COVID Economy

[Hards Alumni]

And those were coveted jobs back in the day. And they paid minimum wage. And no overtime until you hit 50 hours.

Kids today are too soft and spoiled.

Such a lazy ass response to call kids too soft and spoiled.  Your parents generation did the same thing, and it was lazy then too.

[tower912]

Kids generally turn out how they are parented.   

[The Hippie Satan of Hyperbole]

Kids today are too soft and spoiled.

Jeez, you've been retired about a year and you already sound old.

[warriorchick]

Kids generally turn out how they are parented.

Agreed.  And of course I didn't mean all kids.

[jesmu84]

We should definitely keep making it worse and worse for those who aren't working (for whatever reason). We should absolutely do nothing to make working conditions/situation better for folks.

[MU82]

And those were coveted jobs back in the day. And they paid minimum wage. And no overtime until you hit 50 hours.

Kids today are too soft and spoiled.

All kinds of things that were considered "true" or "good" "back in the day" actually sucked or were stupid or were lies told by old people.

If you or your kids were soft and spoiled, that's on either you or your parents. Don't generalize.

Now get out of my yard!

[reinko]

All kinds of things that were considered "true" or "good" "back in the day" actually sucked or were stupid or were lies told by old people.

If you or your kids were soft and spoiled, that's on either you or your parents. Don't generalize.

Now get out of my yard!

And take those ornaments from my tree with you!

[MU82]

And take those ornaments from my tree with you!

Exactly! If you want to put the "X" back in "Xmas," do it elsewhere!!

[TSmith34, Inc.]

So...corporate hoarding?

The World Economy Is Suddenly Running Low on Everything
‘It is anything but efficient or normal.’ Surging corporate demand is upending global supply chains.

https://www.bloomberg.com/news/articles/2021-05-17/inflation-rate-2021-and-shortages-companies-panic-buying-as-supplies-run-short?utm_campaign=news&utm_medium=bd&utm_source=applenews

"Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The frenzy is pushing supply chains to the brink of seizing up. Shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory, raising concern that a supercharged global economy will stoke inflation.

Caught in the crosscurrents is Dennis Wolkin, whose family has run a business making crib mattresses for three generations. Economic expansions are usually good for baby bed sales. But the extra demand means little without the key ingredient: foam padding. There has been a run on the kind of polyurethane foam Wolkin uses — in part because of the deep freeze across the U.S. South in February, and because of  “companies over-ordering and trying to hoard what they can.”

[MU Fan in Connecticut]

So...corporate hoarding?

The World Economy Is Suddenly Running Low on Everything
‘It is anything but efficient or normal.’ Surging corporate demand is upending global supply chains.

https://www.bloomberg.com/news/articles/2021-05-17/inflation-rate-2021-and-shortages-companies-panic-buying-as-supplies-run-short?utm_campaign=news&utm_medium=bd&utm_source=applenews

"Mattress producers to car manufacturers to aluminum foil makers are buying more material than they need to survive the breakneck speed at which demand for goods is recovering and assuage that primal fear of running out. The frenzy is pushing supply chains to the brink of seizing up. Shortages, transportation bottlenecks and price spikes are nearing the highest levels in recent memory, raising concern that a supercharged global economy will stoke inflation.

Caught in the crosscurrents is Dennis Wolkin, whose family has run a business making crib mattresses for three generations. Economic expansions are usually good for baby bed sales. But the extra demand means little without the key ingredient: foam padding. There has been a run on the kind of polyurethane foam Wolkin uses — in part because of the deep freeze across the U.S. South in February, and because of  “companies over-ordering and trying to hoard what they can.”

What I'm seeing is that customers are aware of longer lead times because of some actual shortages.  So they are ordering larger quantities to make up for it with the assumption their subsequent order will have a longer lead time also and the first will cover them until they're ready for the re-order.  (If that makes any sense.)  The problem is everyone is doing this and manufacturer's can't keep up.  For example, our brass supplier is farther down stream than us and he's so overloaded that his deliveries are 8-10 weeks late which means we may be shutting down a chunk of machines next month.  We've placed larger orders on our brass supplier because of their issues which just made things worse................and on and on...............

