I believe the economy may be really bad right now. (1 Viewer)

[Jayrod]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

 

[Keerock]

I'm not in Accounting, but our global business is projecting to be down 25%-50% in 2023. Already been through one RIF this year and all consultants are being phased out. Doesn't look good.

 

[General Malaise]

I've had a couple of conversations this week and looking at our company's financial data (I'm the entire accounting department), things have taken a turn for the worse since the start of the year.

My company is projecting our first annual loss in over 10 years. We are trying to hire some people to fulfill our long term goals, but each new hire is simply going to send us further into the red. Simply put our small business client sales are running at about 1/2 what they have been the last 2 years. Luckily we still have government sector work that will keep us steady and very strong cash reserves, so we'll weather the storm, but we aren't expecting a good year.

Then a friend of mine who I was talking with today told me he is having his worst season in 8 years as a freight broker. Usually was able to broker 70-90 loads a month and has been hovering around 20-25 for the past three months.

That's two canaries in the coal mine of our local economy. Our region has been fairly stable economically, even through 2008, but this may be the worst I've seen in my 20+ years of professional work.

With the toll inflation has taken and wages staying too flat, I'm guessing people just haven't been buying as much as they used to. I'm not sure what it all means as I'm not an economist.

I'm curious if other people are seeing and hearing similar things.

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

 

[SoBeDad]

What's the unemployment rate? Still near historic lows. I'm seeing a little slowdown in Florida due to the rising interest rates, but developers are still building like crazy in Florida. Skyscrapers, warehouses, single family homes, you name it. Urban areas like Miami and Ft. Lauderdale, smaller cities like Palm Coast on the east coast and Naples on the west coast. Tourism keeps setting prepandemic records due primarily to domestic travel, as international travel is still down. The flight of capital and people from colder higher tax states could make Florida immune from the next slowdown.

 

[rockaction]

Skyscrapers, warehouses, single family homes, you name it.

That might be because there's a massive shortage of housing and demand to fix that condition so the capital is flowing there. That's a realllllll layman opinion, but I keep seeing the housing crisis in my Twitter feed by respected economy watchers and political guys (I do not have many political guys in my feed, but their issue has turned to housing and affordable housing a lot recently).

I'm worried like the OP and GM are. I see a lot of homeless where I live and it doesn't seem to be getting any better. At all. The encampments keep growing. Tourism records are being broken, but I wonder how many people can actually afford their travel and aren't racking up debt like GM talks about.

 

[culdeus]

Economy in DFW is strange. Way more homeless than ever, but way more spending on houses and cars. It's always been an area that spent above their means but with rising housing the property taxes now place DFW above California for middle class tax rates.

My industry (automotive electronics) is still booming but adjacent internal sectors (personal electronics) are down big.

 

[MTskibum]

I work in for big oil and we are booming.

We typically are either in a boom or a bust and either can happen almost instantly. We will be hiring like crazy and making huge profits until we are laying off 1/3 of our workforce and losing money.

 

[pollardsvision]

Skyscrapers, warehouses, single family homes, you name it.

That might be because there's a massive shortage of housing and demand to fix that condition so the capital is flowing there. That's a realllllll layman opinion, but I keep seeing the housing crisis in my Twitter feed by respected economy watchers and political guys (I do not have many political guys in my feed, but their issue has turned to housing and affordable housing a lot recently).

I'm worried like the OP and GM are. I see a lot of homeless where I live and it doesn't seem to be getting any better. At all. The encampments keep growing. Tourism records are being broken, but I wonder how many people can actually afford their travel and aren't racking up debt like GM talks about.

The housing issue just sucks, and imo, is a much bigger issue than the economic cycle that we are in.

I don't know that there's a way to fix it, but massive corporations buying up so much real estate is not good for the average citizen.

For an actual human, there's only so much real estate they can typically snap up before they die. Most are lucky to ever have a paid for home. A very small number are able pay off a couple rentals or vacations homes.

And then they die. And then their kids sell it all back into the market to pay off their own debt with what little bit is left after the nursing home and medical bills.

Blackrock won't die and doesn't have broke kids.

 

[Mitchie]

Jayrod + his buddy = the economy.

 

[Doug B]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

 

[Scoresman]

Jayrod + his buddy = the economy.

My local Taco Bell closed the other week. Can't be good.

 

[Terminalxylem]

Healthcare is booming. Not sure how it converts to dollars and cents, but hospitals in HI are eternally bursting at the seams, with patients consistently bedded in hallways, because all the rooms are taken.

