Global Economy Approaches Soft Landing, but Risks Remain
imf.org
imf.org
There's a huge difference between a normal business cycle, and, say, 2008 or 1897. In a normal cycle, there's often a lag time between where the economy actually is (especially viewed with hindsight) and where the Fed policy is. By the time the Fed starts reducing rates, business activity has already started slowing down, and six months later they will say that we're in a recession.
In a real crash, I'm less clear on the dynamics, but I think that soon after the economy starts slowing down, some speculative bubble pops because people figure out that it's not going to keep going up forever. There's not necessarily a clear cause-and-effect or timing link between that and interest rates, so far as I know.
As far as a bubble, yes, it's the evaporation of a huge amount of money. 1929 stock market crash -> all that market cap was lost. In the 2008 crash, home values crashed thus losing a vast amount of hypothetical worth. We were/are/will see a similar real estate crash in the corporate/office sector since the value of these rental units has plummeted post-covid-work-from-home.
Doh.
All industries and all sectors can’t always be booming without there being a perpetual bubble.
We have trouble finding good engineers to hire, so I’m skeptical when I hear people having trouble finding engineering jobs. My assumption (could be wrong) is a lot of people having trouble getting work haven’t adjusted to “the new norm” whether that be decreased salary levels, changing WFH expectations, etc.
E.g. while I might have been open to hiring a digital nomad in 2021, I’m not open to that anymore because there are more “normal” candidates out there who aren’t asking for special treatment or unrealistically high salaries.
And then
> while I might have been open to hiring a digital nomad in 2021, I’m not open to that anymore because there are more “normal” candidates out there who aren’t asking for special treatment or unrealistically high salaries.
Maybe these things are related.
“Normal” has changed. The engineers I know have moved away and are very happy with the flexibility of their new WFH lifestyle and the work life balance it provides. And they will refuse to work for organizations like yours that continue to hold regressive views on WFH.
Which is 100% their right! (But don’t then go on tech forums complaining about how difficult it is to find a job)
PS. My company is fully remote (and was remote pre-Covid) so I definitely don’t have “regressive” views on WFH. I rejected a candidate recently who said they wanted to work out of a van while driving the US. As a 100% remote company I’m cool with people working from different places occasionally, but at a minimum I want our employees to have a desk. I don’t want to hire someone for $150k who’s working from the back of a van. I might have hired them in 2021, but in 2024 not having a permanent residence to have an office in is a disqualification.
So you don't hire on merit or what your candidate is able to deliver. You hire on desk space
But, on average, not having a desk means lower productivity.
I try to only hire great developers.
(I don’t literally believe that there are developers 10x better than the average)
Maybe fast food is paying exceptionally well these days, but I have my doubts.
Sorry, poor choice of words. I should have said “salary expectations above current market salaries”.
I’ve interviewed people is 2 yrs experience (2 yrs out of college, or 2 years after doing a bootcamp) asking $160k fully remote outside Bay Area.
Basically anyone that entered the tech workforce during the COVID boom has really high expectations around compensation and benefits that are unlikely to be met in future jobs now that the market has cooled/stablized.
If you live in an HCoL area, you're probably not very happy about this, but if you live in a LCoL area these compensation packages are excellent.
> while I might have been open to hiring a digital nomad in 2021, I’m not open to that anymore
Might be related?
The only thing that can explain this perfectly well in my opinion is: manager ego. As simple as that.
The difference seems to be that we don't have a RTO policy and actually encourage WFH a lot, you just need to live in a country we have a registered entity for tax reasons, so no digital nomads either.
Maybe your new normal isn't working, you're paying the price for it.
You're not looking hard enough.
Who can afford to be taking smaller salaries when everything is getting more expensive?
That's expected if you don't want to pay the salaries your candidates want. Admitting to not being able to find qualified workers is admitting fundamental incompetence as an employer and as a business. Hiring and retaining workers is the foundation of any business that employs people.
Haven't it struck you that maybe you are unrealistic about salaries if you are having trouble hiring?
Of course the comment is not just paradoxal, it's contradictory.
Behind a basically bias mind, blinded even by the irresistible desire to basically pay little, bank fat profits, and do nothing.
It's an amazing time to be alive. To see how broader access to Information turning against those who used to think the asymmetry would last forever.
People were hiring devs straight out of bootcamps with zero experience for $160k a couple years ago.
Sorry but I can’t hire someone and match their previous salary (from a company that fired them) with a total of 2 yrs experience.
