The Great Resignation? More Like the Great Renegotiation
npr.org
npr.org
- The pandemic gave most people an unusually-long period of time at home to help them realize all the things they could have been doing (e.g. spending more time with family, not being stuck in a commute), if only their work had not been sucking up all their time and energy.
- Income vs. expenses changed to the point where people couldn’t hope to pay off their debts even if they worked. Work has not been paying anywhere near enough. At that point, what is there to lose: if you will be swamped and in debt with work, and you will also be swamped and in debt without work, at least the 2nd option means finally not having to put up with the crap from many workplaces.
Also, it has just become clearer and clearer where all the lies were told. Society did not treat “essential” workers that way at all. There was all kinds of prioritization of bottom line over employee health, especially early on. We all assumed that governments could/would do a lot more to help. Heap on all the unfilled promises for promotions, raises, etc. and many workers just have no reason at all to give a crap anymore.
They did. The US gave out trillions in aid, more than any other country except Japan (by GDP). If you were unemployed this was at least $2400/month and more if you had children - the end result is that poverty and child hunger went down in 2020 and 2021, not up like you seem to think, and everyone went shopping so hard while they were home it brought inflation back.
The reason people don't seem to know this is that journalists weren't unemployed and so have spent the last year tweeting "the government only gave us $1400 because they want us to die".
Like GP is talking about insurmountable debt, but the stats show people actually paid down debt/saved money during the pandemic.
I can't disagree that doomsday journalism has a played a role here.
Here in Canada, if you qualified for CERB, or had social spending (or other luxury spending) cut back, then you're among those who were likely to have saved more or paid down existing debt. For those who did not qualify for CERB, and did not have much pre-existing social/luxury spending, then the pandemic likely hurt them financially. And now with inflation...
IIRC a lot of new people became homeowners in 2020 or relocated somewhere cheaper, which is a positive sign. If rent is going up, that should be fixed by building more housing, which the admin is working on.
This drove me crazy when I saw folks I know on social media expressing the same sentiment. People that I know for a fact did not lose their jobs, actually drove and ate out less (saving thousands)…or some griping and complaining that they did not qualify for the payout due to their income.
The government gave out trillions. Trillions that ended up in the pockets of the country's wealthiest people, who saw their net wealth double or triple during the pandemic and corporate profits soar while working people fell further under water. Its absolutely astounding how out of touch people who look at macro numbers supplied by the FED and the White House and think that everything is swell. Everything isn't swell. There's a reason that 72% of Americans think the country is heading in the wrong direction. American household debt is at an all time high. Millions of Americans face imminent homelessness as eviction moratoriums are lifted. Its incredibly tone deaf to sing the praises of the economy when its as bad or worse than its been for many or most working people in the country in a century.
https://www.theguardian.com/business/2022/jan/17/world-10-ri...
https://www.ibtimes.com/american-household-debt-rises-all-ti...
https://www.nbcnews.com/politics/meet-the-press/downhill-div...
https://buffalonews.com/news/local/deluge-of-eviction-cases-...
Yes they did. PUA made them qualify too. Or if they didn't lose their job, there was PPP and child tax credits.
> Trillions that ended up in the pockets of the country's wealthiest people, who saw their net wealth double or triple during the pandemic and corporate profits soar while working people fell further under water.
No, this didn't actually happen. It looks like their wealth went up if you measure starting from March 2020 when there was a stock market collapse, sure, but poor people's wealth went up and their income has gone up significantly with pay raises since.
Poor people don't have "wealth". Most lived paycheck to paycheck before the pandemic hit and they lost their jobs and were forced to stay home and take care of their children. The ones lucky enough to keep their jobs didn't have their salaries increase nearly as much as inflation, which massively eroded their ability to afford even food and other basic necessities. As cited above, the world's richest people doubled and tripled their net worth during this period. Millions of working people face eviction and homelessness, today, after the recent expiration of eviction moratoriums. Its simply a willful denial of reality to reject these easily checked facts.
The large number of people retiring.
Childcare. I know many families where the lower earning parent has quit their job to parent full time because of how outrageously expensive daycare is.
Long COVID. Many people aren’t capable of the work they did before they got COVID and may not ever be capable again.
I could go on posting factors to consider but these four should never be omitted when discussing the “labor shortage”.
What evidence could be used to distinguish between the various possibilities? I don't actually know, and I'm curious.
* Large portions of the middle class and professional class got temporary, permanent, or indefinite semi-permanent Work From Home privileges, leading lots of people who'd been renting small apartments in the cities to buzz off for a larger house out in the burbs. This leads to a lot of consumption of household goods.
https://www.bankofengland.co.uk/bank-overground/2020/how-has...
I'm sure many high-earners finally got the "FU money" savings required to risk resigning without having new job lined up.
The people demanding "let 'er rip" got what they wanted - mass death to avoid personal inconvenience - and it turns out that they're getting an economic cost anyway.
This doesn't make sense given the average age of people who died from Covid is well over working age.
Well if you target 0% and any actual result below 0% happens, that's deflation which is a disaster for economies.
If inflation is say 10%. Maximum employment is near certainly impossible. Debt will be expensive and the economy crawls to a halt. Who wants to pay 10% interest on their student debt?
So where in between do you have a good price stability? It tends to be around 2%. It allows for error in measurement, it provides safe cushion.
The USA is at 7% inflation. This means the central bank is not doing their job. They by mandate should have drastically increased interest rates. Inflation almost certainly is out of control now. Looking at central bank balance sheets that are very far from balance, and looking at money supply M2. There's a solid 40% inflation coming. Lets say it sticks to 7%, this inflation will last probably 4 years.
When inflation is so high and interest rates are not. The people winning are those in debt. Which is the government and youngins. However, it also means you cant save money. You must spend money as soon as possible. Tourism is dead for many years.
Flipside, what does this also do? It pressures salaries. You are making 7% less this year but you're making 115% less the next year. So anyone in demand will be in demand and be able to buck the inflation curve.
The people most hurt by high inflation are those who just retired. They no longer can demand more $ for their productivity. Their 'safe' investments are way below inflation. They don't realize yet they cant afford to be retired.
One topic they have discussed with fair regularity lately is the current inflation rate. They point out that you can tease out what factors contribute to that 7% inflation number, and once you subtract out 2-3 specific components, components that – with some inductive reasoning – we have good reason to believe are transitory in nature, the inflation number that applies to the broad majority of fundamentals is actually closer to the fed's 2% target.
