When more small businesses will shut more doors. Job opening will fall. The unclogged workers will flood the market too late, due to mismatch, and the gov will cage workers of all type and colors for the second time.
6) US build a $ $ wall with Honduras & Guatemala. US gov beg the world not to invade, because we have nothing to offer, but free housing, free schools that teach to hate America, in order to send them back, med insurance, snap and gov checks.
I’ll hit the “like” and “subscribe” button on this
Word is that here in the UK, furlough is expected to be extended into 2022! I used to think that one day the government would do the right thing. However, I now believe that this thing they have started by giving people money to do nothing will never stop
Tt
“I used to think that one day the government would do the right thing.”
I gave up thinking that in the UK 60 years ago!
Inflation coupled with a skills shortage. Bidding wars among desperate employers for a shrinking pool of available talent. I see nothing wrong with this. It’s better than the alternatives,
First world problems: the food arrives so slowly. Reservations are hit-and-miss. I bring my credit card and can’t feel like a King. OTOH I’ve had no trouble finding contractors for tasks I had to postpone during the pandemic. Admittedly it’s an unscientific measure.
Make sure the restaurant owner and waiter knows you pay cash and tip that way, you’ll get better treatment if you are a repeat customer. The owner of a place where I eat rice plates practically has them on the table by the time I sit down and relax and look out at the street scene.
Good advice. That approach worked while waiters stayed put but is less consistent with rapid turnover. Good practice remembering names, though.
Here, on the SC Coast heavy with hospitality jobs, the labor shortage is mostly a geographic mismatch. The stream of northern Boomer retirees has been steady for several years, but Covid supercharged that southern migration. North Myrtle Beach isn’t quite Naples (FL) w/ its demographics, but it’s getting there. So of course, every deep pocketed investor thought it’d be great to open a restaurant or hotel to profit from retirees and tourists. Unfortunately, the Boomers didn’t bring along their bring along their 18-34 year old grandkids to staff the restaurants and hotels. Even if they had, they wouldn’t have been able to afford the rapidly escalating real estate costs.
Went to a Sonic Drive In this Saturday at lunch time. Pulled up to one of the parked drive in spaces to order and the little voice came out of the speaker,” Sorry due to staff shortages we will only be serving in our drive-thru line. Then we went home to the apartment complex where we live and in the space next to us ( a reserved Tenant space) was a new Lamborghini ( the expensive mid-engine kind). Sign of the times I guess.
I believe this first part, and this second part.
However the lambo won’t be there next week(or even tomorrow) but that little voice in the box might.
Is there an inexpensive kind of Lamborghini?
Yep. The “Lamborghini sprint basso” for example. Google it.
Does going via a drive-thru lane mean you then eat your meal in the car … ?
Ok so doesn’t the Fed/State pandemic unemployment gravy expire in September? Yes they could extent them out another 3 months to the end of the year, or another 6 months, sure. But these job openings numbers and the vaccination rate and availability is going to make it tougher and tougher to extend the gravy for much longer.
Too many people getting too comfortable not working, not paying rent, not paying loans, not paying utilities. There is just no way that this is a “new paradigm”. The genuises in Washington are lining the runway with stacks of greenbacks to set up a “soft landing”. I wouldn’t count on it.
Don’t forget about the child tax credit that starts going out next month. For people with small children, it could be an incentive to stay home longer.
Wolf,
I assume when unemployment ends especially that extra money which some states are in mind to cut, all this will be transitory also.
Isn’t higher wages a backdoor way to reduce the national debt by paying it back in inflation cheapened dollars, that leads to higher amounts of tax withholding on higher wages?
Before I started reading this site years ago, I would have never been able to articulate such a statement, even if its wrong.
Why work when you can “earn” more staying at home? The “Protestant Work Ethic” died long ago.
Besides, it’s the stealth way to raise the minimum wage and put more than the 35% of small businesses already projected to be out of business by the end of this summer even at current wages out of business, thereby putting even more people out of work and shifting the business to big corporations who need less bodies to operate. You know, the ones who actually own “our” government via their lobbyists and their wallets.
Record money printing, persistent unemployment, high inflation, clogged supply chains that will not unclog quickly, what could be better to develop a even larger voter base dependent upon government handouts?
And you think the logjam across multiple industries caused by chip shortages is bad now, a major polysilicon production plant in China just blew up today.
