Labor Shortage

[Aseahawkfan]

Before we beat up on liberals too much, the same is true of many if not most conservatives, just that the subject is different. You will never get a wide breath of information if all you do is listen to either Fox or CNN.

Regarding building wealth, 30 some years ago, the company I worked for got bought out by another, so our former employer gave us a couple of options for our 401K's, either transfer it into our new employer's 401K, create a self directed IRA, or cash it out. I tried my best to convince our folks not to cash it out, that they would pay a 10% early withdrawal penalty plus have to declare it as income and pay tax on it, that it would likely bump them into a higher tax bracket, told them that I would help them find a financial advisor, I even had business cards for a bi-lingual one, but very few listened to me.

I was in HR when the box of envelopes with 401K distribution checks arrived and I watched the HR clerk mate the 401K checks with the employees bi weekly paycheck to be handed out the next pay period, and they were mating checks by about a 3 or 4 to one ratio. In other words, the vast majority had cashed out their 401K's. At 600-700 employees, I think I was getting a pretty fair sample of how Americans in general manage their money.

We are a country of stooges. You can't fix stupid.

The only difference between the Rs and Ds is the Rs at least listen when you tell them about how markets work. Most of the Rs I've met are just as bad with money as the Ds. They talk a tough game and at least accept that their situation is often caused by their own behavior (but not always). But when the rubber hits the road, majority of Rs I know practice the same bad money management, immediate gratification, and spend money often as the Ds I know.

My beef with the Democrats is they always seem to want to blame it on the Republican policies or the wealthy, then when you ask them how they manage their cash and they're telling you stuff like they bought a new car they couldn't afford, they don't save much, they gotta have cable television, they gotta have three phones for the family, or they gotta buy their cigarettes or they gotta take their vacation. I know you don't gotta do any of that. You should be tracking everything you spend to ensure you're spending less than you take in and have a good savings plans. You should be operating from a positive cash position just like quality companies do.

One of the most important financial lessons in this world is spend less than you make and to build up cash so you are making a profit in your regular life. If a company runs like some people run their lives, they wouldn't even exist. Regular people don't have the means to print money and run up debt like the government, so they should be very cognizant of what they take in versus what they spend. The number of people I know that track their money I can count on one hand. I was surprised to learn how many people just spend and spend and don't bother keeping careful track of their money. If the money is in the account, then they can spend it. It's crazy.

I learned how banks play games when I was young with overdraft fees. Once I saw how they process payments before deposits specifically to increase overdraft fees, I vowed that garbage wasn't going to happen to me again. I started tracking everything carefully. I think this practice is illegal now, but I'm surprised it was ever legal. That is one corporate business practice that was set up just to screw people over processing payments before deposits for overdraft fees.

It's one of the reasons I don't believe in this unregulated capitalism fixing the world. Capitalism or just markets are an amazing system for building the best possible economy, but no way you ever have unregulated capitalism. Too many scummy humans in the world to let any system run unregulated. But even with that scumbag banking practice, I learned and adapted my behavior to ensure they were not able to take advantage of me. So much of what occurs economically requires some real basic intelligence, discipline, and record keeping to ensure you can take advantage of the system. Yet we don't teach it in school like we do math, English, and history. Why don't we? A financial education is as vital to doing well in life as learning math or English. It's amazing we don't prioritize it in an increasingly complex modern economy.

[RiverDog]

Yeah, we need to start a new thread dedicated to education. But it's not just our schools that are responsible, or rather, have an opportunity to teach individuals good personal finance habits, especially since Social Security may not be viable, and pensions are disappearing. People will have to depend more on things like 401K's and IRA's for their retirement income.

Employers can help, too. I've had to give employees written warnings when their wages were garnished, and the only message we gave them was to not let the company have to deal with their financial problems as it's a cost to process the garnishment. I gained quite a reputation as being the 'go to' guy about investment strategy on our 401K's, but it was one thing that I didn't like people coming to me with their questions. I didn't want to take the responsibility of telling them how to invest their money then have the stock market crash and for them to lose their savings. Besides, I wasn't qualified. I asked several superiors of mine to please bring in a professional financial counselor and hold voluntary meetings for our employees and pay them for attending. I knew several financial counselors and they said that they'd do it for free so long as they were allowed to hand out their business cards.

We need to get mykc to dip his toe in here. He's an educator and may have some interesting insights on this subject.

[RiverDog]

This past Friday, I met my former boss, the last man I worked for prior to retirement, for a few beers. Once again, he made an attempt to get me to un-retire and come back to work even if it was only as a consultant. I politely declined. The horror stories he told me were truly unbelievable.

For those that aren't aware of my former employer, they are a large food processor with about 20 facilities scattered around the globe with the majority of them being in eastern Washington, northeastern Oregon, and southern Idaho and employs around 10,000.

They have labor shortages of 50+ positions at each facility, from entry level to mechanics and electricians to supervisory and management, yet their engineering department is still building and expanding capacity as demand is strong. Many lines can't run 24/7 due to a lack of labor. A critical employee calls in sick and they have to shut an entire line down. They suspended their attendance policy during Covid so if a worker didn't want to work overtime, they simply went home sick an hour before the end of the shift. When they re-implemented their attendance policy, they announced it a week ahead of time and had horrendous call ins the week before implementation as many took it as unpaid vacation. I asked him about the $1K sign in bonuses I had heard that was being used at some plants and he told me that the union at his plant (about half of the facilities are union shops) wouldn't let them do it, told them if they had that much money to throw around that they could give it to their current workers. They would try to use temporary workers in permanent positions they could not fill with FTE's, a measure against their contract, and the union would object. Man, did I pick a good time to retire!