It‘s terrible for privacy and patient care. Just waiting for an adverse event, to help the c-suite understand the problem(s) with too many customers.

 

[FatMax]

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

Real Estate, at least around here, has been inflated for awhile. As a guy with no plans to sell anything soon, it wouldn't hurt my feelings if real estate had a 2006-2008-like correction. I really, really want to buy another investment property, or even a new primary and turn my current one into a rental. It's crazy talk right now, but in a couple of years ..... ? I can't see how the housing market doesn't crash. Cash strapped homeowners can't refi and new buyers can't even get started with the high rates and high principles. Something has to give, and it's not going to be the rates. At least not in the short term. If the economy falls into a recession, even a mild one, look out.

But yeah, it would be horrible for a lot of people.

 

[culdeus]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Replacement cost is a big factor. If I can hire a ncg to do the work of an experienced person there's only so much we would pay an experienced person over a ncg. If the ncg sucks you just reset. Still cheaper than letting someone get 5-8% plus 20% bonus for 20 years.

 

[Todem]

What's the unemployment rate? Still near historic lows. I'm seeing a little slowdown in Florida due to the rising interest rates, but developers are still building like crazy in Florida. Skyscrapers, warehouses, single family homes, you name it. Urban areas like Miami and Ft. Lauderdale, smaller cities like Palm Coast on the east coast and Naples on the west coast. Tourism keeps setting prepandemic records due primarily to domestic travel, as international travel is still down. The flight of capital and people from colder higher tax states could make Florida immune from the next slowdown.

I am dreading my homeowners insurance renewal. We have no state tax? BS we are about to get hammered with this bill in South Florida.

 

[pollardsvision]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

I have no idea.

My best guess is 2 things:

1. All the other inflation. I'm a tiny business owner, and while my people were making good money before all of this and now. Going up further is hard because every other business expense outside of labor has skyrocketed. And then it's hard to raise prices too much as all consumers are already feeling the crunch.

None of that is new to this era of inflation, but it's a very hard puzzle to solve for employers. It's never just as simple as "well let's just raise prices and pay every body more".

2. Technology. Given the struggles figuring out the above, having fewer employees is always going to be an attractive option. Employers that can figure out how to use tech to elimimate payroll will do that. There are just more options to do that now than there were in the 70's/80's/90's/00's. And there's the promise of even more.

Businesses can't solve #1, and they are leaning on more tech and automation to help them figure out a solution where they don't need to solve #1.

 

[Mummy4]

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

same general area - different matter ...

didn't you and your group make a big copper play a few years ago? or was it some other precious metal?

even with a drop and some recovery - it's way up from where it was a few years ago.

 

[Osaurus]

What's the unemployment rate? Still near historic lows. I'm seeing a little slowdown in Florida due to the rising interest rates, but developers are still building like crazy in Florida. Skyscrapers, warehouses, single family homes, you name it. Urban areas like Miami and Ft. Lauderdale, smaller cities like Palm Coast on the east coast and Naples on the west coast. Tourism keeps setting prepandemic records due primarily to domestic travel, as international travel is still down. The flight of capital and people from colder higher tax states could make Florida immune from the next slowdown.

I am dreading my homeowners insurance renewal. We have no state tax? BS we are about to get hammered with this bill in South Florida.

Mine went up 67%. I’ve never made a claim nor live in any evac zone near the coast.

 

[Doug B]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Replacement cost is a big factor. If I can hire a ncg to do the work of an experienced person there's only so much we would pay an experienced person over a ncg. If the ncg sucks you just reset. Still cheaper than letting someone get 5-8% plus 20% bonus for 20 years.

Yes, but all that was true in the 1970s and 1980s, too.

5-8% would be a pretty large cost-of-living raise. Well, between 2021/22 and 2023, yeah, maybe. Most years, though, it would be a percent or two. Wouldn't necessarily have to be annual, either.

 

[Doug B]

Businesses can't solve #1, and they are leaning on more tech and automation to help them figure out a solution where they don't need to solve #1.

Businesses did solve #1 in the past, though. Saying that, your point about tech/automation is likely some part of the puzzle - but not all of it.

 

[djmich]

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

Real Estate, at least around here, has been inflated for awhile. As a guy with no plans to sell anything soon, it wouldn't hurt my feelings if real estate had a 2006-2008-like correction. I really, really want to buy another investment property, or even a new primary and turn my current one into a rental. It's crazy talk right now, but in a couple of years ..... ? I can't see how the housing market doesn't crash. Cash strapped homeowners can't refi and new buyers can't even get started with the high rates and high principles. Something has to give, and it's not going to be the rates. At least not in the short term. If the economy falls into a recession, even a mild one, look out.

