I've pretty much stopped paying attention to these numbers. I read/listen to multiple sources of news, and the amount of vastly different interpretations of these numbers has me concluding that its pointless to give a damn.
Can you give an example of a single type of statistic where this argument can't be made? Are statistics overall categorically useless? Should they not be reported?
I think in this case it’s worth pointing out that monthly unemployment numbers are historically very uncertain and the subsequent revisions to the initial number are often pretty substantial.
Statistics are certainly not categorically useless, but they are widely misunderstood and thus widely abused. In less political areas I have seen trained experts make elementary mistakes (mistakes happen and it's fine). A lot (nearly all in my informal sampling) of journalists have zero understanding of statistical methods. The term statistical significance leads to knee jerk reactions advocating policy without understanding the basic procedure, or implications of hypothesis testing.
As a numerate person I would personally appreciate it if all statistical claim had a link to a Jupyter Notebook and the associated data. (Though perhaps Observable would be the best choice here since it is run on the web).
And what did you think would happen if you blindly paid people to not look for work? The Biden administration does not seem to understand basic behavioral economics.
You do understand we’re in the middle of a major pandemic, right? It’s not paying people not to work; it’s paying people who were chosen (by the company, not the government) to not work. I was furloughed from a job in March last year. I wasn’t paid unemployment to leave, but instead, paid because I couldn’t work.
Are we still in the middle of the pandemic? At least where I live, anyone who wants a vaccine has been able to get one for a month, so pretty much anyone who wants to be should be fully vaccinated in the next few weeks.
Also, IIRC the CARES Act suspended the requirement to look for more work if you've been furloughed/laid off. A friend of mine who works in a restaurant was getting paid more to go surf at the beach than he used to get paid to go to work. When his employer opened up, my friend was understandably not motivated to get scheduled for very many shifts.
>Are we still in the middle of the pandemic? At least where I live, anyone who wants a vaccine has been able to get one for a month, so pretty much anyone who wants to be should be fully vaccinated in the next few weeks.
It's kind of whack to use absolute # of cases instead of per capita numbers when country populations vary by orders of magnitude.
Countries with slightly fewer cases than USA (Turkey, France, Germany) all have MUCH smaller populations so it doesn't make sense to say they're doing "better"
Is it?
I'm just pointing out that the USA still getting a lot of cases. I'm not saying that other countries are doing better. Would it be better to point out that just under a 1000 people a day are still dying from it in the US? What's the better metric?
The US is the third most populous country in the world. Even if the pandemic were over and COVID were incredibly rare and evenly distributed throughout the world, it would be the expected outcome for the USA to be #3 in the world for new cases because we are #3 in the world for total number of people.
>Would it be better to point out that just under a 1000 people a day are still dying from it in the US?
No, any sort of absolute count is going to be equally misleading. For example my city had 5 covid deaths yesterday. Does that mean that we're 200x safer than the rest of the US? Of course not, it just means that you're comparing two populations of different size.
>What's the better metric?
Anything that's normalized by population size. For example per capita new cases or per capita deaths.
The question was rhetorical.
There is no better metric for showing the pandemic is still on going. If you have 50k cases a day, and 1000 deaths a day, it doesn't matter if other countries are lower or higher, it's clearly on going.
Right now the 7 day avg is below 700 deaths per day and has been steadily declining since the peak in January when it was over 3,000. There's been roughly a 5x reduction in cases as well (45k cases per day over last week down from 260k per day over the worst week in January). To me the strong downward trend indicates that we're cruising towards the end of the pandemic. I can't see it lasting another 4 months, let alone another year (although the COVID rate might never return to 0).
How many deaths per day would you use as a threshold for being past the middle of the pandemic?
1000 deaths, 700 deaths. It doesn't matter.
Is the pandemic still on going?
Yes.
The answer is yes.
I really don't care to get into the minutia when the answer is still yes.
That was certainly true earlier. I think people are questioning if it's still the right thing to do.
From what I see around me there a huge number of unfilled jobs because people are making more money from unemployment than from jobs.
Yes, the job could pay more, but that has its own set of pros and cons. It's almost acting like a backdoor minimum wage, but worse, because some people would rather make a bit less and not work at all. (I'm not saying that's you - I'm talking in generalities here.)
I think the generous unemployment benefits just exposed how little minimum wage people are paid. Many minimum wage people were being laid off, so they went for unemployment benefits. But those weren’t enough (because the jobs were barely paying enough). Enough people were finally complaining about their wages that politicians decided to just give everyone extra unemployment benefit money.
If the extra unemployment benefits from the CARES Act was just changing the unemployment pay to 100% your prior pay, it wouldn’t’ve been as big an issue. But for someone making $300 a week could possibly get $800 through unemployment (~$200 for unemployment plus $600 “bonus”).
The CARES Act suspending the “search for work” requirement didn’t help either. It was necessary at the time as there were no jobs available, but I think it is definitely time to reevaluate that. It encourages people to not go back when the business opens up because they’ll not only have to go back to work, but they’ll be making less.
Unless rest of the world has enough vaccines the pandemic is not ending for anyone.
It takes a one mutation to make current vaccines ineffective. We also don't know how long immunity will last. If it's only a year or two then without eradicating everywhere it won't go away in the US either.
If it was true that the way to create more jobs was simply to make people's lives even more precarious, then it would be as simple as just removing every single social welfare program in existence. It turns out, unsurprisingly, that a large demographic of poor people with nothing to lose is not exactly conducive to a stable and thriving society.
You're getting down votes, but my ex is in HR, and says that as soon as the very generous unemployment came out she had dozens of people quitting. A lot of people prefer unemployment to menial jobs.
See the answer to “My employer has remained open because it is essential. I’m not sick, nor is anyone in my household sick. I do not have children or care for someone who cannot care for themselves. However, I’m afraid of getting coronavirus from customers coming to the store, so I quit and filed for unemployment. Can I obtain benefits under the CARES Act?”
I don't have opinion either way, just saying it might have looked to op they just quit without cause and still collected unemployment benefits, since these reasons are not usually considered causes , op may not have understood it well.
I think the reason they had to add that question in the FAQ is because lots of people were saying that that was their situation, while it actually wasn't.
I don't have actual data, which is obviously not a great position to be in, in a discussion, but I saw a TON of stories from restaurant owners who could not open solely because all the employees left since they made better money by not working.
Or they added it because a lot of people like you have misconceptions. Either way they would be rejected applying for unemployment.
I’ve seen restaurant owners saying they can’t hire people, I haven’t seen restaurant owners saying people quit for unemployment. If it’s the case that the restaurant furloughed or laid off people I don’t see why they expect the state to intervene to help them. Socialism for me, but not for thee?
In the United States you cannot collect unemployment if you quit without good cause, which varies by state. Most states are pretty strict, and generally "good cause" is limited to things like documented sexual harassment, domestic violence, illness, disability or caring for a family member.
I obviously wasn't privy to all the details, but some of the situations she described was that after last March they furloughed (laid off? not sure) a lot of people that they subsequently couldn't get to come back when demand improved.
> .. as soon as the very generous unemployment came out she had dozens of people quitting. A lot of people prefer unemployment to menial jobs.
This comment:
> ...after last March they furloughed (laid off? not sure) a lot of people that they subsequently couldn't get to come back
Did it not occur to you that your statements are entirely contradictory? What actually happened here? Did people quit to get that sweet, sweet government lucre or were they "furloughed" ("no, we're not firing you, we're just not going to pay you or give you work for an indefinite period") and then decide that, gee, maybe they didn't want to come back to work for a company that kicked them to the curb the second things got tough?
So they didn’t quit, they were furloughed or laid off? Why the hell does the employer expect those people to come back? They shouldn’t have stopped paying them in the first place.
I know, I expected the ideological downvotes ;) Hearing the same from a restaurant owner friend, and have seen another friend free-riding for the last year. He’s been taking cheap vacations and going on hikes and road trips. Anecdotal, sure, but with no requirement to even be looking for a job like before, and extra money, it’s quite rational to not work for many people.
> A bright spot: The labor force grew significantly, a counterpoint to the narrative that generous unemployment checks are keeping Americans out of the workforce.
This is a very surprising number given the expectations. There are many companies hiring in the service sector that cannot find enough workers. As such, average hours worked is skyrocketing as well:
The other likely factor is that many schools are either still closed or are doing remote learning, which means many parents are stuck with having to look after their kids when they would otherwise be working.
This also factors into peoples calculations. If you suddenly have to pay for childcare there isn't much of a point to go back to work, even for 15 - 20 an hour.
Child care is a significant and major expense in the US, most of the people on HN that work for tech companies work for companies that more or less are openly hostile towards married employees with families, in fact
anything less than a young single working willing to drink the company cool-aide often “isn’t a good culture fit”. But the average worker has additional costs that never get factored in just to work, transportation (for me that’s about $600/month), dry cleaning ($100), food (of course this can’t be negated entirely but is often more expensive while working outside the home).
The downvotes are because the haves want the have nots to shut up and get back to work for them. It’s the equivalent of taking legitimate points raised by workers and responding with stop being a smart ass.
> The other likely factor is that many schools are either still closed or are doing remote learning, which means many parents are stuck with having to look after their kids when they would otherwise be working.
Also, many day cares are still “temporarily” closed, operating at reduced capacity, not taking new children, or have been permanently shuttered due to the pandemic.
It seems likely that low wages are contributing to this shortage. There's lots of evidence that once employers bump wages to $15+ an hour, the have little difficulty filling roles.
Low wages only contribute to unemployment if you're paying people to not work. Otherwise the decision between "low wages" and "no wages" is an obvious one for everyone.
True for individuals, but married couples often do have to decide whether low wages are worth more than no wages for one of the couple. Same with teenagers.
There was a line of job seekers around the block at In-n-Out burger the other day. They pay $17/hr with paid time off, health/dental/vision and a 401(k) plan. The burgers are still $3.
I've always wondered how local/regional chains, In-n-Out/Dicks, tend to be as cheap as national ones while usually having better food and paying much better than national chains.
Usually they are also in higher COL areas as well so I'd assume they pay more in Tax/Rent etc.
They are privately held. I think it's safe to assume the owners are taking a smaller profit in order to maintain quality and treat their employees well.
Lack of advertising, far smaller menu, and motivated workers. I really wish Americans would stop choosing objectively worse food (McDonalds) over In-n-Out...
That being said, it's long been time for In-n-Out to stop using American cheese and switch to Cheddar, but that's a whole industry problem...
Don't know about all small businesses that provide quality employment and a quality product at low price while remaining in business, but In n Out is famously family owned by an extremely religious family with no desire to grow fast, take over their industry, or go public to turn investors into multibillionaires. They don't even have investors. Perfectly happy to just be ordinary millionaires and share the value of the company with their employees.