Please, don't anyone attempt to tell me that there isn't a labor shortage or that it's going to go away after Covid. I also don't want anyone to try to tell me that homelessness is an economic problem. These are good jobs with health insurance and retirement benefits that they can't fill, albeit most are in rural communities (oh, the horror!). A person that is willing and able to work even a small amount of overtime, 4-8 hours per week, could easily make $60K a year before taxes, well into the 22% tax bracket. Them ain't starvation wages. Plus there's lots of opportunities for advancement.

[Aseahawkfan]

I'm not sure what's going on with labor, but they are definitely short everywhere. Even the 7-11 I usually go to closes two nights a week from the usual 24 because they can't find anyone to work the grave those two nights. My apartment complex only has a roving manager for multiple properties and stuff almost never gets fixed now because of it. The Wendy's by my place was shut down by 10:30 for about 3 months because they couldn't find workers to stay open until 1 am and they were busy that late before they shut down, so it wasn't due to a lack of business. Everywhere I see hiring signs on businesses from grocery stores to trucking to convenience stores. If you want a job, you won't have trouble finding one that's for certain.

Anecdotally speaking, I think a whole lot of people decided to retire during COVID on top of the people who died and the severe reduction in immigration during COVID as well as the pent up demand of people who put off major purchases and trip and the like during COVID. It all led to an explosive economic situation that will take some years to normalize.

It's still tied to COVID. Not sure why you think it's not. You shut down an economy for two years while handing out cash the majority might not even need that they stuff into savings, then you open it all back up you can't expect normal.

One of the main reasons I'm not heavily invested in stocks right now is this whole economic situation is anything but normal. I made a list of economic unknowns and it's so long I gave up trying to figure it out and just decided to keep most of my money on the sideline until I see some indicators it's getting sorted out. We're such a global economy right now I'm not sure what nation shutting down or having problems is going to damage the global supply chain for cars in America or peppers to the grocery store.

It's basically chaos out there right now that we're all hoping stays enough together to reach normalcy without any severe issues that cause some kind of economic disaster.

[RiverDog]

I'm not sure what's going on with labor, but they are definitely short everywhere. Even the 7-11 I usually go to closes two nights a week from the usual 24 because they can't find anyone to work the grave those two nights. My apartment complex only has a roving manager for multiple properties and stuff almost never gets fixed now because of it. The Wendy's by my place was shut down by 10:30 for about 3 months because they couldn't find workers to stay open until 1 am and they were busy that late before they shut down, so it wasn't due to a lack of business. Everywhere I see hiring signs on businesses from grocery stores to trucking to convenience stores. If you want a job, you won't have trouble finding one that's for certain.

Anecdotally speaking, I think a whole lot of people decided to retire during COVID on top of the people who died and the severe reduction in immigration during COVID as well as the pent up demand of people who put off major purchases and trip and the like during COVID. It all led to an explosive economic situation that will take some years to normalize.

It's still tied to COVID. Not sure why you think it's not. You shut down an economy for two years while handing out cash the majority might not even need that they stuff into savings, then you open it all back up you can't expect normal.

One of the main reasons I'm not heavily invested in stocks right now is this whole economic situation is anything but normal. I made a list of economic unknowns and it's so long I gave up trying to figure it out and just decided to keep most of my money on the sideline until I see some indicators it's getting sorted out. We're such a global economy right now I'm not sure what nation shutting down or having problems is going to damage the global supply chain for cars in America or peppers to the grocery store.

It's basically chaos out there right now that we're all hoping stays enough together to reach normalcy without any severe issues that cause some kind of economic disaster.

A lot of people did retire during the pandemic, but a lot of them have since been lured out of retirement by the higher pay.

The biggest thing that is working against us is demographics. Take a look at the birth rates from 1945-1970. There was a big drop in 1960, the year they introduced "The Pill", oral contraceptives, and it continued through the current day. The Baby Boomer generation is hitting the rocking chair in record numbers.

https://www.macrotrends.net/countries/U ... birth-rate

In addition, us Boomers are healthier than our preceding generations. Most of us didn't grow up smoking 2-3 packs of cigarettes a day like my dad did, who died of lung cancer 2 days before his 60th birthday. We're not leaving our houses for the nursing homes or the graveyard like previous generations did, hence the housing crunch.

Obviously, Covid shook things up, but that effect is in our rear view mirror. The resulting impact of what the pandemic did was to contribute to "The Great Resignation", movement from one job to another, particularly in the service and hospitality industries, which suffered the most dramatic losses. While they were off work, they found better jobs, so instead of working as a waitress, they found better paying jobs with better working conditions. There's also people that had to stay home with the kids when the schools closed. Those people are back to work, if not their old job, at a different one. The labor participation rate is basically the same as it was prior to the pandemic and unemployment is at a 54 year low:

Last week’s (4/1/22) claims match the figure from two weeks ago, which is the lowest since November of 1968 when 162,000 people filed for unemployment benefits, according to historical government data.

https://www.dailynews.com/2022/04/07/us ... last-week/

The labor participation rate started declining in 2011, the year the first Boomer turned 66, and started the mass exodus from the work force until it leveled off a few years ago. IMO this isn't going away anytime soon. As a matter of fact, you were the one that predicted that it would all go away when the pandemic ended. It hasn't, and it won't. It's here to stay, at least for the next 5 years or so.

We're already seeing its effect in our annual rate of inflation as companies are passing on their increased labor costs and operating inefficiencies caused by the labor shortage to their customers. It's going to drive companies to innovate. I can foresee a McDonald's store with one technician operating robotic machinery. The more labor costs increase, the more companies can justify the expense of labor saving devices.

The other problem with the labor shortage is that it's having its effect on quality and level of service. All these new people in new jobs need to be trained. And since jobs are so plentiful, no one fears losing their job anymore as they know that there's another one waiting for them around the corner. Fear is a huge motivating factor, and taking away that fear of losing your job is going to have a negative effect on the quality and quantity of work performed.

