Don’t look now but the U.S. economy added over a half million jobs in January alone. Unemployment rate dropped to 3.4%. Not so many years ago 4% was figured rock bottom for modern US economy. (Historical average 5.8%. Lowest 1% in WW1.)
Great for young people. Not so good for inflation. The main tool employers have to attract workers is wages. Wage competition between companies sets off inflationary pressure.
Meanwhile vessel operators have to compete with every other industry for fewer workers. And those industries will compete right back.
it depends what you measure, only people looking for work get counted.
Total employment still below pre covid times hence why people cant find workers, did the economy suddenly expand, no.
Its just sound bites for the DNC after they changed the criteria for a recession
Yes, that’s the major problem. Boomers retiring in droves. A predicted event accelerated by COVID.
How can the economy expand if there are not enough workers? Why would we expect more jobs to be created if the present ones go unfilled because of lack of workers?
It’s not solely a U.S problem. Canada, Australia, NZ and most of Europe have the exact same problem. So it has nothing to do with the messaging of American political parties.
Everything can’t be automated. Everywhere I go things get harder to find and services take longer to perform because of lack of workers.
Want the economy to expand? Increase legal immigration. No other way.
There is inflationary pressure to raise wages. You read it on this forum. People posting that a certain tug company has suddenly raised AB wages etc.
But there is another interesting thing happening: gas prices have dropped. Used truck/car prices are dropping from their high of last year. House prices are dropping in certain areas. Lumber prices have dropped to pre Pandemic levels. The Fed increased interest rates to slow the economy down and squelch inflation. And it seems to be working.
For certain big ticket items, in certain regions, deflation is occurring, but the wage increases of the last 6-12 months won’t be reversed. So employers have a better chance of holding onto the workers they have. But if they want to steal more workers from the other guy, to expand, wages are the biggest tool they have.
That could be why the economists scratch their heads. Uncharted waters. Interesting times.
A variety of metrics point to the collapse of the american middle class and the migration of its wealth to an elite that makes up a much smaller percentage of the population. You don’t need a crystal ball to see where this is going.
Some perspective:
Looking at balance sheets and stock reports many reported increasing profit with no commensurate volume in sales. That is price gouging and surely contribute to inflation. Now you see companies, especially tech companies cutting jobs. Perhaps the cost of running on borrowed money is going up so now they can’t make it like they did before low interest money from the banks due to free money from the Fed. The Fed gifts to banks caused this inflation and the greedy companies that borrowed at low rates to buy back stock, hire extraneous people to project good times ahead are now having an oh shit moment
Just wonder how married Black men over 65 with less than high school fits in here?
I also wonder about how this class divide work?
I know there is an “Upper Class”, in economical terms at least. (AKA “the 1%” according to Bernie)
Then there is the “Middle Class”. (where nearly everybody appears to see themselves).
But who identify as “Lower Class”?? (in their own mind, least of all)
I believe there are some economical parameteres being bandied around in the media (social, partisan, or main stream) but are there any official definition that an outsider can relate to?
Yes. Productivity gains help in some industries: manufacturing, farming, mining, etc.
Productivity increases are more difficult for other industries. How does a towing company expand if it doesn’t have enough mariners to fill its existing boats? What is the productivity revolution there? For nursing and hospital workers? For small businesses that provide construction and repair services?
Where I work we increased productivity over a 100% in 20 years. We haul over twice as much cargo with only about 10% increase in crew size. But it’s been a battle to hold onto those crews, and if we wanted to grow it would be difficult to do so, because of the lack of workers.
Increasingly the wealth of the USA is digital construction, not manufacturing. How do we increase productivity there? Tech companies hire a lot of H1B workers–temporary immigrants–because we don’t produce enough people with the right skill sets here.
That could be true. Also: I live in tech-heavy Seattle. Many of may neighbors are tech people. When I ask them what is going on they mention the rapid growth of companies like Amazon and Zoom during the Pandemic. Now that the Pandemic is over, the need for the workers has decreased. Boom and bust.
The shrinking of the middle class thing is more complex than I thought. Because it is shrinking from both ends at once. The tables below are from the Pew research report cited earlier by someone, comparing inflation adjusted earning between 1970 and 2021. The first graph spells thing out:
What surprises me is this. The amount of lower income people has increased by 4%. Bad. But at the same time the number of upper income people increased by 7%. Where did these newly upper income people come from? The middle class.
So the middle class is shrinking. But is that solely because more people are becoming lower income, or is it because more people are becoming lower income AND more people are leaving the middle class and becoming upper income?
Certainly what is most concerning is that the lower income group is increasing, but I was unaware of the other trend.
Here is graph defining the earnings level for each group, in this study at least:.
I have no idea; it’s a statistical percentage. You can interpret a statistic to fit a variety of theories of your choosing.
It can’t be denied that statistically, the average American only has one testicle. Statistics are funny that way. The fact that you choose to cherry pick what is arguably the least important takeaway from the quoted article reveals something about your mental state but I will spare you my analysis.
The relevant point is that the middle class is shrinking faster than the icecaps.
Regarding ‘someone’s’ mention of a posted report, I think the study’s threshold of $219.5K is barely justifiable 3 years after its publication. With the accelerated rate of inflation and salary increases for the higher earners we’ve been witnessing, I would use a figure closer to $500K which would skew the percentages even more.
The question of what makes someone lower, middle, or upper income is completely up to debate. I’ve yet to find any hard and fast definition for any of it, let alone what makes a person wealthy or poor.
Inflation, too can be a relative thing. For a person who has paid down 25-years on a 30-year mortgage, who owns their vehicles (no payments), inflation is bad. But if that person had received raises in keeping with the CPI, then their main financial outlay (mortgage) has deflated relative to their earnings: the mortgage payment remained the same while their pay increased. So the overall effect of inflation for them may be less than the CPI, since the CPI includes housing and transportation.
On the other hand, a person who bought both a house and vehicle in 2021 is screwed. They experience the effect of inflation far higher than the CPI, because the CPI is at its core an averaging of price changes.
All of which is why I despised economics in college. It is a dice game posing as a science.
It has been well documented that identifying as a member of the middle class is a matter of perception. It’s something impossible to nail down but we can point to certain characteristics to get a handle on what it generally means in financial terms.
Like trying to pin down what is middle class what is quality of life? It used to be only rich people had cell phones, large screen TVs and new and reliable cars. Now you can have all these things and still be considered poor. I think Americans have a skewed view on what is really needed to survive be happy and have a quality life. Too much time looking at what others have and think you need to keep up. I consider my seagoing paycheck pretty good. I only work even time because any longer away from home creates stress with myself and my loved ones. I drive older cars, fix them myself do my own maintenance to keep them reliable and same with my home. This labor shortage is working for me because when i was hired for my current job the company said they did offer even time but i would have to start 28/14. I said thanks for the offer but I only work even time, sorry to waste your time. There was a 2 second pause before even time was offered. If you are selling labor it is a sellers market now.
I always wondered if it was a lack or workers or a lack of pay?
Lots staying home these days in the USA, are the handouts continuing?
Not to mention the era of cheap money that has funded loss making companies for years.
In the USA it seems like profit and share price have not been connected for years.
I joke that 50% of graduates are now working for companies that have never nor will ever make any money.
