*Investors Blog*

[JeffKeryk]

Purely my "man on the street" research says its a tale of two cities.

The low end jobs aren't real. There used by places that use them as a crutch to overwork their current employees. The places want to understaff because they don't want to pay 20 an hour, then they tell their current staff they can't find anyone - and won't raise pay, and treat them like crap, and won't hire there friends when they come to apply.

Then there is the other end - skilled positions like electrician or mechanic, and some white collar stuff - healthcare, engineering, skilled maintenance, etc. - there aren't enough people to fill those positions. Several people I know have switched jobs recently for better pay elsewhere, but a lot of places don't want to pay better, the expect people to switch jobs for the same pay? What they need to do is train, but they won't do that because as soon as someone is trained they jump too.

So you are saying pay is too low to find people. Common sense would agree with you.

There is a shortage of skilled labor. That's why salaries, in many areas, are so high. There are a couple of reasons, the aging population is retiring, people are leaving health care due to overwork the past 2 years and the pandemic has had an effect in several ways.

 

[JeffKeryk]

I hear it all the time from managers in various fields and long time workers themselves. It’s not the pay. It is just that people are not willing to work. It has been going for quite a while now.

Managers can’t keep people. They suddenly quit out of the blue. Some show up for the interview and suddenly back out when they find out work starts at 0600 or they have to pass a drug test or abide by certain dress codes.

I knew a restaurant owner of a fairly large place that couldn’t keep staff despite offering $25 an hour. He had three or four people that were dependable and everyone else was a rotating crew in and out the door as they decided to quit. The place was busy so work was there. He just sold the place. He got tired of it all.

I'm sure there is some of that, but annectdotal stories are not dependable data. A good mechanic shop near me tells me the same story. And I know he pays well. He can't find people. But to assume people are not willing to work? How are they gonna live?

 

[JeffKeryk]

Yep.

Very big difference between a full time job paying $50-60 an hour…… verses a part time McJob with no benefits.

Thats why lots of younger folks don’t want to work and live in parents’s basement.

Well, Mommy and Daddy aren't gonna be around forever.
Dave, do you have any data that shows just how big an issue this is?
I know this is annecdotal, but how many younger folks that are in that position do you know of? Just curious...
I know of young people living longer in their parents home, but the ones I can think of are working.

 

[Dave Hess]

I hear it all the time from managers in various fields and long time workers themselves. It’s not the pay. It is just that people are not willing to work. It has been going for quite a while now.

Managers can’t keep people. They suddenly quit out of the blue. Some show up for the interview and suddenly back out when they find out work starts at 0600 or they have to pass a drug test or abide by certain dress codes.

I knew a restaurant owner of a fairly large place that couldn’t keep staff despite offering $25 an hour. He had three or four people that were dependable and everyone else was a rotating crew in and out the door as they decided to quit. The place was busy so work was there. He just sold the place. He got tired of it all.

Many successful family owned restaurants closed after all the Covid cash was handed out and former workers never wanted to return.

Between rising food prices, utilities, taxes, insurance and unreliable employees…. many owners decided just to close their doors and walk away.

 

[Dave Hess]

Personal Saving Rate

Graph and download economic data for Personal Saving Rate (PSAVERT) from Jan 1959 to Jan 2024 about savings, personal, rate, and USA.

fred.stlouisfed.org

I’m very interested how this will play out in the next year.

Lots of people say economy is booming because the airport, hotel, bars, restaurants, Vegas, malls, pro sporting events are busy does NOT mean these people have the cash to be spending. Everything on credit card , zero concern if they declare bankruptcy and walk away.

Covid shutdown taught Americans they don’t have to pay their bills or care about financial liabilities……

Sad but very true.

 

[Warstud]

Good day if you own the Q's

 

[PimTac]

I'm sure there is some of that, but annectdotal stories are not dependable data. A good mechanic shop near me tells me the same story. And I know he pays well. He can't find people. But to assume people are not willing to work? How are they gonna live?

If I had the answer I would be famous.

More anecdotal examples:

A dump truck driver tells me they cannot get or keep drivers. This is a good paying job with the Teamsters benefits.

A manager for a local GSA warehouse can’t get new people in the door.

A local landscape company had to bring back a retired guy to run the backhoe. Nobody wants the job.


The common denominator I see is that these jobs require work. Manual labor. Working outside. Being on your feet. It seems like everyone wants one of those tech jobs where you sit around and play games to enrich the brain cells. Unfortunately many are being laid off. Now we have thousands and thousands of younger folk hitting the streets. They could get another job tomorrow but it will require work.