Rents might be high in Southern California, but the bulk of their rapid expansion was in the 70s and 80s when land was still reasonably cheap and they may actually own many of their own buildings.
Maybe they do, but I checked the ones in my county and the sites are owned by East Coast REITs. I'm sure they are able to negotiate reasonable long-term leases, of course.
High paying fast food jobs are probably the exception not the norm.
Relying on low skill jobs to provide higher compensation without changing the underlying value prop of the employee seems to undermine fundamental economic principles.
Well, we need to turn that thinking around or our country will be (more) completely fucked. We need people who cook food and build houses and dig trenches, so we need to figure out how to make those people well-enough paid to live a life with dignity. There are tons of "low-skill" jobs that just need to get done.
There are low skilled cooks and high skilled cooks. A fast food worker is low skilled, as in, without prior skills a new entrant could do the task to a similar level of proficiency as someone who has experience.
Cooks at higher end restaurants, however, are skilled jobs. It takes years of knowledge and practice to master some culinary techniques, hence they are harder to replace, their work product can be sold for greater profit, and the individual will be able to obtain higher pay.
The same applies construction and most Amy other industry. Some jobs are low skilled, not requiring prior experience or skill, but many are skilled and can demand higher wages. This system incentivizes the individual to learn new skills, gain knowledge, try new things, and thereby gain a access to opportunities that pay higher wages.
What I am seeing on the ground is definitely disagreeing with this. The thing they are fighting against is people are getting a lot of money in stimulus so there is no desire for them to work. Where I live there are tons of people looking to hire at $20/hr and they are getting zero applicants. These jobs range from Walmart, local delivery drivers, yard crews, etc. It is pretty harsh trying to compete against free money.
Let me know where you are! I know 5 - 10 people locally on unemployment looking for jobs >$13 / hr, 25hrs / week! They'd LOVE a good job with $20/hr, full time, and benefits. There is absolutely no such thing anywhere else in the USA, the people where you live are so lucky! I'm in a second tier West Coast city and anywhere with a help needed sign still up is offering ~$11/hr.
That's actually perfect! I know 3 people in Boise right now with college degrees looking for work like that. Do you hav specifics so I can forward to them?
I know I wouldn't work for Walmart even for $20/hr because their benefits are notoriously bad. You can compete with free money by offering a better total package than just money. Never mind the opportunity cost of working for Walmart instead of starting your own business, educating yourself, etc. etc.
Ah yes, the slogan used worldwide by ultra conservatives and the extreme right. Here in Denmark it is "Det skal kunne betale sig at arbejde! ("You should benefit from having a job!") Said by no-one ever who have actually had to sit on their ass with nothing to do for years. What is your dream is most people's nightmare. With no job you will live a second rate life as everyone who have been there long enough will know. In Denmark they will even have free healthcare like everyone else and yet people still would rather work then collect unemployment benefits (which is also much better and higher than it is in the States). It's a myth.
Strange—I wonder what was happening a year ago that meant people were uninterested in going back in to work. I feel like something weird was happening, but I can't remember what it was.
Haven't seen this personally, a lot of small businesses have closed and WalMart is the same wages. Went to a hiring event with "live interviews" and it was actually just a bag of paper with places that are hiring, with a candy bar and pens inside. All of it being things like home Depot, "nursing assistant", retirement homes, etc. Same as years before the pandemic but few of it being locally grown business. There was a "IT hiring event" and it was actually just entirely an ad for why you have to go to college and get an IT degree, nobody is actually looking to hire outside the box. I believe a number of places figured out they can downsize quite successfully.
There was even a union electrical apprenticeship, which had severe competition, only hired a few people a year, and required all manner of tests all required within 1 day of the event which was impossible to have. (Color blindness test, high school transcripts, etc) the guy really didn't care to be there.
The $3,200 in stimulus provided over the course of a year is not “a lot of money” anywhere in the US. And since it’s the equivalent of $1.50/hour for a full time worker for the year it’s certainly not enough to discourage anyone from working.
If that’s the case then surely you’ll excuse the misunderstanding since “money in stimulus” is an unusual (and somewhat misleading) way for someone to say “unemployment benefits”.
It's boosted by the federal government, hence the stimulus. In some states, people are getting $4k a month for sitting on their butt. Even offering $5k or $6k a month, it's hard to lure people from 0 hours of work to 40 hours of work per week.
I know a printer who can't hire people... he thinks its because of free money, but in reality it's because he's a supreme asshole and when people didn't HAVE to work for him, they chose not to.
A healthy economy is one where people have the flexibility to be choosey and places that offer shit-jobs have to change or go out of business.
As I stated in my comment it was based on recent conversations with business owners in my area, so I am the source.
I find it offensive and sad that you implied I called someone lazy, I didn't. I stated that competing with free money is challenging and is what is making it hard to find employees. Why work for $20/hr when you are getting unemployment benefits that nears $14?
I found your unsubstantiated claim that "people aren't even applying to these great fucking job opportunities" laughable.
EDIT: Apologies, that was a lazy comment. What I meant to say was "I found your comment to be laughable at best and ill-willed at worst."
If you are still into having a discussion with me, even though I offended you, can we make it revolve around the concept of "socialism" and the reasons behind many US citizens being afraid that going down the path of looking out for each other will lead to the US becoming The Soviet Union?
Considering a living wage is considered $14/hour for Idaho[0] for a single, unmarried, no kids adult, I think the bigger problem is probably not unemployment, but with businesses not realizing that their wages are not competitive for labor against almost anything else.
You can't pay the median or worse and expect hiring to be quickly, especially in Boise - a growing urban area that is probably well outside the state's average.
To emphasize your point in other words, this means that the difference between $14 and $20 is massive. $14/hr will just cover food & rent & essentials with nothing left for quality of life. $20/hr means you can afford beer.
Today I woke up regretting being overly aggressive yesterday when replying to your comments. I also regret viewing your words in the worst way possible. Finally, I regret putting words into your mouth. I was (very, very) drunk last night and was acting foolishly. I used our discussion to win karma points. I'll try better next time. Will you accept my sincere apology?
If someone gets free money and they spend it, they increase demand for labor, which makes it easier to raise wages until working becomes attractive again.
This is anecdotal, but I have a friend currently on unemployment benefits and he's enjoying his 'time off' while looking for a more permanent job. He wants a good job, not just any job. So for him it makes sense to be choosy rather than just start working at some place with a help-wanted sign and lose his benefits while also losing his free time to search for something better.
Wow they must make a LOT in unemployment! That doesn't make sense at all to me, unemployment insurance didn't even cover half of my rent, and comes with a stigma.
So does taking a shit job and that being in your employment history.
From the employee perspective it is a lot easier to monitor the job market and actively seek out employment while not employed.
It’s true unemployment is not enough for most people to pay their bills, but that is also true of a lot of full time employment...employers can blame unemployment for being unable to fill positions but if your full time position can’t compete with unemployment benefits the answer isn’t to take away a minimal safety net so employers can force shit wages and no benefits on workers...at best the employer gets the employee they wanted below a living wage and it’s left society as a whole with a significant number of unemployed works with absolutely nothing and not even enough shit jobs with shit wages to employ them all.
It’s not black and white. If you have a gap and the reason is because you got pregnant and gave birth there is likely no stigma at all. Meanwhile if you were working for Google and took a job driving for Uber you might not ever get the opportunity to address it in a future interview because the stigma.
There is a reason your comment was downvoted, hint it’s not because people agree with you, and acknowledging a premises is correct while the conclusion is wrong is not the same as agreeing with you (but you knew that).
We're not talking about maternity leave, but unemployment.
Thanks for agreeing they both have a stigma. You seem to be struggling to make up an example where being employed has a worse stigma than being on unemployment though.
The $600 increase (later dropped to $300 which obviously fell short of the same effect but worked in the same direction) brought the average unemployment check to about 100% of pre-unemployment wages (which was why that level waa chosen, as a flat amount in part because its easier for states to implement but also because it does more for those at the lower end of the income distribution.) And the pandemic reduced the stigma somewhat.
Your quantitative claim contradicts that characterization.
> - at an extra $600, about 40% of workers would make more on unemployment than at their job
Since what I reported was the rough policy target was that the average worker would be making the same with the boost, only 40% and not approximately 50% making more with the boost isn’t me overselling, if anything, it is the opposite.
Definitely, Covid disbursements for many people surpass entry-level job wages. If your Covid relief works out to $15/hr why work for $15/hr? I probably would not move for anything less than $20/hr if I were in that position.
A couple of states are tapering off Covid relief funds so we'll see how that affects worker availability.
I can't speak to any actual person's mentality, but Covid relief is temporary, whereas wages are subject to a ratchet effect and establish a future baseline for what you'll be paid for the rest of your working life. If you're being offered more than you used to make before and it's anywhere near what you earn in temporary relief payments, the economically sanest decision is to take it.
Provided you can, i.e. your kids' school isn't still shut down or something so you have to stay home to watch them.
Yes, there are advantages to taking the job such as if the job has prospects for promotions and you have fewer competing for them, and also you gain more experience and so on, but if your marketable skills are dead-end jobs, there isn't much to incentivize you.
Anytime you hear a company say they "cant find enough workers" you need to add to the end of that sentence the phrase "at the price I'm willing to pay."
All they're saying is they're used to being able to dictate terms and they have less power to do that right now. It's almost as if there was some sort of global crisis that forced everyone to re-evaluate their priorities, and they realized that working for slave wages in dangerous work conditions for companies who demonstrably don't care about them, wasn't a great idea if you could avoid it.
You could also replace “at a price I’m willing to pay” with “at a price my business can sustain and remain in the black.”
I could offer $250k salaries to each line cook in the restaurant, but then I would have to charge something like $750 per entree. Such a business would fail to attract customers at that price and have to close.
Yes, that is an extreme example and quite absurd. But what if you pay them enough so they can comfortably afford their rent and healthcare? Then you charge a little bit more so the people who are comfortable enough to afford eating out can help make up the difference. Maybe you even make the restaurant a little less profitable in the process. What if in doing this, your line cooks now can afford to each out at other restaurants, and the cooks from those restaurants now can afford to eat at yours?
I think you underestimate how small margins are at most restaurants.
My example was hyperbolic to better draw attention to the principle.
The principle applies, as you admit, that the cost increase would need to be passed onto the customer, who in a competitive business environment will likely chose the lower cost option over two products of similar quality.
If the employer did offer a wage increase, it would need to fit in the overall business ecosystem. For small restaurants maybe they can only afford a $2 raise while breaking even. For the local car wash, maybe $1.25 is the limit. By increasing the wage to an arbitrary number ($15/hr), this ignores the market principles that each business operates under.