Once the last of the Baby Boomers retire...a person born in 1960 will turn 67 in 2027...then we'll see some relief as there won't be the mass exodus from the work force as we've been seeing for the past 10 years or so. But until then, it's going to be a rough road.

[Aseahawkfan]

A lot of people did retire during the pandemic, but a lot of them have since been lured out of retirement by the higher pay.

The biggest thing that is working against us is demographics. Take a look at the birth rates from 1945-1970. There was a big drop in 1960, the year they introduced "The Pill", oral contraceptives, and it continued through the current day. The Baby Boomer generation is hitting the rocking chair in record numbers.

https://www.macrotrends.net/countries/U ... birth-rate

In addition, us Boomers are healthier than our preceding generations. Most of us didn't grow up smoking 2-3 packs of cigarettes a day like my dad did, who died of lung cancer 2 days before his 60th birthday. We're not leaving our houses for the nursing homes or the graveyard like previous generations did, hence the housing crunch.

Obviously, Covid shook things up, but that effect is in our rear view mirror. The resulting impact of what the pandemic did was to contribute to "The Great Resignation", movement from one job to another, particularly in the service and hospitality industries, which suffered the most dramatic losses. While they were off work, they found better jobs, so instead of working as a waitress, they found better paying jobs with better working conditions. There's also people that had to stay home with the kids when the schools closed. Those people are back to work, if not their old job, at a different one. The labor participation rate is basically the same as it was prior to the pandemic and unemployment is at a 54 year low:

Last week’s (4/1/22) claims match the figure from two weeks ago, which is the lowest since November of 1968 when 162,000 people filed for unemployment benefits, according to historical government data.

https://www.dailynews.com/2022/04/07/us ... last-week/

The labor participation rate started declining in 2011, the year the first Boomer turned 66, and started the mass exodus from the work force until it leveled off a few years ago. IMO this isn't going away anytime soon. As a matter of fact, you were the one that predicted that it would all go away when the pandemic ended. It hasn't, and it won't. It's here to stay, at least for the next 5 years or so.

We're already seeing its effect in our annual rate of inflation as companies are passing on their increased labor costs and operating inefficiencies caused by the labor shortage to their customers. It's going to drive companies to innovate. I can foresee a McDonald's store with one technician operating robotic machinery. The more labor costs increase, the more companies can justify the expense of labor saving devices.

The other problem with the labor shortage is that it's having its effect on quality and level of service. All these new people in new jobs need to be trained. And since jobs are so plentiful, no one fears losing their job anymore as they know that there's another one waiting for them around the corner. Fear is a huge motivating factor, and taking away that fear of losing your job is going to have a negative effect on the quality and quantity of work performed.

Once the last of the Baby Boomers retire...a person born in 1960 will turn 67 in 2027...then we'll see some relief as there won't be the mass exodus from the work force as we've been seeing for the past 10 years or so. But until then, it's going to be a rough road.

COVID related economic issues are not even close to in the rearview mirror. I'm not sure why you think it's as easy as flipping a switch on and off. It isn't. The COVID related issues will linger for a few years at least. The pent-up demand and the way companies ramped down for COVID will likely take a few years to work through the system. And if the pent up demand disappears and companies ramped back up, then they'll have to ramp back down again once the savings is exhausted. It's one of the major factors driving the current level of demand companies are trying to meet.

Labor is one of many issues going on right now. It's not the most important one on my mind at the moment. This is pure economic chaos right now.

I can't even tell you how Russia is going to play out. I read recently that the Ruble has rebounded and Russia is forcing people to pay for gas from Russia using the Ruble causing an increase in Ruble demand. China is paying for gas using the Yuan. India is thinking about buying the Ruble. Americans have no idea how bad this is going to get for them if this move by Russia destroys the Dollar as the Reserve Currency weakening dollar demand further causing inflation to spiral out of control.

We're talking economic chaos so bad right now that you could literally see a true Depression like collapse in America even while unemployment is low. That would be unprecedented.

The stuff going on right now I've never seen in my life. The labor shortage is just one thing that worries me far less than Russia undermining the Dollar as the reserve currency. I don't think most Americans realize how bad this is going to get if that happens. It's not even close to sinking in. But if other nations like China buy gas in Yuan or India in Rubles and other nations follow suit, you might be seeing prices you thought were unimaginable for goods and services.

I'm watching this close because if this happens, I need to buy some crap real quick because my cash position will be worthless. If it doesn't happen and things normalize, then the reverse could happen and it will be good to have cash.

I really can't emphasize to you enough the economic chaos out there right now across the board. It's really, really bad. No one much knows how it's going to get sorted out. Russia threw a real monkey wrench into the works with its wars. If it effectively neutralizes sanctions against them by accepting payment for commodities only in Rubles and big nations like India and China follow suit, America's position in the world economy will be severely undermined. All we're reading right now are articles claiming Europe is taking unprecedented sanctions and the like while ignoring that China and India, the two most populous nations on earth might go with the Ruble for oil and commodities.

The whole situation is insane. Worst in my life time I can recall. You're focusing way too narrow right now. We can talk about COVID in the rearview mirror in 2024 when Jackass might run again.

[RiverDog]

COVID related economic issues are not even close to in the rearview mirror. I'm not sure why you think it's as easy as flipping a switch on and off. It isn't. The COVID related issues will linger for a few years at least. The pent-up demand and the way companies ramped down for COVID will likely take a few years to work through the system. And if the pent up demand disappears and companies ramped back up, then they'll have to ramp back down again once the savings is exhausted. It's one of the major factors driving the current level of demand companies are trying to meet.