You know, you may be missing something. Though it would be hard to figure it out with data. Here is my hypothesis, sans data. You have an economy hit with a pandemic that caused a huge disruption not just in production and immigration, but also resulted in millions of people uprooting themselves in the middle of the pandemic, and moving elsewhere. What if?: what happened is that people moved from hot job market cities to small cities and rural communities that never had many jobs to begin with. Then the pandemic emergency ends, and all the hot cities demand workers back except those workers moved. End result is a mismatch, workers are in one place while the demand for workers is in another, resulting in a whole bunch of unemployed in rural and small cities and a whole lot of unmet demand for workers in hot large cities.
A
Or a lot of long distance commuters!
https://www.federalreserve.gov/releases/g19/current/default.htm
Does the increase in “Finance Companies” outstanding consumer credit indicate those real high interest-short term loans that cause a lot of problems for people that are practically destitute and sign their life away for a few bucks for a few weeks? Second line under the major holders heading.
Under “CONSUMER CREDIT OUTFLOWS”- way up to 99.9 from some mid to even negatives prior over the last 5years.
lisa2020,
No. “Finance Companies” are non-bank lenders such as Ford Credit that make car loans and other loans to consumers, such as credit cards. Especially with car loans, many of the automaker-owned finance companies offer cheap subsidized loans and leases in order to sell the cars. This is a huge business. There are also much smaller finance companies that specialize in subprime loans, but that’s a small segment.
Wolf’s charts are data, not anecdote, and I would love to see the regional breakdowns in each sector.
But, we all have stories that confirm the data. Going to lunch in a local mid-level restaurant, they cannot open up all their tables, not enough waitstaff or cooks. Waiting lists 30 minutes long in the Philly suburbs…on Wednesday. My friend owns three women’s clothing stores in nice neighborhoods (Chestnut Hill, Princeton, and Center City). He pays the staff $8/hour and the managers $15/hour. Most of the staff are college and high school kids. He is constantly hiring new staff, because they are so transient and don’t make a living wage. Lost both managers, older, who had enough during the pandemic when he had to cut their hours. He needs someone with experience, but very hard to replace at that salary. He knows it.
It’s always been a grind. His experience is that the dislocation of the pandemic disrupted the normal seasonal cycle of retail businesses. Regardless, he’s having his best spring and summer yet. He and his partner are having to work like crazy, because they’re short-staffed.
8/15$ an hour in 2021 in the Philly area? I’m amazed he has any staff at all, when Wawa starts at 15 for cashiers with a signing bonus on top.
I made 8$ an hour at Subway with my first teenage job in the mid 90s in a much lower COL area than Philadelphia. I had to add another comment because I am so flabbergasted that anyone would be desperate enough to take that wage.
I wonder if COVID will be the straw that breaks the camel’s back for a working class that has stagnant wages for 50 years?
All the high school and college kids work for minimum wage up $12/hour in the Philly suburbs. They also mostly live at home in the summers and winter holidays (peak retail seasons), so they don’t have to really support themselves. It has always been that way. My daughter is home from Pitt after her freshman year.
They pick places mostly because they like the manager, the food, or the customers (their friends). Most work hard to earn a few thousand over the summer. None of them collected UI during the pandemic. Students. Few of them will work for Walmart or Amazon. Those jobs are reserved for the working poor.
I wasn’t trying to make a tangent about what teenagers do for work, but rather wondering why anyone would accept 8$ an hour in this area. Almost every gas station I’ve been to recently in the area has help wanted signs on the door with many starting at 15 dollars an hour, so I dont understand what the appeal of doing very similar retail work at half the wage would be. Same thing for managers, I have to imagine that the gas station manager is making more than the 15 that the cashier is being paid. I am not surprised your friend ia short staffed.
He’s a really nice guy, and I don’t have the heart to tell him that he needs to pay more.
Ridiculous wages 8$ won’t pay rent or a car
In souther California my friends daughter who is 17 year old got her first job last week in burger joint which pays her $14 an hour
‘8$ won’t pay rent or a car’ Unless you are an illegal living 12 to an apartment. In that case, it’s good money and supports the family back home in the village. People that rant about the lack of livable wages, like the above, and then militate for open borders are hypocrites.
Don’t blame people who perform under the table work and not paying taxes.
When you see people collecting their $$ by sitting at home, and then your tax is 30% (Federal plus state), and adding the inflation tax on top of it, you are a dumbass if you don’t do something to protect your wealth.
“Don’t blame people who perform under the table work and not paying taxes.”
If you look at WS charts for worker surveys contrasting the Household survey vs Establishment (i.e. employers) survey you will note the Household survey nearly always show higher employment.
I think a significant reason for higher household numbers is large numbers of people who work for cash at gigs that don’t require a SS# or W-2 form (in other words, no taxes collected). Still, these people consider themselves employed.