Another thought experiment: why only $15? Why not $25? Or $50? Wouldn’t that be better? To set a limit already admits the principle holds and therefore any solution without nuance is unlikely to result in a good outcome.
> By increasing the wage to an arbitrary number ($15/hr), this ignores the market principles that each business operates under....Another thought experiment: why only $15? Why not $25? Or $50?
Don't these arguments apply any time the minimum wage is debated? I heard these same arguments in 2007, and the economy didn't implode (well, not because of the minimum wage). Why did we set it to $7.25 over $6.55? Why did we set it to $6.55 over $5.85? The minimum wage is already set, so the "market principles" have already been violated, yet the industry remains and is profitable.
> I think you underestimate how small margins are at most restaurants.... The principle applies, as you admit, that the cost increase would need to be passed onto the customer, who in a competitive business environment will likely chose the lower cost option over two products of similar quality.
No, I don't underestimate it. But I think if workers can't be paid enough to comfortably afford rent and healthcare then there should be no profit whatsoever. If someone is making a profit while someone else can't afford housing, then something is wrong.
I say set the minimum wage at a point that allows people some dignity, and let the market sort the rest out. Restaurants will set a price and customers will choose whether or not to pay it. Those restaurants that have a compelling menu at an acceptable price will prosper, others will fail and be replaced. Eventually an equilibrium will be reached as higher prices are normalized.
As a customer of restaurants, I can tell you I almost never care about price -- it's all about food and experience. I'm going to a restaurant later today and I'm going to pay 25% over the price of the meal so I can assure the waiter gets the cut they deserve. If that restaurant raises their prices 30-40% to pay their workers more, I will still eat there because I want the food and I don't want to cook.
Any business that cannot survive without paying its employees too little for them to live comfortably (not "extravagantly", but also not "desperately") does not deserve to exist. Period. Its business model depends on being subsidized by government programs that support the destitute.
> Anytime you hear a company say they "cant find enough workers" you need to add to the end of that sentence the phrase "at the price I'm willing to pay."
Or add "... who are able to generate more value than they expect to be paid".
Businesses exist to make a profit, and will gladly hire people who make them money. A typical waiter just doesn't generate enough value to justify paying them a wage that will compete with what they're currently being paid to sit around and freeload.
I've talked with several business owners in a major west coast metro.
One has retail hospitality jobs open. Total take home pay is $80k annually. People won't even show up for interviews. He's never seen anything like it.
Another is a manufacturing company. Starting pay is $20/hour for someone who can show up and use a tape measure. They're trying to add another shift of production to meet demand but can't get labor.
There's a popular narrative of "poor business owner! Try not paying minimum wage!" but this is mostly coming from people who don't have first-hand experience in hiring, don't know business owners trying to hire less-skilled workers, and believe these reports are coming from people attempting to offer just the minimum wage.
Financial incentives are not working. I'm not convinced it's only UI - it could be childcare as well, or reticence about COVID, or a mix of all above plus more. But it's clear it's not fictional, and it's clear it's not just a matter of not paying minimum wage.
I can promise you that "People won't even show up for interviews. He's never seen anything like it." is not accurate. Either he isn't advertising the wage and he needs to be, or he is lying his ass off. I know so many people that would take any old job at $80k.
I don't think you're being nuanced enough. Wendy's in Montana is offering $17.50 an hour and not getting applicants. That's clearly a sign of some deep structural labor market issues.
That's a TOTALLY different story than not being able to find people at $80k my guy.
Also $17.50 is an incomplete picture. How many hours per week? Any benefits? I would bet a years salary that it is <40 and no benefits. Would you take that job?
Well, GDP is a measure of how much your country produces. Why do things get produced? Because it can be sold. Who buys things? People with money. How do people get money? By working and being paid. So pay people more, then they'll buy more, then producers can produce more, then your GDP goes up. Is it that simple? No, of course not. But it's not a crazy chain of connections.
> How do people get money? By working and being paid. So pay people more, then they'll buy more, then producers can produce more, then your GDP goes up.
That sounds more like inflation than productivity actually going up.
The business owners might not be wrong, but they might not be right, either. Many people, at least in my area, simply cannot accept jobs even if the compensation seems reasonable, because our housing crisis is severe and our transportation system is garbage. When the median home price is $1.6 million, people you want to hire at $20/hr are driving in from 2+ hours away, which when you consider that many schools and other child care systems are still closed or partially closed means that taking these jobs is simply not possible. The whole thing is tied together. Sensible land use and good transportation will keep a lid on wages. Bad land use and terrible transportation will cause wages to rise.
Why do you feel this to be a compelling argument? It doesn't matter how high you think the wages are. If they are not attracting enough workers, they are too low.
Maybe not such a bad thing given the zeitgeist? Also higher and rising labor expenses force higher capex, a long-term benefit for American competitiveness.
I was just listening to Yellen talk about this today, she definitely thinks childcare and concerns about covid are the primary forces keeping people from seeking work. Lot's of schools are still only having kids in a few days a week, shutting down at the first sign of a positive covid case etc.
This is one compelling argument for UBI being far superior to unemployment benefits or welfare. It supports your basic needs, but it doesn't eliminate the incentive to seek employment.
COVID is still a major danger in most of the US, and hospitality is one of the industries where I, at least, would be most concerned about it. You have to be there in person, the customers are going to be coming from everywhere, and a significant percentage of the customers are going to feel fully entitled to abuse you—and the management is highly likely to tell you they're allowed to, and you just have to do whatever they want. Including let them get in your face with no mask, spittle flying.
$80k/yr for that? Risking my health (or even death) from COVID, guaranteeing damage to my mental health from the abuse? Yeah, pass.
I know less about the manufacturing sector, but from what I do know, it's going to have similar problems: you have to be there in person, and because it's widely considered to be "lower-class" work, there's a higher likelihood than average of abusive behavior toward workers.
I disagree, this seems like an expected outcome. The economy is turbulent; it has been disrupted and is in the process of adjusting. Some (relatively brief and localized) shortages are expected as the markets find a new equilibrium.
Unemployment benefits are not causing the disruptive effects, they're (to some extent) protecting workers from the disruptive effects, which is exactly what they're supposed to do. They are not a handout, they pay for themselves historically; we should let them work.
That's some pretty strong spin... Unnamed forecasters thought the number of jobs added should be higher, so we're disappointed by a quarter million new jobs.
Typically the forecasters are not this wrong. Thus this is cause for investigation and possibly concern. We do want policy makers to be given forecasts on these sorts of things and we do want them to be alarmed when the forecasts are so far off.
Could less accurate forecasting be attributed to exceptional circumstances of the environment they have tried to analyze?
I have the feeling there's quite a few “predictions” during this pandemic that are off. Where people or the economy have acted contrary to popular beliefs or rational modelling.
And it is for April, the general population started being vaccinated in middle of it and it also takes over a month (according to the companies) to get full effect of the vaccine.
Well, not all of those millionaires are "insanely rich", as in "having a million dollars fluid", but are upper middle class and have some ground or something similarly worthwile. I know quite a few millionaires, but many of these are just farmers or owners of a flat in or near a major city. They surely don't live a bad live, but they don't have thousands to pour in dogecoin or casinos.
My point is, take these numbers with a grain of salt.
I'm actually surprised at how low those numbers are. Only 1322 millionaires in Canada? Really? I know most people get a mortgage, but there are a ton of houses in Toronto and Vancouver that are over $1m.
> Dogecoin, a meme and joke, went from a quarter of a cent last year to 66 cents today.
Initially, from what I read about Dogecoin, I thought Dogecoin was an inflationary junk coin since it produces 5billion tokens per year. However, in considering the total supply, this is a lesser inflationary rate (not CPI--just creation) than the USD since this works out to around 4% anually.
I do still think Doge is a poor currency, but I don't see it being much worse (I cringe writing this knowing I'll be blown up) than fiat dollars other than major acceptance.
Either way I completely agree. Something is wrong.
I think the unaffordability of housing is a driver of this. At the rate prices increase saving a couple grand a year is basically pointless so might as well yolo on some crypto/gambling on the off chance of making it big.
It's not entirely illogical either if you assume the marginal utility of money is discontinuous and there is a jumps around at certain thresholds such as being able to afford a reasonable home.
I wonder how inflexible this demand is, what if it's a checkbox that almost every human wants to check? Maybe not for their entire life, but at least until the kids move out.
It is entirely possible that cheap financing results in higher down payments which in the end actually fuels a savings craze that drags inflation down.
I also suspect that over the long term a lot of products are going down in price and housing costs like rents are dragging the CPI up.
My honest opinion is the hard working professionals making 150-350k are getting hosed. Pay the majority of taxes in this country so that other people can loot, riot, and collect welfare. Asset prices debasing everyone’s wage due to rampant money printing, and they won’t stop. Money printing is a tax on the professional class. Being a hard working professional in this country is losing its allure, and is increasingly a suckers bet.
“ Work hard! Don’t worry if we print money and triple the cost of your house and new mortgage! You are in the top 15%! Look your class only pays 20% of the taxes, never mind all that money we printed! It’s not a tax!”
There’s a serious level of subversion about what’s going on economically in this country.
Do you really think an honest hardworking professional making 150-350k would trade their lifestyle for that of people who are collecting welfare? They're free to quit their jobs at any time and start collecting that welfare money!
It’s not at that point yet, but now more than ever as a hard working professional you are carrying others on your back. Massively inflating asset prices are like stealing money out of your pocket if you aren’t fully invested and leveraged. If the shame of living on welfare ever disappear, and safe poor neighborhoods are in high supply, watch men drop out. It’s already happening among millennials
Lend it, so borrowers can spend it on your behalf.
Do nothing and let people stay unemployed.
Considering the lack of demand for credit indicated by low interest rates, lending is almost the same as doing nothing.
The last option causes deflation which requires the Fed to step in and increase the money supply until inflation hits the target inflation rate of 2%. Right now it is around 2.6% which is pretty much as perfect as it gets. Not too low, not too high.
Highly simplified: People are stealing USD and the Fed has to compensate for the loss except the Fed is distributing the new money very inefficiently which causes collateral damage in the asset markets.
Yeah we all think this, jumping out of tech and buying a transam and taking a relaxing job and smoking pot when our wives aren't around.
Anyway, remind yourself of how you couldn't afford that $80-150/mo gym/class. How you didn't go on a real vacation for years because it took 8mo+ to save up for one. How you probably drove a car that constantly broke down because you couldn't get a loan on something decent. How you had to save money from your $6/hr job to eat Burger King on your lunch break across the street. How a huge chunk of your income went into driving yourself to work (gas/maintenance). How you couldn't afford a place without 3-4 roommates. How you went for years without buying a set of 4 tires, instead buying 1 used tire to replace your bald tire before the police/rain gets you.