Of course, not all economic problems are in the rear view mirror, and I didn't say that all Covid related issues are behind us. For one thing, we still have massive supply chain problems that will take time to straighten out. But as far as the topic as stated in the OP, ie the labor shortage, the pandemic is in our rear view mirror. Except for those that have retired, everyone that was without work due to Covid is back on the job, has been for some time now. As far as the labor shortage goes, Covid was a sharp, very short blip on the radar lasting about 4-5 months. By July of 2020, the bulk of those that were laid off due to the pandemic were back to work, which is why I was against the subsequent economic stimulus payments.

The labor shortage is a very simple, easy to understand problem. There are more people leaving the workforce than there are entering it, and the evidence is undeniable and easy to demonstrate. Births and birthrates are direct and unrefuted empirical evidence. Same with total labor, which can be tracked by tax receipts. Take a look at the labor participation rate: In 1990, it was 64%. Now it's 12% lower. Why? The Boomers are living longer and are retiring. 65+ makes up a much higher percentage of the population than it did in 1990. That percentage of the population used to work.

Labor is one of many issues going on right now. It's not the most important one on my mind at the moment. This is pure economic chaos right now.

I didn't say it was the most important problem. However, it's one of the more difficult ones to fix as there's not a lot of options. You can try to get all those folks sleeping in tents and under blue tarps into the work force. You can admit more immigrants. You can design and build more labor saving devices. You can extend the retirement age. But that's about it, and none of those things on their own is going to be enough to make a significant dent in the problem. It has been and will continue to be one of if not the primary driver of inflation.

I can't even tell you how Russia is going to play out. I read recently that the Ruble has rebounded and Russia is forcing people to pay for gas from Russia using the Ruble causing an increase in Ruble demand. China is paying for gas using the Yuan. India is thinking about buying the Ruble. Americans have no idea how bad this is going to get for them if this move by Russia destroys the Dollar as the Reserve Currency weakening dollar demand further causing inflation to spiral out of control.

We're talking economic chaos so bad right now that you could literally see a true Depression like collapse in America even while unemployment is low. That would be unprecedented.

The stuff going on right now I've never seen in my life. The labor shortage is just one thing that worries me far less than Russia undermining the Dollar as the reserve currency. I don't think most Americans realize how bad this is going to get if that happens. It's not even close to sinking in. But if other nations like China buy gas in Yuan or India in Rubles and other nations follow suit, you might be seeing prices you thought were unimaginable for goods and services.

I'm watching this close because if this happens, I need to buy some crap real quick because my cash position will be worthless. If it doesn't happen and things normalize, then the reverse could happen and it will be good to have cash.

I really can't emphasize to you enough the economic chaos out there right now across the board. It's really, really bad. No one much knows how it's going to get sorted out. Russia threw a real monkey wrench into the works with its wars. If it effectively neutralizes sanctions against them by accepting payment for commodities only in Rubles and big nations like India and China follow suit, America's position in the world economy will be severely undermined. All we're reading right now are articles claiming Europe is taking unprecedented sanctions and the like while ignoring that China and India, the two most populous nations on earth might go with the Ruble for oil and commodities.

The whole situation is insane. Worst in my life time I can recall. You're focusing way too narrow right now. We can talk about COVID in the rearview mirror in 2024 when Jackass might run again.

Agreed. But that wasn't the subject(s). If you think my focus is too narrow, then start a new thread or post your concerns in the Ukraine thread we've had going on for some time. This one was about one aspect of our economic problems, and one of the more visible.

[RiverDog]

I just talked to a friend of mine from my former employer. The company is dominated by engineers, wanting to build new lines and expand capacity as demand continues to be strong even though the production guys are telling them that they don't have enough people to staff current lines, let alone any new ones. They're about to open a new line near Pocatello, Idaho, but they don't have near enough laborers to staff it, so they're talking about bringing in immigrants from the Philippines on green cards, ie work permits, to fill the positions. I'm not sure how well that's going to sit with the locals, as there's not many states or regions more red than southeastern Idaho.

My former employer has been in business for over 70 years, and never have the resorted to actively recruiting/enabling aliens to work at any of their facilities. That doesn't mean that I'm against it, to the contrary, I'm a big advocate of increased immigration to address the labor shortage. I just thought it interesting how profound this labor shortage is.

Man, am I glad that I'm retired!

[Aseahawkfan]

I just talked to a friend of mine from my former employer. The company is dominated by engineers, wanting to build new lines and expand capacity as demand continues to be strong even though the production guys are telling them that they don't have enough people to staff current lines, let alone any new ones. They're about to open a new line near Pocatello, Idaho, but they don't have near enough laborers to staff it, so they're talking about bringing in immigrants from the Philippines on green cards, ie work permits, to fill the positions. I'm not sure how well that's going to sit with the locals, as there's not many states or regions more red than southeastern Idaho.

My former employer has been in business for over 70 years, and never have the resorted to actively recruiting/enabling aliens to work at any of their facilities. That doesn't mean that I'm against it, to the contrary, I'm a big advocate of increased immigration to address the labor shortage. I just thought it interesting how profound this labor shortage is.

Man, am I glad that I'm retired!

It really depends on the industry. Quite a few companies are slowing hiring or issuing warnings or starting to cut back. It's as expected with inflation, the increased prices are causing money to flow into certain companies that are remaining strong while other companies are getting hammered. Stocks overall are up, but you're seeing real volatile up and down moves based on earnings and forecasts. You'll see 20% up on a good earnings report and forecast and 20% down on a bad earnings and forecast.

We did get a really strong employment report.

We had a technical recession, but when employment stays as strong as it stayed, real hard to feel like it is a real recession. The Fed is still very much focused on increasing interest rates to bring down inflation.

Not sure how this stupidly named bill the Democrats passed will affect the economy. I imagine it depends on how well the measures to fund it go. So far governments are taking in huge sums of tax monies due to inflation in the United States. Demand driven inflation is putting a lot of pressure in certain industries to raise wages and add production and service capacity.