 

[JeffKeryk]

“Without data, you're just another person with an opinion.”​

― W. Edwards Deming

No offense meant to anyone, but you cannot deal with a problem without evidence, or you are just shooting in the dark.
Annecdotal evidence or talking points are not a good basis for analysis. Say or believe what you will, but that's the bottom line.

 

[PimTac]

“Without data, you're just another person with an opinion.”​

― W. Edwards Deming

No offense meant to anyone, but you cannot deal with a problem without evidence, or you are just shooting in the dark.
Annecdotal evidence or talking points are not a good basis for analysis. Say or believe what you will, but that's the bottom line.

So there is no answer?

 

[PimTac]

A couple more examples. Health care is really getting hit hard with labor shortages. Nurses are leaving the profession. The long hours and stress for everyone have taken a toll.

I just read today about the need for shipyard workers. They can’t get anyone to take the jobs. These are excellent paying jobs usually tied to military contracts. The Navy is way behind on maintenance and it shows.

On a bright note a good friend of ours has a son who has pushed himself and became a pilot. First for United and now for Delta. He is almost done with qualifications for a Captain position on the 737. He wants to keep going and eventually fly overseas. I believe he will make it.


At some point we will reach a tipping point on the labor market.

 

[alarmguy]

If I had the answer I would be famous.

More anecdotal examples:

A dump truck driver tells me they cannot get or keep drivers. This is a good paying job with the Teamsters benefits.

A manager for a local GSA warehouse can’t get new people in the door.

A local landscape company had to bring back a retired guy to run the backhoe. Nobody wants the job.


The common denominator I see is that these jobs require work. Manual labor. Working outside. Being on your feet. It seems like everyone wants one of those tech jobs where you sit around and play games to enrich the brain cells. Unfortunately many are being laid off. Now we have thousands and thousands of younger folk hitting the streets. They could get another job tomorrow but it will require work.

Here is another example as may have noticed I have stayed out of this conversation. More so because it’s investment thread and kind of curious about warstuds comments on the Q’s

To me, it’s so simple anybody and I mean anybody who wants to work, get a fair salary, incredible benefits, raise a family, buy their own home and not need more than a high school diploma to get a job right here in South Carolina.
Of course, college, educated people, how much in demand as well.
This state and following up right behind it, North Carolina is cooking with jobs from major manufacturers. Good jobs. All you have to do is want to work..

Honestly, I’m more interested though in comments on the QQQs I’ve never invested in them before.
I do have NASDAQ 100 index fund and an S&P index fund in my 401(k)

 

[JeffKeryk]

So there is no answer?

There is no short term answer, but there are answers. We cannot get those answers without proper analysis and requisite (hard) decisions.
Why? From what I've read, there are factors like aging population, people choosing other occupations and of course the pandemic.
We lost workers, workers burned out (nurses in particular) and some (truckers for example) decided their time spent away from home was not worth it and chose other professions.

From Fortune:
"The leading cause of the worker shortfall, according to research by the Fed, is a surge in retirements. In his recent speech, Powell noted that there are now about 3.5 million fewer people who either have a job or are looking for one compared with pre-pandemic trends."

There is more in the article, if you are so inclined.

There is no short term solution. I remember this discussion in Business School with a guest speaker, the HP Human Resources EVP.
She told us HP was aware the need for skilled and unskilled work force would be a serious problem going forward. They planned on their own training programs to train, attract and keep their labor force.
The evidence is right in our faces: wages continue to rise, employment is high and therefore so is inflation.

 

[PimTac]

Honestly, I’m more interested though in comments on the QQQs I’ve never invested in them before.
I do have NASDAQ 100 index fund and an S&P index fund in my 401(k)

Check your report on that Nasdaq Index fund. I will be that the fund holds shares of QQQ. Funds do that quite often.

 

[PWMDMD]

Here is another example as may have noticed I have stayed out of this conversation. More so because it’s investment thread and kind of curious about warstuds comments on the Q’s

To me, it’s so simple anybody and I mean anybody who wants to work, get a fair salary, incredible benefits, raise a family, buy their own home and not need more than a high school diploma to get a job right here in South Carolina.
Of course, college, educated people, how much in demand as well.
This state and following up right behind it, North Carolina is cooking with jobs from major manufacturers. Good jobs. All you have to do is want to work..