[JWags85]

What I'm seeing is that customers are aware of longer lead times because of some actual shortages.  So they are ordering larger quantities to make up for it with the assumption their subsequent order will have a longer lead time also and the first will cover them until they're ready for the re-order.  (If that makes any sense.)  The problem is everyone is doing this and manufacturer's can't keep up.  For example, our brass supplier is farther down stream than us and he's so overloaded that his deliveries are 8-10 weeks late which means we may be shutting down a chunk of machines next month.  We've placed larger orders on our brass supplier because of their issues which just made things worse................and on and on...............

Right, hoarding is an unnecessarily aggressive word for demand planning in a supply crisis.  I'm seeing similar.  This isn't vaccines or food or TP and consumer goods, this is business.  Companies that aren't getting ahead of these supply crunches get insanely backed up.  This happens all the time in normal business cycles.  Companies will pay premiums to buy extra just to ensure no supply shortage and make it back eventually, rather than risk being slowed or squeezed out.

Its interesting actually, cause certain markets already do this sort of buying(I think of specifically China in terms of gold and precious stones for the jewellery industry) they specifically plan for 2-3 BIG buys a year instead of biweekly or monthly orders.  And the market bears it just fine.  But all of a sudden, some of the latter type of buyers shift and it throws the ecosystem out of whack.

[TSmith34, Inc.]

Perhaps the word hoarding raises some hackles, but "paying a premium to buy extra" amounts to very close to the same thing. It may be prudent from a planning standpoint, but it certainly sounds like this practice used broadly is contributing to not only the supply chain issues but inflation as well, no?

Feels a bit like everyone rushing to one side of the rowboat at once.

[shoothoops]

Ice Cream parlor in Pittsburgh raises pay to $15/hr. and gets over 1,000 applications.

Prices didn’t go up. Employee attrition went down. Profits didn’t decrease.

https://www.msnbc.com/stephanie-ruhle/watch/ice-cream-parlor-raises-minimum-wage-to-15-hr-flooded-with-job-applications-112471621755

[jesmu84]

Ice Cream parlor in Pittsburgh raises pay to $15/hr. and gets over 1,000 applications.

Prices didn’t go up. Employee attrition went down. Profits didn’t decrease.

https://www.msnbc.com/stephanie-ruhle/watch/ice-cream-parlor-raises-minimum-wage-to-15-hr-flooded-with-job-applications-112471621755

Hmm... might want to get the chamber of commerce's opinion about this first.

[MU82]

The NYT's David Leonhardt on the labor shortage being "more myth than reality":

The chief executive of Domino’s Pizza has complained that the company can’t hire enough drivers. Lyft and Uber claim to have a similar problem. A McDonald’s franchise in Florida offered $50 to anybody willing to show up for an interview. And some fast-food outlets have hung signs in their windows saying, “No one wants to work anymore.”

The idea that the United States suffers from a labor shortage is fast becoming conventional wisdom. But before you accept the idea, it’s worth taking a few minutes to think it through.

Once you do, you may realize that the labor shortage is more myth than reality.

Let’s start with some basic economics. The U.S. is a capitalist country, and one of the beauties of capitalism is its mechanism for dealing with shortages. In a communist system, people must wait in long lines when there is more demand than supply for an item. That’s an actual shortage. In a capitalist economy, however, there is a ready solution.

The company or person providing the item raises its price. Doing so causes other providers to see an opportunity for profit and enter the market, increasing supply. To take a hypothetical example, a shortage of baguettes in a town will lead to higher prices, which will in turn cause more local bakeries to begin making their own baguettes (and also cause some families to choose other forms of starch). Suddenly, the baguette shortage is no more.

Human labor is not the same thing as a baguette, but the fundamental idea is similar: In a market economy, both labor and baguettes are products with fluctuating prices.

When a company is struggling to find enough labor, it can solve the problem by offering to pay a higher price for that labor — also known as higher wages. More workers will then enter the labor market. Suddenly, the labor shortage will be no more.

One of the few ways to have a true labor shortage in a capitalist economy is for workers to be demanding wages so high that businesses cannot stay afloat while paying those wages. But there is a lot of evidence to suggest that the U.S. economy does not suffer from that problem.