I'm not an expert in this area and I don't grok the economics on a deep enough level to be able to reproduce their argument in situ here, but their case that the fed's strategy of holding steady is in fact the most responsible thing to do to achieve that 2% target.
[0] https://about.moodys.io/podcast-series/moodys-talks-inside-e...
Sweet thanks or the recommendation!
>One topic they have discussed with fair regularity lately is the current inflation rate. They point out that you can tease out what factors contribute to that 7% inflation number, and once you subtract out 2-3 specific components, components that – with some inductive reasoning – we have good reason to believe are transitory in nature, the inflation number that applies to the broad majority of fundamentals is actually closer to the fed's 2% target.
That's kind of the complicated thing about these metrics. CPI is often criticized because they already ignore beyond important factors. Like Housing isnt included in CPI? That sure makes CPI a much lower value measurement.
Then people continue to cut out of CPI and oh look we're at 2%? No, we're not. The actual 7% is already too low, the actual number is most likely higher.
>I'm not an expert in this area and I don't grok the economics on a deep enough level to be able to reproduce their argument in situ here, but their case that the fed's strategy of holding steady is in fact the most responsible thing to do to achieve that 2% target.
The Fed in the USA is politically handcuffed and they understand what's happening. There's a geopolitical approach going on, there's a boomer retirement going on, pandemic. lots of factors.
I disagree, we are having inflation because of supply bottlenecks, not because of demand. Raising interest rates would only make it harder for companies to get finances to ensure supply chains meet demand.
That's if you even believe raising interest rates stops inflation. The correlation between interest rates and inflation over the last 40 years is pretty nil.
I've seen this multiple times but what's the underlying evidence for either side. If demand goes up and the supply can't increase to follow, it'll look like a supply issue but ultimately caused by demand. What's ultimately the difference?
Is the idea that if the supply chain is scaled for X then moving from X-2 -> X is easier then X -> X+2?
Factories, ports, and transportation were limited or shuttered completely. Warehousing and storefronts saw the same.
Impairing these network nodes, all at relatively the same time and in great numbers, had gigantic consequences.
And if the supply network is severely damaged, it ultimately means supply will go down.
> it'll look like a supply issue but ultimately caused by demand
Certainly an interesting take. Not unlike this read from somewhat recent. So you're in good company with your position.
https://research.stlouisfed.org/publications/economic-synops...
Mind you, basically everyone and their mother has announced new semiconductor fabs. Intel in Ohio recently for example.
I am curious if these are confounding factors. Maybe they will all play against each other. In terms of the 40% inflation locked in. This has nothing to do with supply chain at all. This is private debt to GDP being 235% in the USA. This is the central bank balance sheet being 8 trillion $ in the negative. This is the money supply being 7 trillion in the negative. Pretty standard Quantity Theory of Money
Supply chain isn't a factor yet, this is ~40% inflation locked in. Now if you consider supply chain struggles. It only exacerbates and makes the situation worse.
>That's if you even believe raising interest rates stops inflation. The correlation between interest rates and inflation over the last 40 years is pretty nil.
The correlation has been weaker because they are using these other options to affect macroeconomics. The central banks are beyond bankrupt, but there is no bankruptcy system for them. So instead of fixing the debt situation, you run inflation high and technically you reduce your debt at the expense of those who are holding currency. Primarily retirees are those who are harmed.
Contrast this with Larry, Larry is very rich, Larry owns stocks in multiple companies, Larry also owns many assets and has enough capital to move it into other places to protect it against inflation. Inflation goes up 10% Larry's stocks, real estate and other ventures go up 12% because people are trying to find places to park their cash to avoid losing it to inflation.
In the end Larry ends up with substantially more money because he could take advantage of the inflation, and also because of his wealth had access to credit to take advantage of the low interest rates, meanwhile Tim has blown out his savings because his car's transmission gave out and he didn't have the money to buy a new one, and now is riding at the edge of his income because everything went up in price but Tim didn't want to end up enslaved to credit card debt just to continue living and the banks won't give you loans for "hey I need to buy groceries", so he got screwed by it all in the meantime the money and purchasing power Tim lost went to Larry.
So someone help me understand where my understanding is wrong, because yes I agree in a world of airless friction-less vacuums inhabited by spherical cows the inflation is good for debtors but in the world of the real it doesn't seem that way.
Inflation is good for debtors if wage keeps pace with inflation. That's it.
Taken to the extreme: Imagine I make $100k in 2030. I take out a 1 year loan for $10k @ 5% (10% my income). Inflation is at 50%, but my wages keep up. 2031: I make $150k. I pay back the loan: $10.5k (7% my income). The loan is worth less as a percentage of my income, because of inflation and wages keeping up.
Generally speaking, wages do keep rough pace with broad CPI inflation, if the inflation is slow, predicted, and a product of monetary policy. The issue in today's climate is multifold, but: first, there are critical sectors of consumer goods which are substantially out-inflating even the elevated CPI averages (housing/rent & microchips are the biggest). Second, most CPI-calculated goods are inflating not due to monetary policy, but due to supply-shock, which is harder to mitigate with wage increases because, well, in short, companies can't make money to give workers raises if they can't sell stuff.
You've got a system where everything is connected to everything else. There is no way you're going know if it's good for you or not. I have a house with a mortgage so inflation is good. If I can keep my job and demand higher wages. But if inflation is high it will put pressure on the fed to bring it down raising interest rates. Higher interest rates mean buyers won't quality for as high of a mortgage and the price of my house goes down. Unless they can also get higher wages to offset inflation. But then the county notices that their coming up short on tax revenue because of inflation and reassess my taxes. But I need a new roof and that just got more expensive. But my 401k is doing great etc, etc.
All of these things are in balance and you have no idea which ones are elastic and which ones aren't. It's like trying to balance a 10,000 leg stool. You can maybe make some gross generalities and even then you're often going to be wrong depending on where you own your home, what businesses are location close to there. What you have your 401k invested in.
This is one way that people with debt "win" due to inflation.
Yeah, rich people benefit more. But that's always been the case. In a deflationary situation, rich people can take dividends from their investments, rather than selling at a discount. While that might be less than they'd normally get, it's much nicer than how wage workers have to work in fear of losing their jobs and having their income go to $0.
It’s not even a cup of coffee, whereas before it was a significant burden. This is true even if your real wages go down, though that’s a problem in its own.
