COVID Economy

[TSmith34, Inc.]

2019 Median $22,217. Vanguard analysis.

https://www.businessinsider.com/personal-finance/average-401k-balance

Yes, the chart I included was also from Vanguard. The difference is, the median balance includes a whole lot of people that aren't anywhere near retirement age.

[GooooMarquette]

For a number of reasons that people have already pointed out, it’s difficult to draw any firm conclusion about how much a change in the stock market affects everyday Americans.

Sure, a lot of people own stock...but a lot of people don’t. And as others have pointed out, ‘average’ 401(k) or IRA balances are difficult to draw any conclusions from, because of people with multiple accounts, among other things.

I think the best we can say is that a good or bad market ultimately affects everybody, but the good and bad effects are felt more directly and immediately by those in a higher income bracket.

[JWags85]

What a broad and largely baseless claim prediction from Gates. “More than 50% of business travel will disappear post-COVID”. Just absolutely asinine

https://twitter.com/jjjinvesting/status/1328899829200773122?s=21

But I’m not surprised at all from a completely detached billionaire who hasn’t dealt directly with clients on a day to day in decades and who has very vested interest in further growth and demand for video conferencing and remote work software.

[GooooMarquette]

What a broad and largely baseless claim from Gates. “More than 50% of business travel will disappear post-COVID”. Just absolutely asinine

https://twitter.com/jjjinvesting/status/1328899829200773122?s=21

But I’m not surprised at all from a completely detached billionaire who hasn’t dealt directly with clients on a day to day in decades and who has very vested interest in further growth and demand for video conferencing and remote work software.

It’s a prediction, not a claim. Still, I agree that it’s pretty far out there....

[warriorchick]

What a broad and largely baseless claim from Gates. “More than 50% of business travel will disappear post-COVID”. Just absolutely asinine

https://twitter.com/jjjinvesting/status/1328899829200773122?s=21

But I’m not surprised at all from a completely detached billionaire who hasn’t dealt directly with clients on a day to day in decades and who has very vested interest in further growth and demand for video conferencing and remote work software.

I don't know about travel, but I would hate to be heavily invested in office space right now.  Why pay thousands of dollars in rent for an employee who has demonstrated that they can do their job perfectly well at home?

[JWags85]

I don't know about travel, but I would hate to be heavily invested in office space right now.  Why pay thousands of dollars in rent for an employee who has demonstrated that they can do their job perfectly well at home?

I can agree with that. I think office arrangements and commercial space will be transformed in some significant ways.

But the whole assumption that business travel is some frivolity that can be easily replaced by a video chat or Zoom is just so pervasive the last 6 months, and a flawed assumption. Hell, WebEx and video chat has existed for well over a decade. And it’s not like businesses and economies are thriving and running hot right now, proving that travel was unnecessary. Interchanging “helpful to bridge the gap and get by in a crisis” with “the new standard” is awful presumptuous.

I guess I’m more just irked about stuff like this that does nothing to help strategize about how to solve forthcoming dilemmas in getting back going, but rather incites panic that business won’t be able to return to prior ways or levels without some massive overhaul in a fundamental component, in the face of enough other headwinds already

[rocky_warrior]

But the whole assumption that business travel is some frivolity that can be easily replaced by a video chat or Zoom is just so pervasive the last 6 months, and a flawed assumption.

You're not wrong, but I don't think Gates is either.  I don't know your profession (I probably should pay more attention and know by now), but I'd guess about 50% of business travel was frivolous - and that's the drop Gates is seeing.  Certainly I see that in my industry.  Of course, it depends on timeframe - as the amount of frivolous business travel seems to go in decade-ish long cycles.  So for the next 3 years - including a vaccine - I think businesses making their numbers is still going to be hard.  And travel expenditures will be scrutinized heavily - and thus drop.  But still half  the pre-pandemic trips will happen - as you note they need to - and thus - "both sides" 

And I think you're way over the top on this inciting panic.  It's really just trying to understand how this is going to affect business travel related (dependent?) organizations.  A vaccine is great, but it's not some switch that's going to make the world go back to Oct 2019.  There's a world of hurt to fix before we can get back there.