But yeah, it would be horrible for a lot of people.

It’ll be rates soon. Fed will pivot as the economy heads into a recession (mild or severe tbd).

I’m in the market for a home, part of me says wait for the recession, the other part says supply/demand imbalance and rate improvement is going to hold the housing market up.

 

[Grahamburn]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Are you in an industry where additional experience equals additional revenue?

Has the extra year you have over a cheaper less experienced employee helped the company make more money? Are you taking on more responsibility to decrease their costs elsewhere?

Employees want 3-4%+ more every year, but I doubt they’re increasing their company’s revenue equitably.

If you’ve asked for a raise and they’ve turned you down present a strong case how that bump helps them achieve their goals.

There’s only so much to go around and the expenses for running a business of any kind are outrageous right now.

People better tighten up.

 

[Runkle]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

There's nothing stopping CEOs, Board members, or whatever combination thereof combines to control 51% of a company from voting themselves larger shares of revenue and giving nothing to the workers below. As long as the numbers grow in the right direction for the shareholders, it's carte-blanche for those at the top. If a company's cost for wages is $X, the shareholders don't care if it's equitably spread among all the workers, or, if everyone gets minimum wage and the CEO gets all the remainder. Still adds up to the same cost for labor.

The "free money" available to corporations from the Fed as a response to the 2008 crisis has done nothing for wages, only increased stock buybacks and higher pay for the C-suite guys.

 

[Craig_MiamiFL]

Let's chat after student loans start back up....

 

[Scoresman]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Are you in an industry where additional experience equals additional revenue?

Has the extra year you have over a cheaper less experienced employee helped the company make more money? Are you taking on more responsibility to decrease their costs elsewhere?

Employees want 3-4%+ more every year, but I doubt they’re increasing their company’s revenue equitably.

If you’ve asked for a raise and they’ve turned you down present a strong case how that bump helps them achieve their goals.

There’s only so much to go around and the expenses for running a business of any kind are outrageous right now.

People better tighten up.

Didn't know Elon Musk posted here. How do you even measure the bolded?

"Hey, guy who works in the mailroom? What was your contribution to the company's revenue last quarter? "

 

[FatMax]

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

Real Estate, at least around here, has been inflated for awhile. As a guy with no plans to sell anything soon, it wouldn't hurt my feelings if real estate had a 2006-2008-like correction. I really, really want to buy another investment property, or even a new primary and turn my current one into a rental. It's crazy talk right now, but in a couple of years ..... ? I can't see how the housing market doesn't crash. Cash strapped homeowners can't refi and new buyers can't even get started with the high rates and high principles. Something has to give, and it's not going to be the rates. At least not in the short term. If the economy falls into a recession, even a mild one, look out.

But yeah, it would be horrible for a lot of people.

It’ll be rates soon. Fed will pivot as the economy heads into a recession (mild or severe tbd).

I’m in the market for a home, part of me says wait for the recession, the other part says supply/demand imbalance and rate improvement is going to hold the housing market up.

I'm not a financial advisor. My advice is worth exactly what you paid for it.

I'd probably wait. No matter what the rates do, your principle is your principle once you sign. And if rates do drop, you won't be able to refi to get any benefit because home prices will be down accordingly (unless another HARP comes around). The only way it works is with a very large down. How large? Who knows, but more that whatever depreciation is coming. If your going all cash, none of this applies obviously, but most are not in that financial position.

Every area is different, so I can only speak about my own (Sacramento CA area). Right now, home prices are dropping, but not much yet. I'd guess they are about 5% down from their peak about 9-12 months ago. But rates have more than doubled over that same time period. It's the perfect turd sandwich for home buyers. Especially first time buyers taking advantage of programs that allow them to get in without putting much down at all. They're going to be underwater in a few years with no hope for a life raft.

 

[culdeus]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Replacement cost is a big factor. If I can hire a ncg to do the work of an experienced person there's only so much we would pay an experienced person over a ncg. If the ncg sucks you just reset. Still cheaper than letting someone get 5-8% plus 20% bonus for 20 years.

Yes, but all that was true in the 1970s and 1980s, too.

5-8% would be a pretty large cost-of-living raise. Well, between 2021/22 and 2023, yeah, maybe. Most years, though, it would be a percent or two. Wouldn't necessarily have to be annual, either.