You seem excessively focused on numbers. If you want economic doom and gloom, it's going to be because of what's actually happening, ie there's a pandemic. It's not going to be because a top line number is 7% when it's suffering from composition effects.
Personally, I think everything's going to be OK.
It's not actually clear that deflation causes economic problems for the commonly cited reason (decrease in consumer spending). I think you're right about most of what you say concerning inflation.
https://www.investopedia.com/articles/markets/111715/can-def...
The Swiss example is a poor one, given the makeup of their economy is nothing like most of the rest of the world, with its bias toward the finance sector. The finance sector would love deflation; they can take no risk and win, or they can take risks (issue consumer loans) and also increase their probability of winning.
All that being said: there's a "correlation not causation" issue in that, the US originally set its "inflation as a target" policy back in the late-60s/early-70s. Ever since then, it doesn't matter what metric you look at, they've all gone sour [1]. Theoretically, causatively, some inflation is good for consumers; but correlatively, its difficult to ignore it as a potential cause for why everything sucks. It's moreso a matter of figuring out... why.
In theory. In reality, customers have a really hard time making loan payments and their collateral no longer covers their debt. I'd say more financial firms have gone bust in a deflationary environment than an inflationary environment.
This is a chart of the US annual inflation rate. Note that consistent inflation only occurs after ~1930. https://commons.wikimedia.org/wiki/File:US_Historical_Inflat...
This is a log-scale chart of US GDP per capita adjusted for inflation and international price differences. https://ourworldindata.org/grapher/gdp-per-capita-maddison-2...
Do you see a discernible change in growth trend since the shift to consistent positive inflation? I don't.
To be clear, I'm not saying this is even close to conclusive evidence, I just feel like its a compelling enough side-by-side to warrant further questioning.
Is it absolutely clear at this point that monetary policy is to blame? It seems to me that supply-chain issues could still be a major factor.
I think it's hard to say this didn't contribute to the demand side of the equation, since a lot of that COVID relief was put into the pockets of upper middle class small business owners. I personally know of several that are spending their six-figure paycheck protection "bonus" on some of the things that are in short supply right now (i.e., houses, cars, remodeling).
In hindsight, these loans should have never been forgiven.
I've never experienced it, so can't speak too authoritatively, but it kind of feels like accepted wisdom in the economic academia: so it isn't questioned - but a lot of economics is propaganda for the powerful, IMO - would minor deflation really hurt the common man significantly? Or would it mostly just punish the rich and powerful who are extremely leveraged?
> Who wants to pay 10% interest on their student debt?
Private student debt lenders already can and do charge in excess of 10% (which seems borderline criminal to me)
In a super simplified example, you have a dollar that's going to be worth more than a dollar tomorrow (the definition of deflation). So maybe you'll wait to buy that shovel till tomorrow. But now less gets done today so tomorrow the money supply is the same but there are fewer things to buy, making your money even more valuable. Then you think, "Shit, things are really looking good for this dollar. If I just hold on to it, it's more valuable then what I was going to do with that shovel" so now you're never going to buy that shovel and pay that person to dig that ditch. So they're just sitting around without a shovel and you're not going to pay someone to just sit around. They'd be perfectly happy to dig that ditch if only they had a shovel, so you lay the person off. Now we have even less productivity and your dollar is looking really good. Next thing you know you realize that every time you shut things down your dollar is looking even better and better. You used to have to work hard for your money but now you're getting rich for not doing something. If you really want to get rich you realize having money is where it's at so you sell off all the shovels you already have for scrap metal, fire all the workers, and sit on the cash.
It's completely perverse. You aren't just paying people to not do anything, you're paying them to destroy productive things. Things that would be good for everyone but while it might be good for everyone in aggregate it's even better for you do do nothing while on a whole most people suffer. So you're sitting in your mansion, doing nothing, amassing a fortune while workers watch as ditches that need to get dug, don't, you're melting down all the shovels, they're unemployed and starving. What do you think the next step is? It's not pretty.
Yes, it has to do with how people react. Japan has been fighting it for awhile now.
http://honesteconomics.com/history/japan-and-deflation/
Japan has many problems. Their immense debt basically requires them to have a total tax burden of ~95%. That is to say, you work for the government for the entire year and you dont even get anything for it. They are just paying the interest payments on their debt and dont get services from their government.
Then you have the real factor that as boomers leave the workforce. There isnt enough people to replace them.
The only thing that seems to be keeping Japan afloat is their government owned slaves. Their judicial system still has forced labour and also a 99% conviction rate. Get accused of a crime and you're going to be producing goods for japanese companies. There's also the "technical intern training" which basically enslaves non-citizens and traps them in these jobs for life. The numbers are extremely suspect as well. The number of goods produced and recorded by big entities like their automotive industry or electronics like Sony couldn't possibly have been produced by the these government slaves. Makes you wonder where the forced labour camps are that aren't making it into the numbers.
>I've never experienced it, so can't speak too authoritatively, but it kind of feels like accepted wisdom in the economic academia: so it isn't questioned - but a lot of economics is propaganda for the powerful, IMO - would minor deflation really hurt the common man significantly? Or would it mostly just punish the rich and powerful who are extremely leveraged?
This derives from the fractional banking system. Basically a bank will lend out $20 for every $1 it has. That is to say if they have a 20:1 ratio. The central bank manages this ratio.
The idea is that in a deflationary environment, you kind of break the fractional reality. Interest rates would be bottom or negative. So you are giving money away AND deflating which means the people you give money to can just hold the free money and make money? Who wouldn't jump at such a wonderful thing?
You can see this happening. Germany's 10 year bond right now is -0.065%. So you buy that bond and the person lending you money has to give you 0.065% per year? for 10 years? LOL? Japan is positive at 0.14% but has been awfully negative lately. Obviously Japan/Germany are worse off because they were the losers of WW2. The boomers retiring harms them the most.
To avoid deflation, they are giving away free debt. Why? Debt is money. For every $ that exists, it's just debt. That's the fractional banking system.
Oh and here's the real kicker. https://medium.com/navigating-life/we-just-went-from-fractio...
The USA on March 26, 2020 eliminated the fractional banking ratio. They can lend out $1000 per $1 if they so please. What a disaster.