That they may double-dip by collecting unemployment benefits at same time is for them and their conscious to reconcile.
Paying over .42 of every dollar I earn on my self employed income is just income confiscation.
Fed 22%
Md 7.5%
Self Empl 15.4%
I consider working for “Southern Income” a badge of honor.
Maybe they meant to say in this survey that the proposed wages were lower than their current unemployment benefits, which is likely true for lower level employees who get the extra $300 a week in federal benefits, and who didn’t take the job.
The survey polled people who were unemployed. This is a self-selective survey. It didn’t include people who were offered a job and took a job.
Not to disappoint those commenters that love bashing the people on unemployment, but most of the people I know collecting UI are working like crazy to get jobs…in their skill set.
My brother is a professional musician and is just starting to get gigs. He and his bands and the orchestras he plays did lots of free video stuff during the pandemic, including playing at vaccine centers every week. He and his wife took jobs in stocking and retail over the winter holidays. Other than that, there have been NO jobs, even waiting tables or in retail, as everyone knows. Now there are, but he’s going nuts trying to line up gigs until Broadway opens in September. He has to file every week and the paperwork is rigorous. Every time he gets a gig, no UI, and he’s fine with that. A professional musician that takes a job in retail or waiting tables effectively ends their career. By the way, new HBO series (not released yet), The Gilded Age, fifth episode, he’s the principle violinist in the orchestra!!
My friend in retail had an employee that quit 16 months ago and has collected UI since. She had been claiming disability as the reason for not working. The state caught up with her, and she is having to pay it all back, because she was not terminated by my friend, and she could not prove her disability. Administrative hearings and everything.
Anecdotes, yes, but a little support for the people who struggled during the pandemic is warranted; as well as for the state agencies trying to keep people honest.
If wages rise because UI Has created a floor, there is a lesson to be learned. We need to bring back a national welfare program in part because it will benefit many/all working folk because higher pay and safety net. Though, I quite sure many here will articulate in their various ways they are immune to learning such lesson.
They have already started chiming in above. So many people live in this self absorbed time warp, where they cant recognize that the not very bright person who used to be able to get by laboring in a warehouse due to a strong back and good work ethic will struggle with the mental demands of efficiency in a Bezosshop. Many of the jobs that used to allow honest people on the left side of the bellcurve to support themselves no longer exist, and the ones that do frequently dont offer enough juice to justify the squeeze(8$ an hour in the Philly area in 2021 ffs).
For now many of those folk have just been sliding into an unnoticed pit of despair and suicide. Hopefully what is going on now is the beginning of a general labor strike that tells the rentier parasites that have hoovered up all the productivity gains of the last 50 years to take their bullshit jobs and shove it.
There are a few lessons to be learned. For starters, don’t allow people to enter the country illegally and depress wages for citizens and legal residents. Don’t give handouts which exceed what anyone makes by working. Don’t incentivize corporations to offshore any more jobs than necessary.
There is no accountability under your inferred proposal, except by the taxpayer. The voters elect populist demagogues to give them free benefits at someone else’s expense. Apathetic government agencies substantially don’t care if the budget is wasted. The politicians compete to provide the most “free” benefits to buy votes with someone else’s money. The program beneficiaries have a sense of entitlement.
No one is entitled to minimum living standards simply for existing.
Here is a counter argument. There is a labor shortage AND a skills shortage. The US (and all developed economies) desperately need more immigrants. At the same time, wages have not risen enough for mostJ skills training , healthcare, and education must be made available to all.
Agree regarding getting a handle on immigration.
And consider this: I used to work with non-ideological Trump supporter. He was frequently saying the govt should $2000/month stimulus checks all the time. He said anyone who needs it should get $2000/month because if the richest nation if the world can’t do this and take of it’s own, it makes no sense.
Need something to do?
Reverse the 12 Labours of Heracles
Cerberus is already done. The dog is free, and proved himself by catching a few frisbees in the Pacific.
1) Supermarkets worker get a discount for their meals
2) Restaurant workers get unemployment checks, cash, and food for free. Most of them are getting fat.
3) In the morning there are lines in MCD takeout window to start the day with junk calories.
4) To avoid “such” crowd, u can order Zabar’s morning breakfast kit, o/n.
Micheal Engel:
“Supermarket workers get their meals free” Yeah if u want to do “dumpster diving” out the back door with the homeless!
That’s a real crock!
“Supermarkets” are not “restaurants”!
In san Diego, some of my friends decided to wait till their UE benefits run out as they make more than before or what they can find right now.