[Frenns Liquor Depot]

I can agree with that. I think office arrangements and commercial space will be transformed in some significant ways.

But the whole assumption that business travel is some frivolity that can be easily replaced by a video chat or Zoom is just so pervasive the last 6 months, and a flawed assumption. Hell, WebEx and video chat has existed for well over a decade. And it’s not like businesses and economies are thriving and running hot right now, proving that travel was unnecessary. Interchanging “helpful to bridge the gap and get by in a crisis” with “the new standard” is awful presumptuous.

I guess I’m more just irked about stuff like this that does nothing to help strategize about how to solve forthcoming dilemmas in getting back going, but rather incites panic that business won’t be able to return to prior ways or levels without some massive overhaul in a fundamental component, in the face of enough other headwinds already

One of the biggest barriers to using these technologies was user acceptance which has occurred out of necessity.  That won’t be undone. 

While I don’t look forward to a world where I am on zoom 8 hours a day in lieu of travel, I can easily see my travel halving.  I have been having more frequent touch points and better accessibility with my clients. It works great when you have an already deep relationship.  Not as much when building one. 

Part of strategizing is guessing how the external environment is changing.  I’m not sure why poor bill gets lambasted for things we are all doing ourselves. 

[mu_hilltopper]

I agree with Rocky and Gates. 

A good 12 years ago, I bought a webcam and set up a video conferencing station at my business.  The thought was, employees could jump on there and have an immediate showing of products to our clients.   It sat, unused.

Now .. 100% of the workforce knows how to use Zoom, Google Meet, etc.

It is unquestionable that business travel will never get back to previous levels.  The only remaining question is how much.   50% might be high, but I wouldn't bet against it.

Even from a supply perspective .. in 1-2 years, there will be fewer airlines, fewer routes, way fewer seats to sell.  Demand down, supply down, prices way up.

[pbiflyer]

You're not wrong, but I don't think Gates is either.  I don't know your profession (I probably should pay more attention and know by now), but I'd guess about 50% of business travel was frivolous - and that's the drop Gates is seeing.  Certainly I see that in my industry.  Of course, it depends on timeframe - as the amount of frivolous business travel seems to go in decade-ish long cycles.  So for the next 3 years - including a vaccine - I think businesses making their numbers is still going to be hard.  And travel expenditures will be scrutinized heavily - and thus drop.  But still half  the pre-pandemic trips will happen - as you note they need to - and thus - "both sides" 

And I think you're way over the top on this inciting panic.  It's really just trying to understand how this is going to affect business travel related (dependent?) organizations.  A vaccine is great, but it's not some switch that's going to make the world go back to Oct 2019.  There's a world of hurt to fix before we can get back there.

This bolded part.  I have been traveling for work for the last 30+ years, the last 2 decades in sales support.  Easily 50% of those trips were frivolous.
Our execs have already said travel will likely be reduced significantly after the pandemic.
For sales and sales support people, I can easily see it reduced significantly. Maybe not 50%, but a substantial amount.  No more travel for an hour meeting.
For consultants, the other big portion of business travel, we have had almost a year of work from home. It will now be more acceptable for consultants working remotely from now on.

Another factor to consider. As mentioned above, office space will be likely reduced with more work from home. Where are those business travels going to go to visit? People's homes?  It was easy when every one was in an office to organize a meeting with people flying in. Now, they will have to coordinate those meetings.

We will emerge from this pandemic with a new work model.  It will be interesting. 

[The Hippie Satan of Hyperbole]

I bet three to five years post pandemic, business travel will be back to about 90% of what it was in 2019.  There are limits to the things you can do via video.  There is a lot of qualitative interactions that take place in person that cannot be easily replicated online.

[MU Fan in Connecticut]

I can agree with that. I think office arrangements and commercial space will be transformed in some significant ways.

But the whole assumption that business travel is some frivolity that can be easily replaced by a video chat or Zoom is just so pervasive the last 6 months, and a flawed assumption. Hell, WebEx and video chat has existed for well over a decade. And it’s not like businesses and economies are thriving and running hot right now, proving that travel was unnecessary. Interchanging “helpful to bridge the gap and get by in a crisis” with “the new standard” is awful presumptuous.