Keeping in mind small business is collectively the largest employer and contributor to US output... let's remember the coming rate hikes will greatly reduce available cash to small businesses that operate with credit lines, credit card debt or via home equity lines. That is a LOT of US businesses. Now add to this increased input costs due to inflation. Now add increased tax rates. You can also expect lending requirements will tighten.
So, it's worth considering the odds of worker prosperity (vs) the odds of a wave of business failures and associated unemployment/underemployment in many (but by no means all) sectors.
Personally, I think the Fed & Treasury will continue fiscal stimulus and capitulate hard in the face of a deep recession. More of the same can kicking, and we'll see what seems like prosperity. In reality, it's a delay of an inevitable downturn unless some magical productivity innovation or goods/services advance emerges to rescue the US economy.
That sounds kind of like a plan. Delay until something random happens.
It's not like they're sitting on piles of cash or other investments that are losing value. If costs go up they'll have to raise prices, just as the prices for what they're buying went up due to rising costs further upstream.
I figured the pandemic cleared out most of the small businesses that would have failed within five years anyway (half do). I wouldn't assume the small businesses left would have as much trouble with inflation as larger ones that operate at greater scales with tighter margins.
Further, they didn't adapt digitally to the take-out heavy model. The prices went up across the board, too. You get a worse meal for 10% more than you used to get a good meal.
A multivariate model of all the inputs would show that many variables matter. They're losing demand, they're paying more for inputs, they're not able to get employees, rough spiral to be in.
PPP and SBA loans kept these companies alive. The bill hasn't come due yet. This is what people don't understand.
But there has been the development and deployment of a major productivity innovation over the last two years. It's called Zoom. Or WebEx/Teams/Meet/etc. And while it doesn't work for everybody, the fact that tens of millions of people suddenly have experience working and running their business remotely means that if it does work for someone, their efficiency goes up.
I’ve just got a feeling that there will be some hidden cost to innovation at large companies (less chance encounters) and a hit to culture (building a good remote culture is really hard) over time. These are not easily quantified, and I’m not sure the costs outweigh the benefits of a remote work force (health and safety, candidate pool, retention, flexibility, etc.).
But it may be a trend in 5-10 years where companies with an in-person focus start eroding market share of remote-first established companies.
Does zoom increase or decrease productivity relative to email and phone calls? I suspect it decreases productivity.
Edit: I should have made the /s more prominent. This is sarcasm.
Can someone explain to me how this works? I'd assume wages to prices are a bit asymmetric. E.g., McD's sells 100 burgers per employee per hour at $2 each. It raises wages from $10 to $15/hour. To keep margin, it now needs to charge $2.05 - which is an increase, sure, but asymmetric: a 50% increase in wages implies a 2.5% increase in prices.
Assuming that occurs everywhere - why do workers need to now demand still-higher pay?
"While Chipotle attributes raising menu prices to the growing price of labor, some analysts point to high CEO compensation as another factor. In 2020 CEO Brian Niccol took home $38 million, $1.24 million of which was his base salary. The rest was made up of other incentives and an annual bonus."
https://www.businessinsider.com/chipotle-is-raising-prices-b....
So that CEO bonus costs ~$0.13 per salad sold.
I'm not sure of the rest of the comp required for the C-Suite, but that seems like a lot. I doubt the CEO's value is irreplaceable.
[0] https://www.laweekly.com/fast-food-using-slow-food-talking-w...
The flaw in this analysis is that you think chipotle only sells salads. They obviously don't. At least based off my experience most people order burritos/bowls, not salads.
Here's my analysis: per wikipedia, chipotle has revenue of $5.586 billion in 2019. If we divide CEO's salary by that, we arrive at 0.68 cents per dollar of revenue. According to wikipedia, chipotle doesn't franchise, so we can assume that's all food revenue. Assuming a salad that costs $10, that's 6.8 cents of CEO comp per salad sold.
The calculation is then:
Compensation / (daily consumers * days) = average cost added per person fed (and, if once per day, per item sold).
This allows us to ignore the price per item or total revenue, which might be misleading.
Funny addition to this is that the NY times just published an article on this topic with this funny anecdote:
"On a chilly Tuesday afternoon this month, James Marsh stopped by a Chipotle near his suburban Chicago home to grab something to eat.
It had been a while since Mr. Marsh had been to Chipotle — he estimated he goes five times a year — and he stopped cold when he saw the prices.
“I had been getting my usual, a steak burrito, which had been maybe in the mid-$8 range,” said Mr. Marsh, who trades stock options at his home in Hinsdale, Ill. “Now it was more than $9.”
He walked out."
https://www.nytimes.com/2022/01/21/business/fast-food-prices...
I find the making it myself option to be much better due to the increased volatility of quality. Sure, I might spend 2 hours cooking and cleaning, but I know the quality will be good 100% of the time, whereas spending $25 per person may or may not get me a decent meal because the restaurant does not have steady employee and/or is cutting corners on quality ingredients to make up for other cost increases.
I think this would hurt the middle restaurants more than McDonalds though. McDonald's has it all streamlined so they can manage costs and still delivery consistency at a low price, but the restaurants in the middle that are okay, but not top tier no longer make sense.
I am not a good cook, but I did learn to cook the things I like to eat out specifically because of this consideration. In the beginning, it was a more difficult decision, but now I wouldn't for the world trade my certain home cooked dishes for restaurant ones.
It doesn't work.
Labor is a tiny fraction of the total cost of most products. We could double wages at the low end ($30 minimum wage) and not affect inflation significantly.
In Seattle:
A mcdonalds medium fry is $4.12.
A taco bell bean burrito is $3.11
A burger king whopper meal is $12.39
Ok, makes sense - thanks
It's not only about the money. Many people are realising just now that they don't get paid enough to take all the crap they get from work.
Anecdotally, I know a handful of engineers who quit their jobs because of this. They were making good money, just not good enough for the number of sleepless nights and stressful days they were going through.
They are working in the same field, just different companies.
> I hope people who are leaving their jobs for less stressful or more accommodating jobs are increasing their income levels as well.
Again, sometimes wages are not worth the loss in health.
My goal this year is to fuck off and live in another country for 4-6 weeks, as vacation and/or as remote work. Then extend that to 2-3 months next year and ~6 months thereafter.
I'm pushing 50 and aware that I've only got so many "good" years left.
Part of me says, am I missing out on my highest earnings years? I'd like to sit on a beach but with a family, most of my days are getting groceries, doing dishes, folding clothes and driving kids around. It's not glamorous but it feels better than work life.