This would continue till the UE benefits are continued and I think is transitory.
Grenade in the room and run!
Other ways of living are possible and will come.
Why doesn’t the Govt pay everybody $30k a year at 18+.
Then take a flat income tax of 25% on everybody, regardless with no reliefs or exceptions. Abolish all other taxes other than a land tax and a 70% tax on all assets moved overseas. You might have to dump the Pentagon and get a proper Health service to make it work.
Discuss, I’m out of here!
Lost one of my landscaping contractors as he was just working temporarily until his job as a cook was called back. Now the owner is out there cutting my grass himself as he can’t find any workers. Even after putting an ad in the Spanish newspaper he got NO RESPONSE.
The solution. Stop the $300 federal payment Now!
Is he paying a good wage?
Consider this an opportunity to ditch the grass and design a low water use xeriscape.
You are right on! Lawns are a waste of natural resources.
Lol.. like he was paying unemployment insurance to his under the table landscaping worker anyway. Oh sorry..
No pago ningun securo de desempleo para us trabadores ilegales.
The working class lives day to day and will not take a job until they have to when the safety net drops. It will be interesting to see their work ethic when the pay drops to what they used to earn but all the higher prices stay ‘sticky’ as we all know they will. This is a long term problem and will require some sort of living wage policy or every hiring business will have a nightmare on their hands.
Start tapering off UI by 20% a month, and those job openings will begin to get filled pretty quick.
UI was designed to be emergency money. The emergency is over. Stop subsidizing people who do not want to work.
This all works it way through as more folks (especially school age kids) get vaccinated, the extra UI dough ceases, and things get back to normal . . . so don’t fret is my advice because this too shall pass.
Indeed, there is no “new normal” here. Just a period of artificial madness. Reality always returns. It’s as reliable as death and taxes.
This thing is already over. The vaccines are mute.
850,000 manufacturing jobs go begging ???
Eureka !!!
I found out how it works.BLS publishes some data,Wall Street trading bots react to data (real or imagined) and stock market keeps skyrocketing.
More balanced account of the situation in American manufacturing can be found in WSJ article published last week:
“The Southwest Is America’s New Factory Hub. ‘Cranes Everywhere.’ ”
Since WSJ tries to compete with WS I will not provide a link,nonetheless,this article deserves to be looked up and read !
Only 300,000 new manufacturing jobs were created in the past THREE years.Current wages at the new high tech plants are $17 per hour…Most of those huge plants will employ 500-1000 workers…
Quote:
“Steel Dynamics Inc., a steel producer based in Fort Wayne, Ind., is opening what will be the region’s largest mill in Sinton, Texas, this year. It will employ around 600 workers and produce three million tons of steel annually.”
US annual steel production is 85 million tons annually.In other words about 20,000 steelworkers could supply all the steel US needs and probably even more.
“More balanced account of the situation in American manufacturing can be found in WSJ article published last week.”
I don’t see how an article on one region is a “more balanced account” of the general U.S. economy. The topic of the WSJ article is not the topic of Wolf’s article.
*Brent: “Current wages at the new high tech plants are $17 per hour.”
That is a false quote. The actual quote in the article is about one company, which is building an extension factory to its plant in Oxnard, California.
WSJ article” “California has seen a longer-term decline in manufacturing employment, but it is well positioned to compete in advanced manufacturing sectors that require specialized skills
and which pay higher wages, a spokesman for the state Department of Finance said. … California’s losses [in manufacturing] are small relative to the state’s $3 trillion economy.”
California isn’t all bad. I grew up in the SF bay area in the 50s, and the weather was great (before smog). In the Southwest you need to live most of your life breathing air-conditioner air.
WSJ article describing Southwest: “Factories will need to manage water supplies in their new desert sites, local authorities said. The region is in a two-decade drought, the driest stretch since the 16th century, according to researchers who published their findings in the journal Science last year. Researchers and local authorities say demand could press the limits of the Colorado River basin and groundwater aquifers in the years ahead, given the region’s growing popularity and projected growth.”
“California isn’t all bad.”
Yeah,I know that.Driving 150 miles from LA to SF feels like transition from Hell to Paradise,at least climate-wise.
Regarding $17 per hour manufacturing wages – nowadays it appears to be the new normal in non-union sector.In the South East it is even less,at the Glock factory in Smyrna,GA workers are making $12 per hour.Mercedes in Tuscaloosa,AL and BMW in Durham,NC are paying $16 per hour.
I worked in manufacturing in the late 80’s,non-union shop,making $12 per hour.Not a tremendous progress in the past 30 years.