Honestly, I’m more interested though in comments on the QQQs I’ve never invested in them before.
I do have NASDAQ 100 index fund and an S&P index fund in my 401(k)

QQQ is a great long-term hold from Investco that has managed to outperform the S&P 500 for the past 20 years. TQQQ is another animal altogether from Proshares and it is a super short-term (like a day) investment.

 

[PimTac]

There is no short term answer, but there are answers. We cannot get those answers without proper analysis and requisite (hard) decisions.
Why? From what I've read, there are factors like aging population, people choosing other occupations and of course the pandemic.
We lost workers, workers burned out (nurses in particular) and some (truckers for example) decided their time spent away from home was not worth it and chose other professions.

From Fortune:
"The leading cause of the worker shortfall, according to research by the Fed, is a surge in retirements. In his recent speech, Powell noted that there are now about 3.5 million fewer people who either have a job or are looking for one compared with pre-pandemic trends."

There is more in the article, if you are so inclined.

There is no short term solution. I remember this discussion in Business School with a guest speaker, the HP Human Resources EVP.
She told us HP was aware the need for skilled and unskilled work force would be a serious problem going forward. They planned on their own training programs to train, attract and keep their labor force.
The evidence is right in our faces: wages continue to rise, employment is high and therefore so is inflation.

Point taken but our economy has been great due to the productivity of the worker. I know that is changing somewhat but when I read that 11 million people left the workforce that is a ton of productivity missing. We are seeing a lot of jobs becoming automated. For example , in a restaurant you order at a kiosk and a robot server brings the food to you.

Right now we are in between trends and certain sectors are hurting.

 

[ZeeOSix]

But to assume people are not willing to work? How are they gonna live?
.
.
Well, Mommy and Daddy aren't gonna be around forever.

Waiting for inheritance while they live at the parents house. I see many places in what's suppose to be "single family" neighborhoods with 2 and even 3 generations living in the same house - no joke.

 

[JeffKeryk]

Point taken but our economy has been great due to the productivity of the worker. I know that is changing somewhat but when I read that 11 million people left the workforce that is a ton of productivity missing. We are seeing a lot of jobs becoming automated. For example , in a restaurant you order at a kiosk and a robot server brings the food to you.

Right now we are in between trends and certain sectors are hurting.

Certainly. Change is the only constant. In Silicon Valley, change is rapid. In a tech career, much of your time is spent just trying to keep up, you are always learning. I got so sick of reading tech manuals, for programming and such. It never ends. If you don't keep up, your career very may be cut short. I learned to embrace change; it is not about choice. Ultimately the problem is reluctance to change more so than the change itself.

Change is coming. It is not about what I think or what I like. The advent of the computer and Internet age has greatly accelerated the rate of change.
We probably have 50 computers in our houses. Even wifey's custom made monster server. I bought the Tesla, in large part, as a way to learn about the tech. Sounds kinda ridiculous, but it is true.

 

[JeffKeryk]

Waiting for inheritance while they live at the parents house. I see many places in what's suppose to be "single family" neighborhoods with 2 and even 3 generations living in the same house - no joke.

May I ask how many people you know who live this way? Have you discussed it with them?
I do agree some people are expecting a nice inheritance; that's nothing new. And there are parents who seem to want to provide everything for their children instead of giving them the tools to buy their own home and provide for themselvs. Scary, IMO.

 

[ZeeOSix]

May I ask how many people you know who live this way? Have you discussed it with them?
I do agree some people are expecting a nice inheritance; that's nothing new. And there are parents who seem to want to provide everything for their children instead of giving them the tools to buy their own home and provide for themselvs. Scary, IMO.

There are a few in my neighborhood, never was that way 5+ years ago. I'm sure the pandemic and the resulting economic impact is a factor.

1. The demographics of multigenerational households

The number of Americans who live in multigenerational family households is about four times larger than it was in the 1970s, while the number in other

www.pewresearch.org

Financial Issues Top the List of Reasons U.S. Adults Live in Multigenerational Homes

Nearly four-in-ten men ages 25 to 29 now live with older relatives.

www.pewresearch.org

 

[PimTac]

May I ask how many people you know who live this way? Have you discussed it with them?
I do agree some people are expecting a nice inheritance; that's nothing new. And there are parents who seem to want to provide everything for their children instead of giving them the tools to buy their own home and provide for themselvs. Scary, IMO.

I know of several households with multiple generations.

Then there are the houses that rent out rooms and bed spaces. That is more common than we think.