Folks should renegotiate. Good on them.
Because most are still not moving. If a worker won't leave under these conditions, there is no reason to ever give them a raise as you don't need it to retain them.
Some of my favorite career advice is to seek out a minimum of one interview per year. This lets you see what skills are in demand, what salaries are being offered, and practice your interviewing skills. It's a great way to educate yourself and improve long term career growth.
Such an adversarial relationship with employees causes them to leave, or at least avoid initiative or innovative solutions that are mutually beneficial to the employer and employee.
https://en.wikipedia.org/wiki/ThedaCare_Regional_Medical_Cen...
Constant articles and such with very little data. Very frustrating as a reader.
The idea that amid a pandemic and such that there are a variety of reasons seems backed up by the data, although I admit that's what I'm inclined to believe / seen.
Actual resignations are up slightly, but the idea that employees are quitting in droves is exaggerated. It’s higher than normal turnover, but the stories are written in ways to suggest that companies everywhere are gutted by employees leaving in bulk. I feel like “great resignation” was deliberately chosen to mislead people into thinking people are just walking out of their jobs, which conjures images of a minor revolution.
Of course, that doesn’t make sense because the employees are being hired at other companies. It’s likely that the worst of the worst companies are seeing a significant net loss of employees, but for most it just means turnover is up a tick.
The problem is compounded because the “great resignation” is a narrative that people really, really want to believe. Every time I brought up the actual data on HN, it’s met with anecdotes about somebody whose friend of friend’s company lost all of their employees or something. These anecdotes seem to be the fuel keeping the narrative going far beyond what the data supports.
I suspect a lot of people were afraid to move on to new opportunities for a while due to the uncertainty of the pandemic. Once enough confidence was restored, the job hopping we'd expect to play out over the course of a couple of years all happened in a few months.
With service workers, resistance to paying what it takes has a compounding effect, because being short-staffed forces people to pick up the slack for missing coworkers, and they end up burning out and quitting, or leaving for another job where the wages are better and the stress is lower.
Taking this view that nothing is going on at a macroscopic scale is like standing in the Himalayas and shouting "but the Earth is really smooth, almost spherical." While at a macroscopic scale you'd be very correct (technically oblate spheriod), the mountains and valleys localized around you are very real challenges you need to navigate. That's important if you never travel outside the Himilayas, maybe not if you're circumnavigating the Earth (just, avoid it, you know). Not everywhere is Kansas and if you ignore very real localized phenomena that may be unavoidable, you're going to have problems navigating if your specific scale can't compensate for it.
Official numbers are up ~50% between Nov 2020 and Nov 2021. IMO official numbers dramatically increased as vaccine mandates occurred and under reported.
https://www.bls.gov/news.release/jolts.t04.htm
Nov 2020 -> Nov 2021; percent change by region:
Northeast 1.8% -> 2.5%
South 2.8% -> 3.5%
Midwest 2.3% -> 3.1%
West 2.0% -> 2.8%
Most of the examples they cite are restaurants.
Yes, I think this is driven by corporate friendly mainstream media to mostly drum up for support for more corporate welfare while simultaneously painting Americans as lazy and undeserving of welfare themselves.
There's a lot going on:
- Boomers, a huge part of the workforce, are beginning to retire, and they aren't coming back
- The US is near full employment [0]. As such, workers have more power. They can "resign" and go somewhere else relatively easily, or they don't have to take poor jobs
- If a business closes right now due to lack of workers, the owner might make the claim that Americans are just lazy & don't want to work, and corporate friendly media might push that idea. However, remember, we're at a time when we're approaching full employment. The business likely wasn't attractive to workers. So is it really the (lack of) workers' fault? Or was the business just poorly run? It's hard to admit that, and easy to blame others. It's OK for businesses to fail, though. Most do.
I think it's really a matter of perspective. If you're used to having a lot of workers (some of whom don't have the luxury of looking for a good job and need to take any job they can get, just to qualify for stuff like food assistance) fighting each other for the same job, so you're able to pay them less, this is a bad situation. If you're a worker who now has many employers vying for your talents, it's a good situation, but you rarely see that story being told in the corporate media.
0 - https://www.axios.com/jerome-powell-full-employment-27be7355...
Link to the article for the subscribers: https://www.economist.com/finance-and-economics/evidence-for...
>Of course, that doesn’t make sense because the employees are being hired at other companies.
I don't think this is a valid assumption. I know a lot of people shifting from dual income families to one parent staying at home with the kids. Even more wanting to go from full time to part time positions.
The local regional/ trauma 2 hospital had (admittedly) lost more than 50% of nurses in a year, (unofficially) replaced fewer than half of those, and that was before any of the vaccine mandates were announced or deadlines set.
Vaccine politics have silenced them since then, but work shifts that were already understaffed at the start of covid with 1 MD, 2-3 mid-levels, and 6-8 nurses are still regularly making due with as little as 1 MD and 2 nurses.
Obviously nurses are a special case given... the state of things over the past 2 years. But those numbers are just absurd, even as an outlier.
I think assuming any sort of (near) net-zero shift in staffing is going to be wrong, be it within a particular office, business, profession, industry, or geographic area.
I have three contracts that drive the bulk of my revenue right now. I have a few different titles, but for simplicity, let's say Sr DevOps. As a matter of course, my oldest clients have my loyalty, but my highest bidder has my attention - work needs to be done on a Saturday night? For my oldest client, I'll do it. Conflicting deadlines come in? I'll try and take the hit (work extra hours), but the priority? The highest payer with the least micro managerial leadership.
You pay me for my experience, or you pay me to attend your meeting while someone else pays me for my experience to actually do something. It's ok, I'll wait, I charge by the hour either way, and if your meeting is useless enough, I can charge you both!
My wife is possibly taking a leave to care for her father ... she's thinking a lot about if she wants to go back. If she wasn't taking a leave that first step / time might not be there to decide to do something else.
While in the past an employee may have tolerated below market wages in exchange for the stability (safety) provided by staying still, inflation and its effects have forced their hand. Food, gas, childcare, housing, transportation, etc... have all increased to the point that they've had to make bolder decisions. And that includes looking for better jobs (wages, benefits, work/life balance).
The narrative is directionally correct. The issue is that the media (including NPR) has done everything they can think of to exaggerate it as much as possible. Once you look at the actual numbers it’s not the sea change we’ve been hearing about everywhere.