Also you are probably old enough to remember Ben Hamper’s evergreen book “Rivethead”.He writes about his experiences working for GM in the early 70’s.He was making $12.77 per hour.And GM stood for Generous Motors ?
Most of these comments besides anecdote ignore the biggest WTF chart. The number of reported job openings is insanely higher than pre-Covid and the number of jobs that exist. It really makes you wonder how many are real.
If you shed 20 million jobs that you then want to refill, how many job openings do you think you will see over time?
I had the same question as Kevin: the numbers are not %% change!
How can it be possible that there are way more openings than there were before COVID started (let alone pre GFC)???
Alku,
Well, like I said, if you lay off 20 million people during the lockdowns, and then you reopen, you’ll have about 20 million open positions you need to fill. So you’ll have a huge number of “job openings.”
The problem now is that these positions are hard to fill, and job openings remain open for a long time because companies cannot fill them.
OK, I got it – this chart only shows openings, so the layoffs are not visible there anyhow.
In this case, what seems a WTF surge (~5.5 M) is actually just a small fraction of 20 M lost jobs
All the service workers are working on getting their real estate license. Soon, we will all have our own Stealtor.
Pay the workers in Bitcoin. No none in their right mind wants to work for a worthless piece of paper. The dollar is a meme currency.
That would almost be like getting paid in lottery tickets.
Retail and furniture stocks are on fire. Just go pick one and it is probably up 30% and some are up 300% from pre-covid prices.
Build-a-bear
Tuesday Morning
Bed Bath and Beyond
Dicks
Sports Authority
Kirkland
Jill
Best Buy
Chico
Duluth Holdings
Abercrombie and Fitch
Guess
Gap
Big Lots
@Home
Covid has been very good to these stores. Maybe not so much for mom and pops but wow. Some of these stores were heading to bankruptcy before covid.
Up and to the right
https://finviz.com/screener.ashx?v=211&f=ind_apparelretail
The Federal Reserve is complicit, via their cheap money policy, in the employment predicament and the record job openings, unfilled. If the federal govt had to borrow at real rates, the doling out would not happen to this degree, or at all.
And we have 4% inflation with zero Fed Funds rates. Never happened before, and all at the hand of the Fed who promotes inflation.
And we have near record lows in long rates, immoderately low. Predictably, this interference in the free market to set rates has locked up the real estate market. Those with homes decide, rightfully, to hang on. You dont pitch your biggest asset in an inflationary environment.
The buyers can borrow, courtesy or the Federal Reserve BELOW the inflation rate for 30yr mortgages. Fed Funds are 0% with 4% inflation. Neither of these conditions have ever happened before! And they are contrived and manipulate by the Federal Reserve.
But wait. What are the duties of the Federal Reserve and are they adhering to them?
So, lets review.
The mission statement of the Federal Reserve is …
“It is the Federal Reserve’s actions, as a central bank, to achieve three goals specified by Congress: maximum employment, stable prices, and moderate long-term interest rates in the United States.”
Mandate #1 The Fed is supposed to promote maximum employment, yet what they have done with the interest rates has had the OPPOSITE EFFECT. The artificial rates provided by the Federal Reserve has allowed the Federal government to borrow at near zero and dole out the money in a fashion that dampers the will of workers to fill employment positions. If there had been real borrowing costs, historical borrowing costs, the doling out would either have been sharply curtailed or not implemented at all. Fail.
Mandate #2 The Fed is supposed to promote stable prices, yet they promote just the opposite, INFLATION. We now have 4% inflation and they do not lift a finger to “promote stable prices”. Fail
Mandate #3 The Fed is supposed to promote moderate (not extreme) long term rates, but we have near record lows, 30yrs bonds almost 2% below inflation. Those rates are IMMODERATE and EXTREMELY low. The Fed is buying $120 Billion a month in the market to promote these rates. Fail.
That’s 0 for 3. That is THREE STRIKES.
And who is watching the fiduciary short falls of the Federal Reserve?
If only the masses knew what was going on. They don’t. I didn’t until recently, thanks in large part to commenters on Wolf’s site. Thank you.
Heard from an co-worker that our old company is not doing wage increases if your wage is about $60k this year. They really want to reward the younger less fortunate. Had to break it to him that they gave us $100k workers the same song and dance. Companies like to keep their workers wages such a secret. They just lie their way to enormous profits
They are not replacing many of the people that have left and are just doing the same with less story
Patience Wolf, those insane number of job openings will come down, it’s inevitable.
