COVID Economy

[The Hippie Satan of Hyperbole]

So I heard this presentation the other day that said the labor shortages are really for two different reasons.

For the services market, Covid in schools and relief payments are the biggest issue.  Many of these jobs went away early in the pandemic and people just aren't going back to them quite yet because either they can't or don't need to.

For the goods market, it is is the upsurge in demand, which also occurred early in the pandemic. 

The problem is that "goods labor" can up their wages all they want to attract those who used to work in the services market, but people who used to work at a restaurant aren't going to start unloading container ships unless they are paid a super premium to do so.

Is this accurate?

[jesmu84]

Retailers have not even begun to pass the correct price increases onto the consumer. Logistics costs have barely been passed on and cost of goods from SE Asia continue to increase. I think after the holiday sales we are going to see an uptick in pricing on consumer goods. IMO, inflation is here for awhile and it might get ugly. Our clients are facing logistics issues, labor shortages, increased cost of goods and inflated wages. Our clients range from small startups to NYSE companies and everyone is facing these problems.

Goose,

What's your impression of this article: https://digital.com/half-of-retail-businesses-using-inflation-to-price-gouge/

"In other words, businesses are inflating already inflated prices in order to turn a bigger profit amid people's fears over uncertain times."

[Goose]

jesmu

It really is a story of the big guys vs. the small guys in regard to inflated pricing. There is no doubt that I believe the Apple, Nike, auto companies and others are sharp enough to raise prices if and when they want to. I think one thing that has not been factored in is a company having ability to understand their inflated costs in real time. The big boys can navigate virtually any obstacle thrown at them and figure out a solution, smaller companies cannot use their own plane or rent entire vessels to get goods delivered.

I guess to answer your question more directly, I do not believe that vast majority companies selling consumer goods are getting margins they were getting pre pandemic. We have clients that discontinued low-cost products from their line due the rising costs.

[MU Fan in Connecticut]

So I heard this presentation the other day that said the labor shortages are really for two different reasons.

For the services market, Covid in schools and relief payments are the biggest issue.  Many of these jobs went away early in the pandemic and people just aren't going back to them quite yet because either they can't or don't need to.

For the goods market, it is is the upsurge in demand, which also occurred early in the pandemic. 

The problem is that "goods labor" can up their wages all they want to attract those who used to work in the services market, but people who used to work at a restaurant aren't going to start unloading container ships unless they are paid a super premium to do so.

Is this accurate?

Yes, accurate from what I read.

I'll add two other things to this that I've read. 
* Almost 800,000 people have died and they weren't all retired persons.  There are fewer workers period because of a large number are unfortunately now dead.
* Baby Boomers are still a large share of the workforce and many just decided to retire early or those who were still working asked themselves why they still were.  "Screw COVID, I'm this close to retirement so I'm done."  For example, with my 32 person company we had two retirements last year and two more who have been retirement age and have been talking about it the last 9 months.

* Container situation is already improving.  We're not seeing any issues in New York and I was just reading that the port of Los Angles had already reduced ships waiting from 75+ to about 40. 
* We're still booking export containers.  The pick-ups usually get pushed out a week because the ship isn't ready but they are going. 
* Metal prices are way up from the beginning of 2021, but they've more or less leveled off the last 4 months.  (Except tin - no idea why that's still going up.)

* Saw a graph today that inflation is still less than the 1980's when it increased under Reagan.

[Uncle Rico]

jesmu

It really is a story of the big guys vs. the small guys in regard to inflated pricing. There is no doubt that I believe the Apple, Nike, auto companies and others are sharp enough to raise prices if and when they want to. I think one thing that has not been factored in is a company having ability to understand their inflated costs in real time. The big boys can navigate virtually any obstacle thrown at them and figure out a solution, smaller companies cannot use their own plane or rent entire vessels to get goods delivered.

I guess to answer your question more directly, I do not believe that vast majority companies selling consumer goods are getting margins they were getting pre pandemic. We have clients that discontinued low-cost products from their line due the rising costs.

I can attest to this as well.  My smaller suppliers are struggling versus the big boys to get shipping appointments because the bigger boys can pay more.