I think in the next few quarters as housing slows and the interest rate moves take effect, we will hopefully see some slowing to put downward pressure on hiring and wages. Not sure how much, but we'll see.

We also have some issues out of China that may be worse than advertised as China always underplays its issues. They are apparently having some real issues with real estate in China that seem to be finally catching up with them and their period of super growth is hitting a wall. If they have a 2008-like property crisis in the world's second largest economy it could act as a deflationary measure for the world as Chinese demand for goods and resources drops substantially. As long as it doesn't lead to some strange decision making by Chinese leadership that leads to severe unrest and violence, then the rest of the world might benefit? It really depends. It's definitely something to watch for people invested in the stock market as a slow down in demand from China would impact a lot of global companies. Europe also seems to be slowing substantially. Russia and Ukraine aren't even in the game at the moment as Russia is a global pariah for the West and Ukraine is uninvestable while a war is going on.

Next few quarters should make things more clear. At least gas prices are dropping which should act in a deflationary manner across the board.

[RiverDog]

It (the labor shortage) really depends on the industry. Quite a few companies are slowing hiring or issuing warnings or starting to cut back. It's as expected with inflation, the increased prices are causing money to flow into certain companies that are remaining strong while other companies are getting hammered. Stocks overall are up, but you're seeing real volatile up and down moves based on earnings and forecasts. You'll see 20% up on a good earnings report and forecast and 20% down on a bad earnings and forecast.

The labor shortage is affecting multiple industries across a wide spectrum. This morning, there's a story out about major airline cancelations and delays even though the weather is no issue, and the vacation season is winding down. The reason: Staffing shortages, and not just pilots, but ground crews and ticket agents. There's a nationwide shortage of teachers, truck drivers, and medical workers. The post office has a shortage, and according to our carrier, some are working 16 hour days. There are currently nearly 11 million job openings, around a million more than there are unemployed.

We did get a really strong employment report.

But that doesn't tell the story about the labor shortage.

Not sure how this stupidly named bill the Democrats passed will affect the economy.

You're right, it is stupidly named. They named it strictly due to political reasons, so when inflation subsides some due to the fall in gas prices, they'll be able to claim credit for bringing down inflation. All Democrats know how to do is spend, and that's the exact opposite of what has to happen to bring down inflation.

Next few quarters should make things more clear. At least gas prices are dropping which should act in a deflationary manner across the board.

Gas prices will continue to fall as demand will drop after Labor Day and the end of the vacation season, just in time for the midterms.

[Aseahawkfan]

The labor shortage is affecting multiple industries across a wide spectrum. This morning, there's a story out about major airline cancelations and delays even though the weather is no issue, and the vacation season is winding down. The reason: Staffing shortages, and not just pilots, but ground crews and ticket agents. There's a nationwide shortage of teachers, truck drivers, and medical workers. The post office has a shortage, and according to our carrier, some are working 16 hour days. There are currently nearly 11 million job openings, around a million more than there are unemployed.

I'm telling you what is going on in the market on earnings conference calls. Some companies are slowing hiring or reducing workforce due to a build up of inventories. Inventory build up is a key sign of decreased demand for goods. Earnings seasons is just about to end. Multiple companies have delivered ongoing plans and talked about slowing hiring in the coming months during their earnings conference calls due to slowing demand. It's on the earnings calls of companies like Apple, Amazon, Microsoft, and the like. We'll see if it shows up in the labor report.

Part of the reason The Fed is raising interest rates is to slow spending to reduce hiring. The strong labor market is part of the reason for inflation. We will see if it works in the coming quarters.

But that doesn't tell the story about the labor shortage.

It actually does if you read the full labor report rather than the headline number. If you delve deeper into the labor report, you will find who was and wasn't hiring. The labor report is a lot more detailed than the headline number.

Gas prices will continue to fall as demand will drop after Labor Day and the end of the vacation season, just in time for the midterms.

If Trump isn't going to back off, might as well keep them around until they get enough power to make the kill on Trump. Trump may still be able to run for office with a Democratic Congress, but I doubt he would want to as he will get impeached quickly because Trump is too reckless and ignorant to not do something to get impeached and removed if the Democrats have power in Congress.

[Aseahawkfan]

https://www.bls.gov/news.release/empsit.nr0.htm

Here is a more in-depth look at the employment report. Still a summary, but has a lot of interesting information on employment you can delve deeper into if you so choose. It's much more in-depth than the headline number the news lists.

[RiverDog]

I'm not talking about a problem that shows up on a jobs report. Outside of inflation, it's entirely possible that this labor shortage could have a negligible impact on the overall economy but can have a serious impact on our daily lives, like having to miss a flight due to the pilot shortage or not be able to dine at your favorite restaurant.

Here's an good example. A couple of weeks ago, I got a call from my primary care doctor's office. I visit him twice a year and schedule my appointments 6 months out. I had my annual Medicare wellness visit scheduled for early October. I schedule it during this period of time so I can have the results ahead of Medicare's open enrollment period that runs this year from Oct.15th through Dec. 8th. If he discovers something and wants to prescribe a drug or begin some type of therapy, I can use that information to choose what kind of supplement to buy for the following calendar year.

In any event, they said that the Dr. was going to be out of town, and I had to reschedule my appointment, and the earliest date at which I could get in was Dec. 12th, over two months from my original appointment and after open enrollment closes. It's a direct result of the shortage of doctors and health care workers in this area. Rural and semi rural areas are the first to experience health care shortages as there's more money to be made in the big cities.

My former employer is another example. They're still making a very handsome profit even though they have a huge number of openings. They just raise their prices to cover any additional operating costs created by overtime expense or line shutdowns. It has had no effect on the demand for their products, but it will continue to put upward pressure on prices, ie inflation.