As companies start to figure out that there are no workers that fit their need to pack boxes, flip burgers, etc, they’ll automate. Most of those openings will go away. Probably right about the time when people are coming off their unemployment benefits. All I can say is it’ll be utterly ironic as far as the timing goes.
MCG
Automation ????
With a years long chip shortage ???
Nope
Automation won’t happen.
Thanks Wolf it certainly appears that we have the commencement of an inflationary spiral. Great for wages, businesses to increase price and profits, sometime down the track this will need to be adjusted through increased interest rates, be interesting to see who the winners are when this happens. The other element to note is to see what happens as the vaccines are rolled out and schools re-open to free up those who wish to work but are unable to due to the risk of becoming ill from the Covid virus. I believe there is presently some hesitancy due to this pandemic, would make an interesting sociological research study. Thanks very much for a very interesting analysis – I understand China to is going through a similar set of circumstances.
“…we have the commencement of an inflationary spiral. Great for wages, businesses to increase price and profits …”
For those cheering on these fast track wage increases going on– you are going to get it up the wazoo like everyone else who participates in this Clown economy.
I note that Chipotle just announced they were raising menu prices 4% to offset increased costs of those employee wage increases they gave out last month.
Enjoy the ‘taste’ of inflation while you can still afford to eat out.
“Chipotle CEO’s 2020 pay more than doubles, as COVID-related PSU modifications provided a $23 million boost”
Yeah, it’s those damn greedy workers’ fault they raised prices…
They’re not going to pay these high wages when desperate people need any sort of cash flow and can potentially be evicted in the fall/winter. Those who negotiate now probably have a better chance to keep their offer for a longer time.
I’m just done with restaurants. Raise prices and still expect a (higher) tip? You bring a cup and plate to my table, I don’t see what value is in that. I’m not responsible for a business model that needs so much help from a customer directly and indirectly. And food prices are not going down either, have fun with artificial shortages and price control tactics.
This is like the grasshopper and the ant story all over again. The grasshoppers are about to face a bitter winter.
Great article, and even greater “rants”!!
I mean comments .
Few points I’d like to reiterate again, regarding the employment opportunities and jobs in the American Economy and the majority of western countries.
those that were able to “afford “ the “ confetti money “ , that was primarily used to placate their populations into further servitude and compliance.
The current picture painted by the statistics presented by Mr Richer are damming !
They represent a total failure of planning and foresight ( on the part of the G’s).
The economy is an amalgam of thousands of wheels and cogs that intertwine and spins in tandem. To ultimately present a whole picture of a functioning society run by an astute and responsible government/s.
To most readers of Wolfstreet , it’s painfully obvious where the failings have occurred.
You only have to read the comments here to gather the missing pieces of the jigsaw.
The abject disconnect from the market and The ruled have manifested itself clearly in the last 15-16 months.
The failure to protect and isolate the vulnerable in our society, the failure to keep our economies functioning in a normal manner, the failure to lift the reliance on the state to the reliance on the individual’s power of procreation and cooperation.
But then governments are Not elected to do that( as this last 15 months have clearly demonstrated)!
Governments are elected to look after their own interests and further ( feather their nests).
The lack of planning to face a crisis ( health or otherwise) , created upheaval in the lives of individuals and communities across every corner of the world, the leading countries have acted in a horrible way that presented us with a more divided, weaker, selfish , and ultimately more fragile world economy and humanity.
One wonders what the next 5 years will bring us?
I dare Not contemplate.
The people ( unfortunately overseeing our fate as a civilization) don’t have our interest at heart.
We will be drawn to a quagmire of even worse proportions than the one we’re currently navigating. It’s only a matter of time and pressure!
“One wonders what the next 5 years will bring us?
I dare Not contemplate.”
Nor I.
Extrapolating current historically reckless trends and conditions 5 years into future (or even one year) is not for faint of heart, or who those who value their sanity.
Businesses in the USA have been subsidized with low wage labor since the 1970’s till today. This very high immigration has kept real wages down.
This is an artificial SUBSIDY.
It is much like how we subsidize cheap debt by forcing interest rates down in hopes of stimulating the economy.
This is an artificial subsidy to cheapen the cost of money.
When you artificially lower the cost of labor thru massive immigration and Fed Reserve policy to drive rates down, then TWO of the most important factors in business proposals/plans show lower cost.
This then makes American people and businesses THINK MISTAKENLY that their business if VIABLE, when it really is NOT.
Businesses in the USA have been so spoiled with cheap labor and cheap money that they waste investment in dubious projects.