I'll take the 150k stresses over my previous $6-12/hr stresses where I felt like I was spinning tires and never, ever going to get out of that.
You're spending a portion of what you make to stabilize society and prevent poverty-driven riots across the country during a global pandemic. There's nothing out of control about it
What’s wrong with paying money so others can live? I see a lot of life as chance. I’m lucky that I grew up upper middle class with parents who paid for college. Now I got a cushy job as a software engineer. I could have just as easily been born to a family with 0 wealth and had to start working at a young age and do that until I died. Why shouldn’t we have a safety net to at least cushion the blow of getting a bad dice roll at birth?
Dead people's families can. The parent poster talked about being `lucky` in that his parents could pay for his college. I want my kids to be `lucky` enough to afford housing and _if they really want_ college.
I grew up poor, was homeless at 16 for a year while still trying to go to HS, eventually had to drop out and climb up the career ladder with no formal education, now make well into 6 figures and I'm more than happy to help people NOT have to go through my situation. You should be as well. I am beyond lucky that I dug myself out of that hole and I know other people will not have my luck. If I didn't start programming as a kid because my school got computers early I would probably be in retail still.
Again, voluntarily sure. I view redistribution of wealth via force to be a net negative on the wealth of society.
> evidently your luck, as well.
I worked at a Burger King, a hardware store, an apartment complex (plumbing toilets and whatnot), and finally put my self through college. It was an exhausting climb the whole way and I _worked_. I was never let go, and I hardly (like a $1500 a pell grant once) received assistance because I _made too much_ in my day job when I finally did go to school.
I wasn't terribly lucky other than I `lucked` into a work ethic and I `lucked` into being born in a country that still had enough of a free market that I _could_ work my way up.
And thinking on it now I don't think I was that well served by my schooling. I feel if anything I was held back in an _almost_ deliberate effort to homogenize me.
I'm guessing you’ve never lived on welfare. Having done that and had a.personal income that, while short of $150K, is a sizable fraction of it (and been everywhere in between), increasing real income has involved a monotonically increasing quality of life. I’m definitely into the range, even short of $150K, where the marginal difference from each additional $ of income is much smaller than at lower levels, but it is still not negative.
Work hard! Don’t worry if we print money and triple the cost of your house and new mortgage! You are in the top 15%! Look you only pay 20% of the taxes, never mind all that money we printed! It’s not a tax!
So you agree with me that one premise was wrong, but you want to double down on your other premises, which are less wrong, but still lack meaningful nuance?
Where did that money go to? To the "socialist" stimulus checks?
The majority of money printed was loaned out to banks and other institutions, which promptly put that money back into the stock market and other investments.
Think about it this way. Would you rather have your investments crash and pay the same taxes, or take the tax increase and also have your investments go up? If you would prefer the second, you benefited from the government's actions.
In fact, I feel the lower class were the ones that the government took from, in the form of impending inflation.
Yeah, it's a loan, when you pay the loan back the money supply actually ends up contracting again and only the residual interest payments are actually added to the economy.
Why would they pay income tax, if the point is to redistribute the money collected back to them?
Seems like instead of collecting $x amount of tax from them in order to give it back in benefits, we could just not have them pay tax (which is the case currently).
The real answer is - raise their wages, and then they will be paying more in federal taxes (just like the upper quartiles are).
USA lower tier professionals (Doctors, Lawyers, Programmers, have a anticompetitive racket - they should all get a 20-30% net haircut in salary, tech should be regulated, we should increase admission to med-school and allow nurse practitioners to serve as doctors, etc.). I say this as someone who benefits greatly from the current system, but also realizes how fucked up it is.
Finance people should be taxed out the wazoo - watching stocks tick up and down on the market is a waste of time and most of them defraud people anyway, estate and wealth tax should be a thing, if they try to denounce citizenship to get away, immediate tax of 50% of [unrealized] profits (we currently do 20%).
Even that wouldn't get us back to how things were in the 1960s, but it would at least be closer, and probably makes things better in the mean time.
I'm not denying that programmers get paid a lot or that our taxes shouldn't be higher but it's a different situation from being a doctor or a lawyer. I have no degree and am entirely self-taught. I would not be able to practice law or medicine without getting one. However, I am a professional software engineer.
Programmers get paid a lot because the market is extremely competitive. Doctors get paid a lot because healthcare in the US is essentially one massive cartel and incredibly inefficient as a result. In most countries, doctors and programmers make similar salaries.
I think the term "software engineer" is sort of meaningless. I know someone who builds ssis packages and while he does know T-SQL, he is relatively unfamiliar with transactions, cannot describe how a balanced tree index works, and will not complete an SQL query without using "nolock".
I have never seen him produce a working program in any dot net language, or for that matter any procedural language except maybe visual basic for applications (excel macros maybe). I think he tried to learn php but gave it up. He also calls himself a software engineer. He makes some good money tho, he's in management.
I rarely see this with other engineering disciplines. Its always the computer programmers lol
Sure, anyone can call themselves that, but if you give me a resume with only SQL on it and you want a programming job, I will definitely start asking about other languages and trying to gauge general experience.
I don’t really care what you call me but I will call myself a software engineer because I have a depth of understanding in how to solve problems with software in a consistent way. I’ve always had an engineering mindset, I grew up in a family of engineers. It’s just the term I prefer.
I’m not sure why that’s noteworthy. We have a progressive taxation system with a tax-free allowance and various deductions for things like dependents that reduce taxes at the bottom of the income range. So there is always going to be some number n which is the ratio between the amount of taxes paid by higher income group X and some lower income group Y and... sometimes it’s going to be 7. Is 7 too big? Too small?
Median income tax is about 10k on 65k of income so people in the bottom 50% pay between 0 and 10k on between 0 and 65k of income.
If you’re earning 200k or so you pay a similar amount of tax on the first 65k of your income.
But yes, you pay more tax on the extra 135k you’re making. But that’s okay, because you’re making an extra 135k. You can afford it.
I do understand the concept of progressive taxation.
$65K is an average household income, but there's no way that the average household is paying $10K in federal income tax, that's laugh-out-loud far of the mark.
Let's just say that's a couple married-filing-jointly.
In 2020, you'd take first of all a $24,800 basic deduction. Then you'd pay $4,429 in income tax on the $40,200 taxable income.
If you had two kids, you'd take two Child Tax Credits for $2,000 each and pay $429 in federal income tax.
An average household with two kids pays essentially no federal income tax in 2020.
Even in the absolute worst-case, a single filer pays no more than ~$7,400 on $65,000 of income.
In 2021, thanks to the increase in the Child Tax Credit ($3000 per child or more younger children), the bipartisan Joint Committee on Taxation estimates that the average household will pay no federal income tax at all on income under $75,000 per year.
Sure, but payroll taxes (~7.5% + 7.5% employer contribution) are a thing and that's another ~$5000 (or $10,000 if you include employer contribution) that the household has to pay.
Also as grandparent mentioned, you pay exactly the same amount of taxes on your first $65K as the person making $65K does.
Wow, okay. People making 150-350k are doing just fine. The majority of people making under that amount are not looting, rioting, and collecting welfare. They are also hard working people, who are earning far less than the value they create for shareholders. You want to talk about a sucker's bet? How about working 39 hours a week for a mega corporation that earns billions in profit, but still won't pay you enough that you have to turn to the state for healthcare and food subsidies.
The notion that people making $350K are having a particularly rough time is nuts.
As for inflation, it's threatening to price people under your $150k/yr cut-off for "hardship" out of decent housing even in mediocre cities, ever, and may eventually hurt creditors some (which, I mean, that's a fine outcome according to most people, I'd think). Those with $150k+ salaries had damn well better have some assets to their name, including maybe a (mortgaged) house, and so will ride the inflationary wave alright. Those with little or nothing, on the other hand, may now never be able to afford anything. Young workers just starting out, who have high-ish income but only because they live in a place with insane housing prices, are getting screwed, too, sure, but established professionals will be fine, unless they've somehow managed not to acquire assets over the years.
Pity the normal couple with $60,000/yr household income. Believe it or not, they raise kids on that income. Go figure.
I wouldn't trade places with someone getting by on unemployment for their $12/hr job they were laid off from, certainly. I don't think they're "looting". We're clearly top-heavy on capital, given how the markets are behaving, so I think I've got a better idea of where the looting's happening.
So you're saying that it's the high earning savers that are screwed but professionals that took a mortgage will ride the inflationary wave. Got it. Everybody most be over-leveraged for the system to work.
I promise you that you are not "getting hosed" lol. The absolute silver spoonery of that statement. The people getting hosed are the essential service / warehouse workers making <$15 an hour with no paid sick leave. I can't believe you make 6 figures to stare at a screen and think you're getting bad deal. The lack of adversity on this site sometimes...
While this is written in an inflammatory tone, they key takeaways are inflation are rising and income from the government as a proportion of total income are increasing and never been higher, respectively.
Jeffrey Gundlach had a great recent presentation on these trend reversals that is worth considering:
> My honest opinion is the hard working professionals making 150-350k are getting hosed.
They...aren’t. It’s true that that group, the 92nd-98th percentile by income in the US, are bearing a somewhat heavier burden than they probably ought to in order to support the illusion of tax progressivity while hyperrich capitalists skate by relatively untaxed, but that’s very much not “getting hosed”, especially compared to the at-least-equally hardworking people much lower on the economic scale
I'd be really curious what your opinion is informed by since I don't see any data to back it up.
Those in the Top Quintile (~200k in 2010 and ~250k today, so right in the middle of your proposed hosed bracket) have seen the greatest increases in Mean Income in the last decade [^1 p.8]. Those in the Upper Income bracket (~190k in 2000 to 207k today) have seen a 20% increase in wealth in the last 30 years while lower brackets have declined [^2].
Do you have any data to backup your assertion that "being a hard working professional in this country is losing its allure, and is increasingly a suckers bet"? These jobs seem to have a much greater increase in wages [^3 Fig. F][^4 Fig. 1] (4x in the last 40 years) than those in all other lower income groups. I'm not sure how anyone could come to the conclusion that increasing wealth and top of the pile wage growth are "a suckers bet".
> Those in the Top Quintile (~200k in 2010 and ~250k today, so right in the middle of your proposed hosed bracket)
Actually, not. Your numbers are household, not individual quintiles; the proposed “hosed" bracket bracket is about about 92nd-98th percentile by individual income.
Based on numbers from the U.S. Census Bureau, over the past twenty five years, the 95th percentile income household has grown from an aggregate share of income of 21.2% (in 1994) to 23.0% (in 2019).