If the developers you want to hire cannot produce enough for your company to make a profit at the salary levels they are asking, this is a hint that your company is not profitable enough to continue functioning. That happens sometimes when margins get thinner. The equation between what customers are willing to pay for the work, and what profit the company desires, and what salaries the workforce demands for doing the work, doesn't give a positive result anymore. So the business model doesn't work anymore.
Otherwise you'd hire them right? If the company will make a profit from their work. Or are you foregoing profits out of spite?
Edit: I say all this because I used to be incompetent at hiring and my business at the time suffered as a consequence. My mistake was that I was looking to hire people through networks of friends and family, instead of plain old job ads. Sounds like a dumb mistake, but as mentioned I was incompetent. Once I started publishing ads I had no problem finding a lot of good candidates. Hiring and retaining employees is a skill, the most important skill of a business owner.
Yes, if there were another produce supplier offering half the price for a better product.
I was probably wording my comments too strongly in this thread. It's not like we can't find anyone to hire. Just that we typically can find really good people if we spend just a tad bit longer rather than jumping on the first decent candidate.
In 2021, you basically had to jump on the first decent candidate because if you didn't they'd be snatched up by another company within days. In this market, you can afford to hire slower, talk to more people, and find the right fit.
Also, having hired and worked with dozens of people, I've seen zero correlation between salary and performance + employee retention. Paying someone more salary is not at all correlated with higher performance or higher employee retention (once you're above the 50th percentile). Everyone at our company is above 50th percentile in salary benchmarks, some people are at 70th or 90th percentile, and their performance + retention is no different than people paid 50th percentile.
TLDR: Throwing money at a problem usually doesn't fix it. Same applies in hiring. Throwing money at people doesn't make them perform better or stay at your company longer, once you're paying at least 50th percentile salaries.
The folks who took advantage of the ability to leave the city and get a house somewhere other than the Bay or one of the three other cities tech was hiring in are older folks for whom moving back to be near family had some resonance. They've now had 4 years to build a life there.
Of course you can't find talented engineers who want to uproot their families and rip their kids away from their cousins, schools, and friends to go live in an apartment in a city and commute to whatever horseshit open floor plan dorm simulator you're calling an office, and especially not if you're not willing to pay an "unrealistically high salary." You'd need to pay me an unrealistically high salary to consider that, too.
As usual, there's not a skill gap or a worker shortage, there's an unwillingness to pay talent what it's worth.
> I might have been open to hiring a digital nomad in 2021, I’m not open to that anymore because there are more “normal” candidates out there who aren’t asking for special treatment or unrealistically high salaries.
Let me rephrase.
"I'm not open to hire people who refuse to be dictated by me, the boss, how they should live their lives. I'm now demanding again that my employees get stuck with locality market constraints as they tend to play in my favor.
Except that, I struggle to find good enginners. I find normal people who aren't good enough to make demands though, thanks to the coordinated massive layoffs, so I will keep fighting."
See, workers, those who truly do the work that is. Have for the most part figured out the manipulations.
A layoff squeeze, or two or even 10 to pressure the job market, to make demands for fairer salary be under control, simply won't work. Temporarily, maybe. As people do need not just to eat but also pay back mortgages. But what it did mostly is creating more noise for the employer side. Great enginners don't get laid off. Those who do know usually very well their value, get recommendations and a new role in no time.
The economy isn't collapsing, demands is there otherwise there wouldn't be an inflation to fight , we need more workers than ever.
the capital refuses to accept a certain reality. That is that Workers will continue to have access to more information. Hence making it futile to exercise manipulations.
I'm for free markets and find the disguised attacks and ambushes against the "working class" appalling. Workers aren't even unionized. They just individually have neurons and access to the internet. The same who have been promoting the idea that we better all get richer finally realized that's not fun, that fewer should be much richer and the rest poorer
The shift is happening fast. It won't be measured in years, but weeks and months. By year's end everything will be different. In 24 months entire career paths will be obliterated and there is no time to retrain. It's a cotton gin moment.
Why?
The same was said again and again again about the offshoring programmers. Reality? Here we are with countless unfilled jobs hiring for senior enginners in NYC for over 200k per year.
The gap, at least cultural, between a coder in Bengalore and San Francisco is significant. Imagine compared to an outsourced "consultant" behind a prompt .
Plus, coding is about 10% of the work. If that. What matters in the end is the thinking, design and solutioning.