Before I had high blood pressure and had to keep my LDL below 100, I ate sometimes at fast food. But, probably 1 to 2 out of ten fast food chain locations really shouldn’t be there because they are viable businesses if you take away the subsidized labor and subsidized cheap money.
Investment, labor, money…these things should be allowed to better settle at where they would normally be without the politicized subsidies. Also, subsidizing people to not work can have similar effects but the other way.
We really don’t need another Burger King, or another Starbucks.
We need to pay people more, let interest rates rise, tariff/tax imports more for luxuries and…get this…
BUILD and EXPORT much more than we are doing.
A country with these problems, including huge trade deficits every year cannot go on indefinitely. Our currency will continue to slowly erode over the next generation.
Sapwolf
Yes, mate!
It is a car crash on a painful slow motion repeat.That most FAKE economists and highly paid “ taxpayers paid that is” officials, refuse to see.
If you keep denying the reality, it doesn’t matter or even exist!
We can all live in a world of imaginary realities made up by our highly costly, incompetent governments and the likes of Apple and google!!!
Great comment!
Best comment in the whole page, Sapwolf. Only thing I’d add is that it’s not all immigration. Ever since the 90s, there really hasn’t been welfare, it’s workfare. There’s an enormous number of SNAP recipients working for Walmart or Target or at Amazon warehouses. So you’ve effectively got government entitlements backstopping these billionaires like Bezos or billionaire families like the Waltons. It’s nice to own a money printing press, but it’s even nicer when you can rent the printing press with a few hundred thousand in annual campaign donations.
Here’s an entertaining data point: I have a friend who’s been on disability for something like 12 years. He has to work because disability isn’t enough to live on, but he can’t make over about $1,500 a month, or he loses disability payments. So he’s had to turn down jobs because he’ll lose the disability payment, but the extra income won’t cover what he would lose in disability payments. How’s that for an economic choice?
Like
What does it take for the Fed to stop QE (120 billion a month)?
4% inflation?…apparently not.
Record job openings?….apparently not.
So what is the threshold, the trigger, the signal to the Fed that they may now retire?
Officially stated as “full employment” They also said they would interpret the data in order to judge if the benchmark was met. Obviously when other central banks pullback on their support it puts pressure on the Fed to fall into line. IMO the Fed is in a tougher place than most CBs, which are operating in countries with social support systems, nations in which corporations pay taxes and those taxes support the government. US system the corporations are multinationals and can move about the globe at will, without any responsibility. IF USG does not establish a reliable source of revenue their bonds will become worthless and that is the trigger at which QE automatically ends.
Total payments from the Government for sitting on your arse in your air conditioned room exceed the prevailing wages on many jobs.
Here is the fix: “Effective July 1st, all Government payments will cease”.
Guarantee, in 2 weeks the labor shortage will disappear.
The Administration caused this fiasco, and what is their solution? Create a multi billion dollar add on program….
One of two things is in play here. Either the Government is stocked with people determined to ruin our economy, – or – they are criminally stupid people, whose actions will ruin our economy.
C’mon you brilliant people, lets have your version of this problem. More Tax Payer money to non tax payers so they don’t have to support themselves?
CreditGB
“Total payments from the Government for sitting on your arse in your air conditioned room exceed the prevailing wages on many jobs.”
“Here is the fix: “Effective July 1st, all Government payments will cease”.
Guarantee, in 2 weeks the labor shortage will disappear.“
For this to happen, they’ll need to open the country (PRONTO).
Enough of this scare mongering BS, and back to normal life. All the community have to do is to protect their most vulnerable ,and the government had 18 months so far to figure that out, and they achieved NADA!
People’s lives are turned off and on like a bloody light switch!! This is ridiculous and over the top.
Read Wolf’s article pertaining to China’s steel production vis a vis the cumulative production of the western countries!!
Is it any wonder we’re in this crappy situation?
I reckon we’ve ( so far) traded too much freedom for little or No security!
How long till we stop debating how many genders or pronounces we should qualify to use , and start building this joint again?
CreditGB
They are both criminally stupid and incompetent.
– It seems Mr. Market is not “too worried” about (price) inflation. Because the 30, 10 & 5 year yield have been falling this week.
– How many people are still on a mortgage payments “holiday”.
Last night I walked through a local (SoCal) large strip mall to do some shopping. Every single store had a help wanted notice on the front window except Starbucks. Target was the only one that had a starting hourly rate on the notice – $15.
This morning I walked through a different small strip mall to get my coffee and every little store had a help wanted sign except Starbucks.