At that level of income and likely technological knowledge, nothing prevents you from moving somewhere else cheap, buy a house with your savings and use your professional knowledge to start a remote business.
Sure, a lot of factors to consider but I think you can find a better bang for your buck.
Go where you're treated best!
If I were American I would have renounced my citizenship long ago (mainly for the taxes on worldwide income when not resident in the USA).
Most of Europe is not much better though, it's actually pretty comparable to the USA (more expensive housing, lower salaries, cheaper healthcare).
What on earth are you talking about? I'm in that class. I'm sitting here in an air-conditioned room in a $1500 chair in a four-story townhouse looking at my window at an unobstructed downtown skyline view, sitting with a mini-fridge full of my favorite drink in arm's distance, an OLED on the wall, a king-size bed with a separate laptop right next to it so I can hop in and work laying down whenever I feel worn out. My life is fantastic.
As for mortgage cost, rates are the lowest they've ever been. I just refinanced to cut my payoff time in half keeping the payments almost exactly the same. The property values are shooting up, but I already own the property, so how does that hurt me? It's wealth, not an expense. 401k and IRA are doing fine. What do I care if the real value of the couple grand I keep in checking as bare dollars is going to be nothing in 50 years? That's a tiny portion of holdings and I'll be dead by then anyway.
I don't understand complaints like this. If anyone is getting hosed, it's people in the 40-60K salary range. Just enough to not qualify for any kind of public assistance, but not enough to not be living paycheck to paycheck and forced to rent forever at perpetually increasing prices so property owners like us can get rich.
As for other people are doing, I guess looting and rioting happened somewhere since it was on the news. But again, I live downtown smack dab in the middle of a major metro. I'm watching what these people are doing in full public view every day. Mostly, they're either living in tents next to the highway or they're out in the sun for 12 hours every single day hauling wood and stone to put up new condo developments all over the place for the benefit of homebuilders and people like me with enough money to buy downtown condos. As far as I know, the bulk of protesters in any activist movement are well-off suburbanites who can afford to take time off work or college students.
Its a “tax” (a reduction in real value held) on holders of dollar denominated assets, transferring value to holders of dollar-denominated liability.
> More so on the poor, who have fewer assets that inflate along with the money printing.
The poor tend to have most of their gross assets in tangible non-financial assets (like a car and other durable goods), which do tend to inflate with general inflation (they may depreciate independent of inflation.)
In terms of dollar denominated items, the poor tend to be net debtors, and inflation reduces the real value of that debt.
> My honest opinion is the hard working professionals making 150-350k are getting hosed. Pay the majority of taxes in this country so that other people can loot, riot, and collect welfare.
There is a lot of confusion here to unpack, but the central idea, that taxes pay for the government is the key confusion. Taxes are a means of wealth redistribution and method to curb inflation. Taxes don't fund the federal government - it can print money just fine.
At this pay level, you can easily become an asset owner. You're supposed to become a home owner and a stockholder (at least through your 401k). Don't even pretend that anyone in that range has it rough.
This is such an inflammatorily bad take that I suspect it's trolling at this point.
African Americans do not collect the majority of welfare in this country. Sops to multi billion dollar corporations like WalMart - why is that not welfare?
A trillion dollars of HNW tax evasion happens every year, simply because the IRS is underfunded and understaffed - why is that not the problem?
And isn't asset price inflation a direct outcome of inequality? Lower money velocity leads to asset bubbles - this is something we know of since the French Revolution now.
It's someone that believed the story and now sees the game has many more strings attached and the political class is throwing this promise to the dogs.
Sometimes even the beasts of burden rebel. Though it may seen they should be grateful for getting their guaranteed hay at the end of the day.
This article is not great: the entirety is like 10 bullet points with very little analysis. There has to be a better source than link at the top (WaPo's analysis seems pretty solid).
Looking at the graph though, I'm curious: why did forecasters expect a huge vertical jump in April instead of a continuation of the trend from the month before, especially with all the small businesses that went under last year.
It's because a lot of economists are as dumb as rocks. People like Larry Summers predicted a million new jobs because they are viewing the stimulus plan through the narrow and misleading lens of "output gap" and can't figure out other reasons people can't or don't work like limited mobility, housing crisis, and child care.
How much "skin in the game" do people in the other social sciences have? eg. anthropology, political science, sociology, law. Furthermore, what if they do have skin in the game, won't the retort just change to "well they have a well vested interest to lie/mislead"?
That's Axios's style. Their thesis is that most "analysis" is biased (and often wrong), and therefore they stick to just reporting the raw facts as concisely and easy to digest as possible. I, for one, love it but I understand why it may be off-putting to some.
I really hate the framing of the "Labor Shortage" narrative in general. Does supply and demand only work one way?
The Citations Needed podcast did an interesting episode on this kind of framing.[0] Although they skew heavily toward the left so take it with a grain of salt.
I'm curious to see if the heightened unemployment benefits act as a new de facto minimum wage law, but I have a feeling everything will be cut to try and force people back into the labor force before anything super interesting happens.
The labor market is not adequately explained with only Econ 101 concepts. Employers pay below the true market rate that they are capable of paying because of their market power to set prices.
Raising the cost of labor means less employment. This is really unassailable and as much as people desire it to not be true, it is. It may not show up as a straight line like an Econ 101 graph, but it's 100% there. It gets confirmed over and over again.
No, I'm not going to provide sources on this. They are everywhere.
Sure there are some places paying less because they have jobs and a choice of workers. Artificially raising the pay will yield the same number of jobs. This isn't true across the entirety of the US labor market.
Not so simple. Raising the cost of labor also means increased aggregate demand as workers make use of a higher disposable income. On the business side, capex increases as routine work is automated. As we've in prior periods, automation creates more jobs than it eliminates, whether the through higher-end tasks or through increases in demand due to fall-off in breakeven price.
One thing that I have not seen said is about the stability of unemployment.
I remember last year that there were a lot of people waiting a long time to get on unemployment due to the pandemic. Months went by before those checks came in.
Now, if you have the resources to work a job, you'll have to go off unemployment. But if that job fires you, you're stuck back in the possibly months long process to get unemployment. Sure, you could try to get another job, but that also has a time lag and other risks, and diapers don't buy themselves.
It's not about the cash as much as it is about the cash-flow. You can plan around a small amount. But variable amounts are much harder to plan for, even if the net cash may be higher in the end.
No it works both ways. When someone says there is a labor shortage it doesn't mean it's labor's fault, it just means that labor has the power to set prices. If companies want to hire they need to raise wages. If a company can't afford to raise wages, they will need to operate with less workers or shut down operations.
There are winners and losers from this dynamic so I'm sure different sides will have a narrative. But the labor shortage isn't a spin on reality, it's an observation that it is difficult to hire in current conditions.
It's a bit different with labor. When the demand for oil outpaces supply, there are commodities markets to mediate that, and I can still buy as much oil as I can afford at the higher price.
Labor is subject to search costs that create a wedge between supply and demand. It may take me a year to fill a position.
In addition to search costs, there are also onboarding costs. It may cost me 300K to train a dev and then after a year they leave.
So I may not be able to fill a spot even if I am willing to pay a price that someone is willing to accept, as the costs of finding that person and the risk of not being able to keep them may be far too high.
And that is true even if there is a large pool of people willing to work for me at the price I am willing to pay.
So the labor market is a lot more complex than the market for oil, and there are these extra costs that may balloon from time to time and cause the market to freeze up and not clear for many positions. For this reason, both employers and workers need some stability in wages and expectations sufficient to make long term plans and commitments, and when volatility destroys that stability, you get into scenarios where workers and employers can no longer find each other.
It is the flipside of a recession, where people say "there aren't enough jobs". Both the worker saying "there aren't enough jobs" in a downturn and the employer saying "there aren't enough workers" are right because the economist drawing simple supply and demand curves is omitting the complications that exist in labor markets which do not exist in commodities markets.
Looking at the chart, it has exactly the appearance I would expect. Re-employment after some kind of sudden downtrend would display the same behavior as fuel prices at retail gas stations I would think. That is to say a steep change followed by a slow movement in the other direction.
The math here is simple. Economy = vaccination rate. People aren’t getting vaccinated so we can’t return to business as usual. People who claim it’s about incentives like wages or unemployment pay are imposing their agenda on the facts. It’s all about vaccinations at this point. We vaccinate everyone or get stagflation.
I'm not sure what to think about the current situation. My wife and other local business owners I've spoken with over the last couple of months (we live on Cape Cod) are having a hard time hiring people, and they're all offering a minimum of $15-$16/hr. If the worker shortage continues, it'll compound in the summer with the tourist season, especially if the typical seasonal workers aren't available due to travel restrictions (many are international).
We're also having trouble with schools and daycares that've become used to closing at 3-4 pm and are unlikely to return to staying open until 5-5:30 pm.
It'll be interesting to see the long-term effects of this accidental experiment over the last year of UBI/shorter work hours. We're lucky enough to afford a nanny to fill the gaps along with family, but I have no idea how other people do it. Part of me hopes it's just the additional family duties and increased unemployment benefits keeping people temporarily out of the workforce for now and not a permanent trend of preferred underemployment. It's been tough seeing so many local businesses go under over the last year.
seasonal work is less desirable than full time work. also cape cod is an odd place. they have a huge need for seasonal low skilled labor but don't really have the housing to support it.
As a local business owner, at what point would you consider raising the hourly wages? I think it's a tough price-discovery exercise for business owners because you don't necessarily have workers proactively giving you their asking price; you're having to place bids and then wait N days to figure out whether the bid was sufficient (or not).
Then there's also the decision of whether to pass those costs downstream to your customers.
There hasn't been any UBI the past year. UBI means you can work without losing your benefits. What we have now discourages work because it's effectively an 80-100% tax rate on earnings.
A friend who was a waiter is not going back to work because her salary depends (75% of it) on tips, however many households switched to food delivery services.
Once people start going to restaurants again, in large enough numbers, employees who depend on tips will return. Base salary for servers is peanuts otherwise.
Restaurant workers in particular are facing higher risk for less pay (fewer customers == fewer tips), and working conditions in restaurants were already terrible.
From the article : “We are so sick and tired of [restaurant owners] assuming we want a handout. We want to work, but we also want to be treated like human beings. We haven’t been for way too long.”
Since a lot of policy was based off of these employment forecasts which turned out to be way off, what are the expected adjustments to the policies in place?
Tough position for Biden. The poor would rather prolong rent forgiveness + stimulus. The rich love the negative employment numbers since it implies lower rates for longer, which means more gains in the market.
Any claims about labor shortage, hiring difficulties, "no one wants to work", etc. should always be read with the automatic addendum "...at the price we want to pay".