The data is being omitted because the omission leaves more room for imaginations to run with the headlines.
Having said that I'm also not writing a news article so I think the standard for not having data is a bit different. I don't expect any random person on HN to source everything ... like I would a news article.
It has the issues of small sample size and cherry-picking (i.e. the researchers tranched companies by industry and had a model of "toxic culture" that could be disagreed with if one cared to make the case), but the overall turn-head-and-squint takeaway is the pandemic forced a lot of workers to ask the question "Am I willing to risk death for the assholes I work with?" and for a lot of employees, the answer was "no." Places where the answer was not "no" had higher retention (both across industries and within industries).
What they do after that is an open question... Some choose another company, some choose another non-career avenue if it is available to them. But the point is the pandemic forced a perspective shift that hadn't happened before.
Very personal opinion ahead (and not tailored to this specific topic): that's most journalism for you. They're not here to "inform the citizen" as a noble mission. Most of the things the press publishes are greatly exaggerated and dramatic to evoke different emotions to the reader which are closely tied to an agenda. The fix is IMHO easy: stop consuming such media once you find such disparities instead of reading again and again about the same and other topics, because they'll most likely lie/exaggerate in everything else and at the end, you'll be happier and better informed by not filling your memory with bs.
Edit: typo with->which
Some news companies have even started to explicitly adopt "advocacy over reporting" models, where they don't aim to be journalists in the original source of the word, but paid propaganda subscriptions.
(yeah, yeah, there are economic incentives to do so - but there are also economic incentives to make shoddy, low-quality products and cheat your customers in other realms, and yet it's still wrong)
Of course, as the NPR article points out, people are really just scrambling to find higher-paying jobs, because of rising costs for goods and services.
U-3 is the figure most commonly reported. U-4,5,6 start to add in various groups of under-employed or discouraged workers. All of those figures are approaching pre-COVID levels and approaching the lows we saw in 2000. We also see U-6 closer to U-3 now than at many points in previous years (as the economy crashes, U-6 tends to get further away from U-3 as workers are forced into part-time or underemployment situations).
The people are rebelling against the reality of the new social contract.
Source: https://www.statista.com/statistics/1191568/reported-deaths-...
"Thus the undisputed rise in nominal or money wages following the Black Death was literally ‘swamped’ by the post-Plague inflation, so that real wages fell." https://ideas.repec.org/p/tor/tecipa/munro-04-04.html
(Wow, it’s like free karma to post these.)
It's getting very expensive to meet the ends. Wages will have to go up. When ppl think things aren't fair, they revolt.
House prices and rent go up to soak up as much wages as possible. An increase in wages for everyone helps nobody. Bidding on houses is a zero-sum game where we all bid against each other for the amount we can each just afford in interest repayments. Rent has congruent dynamics.
Of course I was not really competent enough to deal with all that technical debt so I agreed to stop.
Free money for me.
Shouldn't labor be free to move where demand is? Demand represented by fairer compensation.
I have a hard time believing these people are permanently quitting work. Rather think of it from the point of a business trying to attract new customers.
I can see the inflation affecting me in my purchases and it's not breaking me. Restaurants are charging more and it's making me re-evaluate how important dining out is if it means trapping people in a low wage job they hate.
Do I really wish for someone not to move up the ladder into a better position just so I can choose from some 50 restaurants in my area? Would my life still not support the indulgence of being able to eat out with say 25 restaurants instead of 50? And with a heftier bill but less frequently going out to eat?
I think America is finally exercising some of the benefits of capitalism for the lower class and not just for the elite.
It’s not surprising that a shrinking labor force (relative to demand) causes ripple effects. As good positions open up it triggers a musical chairs cascade as everyone else trades up for better jobs. When the music stops it seems pretty obvious that the lowest-paid and/or worst jobs are the ones that will be empty.
[1] https://www.npr.org/2021/12/22/1063104262/immigrant-workers-...
All while the world's elites have doubled or tripled their fortunes. Great Robbery would be a more apt name than Great Resignation.
And its not clear that US federal spending is causing the inflation. Month-on-month, the trajectory has been remarkably similar between US, UK and EU.
https://econbrowser.com/archives/2022/01/inflation-us-vs-eur...
Update: I think some people's views of this are skewed by the prices in the places they live. It's worth while doing the comparison of what can be bought for about 1.4 million, in Roanoke:
https://www.zillow.com/homedetails/15-Cardinal-Rd-SE-Roanoke...
and in Los Angeles:
https://www.zillow.com/homedetails/2495-Butler-Ave-Los-Angel...
That's why the concentration of wealth into a very few hands at the top marches on, not because of "wages".
If someone one owns a billion dollars of stock foobar, and foobar grows 10x, then that person is now worth 10B and "made" 9B. However they have not sold anything so while they can be reported as making 9B, they are none of it was directly cash and not taxed; at least not yet.
However, while Bezos "only" has a salary/bonus of 1.5 million a year, it is very common for executives to have total comp packages in the 10s to hundreds of millions a year. These can easily be converted into hourly rate equivalents because there is only so many hours you can work a year.
If inflation goes to zero, that does not mean prices have fallen to where they were before. It merely means prices stop increasing further.
So a temporary bout of inflation equal in magnitude to a one-time but persistent wage increase, _do_ cancel out.
Or, more accurately: if everyone has more money, wouldn't demand for goods & services go up? And per the law of supply & demand, if demand goes up, prices should go up. And, per how inflation is calculated (CPI), if prices go up, inflation is on the rise. That's a lot of steps to get from "printing money" to "the value of the US dollar decreases".
It certainly can cause, and is a component of today's, inflation. But there are three confounding factors:
First: We're in an unprecedented economic climate, yet we still apply many of the laws of economics written during the Gold Rush. Today, its reasonable to assume that many people have a "demand maximum"; outside of a few high value commodities (houses and cars being the two biggest), there's only so many CPI-included goods & services which can see significantly increased consumer demand given a larger money supply. Food doesn't really see increased demand. Housing and Living supplies don't. Maybe you splurge on a PS5 (if you can find one, see (3)) or a bigger TV.