Max unemployment bennies in CA? $750/week including the Fed bonus. That’s $39K/yr for doing nothing.
As I tell my family, please take a deep breath and relax and let things play out. In an age of wanting to see immediate results and information now now now many people miss the forest for the trees. Of course a 100 year storm of a global pandemic is going to take quite awhile to fully play out as to all the repercussions. Understand the politics of pandemic financial management and the necessity to avoid immediate acute disaster even if it means planting the seeds of future disaster.
If there was ever an argument to get government and central banking out of our lives the last 13 years should convince anyone.
All they do is interfere with free markets while giving gifts to the plutocrats who really run every country in the world.
It takes a bought and paid for government to create these distortions.
LEAVE US THE FUCK ALONE.
Michael Gorback
Watch your f$ckin language
If your employees qualify for medicaid and food stamps, it’s NOT a business.
The most important Way Too Funny (WTF) chart is unfortunately missing, and it would reveal a lot on this topic: Hiring staff/HR specialist Job Openings. Are they included in the section Leisure & Hospitality? A warmer, more welcoming attitude and some amount of hospitality would surely help employers fill their openings. Or maybe Arts, Entertainment, Recreation Job Openings? … No drug tests anymore!? Indeed, hiring was a skill and tends to become an art. Or in the section Retail Trade Job Openings, since workforce became a commodity (human resource) traded on the market and the Supply Chain Specialists should deal with the enrollment? Anyway, for the 10 million openings there would be needed at least 100k new experts in hiring & training, on top of those already existing. And that doesn’t even count many thousands of lazy HR specialists who took an extended leave just to receive the stimulus checks while eating popcorn/watching Netflix, and who need to be replaced.
Wolf, please allow me one more for the road / i’ve earned it. inspired by the flock of black swans taking up the sky with the locusts, please give me this one-time dispensation to have our own kind of GAAP accounting to amortize this barrage of posts against the past or future. (i know, Tony22… i’m learning, too. i’m still lost on the Federal Reserve but so far my cliff notes says they’re the Illuminati everyone’s been on about).
sorry , Wolf. leakage, i know. i’ll keep it brief:
PETUNIA-
i forgot the BEST part of my Manhattan drama at the bowling alley on the water. it was all so …operatic.
so we make up, Lisa and I. with the help of the kind brother who stopped and feared me not to give me a handful of tissues, i cleaned up and we snuggled up on the F line i think, on a late crowded train home.
she and i are cuddled up because we just fought and made up, and there’s no room on the car. we squeezed in and we’re talking about how glad we are we were always best friends and stuff.
THEN these big tall loud cats get on the car and with nowhere to sit and it’s mad late and they’re BORED and riled up and they wanna start something with someone. they’re looking around and Lisa and i are cuddling like baby kitties and everyone’s looking down and around and trying to AVOID their eyes.
i look up at them from Lisa’s shoulder, and my eyes are swollen and red and the most annoying antsy guy catches my eyes and looks confused. i stare him dead in the eye and he’s ready to start something with me, right? it’s late/early morning and he’s ready to pop.
so i says to him in a low voice because if no one did he was gonna talk first and set the tone and that’s hard to come back from, right? so i say all sweet like he’s my baby brother ready to have a tantrum: “come on and sit down next to us. there’s room.” i curl up under Lisa more and say, “come on, don’t be scared. i just met this lady fifteen minutes ago.”
and his head went BOOM! and brain parts all over the car.
nah, only kidding. his eyes bulged and he laughed and nodded. then he took me up on the mass cuddle and pushed and squeezed in to sit next to us all and we were ALL adorable that night. / i was proud because my uncle taught me that when i was a little kid hanging out with him. he said if there were scary guys on the train, break the ice and talk first. he said ask ’em for a match even though i was like 11.
(in Manhattan girls were doing lines of coke by age 11)
i share this because as a writer type, i’m always thinking of my best lines decades later when they’re not even as funny as “the jerk store” as a comeback.
when will i get to tell that story? it was OLD New York fuck you as i love you.
x
—
Okay, Wolf. thanks. i’ll balance out my account back to zero now.
(i’m trying to wedge money speak on this MONEY SITE)
and to all a good night.
My hospital was holding a conference this week where administration was thinking of mandating the “vaccines” if they are approved by the FDA.
LOL.
In my subspecialty group we would be 4 out of 5 to quit. In a specialty that has more job offers than at any time in the last 20 years.
Duck em.
What does WTF mean in the article? Willing to Fail? thanks for advice.
“What the Fuck” = expression of wonderment, sometimes (but not here) used with a question mark behind it, as in WTF?