I was making $12/hour as a bus boy at a restaurant in the 90s. $15/hour is pathetic. Target is _starting_ at $15/hour in the rural midwest, near me.
Yes, maybe their restaurant (and other biz) margins are small but they're business people, get creative. Biz is not entitled to cheap labor.
Adjust prices, raise wages, have managers do work.
This is the first time in decades I've heard of labor having an actual choice.
People should be able to be picky about what job they want to work. Do you want to work a service job during COVID? Pay is crap, people are crap to employees, and you get the chance of getting a deadly virus. Sign me up!
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[ 3.2 ms ] story [ 240 ms ] threadThey probably shouldn't...
1) Humans are on average bad with numbers. This could have unforseen negative impacts.
2) Your average person can't define causal inference, let alone make a well-informed one.
3) Few of the presenters (news people) have a grasp on 1 & 2. If they do, also communicating that becomes a challenge that requires solving 1 & 2.
https://projects.fivethirtyeight.com/jobs-report-growth-unem...
As a numerate person I would personally appreciate it if all statistical claim had a link to a Jupyter Notebook and the associated data. (Though perhaps Observable would be the best choice here since it is run on the web).
Also, IIRC the CARES Act suspended the requirement to look for more work if you've been furloughed/laid off. A friend of mine who works in a restaurant was getting paid more to go surf at the beach than he used to get paid to go to work. When his employer opened up, my friend was understandably not motivated to get scheduled for very many shifts.
USA is still #3 in the world for cases per day.
Countries with slightly fewer cases than USA (Turkey, France, Germany) all have MUCH smaller populations so it doesn't make sense to say they're doing "better"
>Would it be better to point out that just under a 1000 people a day are still dying from it in the US?
No, any sort of absolute count is going to be equally misleading. For example my city had 5 covid deaths yesterday. Does that mean that we're 200x safer than the rest of the US? Of course not, it just means that you're comparing two populations of different size.
>What's the better metric?
Anything that's normalized by population size. For example per capita new cases or per capita deaths.
The question was rhetorical. There is no better metric for showing the pandemic is still on going. If you have 50k cases a day, and 1000 deaths a day, it doesn't matter if other countries are lower or higher, it's clearly on going.
How many deaths per day would you use as a threshold for being past the middle of the pandemic?
From what I see around me there a huge number of unfilled jobs because people are making more money from unemployment than from jobs.
Yes, the job could pay more, but that has its own set of pros and cons. It's almost acting like a backdoor minimum wage, but worse, because some people would rather make a bit less and not work at all. (I'm not saying that's you - I'm talking in generalities here.)
If the extra unemployment benefits from the CARES Act was just changing the unemployment pay to 100% your prior pay, it wouldn’t’ve been as big an issue. But for someone making $300 a week could possibly get $800 through unemployment (~$200 for unemployment plus $600 “bonus”).
The CARES Act suspending the “search for work” requirement didn’t help either. It was necessary at the time as there were no jobs available, but I think it is definitely time to reevaluate that. It encourages people to not go back when the business opens up because they’ll not only have to go back to work, but they’ll be making less.
It takes a one mutation to make current vaccines ineffective. We also don't know how long immunity will last. If it's only a year or two then without eradicating everywhere it won't go away in the US either.
It's work in a hot environment where you have to wear pretty significant PPE all day. Very uncomfortable, manual labor.
See the answer to “My employer has remained open because it is essential. I’m not sick, nor is anyone in my household sick. I do not have children or care for someone who cannot care for themselves. However, I’m afraid of getting coronavirus from customers coming to the store, so I quit and filed for unemployment. Can I obtain benefits under the CARES Act?”
I don't have actual data, which is obviously not a great position to be in, in a discussion, but I saw a TON of stories from restaurant owners who could not open solely because all the employees left since they made better money by not working.
I’ve seen restaurant owners saying they can’t hire people, I haven’t seen restaurant owners saying people quit for unemployment. If it’s the case that the restaurant furloughed or laid off people I don’t see why they expect the state to intervene to help them. Socialism for me, but not for thee?
> .. as soon as the very generous unemployment came out she had dozens of people quitting. A lot of people prefer unemployment to menial jobs.
This comment:
> ...after last March they furloughed (laid off? not sure) a lot of people that they subsequently couldn't get to come back
Did it not occur to you that your statements are entirely contradictory? What actually happened here? Did people quit to get that sweet, sweet government lucre or were they "furloughed" ("no, we're not firing you, we're just not going to pay you or give you work for an indefinite period") and then decide that, gee, maybe they didn't want to come back to work for a company that kicked them to the curb the second things got tough?
> A bright spot: The labor force grew significantly, a counterpoint to the narrative that generous unemployment checks are keeping Americans out of the workforce.
https://fred.stlouisfed.org/series/AWHAELAH
It seems likely that unemployment benefits are contributing to this labor shortage.
edit: why the downvotes?
The downvotes are because the haves want the have nots to shut up and get back to work for them. It’s the equivalent of taking legitimate points raised by workers and responding with stop being a smart ass.
Also, many day cares are still “temporarily” closed, operating at reduced capacity, not taking new children, or have been permanently shuttered due to the pandemic.
This report from Pittsburgh is a good example: https://www.bizjournals.com/pittsburgh/news/2021/05/04/how-l...
Usually they are also in higher COL areas as well so I'd assume they pay more in Tax/Rent etc.
That being said, it's long been time for In-n-Out to stop using American cheese and switch to Cheddar, but that's a whole industry problem...
Most Americans don't have that option, sadly.
> it's long been time for In-n-Out to stop using American cheese and switch to Cheddar
Please no—American cheese melts better. Or you need to have heavily processed cheddar to melt as nicely, and then there's not much of a difference.
Rents might be high in Southern California, but the bulk of their rapid expansion was in the 70s and 80s when land was still reasonably cheap and they may actually own many of their own buildings.
Relying on low skill jobs to provide higher compensation without changing the underlying value prop of the employee seems to undermine fundamental economic principles.
Cooks at higher end restaurants, however, are skilled jobs. It takes years of knowledge and practice to master some culinary techniques, hence they are harder to replace, their work product can be sold for greater profit, and the individual will be able to obtain higher pay.
The same applies construction and most Amy other industry. Some jobs are low skilled, not requiring prior experience or skill, but many are skilled and can demand higher wages. This system incentivizes the individual to learn new skills, gain knowledge, try new things, and thereby gain a access to opportunities that pay higher wages.
Walmart, Sports Authority, D&B Supply, and Albertsons on Fairview and Eagle. Lowes on Eagle. All were $18-$20 some with bonuses.
Maverik on Fariview and 5 mile, Maverik on Fairfield and Cloverdale.
Both Walmart's on Overland.
Gemstate metals was looking for machinists.
That's the problem here. It's not the fault of the businesses.
$20 hour inconsistent gig work isn't the same as a $20 salaried job.
There was even a union electrical apprenticeship, which had severe competition, only hired a few people a year, and required all manner of tests all required within 1 day of the event which was impossible to have. (Color blindness test, high school transcripts, etc) the guy really didn't care to be there.
>"The thing they are fighting against is people are getting a lot of money in stimulus so there is no desire for them to work."
A healthy economy is one where people have the flexibility to be choosey and places that offer shit-jobs have to change or go out of business.
Please define "a lot of money".
>> so there is no desire for them to work
Those lazies, why won't they work for peanuts?
>> Where I live there are tons of people looking to hire at $20/hr and they are getting zero applicants.
Source please, if you will.
I find it offensive and sad that you implied I called someone lazy, I didn't. I stated that competing with free money is challenging and is what is making it hard to find employees. Why work for $20/hr when you are getting unemployment benefits that nears $14?
EDIT: Apologies, that was a lazy comment. What I meant to say was "I found your comment to be laughable at best and ill-willed at worst."
If you are still into having a discussion with me, even though I offended you, can we make it revolve around the concept of "socialism" and the reasons behind many US citizens being afraid that going down the path of looking out for each other will lead to the US becoming The Soviet Union?
$20/hour * 40 hours/week * 50 weeks is $40k/year.
This is life changing amounts different.
Considering a living wage is considered $14/hour for Idaho[0] for a single, unmarried, no kids adult, I think the bigger problem is probably not unemployment, but with businesses not realizing that their wages are not competitive for labor against almost anything else.
You can't pay the median or worse and expect hiring to be quickly, especially in Boise - a growing urban area that is probably well outside the state's average.
[0]: https://livingwage.mit.edu/states/16
But like you said, it's a worthless anecdote.
So does taking a shit job and that being in your employment history.
From the employee perspective it is a lot easier to monitor the job market and actively seek out employment while not employed.
It’s true unemployment is not enough for most people to pay their bills, but that is also true of a lot of full time employment...employers can blame unemployment for being unable to fill positions but if your full time position can’t compete with unemployment benefits the answer isn’t to take away a minimal safety net so employers can force shit wages and no benefits on workers...at best the employer gets the employee they wanted below a living wage and it’s left society as a whole with a significant number of unemployed works with absolutely nothing and not even enough shit jobs with shit wages to employ them all.
There is a reason your comment was downvoted, hint it’s not because people agree with you, and acknowledging a premises is correct while the conclusion is wrong is not the same as agreeing with you (but you knew that).
Thanks for agreeing they both have a stigma. You seem to be struggling to make up an example where being employed has a worse stigma than being on unemployment though.
Your quantitative claim contradicts that characterization.
> - at an extra $600, about 40% of workers would make more on unemployment than at their job
Since what I reported was the rough policy target was that the average worker would be making the same with the boost, only 40% and not approximately 50% making more with the boost isn’t me overselling, if anything, it is the opposite.
A couple of states are tapering off Covid relief funds so we'll see how that affects worker availability.
Provided you can, i.e. your kids' school isn't still shut down or something so you have to stay home to watch them.
Seems like things are working exactly as they should in a modern society. Business needs to pay a living wage to attract workers.
All they're saying is they're used to being able to dictate terms and they have less power to do that right now. It's almost as if there was some sort of global crisis that forced everyone to re-evaluate their priorities, and they realized that working for slave wages in dangerous work conditions for companies who demonstrably don't care about them, wasn't a great idea if you could avoid it.
I could offer $250k salaries to each line cook in the restaurant, but then I would have to charge something like $750 per entree. Such a business would fail to attract customers at that price and have to close.
My example was hyperbolic to better draw attention to the principle.
The principle applies, as you admit, that the cost increase would need to be passed onto the customer, who in a competitive business environment will likely chose the lower cost option over two products of similar quality.
If the employer did offer a wage increase, it would need to fit in the overall business ecosystem. For small restaurants maybe they can only afford a $2 raise while breaking even. For the local car wash, maybe $1.25 is the limit. By increasing the wage to an arbitrary number ($15/hr), this ignores the market principles that each business operates under.