The issue is ncg salary doesn't always go up. Experienced hires do. We paid ncg less every year from like 2012-2016 and had no issues onboarding.

 

[The Z Machine]

They're going to be underwater in a few years with no hope for a life raft.

That will cause even tighter supply as many people won't be able to move and won't want to give up on home ownership.

 

[The Z Machine]

What

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Replacement cost is a big factor. If I can hire a ncg to do the work of an experienced person there's only so much we would pay an experienced person over a ncg. If the ncg sucks you just reset. Still cheaper than letting someone get 5-8% plus 20% bonus for 20 years.

Yes, but all that was true in the 1970s and 1980s, too.

5-8% would be a pretty large cost-of-living raise. Well, between 2021/22 and 2023, yeah, maybe. Most years, though, it would be a percent or two. Wouldn't necessarily have to be annual, either.

The issue is ncg salary doesn't always go up. Experienced hires do. We paid ncg less every year from like 2012-2016 and had no issues onboarding.

What is an ncg?

 

[Doug B]

ncg = new college graduate

 

[Stoneworker]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

The "free money" available to corporations from the Fed as a response to the 2008 crisis has done nothing for wages, only increased stock buybacks and higher pay for the C-suite guys.

The Fed pursued its easy money policies knowing full well how they were disproportionately benefiting the wealthy. They felt it was a small price to pay for keeping the max number of people employed.

Mpls Fed President Neel Kashkari has stated exactly that many, many times in various interviews (e.g. PBS Frontline).

 

[General Malaise]

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

It's a big problem.

same general area - different matter ...

didn't you and your group make a big copper play a few years ago? or was it some other precious metal?

even with a drop and some recovery - it's way up from where it was a few years ago.

Very close - we made a sizeable investment in physical cobalt in 2016, which is a by-product metal that's found with nickel and zinc but is largely mined from The DRC. We jumped in at $13/Lb, rode it up to $43, made some sales, helped establish a publicly traded cobalt ETF and then watched prices collapse all the way back to $13. Shame on us but cobalt is still an essential element in the chemistry of lithium-ion batteries and EVs. Today it's sitting at $18 but our enthusiasm for physical has waned. Still own quite a bit, but we're just sitting on it.

Copper is one we follow but would prefer to play it through investment in stocks that mine for it. It's a much bigger per annum market than cobalt so owning physical just isn't practical. Demand seems to remain strong which doesn't portend to a collapse in home builders or manufacturing in general. "Doctor Cooper" is essential to the continuation of industrial growth.

The element we are REALLY interested in right now is helium, followed by tin. Both are critical elements in short supply with growing applications fighting for reliable production to meet demand. If you follow the money in helium and tin, a global recession is not the conclusion one should reach, but that could change in a hurry.

 

[The Z Machine]

ncg = new college graduate

Thanks.

In my line of work, a person with 5 years experience is at least 2-3x more effective than an ncg. It takes about 18 months to really start to contribute effectively and start to be relied upon. Until then, if you have an ncg on a critical path item, expect it to be late, wrong, or incomplete.

 

[Leeroy Jenkins]

The real hit to the economy is when all the debt related to office real estate matures.

 

[Todem]

The other major problem is that people are battling inflation and things they can't afford by piling on massive amounts of credit card debt. With rates now skyrocketing, that's going to lead to a lot of problems very soon, including charge-offs, delinquencies, bankruptcies, etc and unlike the last 20 years, homeowners with massive unsecured debt loads aren't going to be able to dip into the well of refinancing their homes or taking out HELOCs as easily as they could in recent past.

Real Estate, at least around here, has been inflated for awhile. As a guy with no plans to sell anything soon, it wouldn't hurt my feelings if real estate had a 2006-2008-like correction. I really, really want to buy another investment property, or even a new primary and turn my current one into a rental. It's crazy talk right now, but in a couple of years ..... ? I can't see how the housing market doesn't crash. Cash strapped homeowners can't refi and new buyers can't even get started with the high rates and high principles. Something has to give, and it's not going to be the rates. At least not in the short term. If the economy falls into a recession, even a mild one, look out.

But yeah, it would be horrible for a lot of people.

It’ll be rates soon. Fed will pivot as the economy heads into a recession (mild or severe tbd).

I’m in the market for a home, part of me says wait for the recession, the other part says supply/demand imbalance and rate improvement is going to hold the housing market up.

Contrary to what you maybe hearing from the talking heads…..The Fed is not going to pivot this year IMO.

I would not count on that at all.

 

[Desert_Power]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

You may enjoy this older series on wages/inequality if you have not read before.