Houses & Cars, being the two biggest areas people will splurge, and related to that, Rent, are seeing massive price inflation. Which leads to:
Second: All else being equal, the average consumer sitting near a "demand maximum" socioeconomic point should mean that they're sitting on more money in a bank account. But, most aren't. The fundamental reasoning for this is complex, but it boils down to: most of the money being printed by the Fed isn't entering consumer pockets. On the contrary, most Fed policies have hurt consumers more than helped; because of rising real estate prices, which are in no-small-part due to low interest rates, housing & rent prices have skyrocketed, which mostly hurts consumers. QE over the past decade has lined American company balance sheets to unprecedented values, but that money hasn't trickled down to front-line workers in any meaningful sense; all it really serves to do is inflate stock prices, which destabilizes the stock market and makes for fun Forbes headlines about the richest Americans getting even richer (on paper).
Third: Biggest: Supply chain shock. CPI is calculated based on the price of consumer goods. Supply & Demand overwhelm the pricing decisions of most consumer goods. Some products are experiencing demand shock; but nearly everything is experiencing supply shock right now. Blame COVID. Blame China & Russia. Blame capitalism's tendency toward hyper-optimization creating a brittle supply chain.
Overall point being: Many correctly associate the word "inflation" to mean "weakening of the US dollar", but then incorrectly extrapolate it to mean "weakening of the US dollar relative to other currencies". The reality is exactly what's written on the box: its weakening relative to what you'd buy with it. And if its happening to most currencies (as it is, today); its not a currency issue, it's a supply/price issue. I'd argue not only is it not clear that Fed spending is causing inflation; its most probable that it isn't, and Fed spending over the past two years has been a positive, invisible force against higher inflation.
“Moving up” in a tax bracket never means earning less in nominal or in real terms. It just means you get less in your pocket of the extra you earned, not of the total you earned.
https://www.investopedia.com/ask/answers/071114/can-moving-h...
This has been going on for like 30-40 years. It's sad, but nothing new. I got about a 4.5% value cut this year.
I have not done the math, but I would not be surprised to see this is true for me. Certainly feels like it.
I do not hate my current job, and I loathe interviewing, but I feel like I will need to jump soon just so I can push the reset button and get my compensation to keep up with inflation lately.
It could easily be 20% raises for those moving and 1% for those who are not.
Lots of reasons.
First of all, job hunting takes time and effort. If you're rusty at interviewing and need some practice, then even more so. People that have kids or other responsibilities outside of work have even less of both available. On top of that you have to face rejection, which for many people is emotionally difficult.
Secondly, even if everything goes well, it's still a substantial risk. The new job might seem great at first, then turn out to be a nightmare a couple of months in. The old job might not be ideal, but you're used to it, and know you can live with it -- it's the devil you know. Same way that couples often stay in unsatisfying relationships for years, because it seems better than risking ending up alone.
On the surface they are complaining but I suspect many are using this as an opportunity to make changes that they've wanted to make for a long time but couldn't for various reasons. Mainly because elites tend to play game of thrones in their respective organizations and it wasn't politically favorable to make certain changes before covid.
Who and how?
Not that these things don't happen regardless but artificially inflated capital (AKA debt) perpetuates the issue.
Maybe we should realize that increasing debt via banks and financial products is not good in of itself. Especially when we contrast it with investing in technology and workers.
https://www.reuters.com/business/pandemic-boosts-super-rich-...
The words "all" and "doubled" are an exaggeration, though.
My concern with this is primarily because people in Germany (not that many) believe that the pandemic is controlled by big pharma, big tech and by the 'elite' (great reset) and I think it's just much simpler described somehow else than the control of rich people.
I don't get it. Why does what they do have anything to do with what you or I do? Why does anyone begrudge someone else for being lucky, harder-working, in the right place at the right time, better looking, fitter, smarter, better at business, better at making connections, faster at learning, or anything else that helps them acquire more wealth? Was it at your expense? I've certainly been passed for hiring because someone found a better candidate. I've receive smaller raises than a co-worker probably because they did more impactful work. I'm sure I've missed opportunities due to office politics.
I guess this is where we should all whip out the "U mad bro?" meme.
Yes, I think the point of complaints of the richest becoming richer is that they are doing so on the backs of the poor. They are underpaying employees and otherwise taking advantage of the lower classes to extract efficiency from them. If at the end of the year, I'm poorer because wages didn't even keep pace with inflation but my employer is 2-3x richer, something is wrong.
In a healthy econonomy, the idea would be that the employer pays you for services rendered and we both come out ahead and with some sort of balance.
Which, in a truly competitive free market, that should be the case. Amazon shouldn't be able to pay peanuts and work employees like dogs (or drones). Because in a free market, a competitor would show up and pay more and treat employees with more respect. But the moat is too wide and deep for many of these companies.
Heck, even if someone did make a serious play for Amazon's online retail and fulfillment, they would simply use their AWS earnings or even borrowing power due to their market cap to fund their retail side and underprice you out of the market. (Something that they have done several times before).
The vast majority of the stimulus money was spent on bills, not frivolity.
[1] https://www.nbcnews.com/business/business-news/how-are-stimu...
I don't think this is the point of "anti work". The point is (to me) that people should be treated equitably at work and that work shouldn't be the center of our lives
"Defund the police". No no, we don't actually mean defund the police...
"Anti work". No no, we don't actually mean we're anti work...
"True, the subreddit is called /r/antiwork. And yes, their motto (right at the top of their page) is "Antiwork: Unemployment for all, not just the rich!". But is it fair to call them "Anti-work"? Have you considered their moderate membership?"
I suppose you identified the potential problem here: people inferring that “defund the police” doesn’t actually mean “defund the police” and ascribing softer, feel-good intentions which aren’t there.
But that’s a story as common as blue skies and chirping birds: once your favorite sub-Reddit gets big enough…it starts to stink.
To some extent I also believe it's natural to try to elicit an emotional response from the other "side," because then you can focus on attacking their words, tone, character, etc instead of engaging in reasoned discourse and debate. You get a bit of an automatic advantage if your opponent is already in an emotionally charged state. From what I've seen, the phrases you mention are pretty good at that too.
All of this ends up doing more harm than good most, if not all, of the time.
The former just seem like good politics: "states' rights" allowed slave owners to court people who were worried about "big government" while conveniently ignoring the grave injustice that's actually occurring. The latter seems like good twitter politics; it'll get good engagement for being so inflammatory, but at the end of the day, most people don't actually agree.
It's one thing to say "defund the police", and it's another to say "penalize police brutality, take police funds and use them to fund social workers trained to disarm situations without using violence, etc."