Another thought experiment: why only $15? Why not $25? Or $50? Wouldn’t that be better? To set a limit already admits the principle holds and therefore any solution without nuance is unlikely to result in a good outcome.
Don't these arguments apply any time the minimum wage is debated? I heard these same arguments in 2007, and the economy didn't implode (well, not because of the minimum wage). Why did we set it to $7.25 over $6.55? Why did we set it to $6.55 over $5.85? The minimum wage is already set, so the "market principles" have already been violated, yet the industry remains and is profitable.
> I think you underestimate how small margins are at most restaurants.... The principle applies, as you admit, that the cost increase would need to be passed onto the customer, who in a competitive business environment will likely chose the lower cost option over two products of similar quality.
No, I don't underestimate it. But I think if workers can't be paid enough to comfortably afford rent and healthcare then there should be no profit whatsoever. If someone is making a profit while someone else can't afford housing, then something is wrong.
I say set the minimum wage at a point that allows people some dignity, and let the market sort the rest out. Restaurants will set a price and customers will choose whether or not to pay it. Those restaurants that have a compelling menu at an acceptable price will prosper, others will fail and be replaced. Eventually an equilibrium will be reached as higher prices are normalized.
As a customer of restaurants, I can tell you I almost never care about price -- it's all about food and experience. I'm going to a restaurant later today and I'm going to pay 25% over the price of the meal so I can assure the waiter gets the cut they deserve. If that restaurant raises their prices 30-40% to pay their workers more, I will still eat there because I want the food and I don't want to cook.
That just means your business model is unsustainable.
Or add "... who are able to generate more value than they expect to be paid".
Businesses exist to make a profit, and will gladly hire people who make them money. A typical waiter just doesn't generate enough value to justify paying them a wage that will compete with what they're currently being paid to sit around and freeload.
One has retail hospitality jobs open. Total take home pay is $80k annually. People won't even show up for interviews. He's never seen anything like it.
Another is a manufacturing company. Starting pay is $20/hour for someone who can show up and use a tape measure. They're trying to add another shift of production to meet demand but can't get labor.
There's a popular narrative of "poor business owner! Try not paying minimum wage!" but this is mostly coming from people who don't have first-hand experience in hiring, don't know business owners trying to hire less-skilled workers, and believe these reports are coming from people attempting to offer just the minimum wage.
Financial incentives are not working. I'm not convinced it's only UI - it could be childcare as well, or reticence about COVID, or a mix of all above plus more. But it's clear it's not fictional, and it's clear it's not just a matter of not paying minimum wage.
Also $17.50 is an incomplete picture. How many hours per week? Any benefits? I would bet a years salary that it is <40 and no benefits. Would you take that job?
/s
That sounds more like inflation than productivity actually going up.
https://www.google.com/search?q=bozeman+montana+wendy%27s+hi...
Also, I don't understand why $13 is "obviously pathetic". I make a little over $15 an hour and I get by just fine.
This isn't a competitive environment.
$80k/yr for that? Risking my health (or even death) from COVID, guaranteeing damage to my mental health from the abuse? Yeah, pass.
I know less about the manufacturing sector, but from what I do know, it's going to have similar problems: you have to be there in person, and because it's widely considered to be "lower-class" work, there's a higher likelihood than average of abusive behavior toward workers.
Unemployment benefits are not causing the disruptive effects, they're (to some extent) protecting workers from the disruptive effects, which is exactly what they're supposed to do. They are not a handout, they pay for themselves historically; we should let them work.
I have the feeling there's quite a few “predictions” during this pandemic that are off. Where people or the economy have acted contrary to popular beliefs or rational modelling.
233 536 770(P) 266(P)
https://data.bls.gov/timeseries/CES0000000001?output_view=ne...
For vaccines coming online and people _starting_ to get back to normal, it doesn't seem like a stretch to expect a number higher than this.
Dogecoin, a meme and joke, went from a quarter of a cent last year to 66 cents today.
And the second most popular job in today payrolls were Casino workers, at an staggering 72k people.
Something must be seriously wrong when people think it is wise to dump money on memes and casinos!
[0] https://en.wikipedia.org/wiki/List_of_countries_by_the_numbe...
My point is, take these numbers with a grain of salt.
Initially, from what I read about Dogecoin, I thought Dogecoin was an inflationary junk coin since it produces 5billion tokens per year. However, in considering the total supply, this is a lesser inflationary rate (not CPI--just creation) than the USD since this works out to around 4% anually.
I do still think Doge is a poor currency, but I don't see it being much worse (I cringe writing this knowing I'll be blown up) than fiat dollars other than major acceptance.
Either way I completely agree. Something is wrong.
It's not entirely illogical either if you assume the marginal utility of money is discontinuous and there is a jumps around at certain thresholds such as being able to afford a reasonable home.
It is entirely possible that cheap financing results in higher down payments which in the end actually fuels a savings craze that drags inflation down.
I also suspect that over the long term a lot of products are going down in price and housing costs like rents are dragging the CPI up.
“ Work hard! Don’t worry if we print money and triple the cost of your house and new mortgage! You are in the top 15%! Look your class only pays 20% of the taxes, never mind all that money we printed! It’s not a tax!”
There’s a serious level of subversion about what’s going on economically in this country.
Spend it, which creates new jobs.
Invest it, so businesses can create new jobs.
Lend it, so borrowers can spend it on your behalf.
Do nothing and let people stay unemployed.
Considering the lack of demand for credit indicated by low interest rates, lending is almost the same as doing nothing.
The last option causes deflation which requires the Fed to step in and increase the money supply until inflation hits the target inflation rate of 2%. Right now it is around 2.6% which is pretty much as perfect as it gets. Not too low, not too high.
Highly simplified: People are stealing USD and the Fed has to compensate for the loss except the Fed is distributing the new money very inefficiently which causes collateral damage in the asset markets.
Anyway, remind yourself of how you couldn't afford that $80-150/mo gym/class. How you didn't go on a real vacation for years because it took 8mo+ to save up for one. How you probably drove a car that constantly broke down because you couldn't get a loan on something decent. How you had to save money from your $6/hr job to eat Burger King on your lunch break across the street. How a huge chunk of your income went into driving yourself to work (gas/maintenance). How you couldn't afford a place without 3-4 roommates. How you went for years without buying a set of 4 tires, instead buying 1 used tire to replace your bald tire before the police/rain gets you.
I'll take the 150k stresses over my previous $6-12/hr stresses where I felt like I was spinning tires and never, ever going to get out of that.
You would choose welfare over a $150K salary?
Nothing if it's voluntary.
> I grew up upper middle class with parents who paid for college.
I didn't.
> I could have just as easily been born to a family with 0 wealth and had to start working at a young age and do that until I died.
I was and would likely not end up dead with 0 wealth if I can manage to keep some of what I'm now generating.
And evidently your luck, as well.
> evidently your luck, as well.
I worked at a Burger King, a hardware store, an apartment complex (plumbing toilets and whatnot), and finally put my self through college. It was an exhausting climb the whole way and I _worked_. I was never let go, and I hardly (like a $1500 a pell grant once) received assistance because I _made too much_ in my day job when I finally did go to school.
I wasn't terribly lucky other than I `lucked` into a work ethic and I `lucked` into being born in a country that still had enough of a free market that I _could_ work my way up.
And thinking on it now I don't think I was that well served by my schooling. I feel if anything I was held back in an _almost_ deliberate effort to homogenize me.
I should add that I also support local farms and businesses now that I have the funds.
I'm guessing you’ve never lived on welfare. Having done that and had a.personal income that, while short of $150K, is a sizable fraction of it (and been everywhere in between), increasing real income has involved a monotonically increasing quality of life. I’m definitely into the range, even short of $150K, where the marginal difference from each additional $ of income is much smaller than at lower levels, but it is still not negative.
https://taxfoundation.org/summary-of-the-latest-federal-inco...
Chill.
It's banks and REIT's and corporations and foreign investors buying up houses, not poor people.
The majority of money printed was loaned out to banks and other institutions, which promptly put that money back into the stock market and other investments.
Think about it this way. Would you rather have your investments crash and pay the same taxes, or take the tax increase and also have your investments go up? If you would prefer the second, you benefited from the government's actions.
In fact, I feel the lower class were the ones that the government took from, in the form of impending inflation.
My turn: do you expect more than half of all households in America to be paying no federal income tax at all?
Seems like instead of collecting $x amount of tax from them in order to give it back in benefits, we could just not have them pay tax (which is the case currently).
The real answer is - raise their wages, and then they will be paying more in federal taxes (just like the upper quartiles are).
USA lower tier professionals (Doctors, Lawyers, Programmers, have a anticompetitive racket - they should all get a 20-30% net haircut in salary, tech should be regulated, we should increase admission to med-school and allow nurse practitioners to serve as doctors, etc.). I say this as someone who benefits greatly from the current system, but also realizes how fucked up it is.
Finance people should be taxed out the wazoo - watching stocks tick up and down on the market is a waste of time and most of them defraud people anyway, estate and wealth tax should be a thing, if they try to denounce citizenship to get away, immediate tax of 50% of [unrealized] profits (we currently do 20%).
Even that wouldn't get us back to how things were in the 1960s, but it would at least be closer, and probably makes things better in the mean time.
Programmers get paid a lot because the market is extremely competitive. Doctors get paid a lot because healthcare in the US is essentially one massive cartel and incredibly inefficient as a result. In most countries, doctors and programmers make similar salaries.
I have never seen him produce a working program in any dot net language, or for that matter any procedural language except maybe visual basic for applications (excel macros maybe). I think he tried to learn php but gave it up. He also calls himself a software engineer. He makes some good money tho, he's in management.
I rarely see this with other engineering disciplines. Its always the computer programmers lol
Just 2 cents from the peanut gallery!
I don’t really care what you call me but I will call myself a software engineer because I have a depth of understanding in how to solve problems with software in a consistent way. I’ve always had an engineering mindset, I grew up in a family of engineers. It’s just the term I prefer.
Median income tax is about 10k on 65k of income so people in the bottom 50% pay between 0 and 10k on between 0 and 65k of income.
If you’re earning 200k or so you pay a similar amount of tax on the first 65k of your income.
But yes, you pay more tax on the extra 135k you’re making. But that’s okay, because you’re making an extra 135k. You can afford it.
$65K is an average household income, but there's no way that the average household is paying $10K in federal income tax, that's laugh-out-loud far of the mark.
Let's just say that's a couple married-filing-jointly.
In 2020, you'd take first of all a $24,800 basic deduction. Then you'd pay $4,429 in income tax on the $40,200 taxable income.
If you had two kids, you'd take two Child Tax Credits for $2,000 each and pay $429 in federal income tax.