I guess I’m more just irked about stuff like this that does nothing to help strategize about how to solve forthcoming dilemmas in getting back going, but rather incites panic that business won’t be able to return to prior ways or levels without some massive overhaul in a fundamental component, in the face of enough other headwinds already

I'm in manufacturing sales and I need to meet my customers in person.  Video just won't work.  As someone else said, most of my company's customers, I don't have a longtime business relationship with, so a video conference is awkward and feels out of place and most don't want to do.  Every customer I've personally met in person I've walked away with more business, a locked in contract or at the very least the opportunity to quote a project to break in.   

My corporation has always been pretty good about not flying people in from all over for an hour or two meeting.  Those have always been teleconferences now moved on to Microsoft Teams meetings.  Where they usually say "don't turn on video because it uses too much bandwidth" which I find odd.

[forgetful]

I can agree with that. I think office arrangements and commercial space will be transformed in some significant ways.

But the whole assumption that business travel is some frivolity that can be easily replaced by a video chat or Zoom is just so pervasive the last 6 months, and a flawed assumption. Hell, WebEx and video chat has existed for well over a decade. And it’s not like businesses and economies are thriving and running hot right now, proving that travel was unnecessary. Interchanging “helpful to bridge the gap and get by in a crisis” with “the new standard” is awful presumptuous.

I guess I’m more just irked about stuff like this that does nothing to help strategize about how to solve forthcoming dilemmas in getting back going, but rather incites panic that business won’t be able to return to prior ways or levels without some massive overhaul in a fundamental component, in the face of enough other headwinds already

If you agree on the bolded you have to expect that a significant amount of business travel will be gone. A lot of business travel was to these large "office headquarters". To get people together at a central site. If the large "headquarters" model dissipates, there is no central site to get together, instead the logical central site is on zoom.

That won't apply to all industries, but there certainly is a strong possibility that it is pervasive in enough industries to significantly impact business travel.

[Coleman]

You're not wrong, but I don't think Gates is either.  I don't know your profession (I probably should pay more attention and know by now), but I'd guess about 50% of business travel was frivolous - and that's the drop Gates is seeing.  Certainly I see that in my industry.  Of course, it depends on timeframe - as the amount of frivolous business travel seems to go in decade-ish long cycles.  So for the next 3 years - including a vaccine - I think businesses making their numbers is still going to be hard.  And travel expenditures will be scrutinized heavily - and thus drop.  But still half  the pre-pandemic trips will happen - as you note they need to - and thus - "both sides" 

And I think you're way over the top on this inciting panic.  It's really just trying to understand how this is going to affect business travel related (dependent?) organizations.  A vaccine is great, but it's not some switch that's going to make the world go back to Oct 2019.  There's a world of hurt to fix before we can get back there.

You're right. Business travel won't disappear, but I guarantee you it will decline. Instead of going to conferences in person like I have every year, I have attended online training, and its just as valuable and 5x cheaper.

Will executives still travel to secure big deals? Sure. But the average worker bee will travel MUCH less, if at all.

[GooooMarquette]

You're right. Business travel won't disappear, but I guarantee you it will decline. Instead of going to conferences in person like I have every year, I have attended online training, and its just as valuable and 5x cheaper.

Will executives still travel to secure big deals? Sure. But the average worker bee will travel MUCH less, if at all.

Agreed. Top level execs, salespeople making major deals, and other 'high end' business travel will likely revert back to normal or near normal levels. But midlevel employees, consultants going to 1-hour meetings, professionals traveling to continuing education conferences and the like will probably decline dramatically.

[JWags85]

If you agree on the bolded you have to expect that a significant amount of business travel will be gone. A lot of business travel was to these large "office headquarters". To get people together at a central site. If the large "headquarters" model dissipates, there is no central site to get together, instead the logical central site is on zoom.

That won't apply to all industries, but there certainly is a strong possibility that it is pervasive in enough industries to significantly impact business travel.