[Aseahawkfan]

I'm not talking about a problem that shows up on a jobs report. Outside of inflation, it's entirely possible that this labor shortage could have a negligible impact on the overall economy but can have a serious impact on our daily lives, like having to miss a flight due to the pilot shortage or not be able to dine at your favorite restaurant.

Here's an good example. A couple of weeks ago, I got a call from my primary care doctor's office. I visit him twice a year and schedule my appointments 6 months out. I had my annual Medicare wellness visit scheduled for early October. I schedule it during this period of time so I can have the results ahead of Medicare's open enrollment period that runs this year from Oct.15th through Dec. 8th. If he discovers something and wants to prescribe a drug or begin some type of therapy, I can use that information to choose what kind of supplement to buy for the following calendar year.

In any event, they said that the Dr. was going to be out of town, and I had to reschedule my appointment, and the earliest date at which I could get in was Dec. 12th, over two months from my original appointment and after open enrollment closes. It's a direct result of the shortage of doctors and health care workers in this area. Rural and semi rural areas are the first to experience health care shortages as there's more money to be made in the big cities.

My former employer is another example. They're still making a very handsome profit even though they have a huge number of openings. They just raise their prices to cover any additional operating costs created by overtime expense or line shutdowns. It has had no effect on the demand for their products, but it will continue to put upward pressure on prices, ie inflation.

The labor report indicates there is a problem. It validates what you're saying, which is why I don't wholly disagree with your stance. It shows the industries with big shortages and leisure is a big one. The labor report is very thorough in its coverage. It shows why a lot of this is occurring tracking many metrics that if you read it, you see some of the reasons the problems you're seeing are there. It even shows who is most hurt by it with demographics and other information. The labor report has a ton of information in it. It's a good read.

But it is also what is known as a lagging indicator as in it shows what is happened up to that point, but not what is going to happen. That is why you watch the other indicators like earnings calls, inventories, and indicators that show whether the economy is slowing which will slow hiring. Right now The Fed is trying very hard to send the economy into a real recession to slow inflation which is at the moment demand driven. Oil prices are coming down and that helps. But so far unemployment is very, very low and wages are another driver of inflation. The Fed has no reason to believe the economy will cool off too much while unemployment is this low as worker shortages drive up wages and cause what you were talking about a while back: the wage-price spiral. I think we're seeing the wage-price spiral especially in rents and property.

The question becomes will The Fed interest rate measures slow the economy enough to slow down the wage-price spiral? Not sure. Still dealing with a lot of factors in the economy. What happens if the Chinese economy does blow up and we lose that manufacturing capacity or it drops substantially? it is far more expensive to produce goods locally or in more expensive nations which drives prices up. We also might see a drop in demand from China, which will cause a drop in production from local companies employing people to produce goods for export. So all of this is heavily inter-related.

I'm watching it all as much as I can to see how it works out. Right now the market is on the rise again, but to me the multiples still look a bit too high for quite a few companies and industries. If the Democrats gain a heavy edge in Congress come November, I'm expecting big tax increases across the board. That is rarely good for the market short-term.

[Aseahawkfan]

Riverdog

Do you know of a company known as Lamb Weston?

[RiverDog]

Riverdog

Do you know of a company known as Lamb Weston?

Yep. My former employer. I worked for them for 25 years.

[RiverDog]

More evidence of the labor shortage, as if we don't have enough.

I read on our neighborhood blog "Next Door" that there are some areas that are only receiving USPS mail deliveries 3 days a week. The reason: Not enough carriers. It used to be that the USPS was one of the more desirable occupations, at least in terms of salary and benefits. I'm not sure if that's changed or not, but something tells me that it hasn't.

For the past several decades, I've argued that USPS could save a lot of money by eliminating Saturday deliveries or reducing mail service to two-three times weekly. We don't need mail delivered to our doorstep 6 days a week. But now, they're being forced to cut back due to the labor shortage.

[curmudgeon]

I know many veteran mail carriers here in the Tri-Cities. Some new hires walk out during orientation, many others leave after they’ve started the job. Most common reason? “The work is too hard!”

[RiverDog]

I know many veteran mail carriers here in the Tri-Cities. Some new hires walk out during orientation, many others leave after they’ve started the job. Most common reason? “The work is too hard!”

I'd be surprised if it's the physical labor. What's more likely are the working conditions. Mail carriers don't get "breaks" as we know it where you go sit down in a break room, get a can of pop out of a vending machine, and eat a meal, maybe watch something on the TV. Most of the vehicles don't have air conditioning, and even if they did, they are in and out of it so much that they're still going to get overheated when it's 100+ degrees. Same in the wintertime. But the sentiment is the same. Why do all that crap when you can wait tables for $20/hour plus tips?

The other thing is that when it comes to a compensation package, the younger generation tends to look exclusively at wages and vacation time and ignores health and retirement benefits. The federal government has one of the most liberal retirement plans in the industry, but that don't mean much to the 20-something year old kid that thinks they're going to be forever young. Retirement is too far in the distance for them to be concerned about it.

[Aseahawkfan]

I'm with curmudgeon on this one. Younger people's work ethic is terrible. They are electronically addicted to their phones. The smartphone is like the concerns about the TV on steroids that you can carry with you all the time.

Can you tell I've been having issues with young workers? It's super annoying the laziness and general lack of respect for the job and the lack of ability not to be looking at their phone all day.

[RiverDog]

I'm with curmudgeon on this one. Younger people's work ethic is terrible. They are electronically addicted to their phones. The smartphone is like the concerns about the TV on steroids that you can carry with you all the time.

Can you tell I've been having issues with young workers? It's super annoying the laziness and general lack of respect for the job and the lack of ability not to be looking at their phone all day.