An average household with two kids pays essentially no federal income tax in 2020.
Even in the absolute worst-case, a single filer pays no more than ~$7,400 on $65,000 of income.
In 2021, thanks to the increase in the Child Tax Credit ($3000 per child or more younger children), the bipartisan Joint Committee on Taxation estimates that the average household will pay no federal income tax at all on income under $75,000 per year.
Also as grandparent mentioned, you pay exactly the same amount of taxes on your first $65K as the person making $65K does.
https://www.taxpolicycenter.org/sites/default/files/styles/o...
As for inflation, it's threatening to price people under your $150k/yr cut-off for "hardship" out of decent housing even in mediocre cities, ever, and may eventually hurt creditors some (which, I mean, that's a fine outcome according to most people, I'd think). Those with $150k+ salaries had damn well better have some assets to their name, including maybe a (mortgaged) house, and so will ride the inflationary wave alright. Those with little or nothing, on the other hand, may now never be able to afford anything. Young workers just starting out, who have high-ish income but only because they live in a place with insane housing prices, are getting screwed, too, sure, but established professionals will be fine, unless they've somehow managed not to acquire assets over the years.
Pity the normal couple with $60,000/yr household income. Believe it or not, they raise kids on that income. Go figure.
I wouldn't trade places with someone getting by on unemployment for their $12/hr job they were laid off from, certainly. I don't think they're "looting". We're clearly top-heavy on capital, given how the markets are behaving, so I think I've got a better idea of where the looting's happening.
Jeffrey Gundlach had a great recent presentation on these trend reversals that is worth considering:
https://youtu.be/gy65QvvsXPI
They...aren’t. It’s true that that group, the 92nd-98th percentile by income in the US, are bearing a somewhat heavier burden than they probably ought to in order to support the illusion of tax progressivity while hyperrich capitalists skate by relatively untaxed, but that’s very much not “getting hosed”, especially compared to the at-least-equally hardworking people much lower on the economic scale
Those in the Top Quintile (~200k in 2010 and ~250k today, so right in the middle of your proposed hosed bracket) have seen the greatest increases in Mean Income in the last decade [^1 p.8]. Those in the Upper Income bracket (~190k in 2000 to 207k today) have seen a 20% increase in wealth in the last 30 years while lower brackets have declined [^2].
Do you have any data to backup your assertion that "being a hard working professional in this country is losing its allure, and is increasingly a suckers bet"? These jobs seem to have a much greater increase in wages [^3 Fig. F][^4 Fig. 1] (4x in the last 40 years) than those in all other lower income groups. I'm not sure how anyone could come to the conclusion that increasing wealth and top of the pile wage growth are "a suckers bet".
[1] CRS The U.S. Income Distribution: Trends and Issues - https://fas.org/sgp/crs/misc/R44705.pdf
[2] Pew Research "Trends in income and wealth inequality" - https://www.pewresearch.org/social-trends/2020/01/09/trends-...
[3] Economic Policy Institute - "State of Working America Wages 2019" https://www.epi.org/publication/swa-wages-2019/
[4] CRS "Real Wage Trends, 1979 to 2019" - https://fas.org/sgp/crs/misc/R45090.pdf
Actually, not. Your numbers are household, not individual quintiles; the proposed “hosed" bracket bracket is about about 92nd-98th percentile by individual income.
The figures get even worse in this case. The 95th percentile of individual income has far greater wage and wealth growth over the last 40 years.
This is probably 90% of the reason for the crypto boom.
At that level of income and likely technological knowledge, nothing prevents you from moving somewhere else cheap, buy a house with your savings and use your professional knowledge to start a remote business.
Sure, a lot of factors to consider but I think you can find a better bang for your buck.
Go where you're treated best!
If I were American I would have renounced my citizenship long ago (mainly for the taxes on worldwide income when not resident in the USA).
Most of Europe is not much better though, it's actually pretty comparable to the USA (more expensive housing, lower salaries, cheaper healthcare).
As for mortgage cost, rates are the lowest they've ever been. I just refinanced to cut my payoff time in half keeping the payments almost exactly the same. The property values are shooting up, but I already own the property, so how does that hurt me? It's wealth, not an expense. 401k and IRA are doing fine. What do I care if the real value of the couple grand I keep in checking as bare dollars is going to be nothing in 50 years? That's a tiny portion of holdings and I'll be dead by then anyway.
I don't understand complaints like this. If anyone is getting hosed, it's people in the 40-60K salary range. Just enough to not qualify for any kind of public assistance, but not enough to not be living paycheck to paycheck and forced to rent forever at perpetually increasing prices so property owners like us can get rich.
As for other people are doing, I guess looting and rioting happened somewhere since it was on the news. But again, I live downtown smack dab in the middle of a major metro. I'm watching what these people are doing in full public view every day. Mostly, they're either living in tents next to the highway or they're out in the sun for 12 hours every single day hauling wood and stone to put up new condo developments all over the place for the benefit of homebuilders and people like me with enough money to buy downtown condos. As far as I know, the bulk of protesters in any activist movement are well-off suburbanites who can afford to take time off work or college students.
Its a “tax” (a reduction in real value held) on holders of dollar denominated assets, transferring value to holders of dollar-denominated liability.
> More so on the poor, who have fewer assets that inflate along with the money printing.
The poor tend to have most of their gross assets in tangible non-financial assets (like a car and other durable goods), which do tend to inflate with general inflation (they may depreciate independent of inflation.)
In terms of dollar denominated items, the poor tend to be net debtors, and inflation reduces the real value of that debt.
And also, of course, recipients of the new dollars.
There is a lot of confusion here to unpack, but the central idea, that taxes pay for the government is the key confusion. Taxes are a means of wealth redistribution and method to curb inflation. Taxes don't fund the federal government - it can print money just fine.
African Americans do not collect the majority of welfare in this country. Sops to multi billion dollar corporations like WalMart - why is that not welfare?
A trillion dollars of HNW tax evasion happens every year, simply because the IRS is underfunded and understaffed - why is that not the problem?
And isn't asset price inflation a direct outcome of inequality? Lower money velocity leads to asset bubbles - this is something we know of since the French Revolution now.
Sometimes even the beasts of burden rebel. Though it may seen they should be grateful for getting their guaranteed hay at the end of the day.
Looking at the graph though, I'm curious: why did forecasters expect a huge vertical jump in April instead of a continuation of the trend from the month before, especially with all the small businesses that went under last year.
And yes, the last time we made public policies based on imperfect anthropology (Nazi Germany, Apartheid SA or Rhodesia) it was a disaster.
The Citations Needed podcast did an interesting episode on this kind of framing.[0] Although they skew heavily toward the left so take it with a grain of salt.
I'm curious to see if the heightened unemployment benefits act as a new de facto minimum wage law, but I have a feeling everything will be cut to try and force people back into the labor force before anything super interesting happens.
[0] https://citationsneeded.medium.com/episode-135-the-labor-sho...
At the expense of full employment.
The labor market is not adequately explained with only Econ 101 concepts. Employers pay below the true market rate that they are capable of paying because of their market power to set prices.
No, I'm not going to provide sources on this. They are everywhere.
Sure there are some places paying less because they have jobs and a choice of workers. Artificially raising the pay will yield the same number of jobs. This isn't true across the entirety of the US labor market.
There is also a labor market outside the US that puts a ceiling to US wages.
I remember last year that there were a lot of people waiting a long time to get on unemployment due to the pandemic. Months went by before those checks came in.
Now, if you have the resources to work a job, you'll have to go off unemployment. But if that job fires you, you're stuck back in the possibly months long process to get unemployment. Sure, you could try to get another job, but that also has a time lag and other risks, and diapers don't buy themselves.
It's not about the cash as much as it is about the cash-flow. You can plan around a small amount. But variable amounts are much harder to plan for, even if the net cash may be higher in the end.
There are winners and losers from this dynamic so I'm sure different sides will have a narrative. But the labor shortage isn't a spin on reality, it's an observation that it is difficult to hire in current conditions.
Labor is subject to search costs that create a wedge between supply and demand. It may take me a year to fill a position.
In addition to search costs, there are also onboarding costs. It may cost me 300K to train a dev and then after a year they leave.
So I may not be able to fill a spot even if I am willing to pay a price that someone is willing to accept, as the costs of finding that person and the risk of not being able to keep them may be far too high.
And that is true even if there is a large pool of people willing to work for me at the price I am willing to pay.
So the labor market is a lot more complex than the market for oil, and there are these extra costs that may balloon from time to time and cause the market to freeze up and not clear for many positions. For this reason, both employers and workers need some stability in wages and expectations sufficient to make long term plans and commitments, and when volatility destroys that stability, you get into scenarios where workers and employers can no longer find each other.
It is the flipside of a recession, where people say "there aren't enough jobs". Both the worker saying "there aren't enough jobs" in a downturn and the employer saying "there aren't enough workers" are right because the economist drawing simple supply and demand curves is omitting the complications that exist in labor markets which do not exist in commodities markets.
We're also having trouble with schools and daycares that've become used to closing at 3-4 pm and are unlikely to return to staying open until 5-5:30 pm.
It'll be interesting to see the long-term effects of this accidental experiment over the last year of UBI/shorter work hours. We're lucky enough to afford a nanny to fill the gaps along with family, but I have no idea how other people do it. Part of me hopes it's just the additional family duties and increased unemployment benefits keeping people temporarily out of the workforce for now and not a permanent trend of preferred underemployment. It's been tough seeing so many local businesses go under over the last year.
Then there's also the decision of whether to pass those costs downstream to your customers.
There hasn't been any UBI the past year. UBI means you can work without losing your benefits. What we have now discourages work because it's effectively an 80-100% tax rate on earnings.
A friend who was a waiter is not going back to work because her salary depends (75% of it) on tips, however many households switched to food delivery services.
Once people start going to restaurants again, in large enough numbers, employees who depend on tips will return. Base salary for servers is peanuts otherwise.
https://www.eater.com/22417344/restaurant-labor-shortage-cov...
Restaurant workers in particular are facing higher risk for less pay (fewer customers == fewer tips), and working conditions in restaurants were already terrible.
From the article : “We are so sick and tired of [restaurant owners] assuming we want a handout. We want to work, but we also want to be treated like human beings. We haven’t been for way too long.”
Yes, maybe their restaurant (and other biz) margins are small but they're business people, get creative. Biz is not entitled to cheap labor.
Adjust prices, raise wages, have managers do work.
This is the first time in decades I've heard of labor having an actual choice.
People should be able to be picky about what job they want to work. Do you want to work a service job during COVID? Pay is crap, people are crap to employees, and you get the chance of getting a deadly virus. Sign me up!