I don't know about that. More like it muddies the waters and leads to miscommunication and polarization
It’s not hard to come up with a catchy tagline that doesn’t completely misrepresent the movement. Thing is, the movement is about defunding police. They’re not shy about that: https://defundthepolice.org/
"cultural appropriation" - no no, we mean cultural appropriation but from minorities (it's amusing that the popular definitions you see of cultural appropriation have cultural appropriation in it).
"white fragility" - no no, we don't mean white people are fragile but that some are uncomfortable talking about race issues
If you have to explain what your shitty buzzword means every time, then it's not designed to convey your bait-and-switch definition.
Anyway, "Anti work" may as well be parsed as "Anti The-Kind-Of-Bullshit-Work-We've-Been-Doing". A totally reasonable interpretation.
A single voice may have freedom of speech, but the accepted narrative is controlled and much louder.
The crowd around here, of course, always constantly jumps on this as if it is all one big inconsistent argument from a specific group. Selectively forgetting in these moments what the internet is like in general. It's funny, just look at the peer replies here, people are so excited to point out the patent inconsistency, the naive radicals who don't know what they want; obviously because people who would even have something close to those thoughts must be confused and irrational.
> A subreddit for those who want to end work, are curious about ending work, want to get the most out of a work-free life, want more information on anti-work ideas and want personal help with their own jobs/work-related struggles.
Thankfully that TRO was dissolved, but nonetheless.
Obviously there's a market for that sort of thing, so I guess that says something. I just wouldn't use people's fantasies to deduce something about their actual behavior - I think almost everyone at one point fantasizes about not needing their job.
Like most of Reddit, the style and rhetorical flourishes are over the top. But the substance being posted does not seem to match what a surface analysis would imply.
Its not popular on HN but most of the libertarian tenants that belay picking yourself up by your bootstraps are not applicable to a supermajority of labor. There is no change of attitude within the framing of the economic system as it exists that individual actors take on a collective scale to suddenly stop being exploited systemically.
...so continue working aka the exact opposite of what anti-work seems to imply. Gotcha.
Another term got co-opted for political purposes, wonderful. Nonsense that once again originates in the US, which will inevitably land on our shores in no time.
Some of the people in /r/antiwork see these shortages as artificial or caused by a society that funnels labor toward profit instead of toward need, but to your other point, there are a lot of people on that reddit who are incredibly naive or just have a chip on their shoulder.
from a objective POV many but not all are mostly artificial, but not because of someone planing it or anything like that, but because of emergent behavior of our economical system and the complexity of supply chains.
Sadly all of this is very hard to change.
Especially with our world currently heading into a not so grate direction in nearly every sector and most countries...
Then over the last year it has turned into a wall of (mostly fake) "my boss is bad" stories.
edit: There are many smaller communities on reddit that do have mature conversation and content, they're just vastly outnumbered by the edgy teen clickbait content we see on the front page.
You should tell this to them. I've spent a lot of time in the sub (left recently though) and many of the people there seem to think we have the technology and means for a fully automated economy and are simply choosing not to switch over.
They truly believe if we had some form of pseudo-anarchist revolution, they would never have to spend another day doing anything but fun, rewarding activities.
The subreddit is mostly about people languishing the fact they cannot escape this cycle and day dreaming about how to get out, or sharing horrible work experiences with others for sympathy.
Can anyone offer me rational arguments for why they shouldn’t just pay people based on what they offer the job rather than where they choose to live?
Because it makes me salty to be paid half of what a colleague does because I’m in rural Canada and not San Francisco.
Your salary is determined by what a competitor would offer you. Nothing else, forget about your output, adding value, increasing profits, your cost of living, or whatever.
When you are in SF and most importantly, are willing to physically into the office, then there can be only so many available workers. This means high competition from companies for workers.
When you are remote, there may be many more available workers, so less competition from companies.
Naturally, companies / managers try to bend the negotiation in their favor by trying to convince you that your cost of living is lower (happened to me). My advice is to shut this argument down immediately, be willing to get up and leave (for one of the many other real companies willing to hire you).
IMHO it's OK to get a different salary when not in a big city, after all, both sides play the negotiation game. You get access to a bigger pool of companies too, you just have to share it with more workers (probably). On a society-level it's absurd that a SF dweller gets a million dollar mortgage subsidy, and you in rural Canada get (let's say) a 100k mortgage only - for the same productive output. All while crying about city/countryside inequality.
Why would they pay you twice as much when you accepted half?
Because I didn’t have all the information such as what others were being paid. I only knew that they were offering double what my current employer was offering to keep me.
Sure but you're paid multiples of someone in Mexico. Can you explain that?
But within the US it's pretty ridiculous.
Not all of how you spend your pay is scaled by your cost of living for example...
My employer can't predict where I want to retire, yet by scaling my entire pay by cost of living where I currently am they'd be limiting how much I can save.
You can live in a high cost of living area and decide you're ok with living with roommates and ramen noodles. That results in the same living expenditure as someone in a low cost of living area with significantly more room to save.
What are "US wages"?
A police officer in SF or NYC makes substantially more than a police officer in Oklahoma City or Topeka.
Even the US has large regional variations in wages, standards of living, and economic productivity.
A somewhat parallel example is whenever someone tries getting a car repaired or plumbing work done. They may all charge their own flat rate for labor but they almost always exorbitantly overcharge for parts. Why? Because if everyone else does it, they can too. It's money on the table they would be missing out on otherwise. It's an infuriating situation (I was charged $30 for 2 $4 gaskets on my repair yesterday) but it's a pattern that's been quite commonplace.
Buyer beware, though.
Think about it - who would take care of all those people in the western world. I could see it happening in Asian cultures, but in the west? Nah. It’s not in us.
I mean seriously, did we ever check ourselves to think that people would just stay home?
Sure a certain percentage will — and that’s actually a good thing, especially families where both mom and dad worked. Since the cost of child care the and the benefit of caring for your own child is so great.
But with most government subsidies ending, I see a lot of parents getting pretty antsy with grown kids at home.
Let’s get real, people are going to have to get off their tukuses that they have been sitting on over the last few years and head back to some kind of work.
It’s good if they choose something more satisfying, but most people will not have that luxury and the world does not owe us anything.
So back to work you lazy bums!!
IMO most people want to work and be productive, but they don't want to be exploited.
10-15% of the workers quitting is enough! If 2 of my 13 employees quit at the same time, I will have to start working 65-80 hours a week.