Also, a lot of low-cost products are either being discontinued or taking hefty price increases to increase margins

[MU Fan in Connecticut]

We're not consumer products, but for the most part, we price our customers by breaking out metal value & fabrication price.  Our fabrication has stayed the same and the metal values fluctuate monthly and our customers will see the benefit when metal prices drop again in the future.

[MU82]

From the NYT:

All of the Republican governors who opposed the $1.9 trillion Covid relief bill, which passed in March with only Democratic votes, have accepted the money it allocated to their states. Now, they're in the awkward position of criticizing the spending while championing programs that rely on the funds. Here are some of their strategies:

Gov. Kristi Noem of South Dakota derided the stimulus as a "giant handout" while outlining how she would use nearly $1 billion slated for her state to invest in local water projects and build new day care centers. She said that if she rejected the funds, they would be used by other states. (If a state rejected the money, which none have, it would instead be returned to the Treasury Department.)

Gov. Ron DeSantis of Florida said the $3.4 billion the state has received so far would go toward infrastructure, transportation and work force retention. He justified it by arguing that the federal government fueled economic disruption with pandemic shutdowns and vaccine and mask mandates that he opposed.

Gov. Doug Ducey of Arizona has used some of the money for education programs designed to exclude schools with mask mandates. (The Treasury Department warned Ducey in October that the state could lose some of its funds if it did not change the policy.)

[Lennys Tap]

How different states have done vs Covid (health, economy, socially, economically) https://www.politico.com/interactives/2021/covid-by-the-numbers-how-each-state-fared-on-our-pandemic-scorecard/

[MU82]

Thanks for that link, Lenny. I just read the entire piece and found it very interesting.

I like the way the researchers/authors broke things down in each category, and I also didn't feel they were pushing an agenda. They presented the data they had, leaving it  to readers to draw their own conclusions.

[ZiggysFryBoy]

Thanks for that link, Lenny. I just read the entire piece and found it very interesting.

I like the way the researchers/authors broke things down in each category, and I also didn't feel they were pushing an agenda. They presented the data they had, leaving it  to readers to draw their own conclusions.

So, like, actual journalism?

[rocket surgeon]

From the NYT:

All of the Republican governors who opposed the $1.9 trillion Covid relief bill, which passed in March with only Democratic votes, have accepted the money it allocated to their states. Now, they're in the awkward position of criticizing the spending while championing programs that rely on the funds. Here are some of their strategies:

Gov. Kristi Noem of South Dakota derided the stimulus as a "giant handout" while outlining how she would use nearly $1 billion slated for her state to invest in local water projects and build new day care centers. She said that if she rejected the funds, they would be used by other states. (If a state rejected the money, which none have, it would instead be returned to the Treasury Department.)

Gov. Ron DeSantis of Florida said the $3.4 billion the state has received so far would go toward infrastructure, transportation and work force retention. He justified it by arguing that the federal government fueled economic disruption with pandemic shutdowns and vaccine and mask mandates that he opposed.

Gov. Doug Ducey of Arizona has used some of the money for education programs designed to exclude schools with mask mandates. (The Treasury Department warned Ducey in October that the state could lose some of its funds if it did not change the policy.)

  wtf??  try starting a topic on this and watch what happens...you throw this bloviated crap out here to feel better knowing if we try to argue the other side or the rest of the story, this get's the LOCKDOWN faster than you can say what's the flavor of the day uncle joey

in other words, time for medication check, find a new hobby, stamp collecting, crochet, wood working, a scenic puzzle, yoga...

[Uncle Rico]

  wtf??  try starting a topic on this and watch what happens...you throw this bloviated crap out here to feel better knowing if we try to argue the other side or the rest of the story, this get's the LOCKDOWN faster than you can say what's the flavor of the day uncle joey

in other words, time for medication check, find a new hobby, stamp collecting, crochet, wood working, a scenic puzzle, yoga...

8 of 10

[The Hippie Satan of Hyperbole]

8 of 10

You're being generous this Holiday season.

[Uncle Rico]

You're being generous this Holiday season.

I'm a socialist like Santa Claus

[forgetful]

How different states have done vs Covid (health, economy, socially, economically) https://www.politico.com/interactives/2021/covid-by-the-numbers-how-each-state-fared-on-our-pandemic-scorecard/

I agree with MU82, well written article.