I don’t necessarily agree. I certainly don’t think you’re gonna have people go 100% remote who weren’t before. If you’re 50/50 or something with in person and WFH, you schedule meetings around that.  I think there is just too much focus on this huge across the board sweeping changes in a flash instead of a migration over time to new formats.

I really think it depends on the type of travel. Inter company movement or touch bases? Ok sure. Some quick customer meetings? Sure. But I see people talking about the demise of international business travel, which is just silly. As I’ve mentioned, that’s a large component of my business and my volume of Zoom meetings or the like have just upticked a bit, nothing significant, and all people can talk about is a return to standard travel.

My old roommate is in enterprise sales for Oracle. His team he manages is spread around a few offices across the country.  I asked about his travel post-COVID and he said he doesn’t anticipate much change. People often don’t want to be sold to over video for big packages and programs, even for software and tech.

Conferences will decline, but trade shows won’t. Any efforts to move the latter online have been disastrous from many that I’ve spoken with.

[Coleman]

Business travel will certainly decrease, the question is how much.

Tangential to this is the question of whether further airline consolidation is likely. A year ago I would have said there's no way from an antitrust perspective but you have airlines hemorrhaging money and jobs right now. I could see any of the following possibilities happening to create synergies and economies of scale...

Any of the Legacy big 3 (United, Delta, American) buying a JetBlue or Frontier

A JetBlue-Alaska merger

Southwest buying Spirit or Frontier

[jesmu84]

This is a good time to remind that we pumped TRILLIONS into the market, but told individuals (and especially those who aren't invested in the market) "sorry, we don't have more than $1200 for each of you".

Not to mention the loss of jobs, loss of healthcare, forced evictions, etc.

[jesmu84]

Lockdown vs stimulus

https://youtu.be/k0O6Ttjp0fs

[#UnleashSean]

Lockdown vs stimulus

https://youtu.be/k0O6Ttjp0fs

Vote 3rd party, get rid of the nonsense.

[MarquetteDano]

Business travel will certainly decrease, the question is how much.

Tangential to this is the question of whether further airline consolidation is likely. A year ago I would have said there's no way from an antitrust perspective but you have airlines hemorrhaging money and jobs right now. I could see any of the following possibilities happening to create synergies and economies of scale...

Any of the Legacy big 3 (United, Delta, American) buying a JetBlue or Frontier

A JetBlue-Alaska merger

Southwest buying Spirit or Frontier

Anecdotal admittedly,  but I expect my company to travel about 33% less going forward (have small consulting company).  We were travelling 75%.  I think we have proven to clients that 50% is doable.

[GooooMarquette]

Anecdotal admittedly,  but I expect my company to travel about 33% less going forward (have small consulting company).  We were travelling 75%.  I think we have proven to clients that 50% is doable.

A friend who is a consultant in Portland tells me roughly the same thing. She and her staff spent about 75% of their time on the road before Covid. Her sense, after talking with her largest clients, is that this will be 25-50% post-Covid.

[shoothoops]

Whether 47 percent or 51 percent of 55 percent of the public owns stock kinda misses the point, because the vast majority of those people own very little stock.
The fact is that the top 10 percent of households by net worth own about 88 percent of the market.
So when people point to the market as an indicator of economic, what they're really saying is that the economy is good for the already wealthy.

Yes, this.

[MU82]

Who says COVID-19 is bad for the economy?

From the AP ...

The Texas border county of El Paso, where more than 300 people have died from COVID-19 since October, is advertising jobs for morgue workers capable of lifting bodies weighing 175 pounds or more. Officials are offering more than $27 an hour for work described as not only physically arduous but “emotionally taxing as well.”

The county had already begun paying jail inmates $2 an hour to help move corpses and has ordered at least 10 refrigerated trucks as morgues run out of room.

[shoothoops]

Walmart made $129B in profit last year, but at least 14,500 of their employees receive SNAP benefits.

McDonald's made $11B in profit, but at least 8,780 employees receive SNAP benefits.


https://twitter.com/washpostbiz/status/1329185396891201537