Putting a WordPress standard looking and doing template together? Sure gpt4 would do and help udemy self taught "programmer" do it just fine. Innovation and building fit for purpose systems? Humans. Even with quantum computers and 7 trillion parameters models, still humans.
Here we are at it again. AI will shift all these workers off payroll . Compress salaries. They are just manipulation, fear mongering to make job seekers give in and accept those underpaid vacant jobs.
Where are senior nurtured at? From companies, usually small, and/or those that don't buy the outsourcing/off shoring fallacy, or because it isn't an option for their organization.
The ratio of senior to junior has always been an issue and is independent to the offshoring phenomenon. More new people get into tech, and faster than seniors get formed. So it always seems there are too many junior, not enough senior. It also means there will defacto be far more seniors in the next generation than there are today. Still even less relative to how many we will need though.
Do you have people under you? If yes, I gurantee they can be replaced by a script kiddie with some prompt experience. If no, well… https://www.youtube.com/watch?v=HdKqAVpUOwI
I myself don't tend to believe that performance improvement is that dramatic.
The most competent few can do a lot more, and command a higher salary, while the masses discover they are out of jobs.
After that, people discover that the product is now cheaper, so they may or may not buy more of it, maybe or maybe not increasing the total they spend, and maybe or maybe not creating more jobs for the mass that was displaced earlier.
Anyway, believing that LLM-programming is going to have that impact is just ridiculous.
What are some real world examples of this that you have personally witnessed that makes you think this is happening so fast?
oh - and AI replaced me in late 1980s just like Doctor Dobbs predicted /s
basically, every 10 years _someone_ is claiming programmers will be obsolete - and its been that way for 40 years. But usually that just means the market cools for a year or two, then comes roaring back...
Possible we might see some real class solidarity if those being displaced can get over themselves.
But electrician/plumber/nursing/other physically demanding jobs have always been the other, and more resilient, option. But they’re not desk jobs.
I meant the Marxist petit-bourgeoisie, which is one of the (multiple, sometimes incompatible) definitions of the middle class. If by middle class you just mean people who have around median income or so, I’d quibble about whether that is any more “real,” but who cares? It is just a definition.
Anyway, I think people generally expect something like that petit-bourgeoisie status from their engineering degrees. It is the expectation that our skills will be in demand enough that we can tell management to get bent if they ask us to do something unethical or dangerous; this is a dramatically different position in the labor market, but it requires rare and in demand skills.
https://www.imf.org/en/News/Articles/2015/09/28/04/53/sores1...
forecast: "World growth to slow in 2008, but still expected to remain solid at 4¾ percent "
reality (Fed report 2013): "From peak to trough, US gross domestic product fell by 4.3 percent, making this the deepest recession since World War II."
If climate scientists made forecasts that were this ridiculously off base in the wrong direction, the whole field would be laughed out of the room. How is it that the neoclassical econometric modelers at the IMF aren't? It's more like astrology than science.
Because of people chasing alpha in the markets, any forecast with too much predictive power will tend to alter the system in ways that reduce its predictive power
Public reception is a top concern for climate scientists.
World GDP Change in
2008 +2.1%
2009 -1.4%
2010 +4.5%
https://data.worldbank.org/indicator/NY.GDP.MKTP.KD.ZG?end=2...
The point is, there's a difference between proper forecasts and (what amounts to) propaganda.
If even a small percentage of people stopped doing those things, it would all fall apart.
https://www.chicagotribune.com/2007/03/01/fed-chief-economy-...
I have to say, this made me chuckle. Climate scientists have gone from warning us that we're entering an ice age, to warning us that the globe is warming too much. They've consistently gotten their forecasts wrong concerning rising sea levels, and their forecasts concerning when the world would end. It's pure alarmism, extremism, and is the cause for the increasing eco-terrorism we are seeing.
Anyone that would like a little more info can watch this: https://www.youtube.com/watch?v=_2Yms_-vgbU
Also, a philosopher cosplaying as a climate scientist may not be the best source for climate information. Until he starts having his statements and information peer-reviewed, it's nothing more than the philosophical musings of a man who, he himself, believes that the pinnacle of life is to feed the machine and consume, consume, consume.
Yes, we're past the historical warm maximum period of this cycle and we'd be steadily (and very slowly) heading into another ice age over the next 70,000 years or so - but again, fossil fuel combustion and the injection of mass amounts of fossil CO2 into the atmosphere have radically altered that trajectory. This is not hard to understand, unless you're deliberately trying not to.