One thing I would caution against in these types of articles though is "missing data." This is particularly prevalent in states with large minority populations, especially hispanic (even more so if undocumented).

Studies are showing that deaths in the poor and minorities are grossly inaccurate. In many cases, because they were less likely to seek medical care, or go to hospitals. As a result, many died at home with poor documentation as to the specific cause of death. These individuals would have greatly increased hospitalizations and deaths, and represent missing data in specific states.

[Lennys Tap]

Thanks for that link, Lenny. I just read the entire piece and found it very interesting.

I like the way the researchers/authors broke things down in each category, and I also didn't feel they were pushing an agenda. They presented the data they had, leaving it  to readers to draw their own conclusions.

I agree, Mike. When delivering their "report card" to the states, as a tip of the hat to "fairness"  they'd weighed all 4 categories equally - which many will find problematic.

That said, I thought the results were interesting. In general, small, mostly midwestern and western states got the highest marks but Nevada and Wyoming were notable exceptions and ended up at the bottom.

Among the 10 most populous states, Florida (tied for 11th) was the clear winner, followed by California and Pennsylvania (tied for 25th), Illinois (29th), Ohio (31st), Texas (34th), Georgia and N Carolina (tied for39th) and Michigan and New York (tied for 44th).

[MU82]

  wtf??  try starting a topic on this and watch what happens...you throw this bloviated crap out here to feel better knowing if we try to argue the other side or the rest of the story, this get's the LOCKDOWN faster than you can say what's the flavor of the day uncle joey

in other words, time for medication check, find a new hobby, stamp collecting, crochet, wood working, a scenic puzzle, yoga...

ThankQ, doQter roQQet.

[The Hippie Satan of Hyperbole]

Spoke to a local CEO yesterday and he thinks the two biggest problems with the job market have been Boomers accelerating their retirement plans due to the pandemic and a hot stock market, and the lack of immigration (both documented and undocumented.)  He is quite concerned in the long-term because both speak to not having a large enough workforce for the jobs that are currently in place.

[MU Fan in Connecticut]

Spoke to a local CEO yesterday and he thinks the two biggest problems with the job market have been Boomers accelerating their retirement plans due to the pandemic and a hot stock market, and the lack of immigration (both documented and undocumented.)  He is quite concerned in the long-term because both speak to not having a large enough workforce for the jobs that are currently in place.

I agree.
Every company & factory I ever worked for had there "own set of immigrants".  One would get a job and help the rest of the same ethnic community get a job in the same place.  They were usually the least to complain and could be counted on the follow procedures the best.

[MUfan12]

Spoke to a local CEO yesterday and he thinks the two biggest problems with the job market have been Boomers accelerating their retirement plans due to the pandemic and a hot stock market, and the lack of immigration (both documented and undocumented.)  He is quite concerned in the long-term because both speak to not having a large enough workforce for the jobs that are currently in place.

That's mirrors what I see on a daily basis.

Need to increase the H1-B visas as well to bridge the gap in technical talent.

[Hards Alumni]

Spoke to a local CEO yesterday and he thinks the two biggest problems with the job market have been Boomers accelerating their retirement plans due to the pandemic and a hot stock market, and the lack of immigration (both documented and undocumented.)  He is quite concerned in the long-term because both speak to not having a large enough workforce for the jobs that are currently in place.

100% what I think as well.

Two of our government contacts have decided they're retiring early this year.  One with a month's notice, the other with almost none.

[forgetful]

That's mirrors what I see on a daily basis.

Need to increase the H1-B visas as well to bridge the gap in technical talent.

Or increase the salary for positions, and provide free college (at the very least for tech positions).

[The Hippie Satan of Hyperbole]

Right increasing wages are going to fill the positions.  But that is just going to put more inflationary pressure on the economy.

[forgetful]

Right increasing wages are going to fill the positions.  But that is just going to put more inflationary pressure on the economy.

No, it won't.

[ZiggysFryBoy]

Spoke to a local CEO yesterday and he thinks the two biggest problems with the job market have been Boomers accelerating their retirement plans due to the pandemic and a hot stock market, and the lack of immigration (both documented and undocumented.)  He is quite concerned in the long-term because both speak to not having a large enough workforce for the jobs that are currently in place.

"Some people say" - Pakuni.