We're saying the same thing. All I was doing was saying that I didn't think it had anything to do with physical labor, that a USPS carrier doesn't do a lot of physically demanding work, that their objections to the work was likely due to the working conditions. They don't have the same work ethic, and it's because they have too many options. Some people say that they don't want immigrants competing with them for jobs. I say horsepucky! Labor is just like anything else in a free market economy: Competition is what keeps quality high and prices low. Now, the opposite exists. Wages are high and the quality of work sucks.

When I hired on in my first job out of college in 1978, I was scared to death of losing my job. For my first three years, I never called in sick nor was I anything less than 15 minutes early for my scheduled shift. I didn't complain about the shifts I was assigned to (I was not given any choice) and I did not complain about being passed over for promotion. I had two weeks of vacation, after having worked an entire year without one, and was told when to take it, ie when the plant was down in the summer. I felt Iucky to have gotten the job. Indeed, my boss told me that they had passed over several candidates that had higher GPA's and had come from what was perceived to be better colleges. But the unemployment rate back then was 2-3 times higher than it is today.

And I'm not just blowing smoke up my own tail. Nearly all of my colleagues had the same approach to their jobs as I did mine.

[Aseahawkfan]

We're saying the same thing. All I was doing was saying that I didn't think it had anything to do with physical labor, that a USPS carrier doesn't do a lot of physically demanding work, that their objections to the work was likely due to the working conditions. They don't have the same work ethic, and it's because they have too many options. Some people say that they don't want immigrants competing with them for jobs. I say horsepucky! Labor is just like anything else in a free market economy: Competition is what keeps quality high and prices low. Now, the opposite exists. Wages are high and the quality of work sucks.

When I hired on in my first job out of college in 1978, I was scared to death of losing my job. For my first three years, I never called in sick nor was I anything less than 15 minutes early for my scheduled shift. I didn't complain about the shifts I was assigned to (I was not given any choice) and I did not complain about being passed over for promotion. I had two weeks of vacation, after having worked an entire year without one, and was told when to take it, ie when the plant was down in the summer. I felt Iucky to have gotten the job. Indeed, my boss told me that they had passed over several candidates that had higher GPA's and had come from what was perceived to be better colleges. But the unemployment rate back then was 2-3 times higher than it is today.

And I'm not just blowing smoke up my own tail. Nearly all of my colleagues had the same approach to their jobs as I did mine.

That's some of it.

But it's also upbringing. This younger generation is either spoiled as hell or just didn't have much of an upbringing with some disaffected, uninvolved parents (likely divorced) that didn't think teaching their kid a work ethic was important.

The number of parents letting their kids live at home into their 20s playing video games and screwing off has to be a huge amount higher than when I grew up. I still remember hitting 18 and my dad was "you're working or going to college or getting the F out." Those were my options. He wasn't what I could call a great dad most of my life (not terrible, but definitely part of the 60s having too much fun for too long to be bothered to stay at home much generation), but one thing he did teach was a work ethic.

I see parents around my age that don't even think that is important any longer. They don't teach it. They kind of wait for their kid to wander off from home at some point of their own accord. I do spend time asking some of these kids how they were brought up. I ask them if their parents taught them a work ethic. The number clueless looks I get from the younger generation makes me want to kick some of their parent's asses.

And I don't blame them because I know their parents. They're my age. They were raised by a generation of self-centered I guess boomers. The whole 60s generation changed how kids were raised for the worst. They were a very self-centered, self-involved group of people having midlife crises, doing drugs, and partying until they had to stop due to age and health. A far cry from the previous generation that grew up in The Depression and World War 2. So it's no surprise they raised a bunch of kids that didn't get much traditional teaching.

The current state of Americans is multifactorial and the downward fall of the American work ethic has definitely been a noticeable part of it society's push to "change."

I find it hard to believe you can't see with your own eyes the negative cultural differences between older Americans and current Americans. I'm not talking the crappy beliefs like racism and sexism. I'm talking about the positive beliefs like family cooperation, a strong work ethic, a sense of personal responsibility, and believing it a duty to take care of your kids. In fact, the younger generation isn't even taught the word duty and responsibility as important ethical considerations.

[Aseahawkfan]

3.4% unemployment even while Big Tech is laying people off. Very strange economy. Inflation normalizing, but wages rising again.

No one even wanting $15 minimum wage any longer because we blew right past that. Fast food is starting people at $18 an hour in my area. It is crazy.

[RiverDog]

3.4% unemployment even while Big Tech is laying people off. Very strange economy. Inflation normalizing, but wages rising again.

No one even wanting $15 minimum wage any longer because we blew right past that. Fast food is starting people at $18 an hour in my area. It is crazy.

The low unemployment doesn't surprise me. We still have over 10 million job openings. For every person that gets laid off, there's 10 jobs waiting for them. The minimum wage is completely irrelevant in this economy. There might be a few farm workers that are still making minimum, but none in non farm.

The lower inflation numbers do surprise me. They look a lot better than they did a few months ago and the Fed has backed off their interest rate hikes a bit raising it just a 1/4 of a point a few days ago. But I don't think we're going to see it below 4% as is their target for a long time. With all the competition for labor out there, employers are going to have to continue to raise wages.

Interestingly, despite the good news on the economy, Biden's poll numbers haven't improved much, which shows just how unpopular the man is. As a rule, a POTUS can expect a bump when the economy improves.

[Aseahawkfan]

The low unemployment doesn't surprise me. We still have over 10 million job openings. For every person that gets laid off, there's 10 jobs waiting for them. The minimum wage is completely irrelevant in this economy. There might be a few farm workers that are still making minimum, but none in non farm.

The lower inflation numbers do surprise me. They look a lot better than they did a few months ago and the Fed has backed off their interest rate hikes a bit raising it just a 1/4 of a point a few days ago. But I don't think we're going to see it below 4% as is their target for a long time. With all the competition for labor out there, employers are going to have to continue to raise wages.