If anything, wages today are historically low. They have been growing slowly for decades for every income group other than the affluent. As a share of gross domestic product, worker compensation is lower than at any point in the second half of the 20th century. Two main causes are corporate consolidation and shrinking labor unions, which together have given employers more workplace power and employees less of it.

Just as telling as the wage data, the share of working-age Americans who are in fact working has declined in recent decades. The country now has the equivalent of a large group of bakeries that are not making baguettes but would do so if it were more lucrative — a pool of would-be workers, sitting on the sidelines of the labor market.

Corporate profits, on the other hand, have been rising rapidly and now make up a larger share of G.D.P. than in previous decades. As a result, most companies can afford to respond to a growing economy by raising wages and continuing to make profits, albeit perhaps not the unusually generous profits they have been enjoying.



Sure enough, some companies have responded to the alleged labor shortage by doing exactly this. Bank of America announced Tuesday that it would raise its minimum hourly wage to $25 and insist that contractors pay at least $15 an hour. Other companies that have recently announced pay increases include Amazon, Chipotle, Costco, McDonald’s, Walmart, J.P. Morgan Chase and Sheetz convenience stores.

Why the continuing complaints about a labor shortage, then?

They are not totally misguided. For one thing, some Americans appear to have temporarily dropped out of the labor force because of Covid-19. Some high-skill industries may also be suffering from a true lack of qualified workers, and some small businesses may not be able to absorb higher wages. Finally, there is a rollicking partisan debate about whether expanded jobless benefits during the pandemic have caused workers to opt out.

For now, some combination of these forces — together with a rebounding economy — has created the impression of labor shortages. But companies have an easy way to solve the problem: Pay more.

That so many are complaining about the situation is not a sign that something is wrong with the American economy. It is a sign that corporate executives have grown so accustomed to a low-wage economy that many believe anything else is unnatural.

[The Hippie Satan of Hyperbole]

I also think there is a disconnect between many of the people seeking work and those jobs that are open right now.  I read this somewhere and am blankingo on the source, but a lot of the jobs that are open now are ones that are generally "side hustles" or ones generally filled by younger labor. 

But the unemployed who are seeking employment are generally those who are young professionals.  And those people aren't going to take short term jobs at Target when they are looking for long-term, career oriented jobs.  Especially at the wages being offered now.

Sure the enhanced unemployment has something to do with this, but some of this is just going to need time to sort itself out.

[pbiflyer]

Our company has offices worldwide. They have, while not made it official, basically said that the WFH model will remain as an option permanently moving forward as long as your job permits. Make sense for a significant portion of employees.

Today we get a note from HR: Do not move to another country BEFORE checking with HR and your manager.  I guess someone took that work from wherever you want a bit too literally.

[warriorchick]

Our company has offices worldwide. They have, while not made it official, basically said that the WFH model will remain as an option permanently moving forward as long as your job permits. Make sense for a significant portion of employees.

Today we get a note from HR: Do not move to another country BEFORE checking with HR and your manager.  I guess someone took that work from wherever you want a bit too literally.

So...Hawaii?  American Samoa?

[Billy Hoyle]

So...Hawaii?  American Samoa?

my wife's cousin and his wife relocated to Hawaii for five months. He said the only issue was having to get up at 3am.

I also think there is a disconnect between many of the people seeking work and those jobs that are open right now.  I read this somewhere and am blankingo on the source, but a lot of the jobs that are open now are ones that are generally "side hustles" or ones generally filled by younger labor. 

But the unemployed who are seeking employment are generally those who are young professionals.  And those people aren't going to take short term jobs at Target when they are looking for long-term, career oriented jobs.  Especially at the wages being offered now.

Sure the enhanced unemployment has something to do with this, but some of this is just going to need time to sort itself out.

a local chain of restaurants, pubs, and hotels is offering a $1000 immediate cash bonus for positions and $15 per hour. They still aren't getting applicants. Our state's new UE max rate is basically $26/hour when combined with the federal $300 bonus. There is talk about reinstating the requirement people actually look for work but that hasn't been decided yet.