Interestingly, despite the good news on the economy, Biden's poll numbers haven't improved much, which shows just how unpopular the man is. As a rule, a POTUS can expect a bump when the economy improves.

Trump vs. Biden. Not exactly the most exciting choices for president. Only the diehards are looking at these candidates and jumping for joy. The rest of us are going, "What the hell happened to the United States? How can we not do better than this?" Then again I wouldn't take the presidency right now. Pay isn't good enough. You're just the guy up there getting hated on and lied about and crapped on by millions of Americans along with their favorite news hosts. Not a very attractive job at this point in time unless you really want it for prestige or really think you're going to make a difference or you're a career politician and this is the highest you can rise. POTUS job sucks in modern America.

[RiverDog]

Trump vs. Biden. Not exactly the most exciting choices for president. Only the diehards are looking at these candidates and jumping for joy. The rest of us are going, "What the hell happened to the United States? How can we not do better than this?" Then again I wouldn't take the presidency right now. Pay isn't good enough. You're just the guy up there getting hated on and lied about and crapped on by millions of Americans along with their favorite news hosts. Not a very attractive job at this point in time unless you really want it for prestige or really think you're going to make a difference or you're a career politician and this is the highest you can rise. POTUS job sucks in modern America.

Not exactly the most exciting choices? They're the worst two choices we've ever had. If Joe Biden is re-elected in 2024, he'll be 86 years old by the time he completes his 2nd term, if he lives that long.

You mentioned a fundamental problem with our democratic system and one of the reasons why I often times wish we lived under a monarchy or some other type of republic that did not depend on direct elections, that it's so corrosive that no one in their right mind would want to go into politics. That's how we end up with someone like Donald Trump as he has an insatiable narcissistic ego and a lot of money. We do a lot better job of procuring military leaders, CEO's, and university presidents than we do politicians.

[Aseahawkfan]

Not exactly the most exciting choices? They're the worst two choices we've ever had. If Joe Biden is re-elected in 2024, he'll be 86 years old by the time he completes his 2nd term, if he lives that long.

You mentioned a fundamental problem with our democratic system and one of the reasons why I often times wish we lived under a monarchy or some other type of republic that did not depend on direct elections, that it's so corrosive that no one in their right mind would want to go into politics. That's how we end up with someone like Donald Trump as he has an insatiable narcissistic ego and a lot of money. We do a lot better job of procuring military leaders, CEO's, and university presidents than we do politicians.

That's because military leaders, CEOs, and university presidents are appointed on merit and can be removed quickly if they don't perform, while the president is elected based on the popular vote with only some oversight by the electoral college driven by the media and powerful political special interests using the media as a weapon.

For me this current version of America is one I don't even like or feel aligns with the ideals I believe to be best for the nation. As I head closer to death, I've kind of checked out trying to fight this weird, soft group of Americans coming up that are raised to be mentally ill victims where everything wrong is some kind of disease or mental illness, manipulated by the media, and addicted to their electronic devices.

I hope the younger generation is enjoying this world because I am not. It's their vision of America I guess, so it must be what they want.

[RiverDog]

Not exactly the most exciting choices? They're the worst two choices we've ever had. If Joe Biden is re-elected in 2024, he'll be 86 years old by the time he completes his 2nd term, if he lives that long.

You mentioned a fundamental problem with our democratic system and one of the reasons why I often times wish we lived under a monarchy or some other type of republic that did not depend on direct elections, that it's so corrosive that no one in their right mind would want to go into politics. That's how we end up with someone like Donald Trump as he has an insatiable narcissistic ego and a lot of money. We do a lot better job of procuring military leaders, CEO's, and university presidents than we do politicians.

That's because military leaders, CEOs, and university presidents are appointed on merit and can be removed quickly if they don't perform, while the president is elected based on the popular vote with only some oversight by the electoral college driven by the media and powerful political special interests using the media as a weapon.

Oh, I agree, and I wasn't proposing a solution. I was just saying that we do a lot better job at selecting our leaders in other walks of life. I was highlighting the weakness of a democracy. If we had a competent king or queen, they'd likely do a better job of selecting our leaders. They couldn't do much worse.

For me this current version of America is one I don't even like or feel aligns with the ideals I believe to be best for the nation. As I head closer to death, I've kind of checked out trying to fight this weird, soft group of Americans coming up that are raised to be mentally ill victims where everything wrong is some kind of disease or mental illness, manipulated by the media, and addicted to their electronic devices.

I hope the younger generation is enjoying this world because I am not. It's their vision of America I guess, so it must be what they want.

Agreed.

[Aseahawkfan]

I have heard the monarch thing. Sometimes I think about it, but at the same time I know that a monarch or the like succession is going to lead to some scum getting power and they are much harder to remove. I like a government with power spread amongst many people to it never becomes concentrated like Russia or China. It's why I am so against a popular vote because that is tyranny of the mob and power concentrated into a mob who can vote themselves benefits is equally bad to a lunatic monarch or a dictator, which too many don't seem to realize. A nation should never run on the popular vote as that puts no measures in place if the majority mob votes in something scumbag or tries to bankrupt the nation.

There should be lots of divested power with institutions that are competent at handling necessary aspects of government and just enough interference to ensure things don't go off the rails, while leaving people in an environment sufficient to allow them to govern their personal life as they wish so long as it doesn't interfere with the lives around them or cause harm or havoc.

It's a fine line that has lots of pushing and pulling. So far we have not had a Putin and been able to survive while settling the worst of our human tragedies like slavery, The Depression, and multiple World Wars without falling into a tyranny or self-destructing. It is a strong testament to the quality design of the system divesting power with lots of self-corrective institutions pushing and pulling against each other to keep the nation from becoming oppressive and depressing.