[MU82]

my wife's cousin and his wife relocated to Hawaii for five months. He said the only issue was having to get up at 3am.

a local chain of restaurants, pubs, and hotels is offering a $1000 immediate cash bonus for positions and $15 per hour. They still aren't getting applicants. Our state's new UE max rate is basically $26/hour when combined with the federal $300 bonus. There is talk about reinstating the requirement people actually look for work but that hasn't been decided yet.

Are you in Oregon? I just went to the calculator on the site to estimate the benefits for somebody who had earned $48K/year while working 40 hours/week. The max annual state payout is $15,600. Throw in another $15,600 from the feds, and that's $31,200, or $15/hour.

Let me know if I calculated that wrong; it's certainly possible as I did it in about 3 minutes.

[lawdog77]

Are you in Oregon? I just went to the calculator on the site to estimate the benefits for somebody who had earned $48K/year while working 40 hours/week. The max annual state payout is $15,600. Throw in another $15,600 from the feds, and that's $31,200, or $15/hour.

Let me know if I calculated that wrong; it's certainly possible as I did it in about 3 minutes.

Here's a listing by state:
https://www.ziprecruiter.com/blog/unemployment-benefits-by-state/#:~:text=The%20maximum%20unemployment%20benefit%20available%20to%20individuals%20in%20Indiana%20is,or%20about%20%2410%20per%20hour.

Still not sure why some states opted out of free federal money for their residents. Look at the amounts states like Indiana, and Tennessee get. Those people need the federal 300 the most.

[Billy Hoyle]

Are you in Oregon? I just went to the calculator on the site to estimate the benefits for somebody who had earned $48K/year while working 40 hours/week. The max annual state payout is $15,600. Throw in another $15,600 from the feds, and that's $31,200, or $15/hour.

Let me know if I calculated that wrong; it's certainly possible as I did it in about 3 minutes.

Yes.  The maximum amount is increasing to $1033/week ( including the $300 per week). That's what I was going off of to get to $26/hour.

An individual who earned $48k/year would get $838 per week now ($538 plus $300) until July 1, then $891 after July 1. That would come out to $22/hour. It's also untaxed.

This is the site to calculate benefits. I put in $12k per quarter:  https://fileunemployment.org/oregon/or-calculator/

[MU Fan in Connecticut]

my wife's cousin and his wife relocated to Hawaii for five months. He said the only issue was having to get up at 3am.

a local chain of restaurants, pubs, and hotels is offering a $1000 immediate cash bonus for positions and $15 per hour. They still aren't getting applicants. Our state's new UE max rate is basically $26/hour when combined with the federal $300 bonus. There is talk about reinstating the requirement people actually look for work but that hasn't been decided yet.

The State of Connecticut is offering $1,000 bonus for any unemployed person currently collecting who gets a job and works for two months.   

[pbiflyer]

So...Hawaii?  American Samoa?

Both customers, so maybe. Sadly, I fall into the "need to be able to fly to major US cities in a few hours", so American Samoa is out, Hawaii, I think I would have to get them to move my territory. And I think there would be a couple people ahead of me!

[MU82]

Here's a listing by state:
https://www.ziprecruiter.com/blog/unemployment-benefits-by-state/#:~:text=The%20maximum%20unemployment%20benefit%20available%20to%20individuals%20in%20Indiana%20is,or%20about%20%2410%20per%20hour.

Still not sure why some states opted out of free federal money for their residents. Look at the amounts states like Indiana, and Tennessee get. Those people need the federal 300 the most.

Yes.  The maximum amount is increasing to $1033/week ( including the $300 per week). That's what I was going off of to get to $26/hour.

An individual who earned $48k/year would get $838 per week now ($538 plus $300) until July 1, then $891 after July 1. That would come out to $22/hour. It's also untaxed.

This is the site to calculate benefits. I put in $12k per quarter:  https://fileunemployment.org/oregon/or-calculator/

Thanks to both of you. That is a ton of UE benefits.

Compare it to South Carolina, where after 6/30 it works out to $8/hour. In NC, it's $16/hr now but goes down to $9/hr in September, and state benefits are eliminated after 13 weeks. Arizona is $14 now, $6 come July.

Probably needs to be a happy medium.