 

[Stoneworker]

The real hit to the economy is when all the debt related to office real estate matures.

I'm with you in concept, but IMO the biggest impacts from that may still be a ways off. Even though significant amounts are becoming due as we speak, banks are always extremely reticent to take back the keys on real estate and therefore often find creative ways to extend/restructure those loans.

I believe the nearer-term threat (6+ months) will be the impact of widespread tightening loan/credit standards by the banks (already in full swing). That's going to rapidly dry up liquidity across the board and grind economic growth to a halt (i.e. big-time layoffs).

 

[FairWarning]

When Disney is gearing up to lay off 15%, it’ll make for an interesting summer.

im working two jobs now and can’t keep up.

 

[parasaurolophus]

Didn't know Elon Musk posted here. How do you even measure the bolded?

"Hey, guy who works in the mailroom? What was your contribution to the company's revenue last quarter? "

A mailroom employee can't increase their value to the company after a certain amount of time, unless they leave the mailroom.

 

[Jayrod]

Jayrod + his buddy = the economy

I'm trying to keep my snark level low on my reply here....but it is going to be tough.

No, that isn't what I said, indicated, or meant....at all. I know it is just 2 anecdotes, but they are unprecedented in the last 10 years. My "buddy" works for one of the 20 largest shipping companies in the country. If he is seeing 1/3 of the volume, that has VERY broad implications. My company has seen a 50% reduction in small business orders across the board, a pool of about 250 companies throughout Southwest Missouri. So it isn't just 2 dudes. It is our respective companies and all of the customers of those 2 companies. It is fairly widespread or I wouldn't have started the thread.

 

[DallasDMac]

We put a bid on a house this weekend that was on the market right around 48 hours. I made a slightly above asking price cash offer, and was nowhere near the highest of the 12 bids! The house sold for 17% above asking. The market here for real estate is insane. Unfortunately it is mostly driven by out of staters (mostly former CA residents) paying ludicrous amount for what's available., I truly feel sorry for those trying to be first time home owners. They have zero chance in this economy.

 

[Grahamburn]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Are you in an industry where additional experience equals additional revenue?

Has the extra year you have over a cheaper less experienced employee helped the company make more money? Are you taking on more responsibility to decrease their costs elsewhere?

Employees want 3-4%+ more every year, but I doubt they’re increasing their company’s revenue equitably.

If you’ve asked for a raise and they’ve turned you down present a strong case how that bump helps them achieve their goals.

There’s only so much to go around and the expenses for running a business of any kind are outrageous right now.

People better tighten up.

Didn't know Elon Musk posted here. How do you even measure the bolded?

"Hey, guy who works in the mailroom? What was your contribution to the company's revenue last quarter? "

And yet, this person expects increases in pay and time off simply for showing up to work for a year. Why?

 

[Scoresman]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Are you in an industry where additional experience equals additional revenue?

Has the extra year you have over a cheaper less experienced employee helped the company make more money? Are you taking on more responsibility to decrease their costs elsewhere?

Employees want 3-4%+ more every year, but I doubt they’re increasing their company’s revenue equitably.

If you’ve asked for a raise and they’ve turned you down present a strong case how that bump helps them achieve their goals.

There’s only so much to go around and the expenses for running a business of any kind are outrageous right now.

People better tighten up.

Didn't know Elon Musk posted here. How do you even measure the bolded?

"Hey, guy who works in the mailroom? What was your contribution to the company's revenue last quarter? "

And yet, this person expects increases in pay and time off simply for showing up to work for a year. Why?

So wages shouldn’t ever get increased to match inflation?

Showing up to work everyday somewhere where upper management shares your opinion and attitude about the workforce would definitely be a feat worth rewarding.

 

[Grahamburn]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

Are you in an industry where additional experience equals additional revenue?

Has the extra year you have over a cheaper less experienced employee helped the company make more money? Are you taking on more responsibility to decrease their costs elsewhere?

Employees want 3-4%+ more every year, but I doubt they’re increasing their company’s revenue equitably.

If you’ve asked for a raise and they’ve turned you down present a strong case how that bump helps them achieve their goals.

There’s only so much to go around and the expenses for running a business of any kind are outrageous right now.

People better tighten up.

Didn't know Elon Musk posted here. How do you even measure the bolded?

"Hey, guy who works in the mailroom? What was your contribution to the company's revenue last quarter? "

And yet, this person expects increases in pay and time off simply for showing up to work for a year. Why?

So wages shouldn’t ever get increased to match inflation?

Showing up to work everyday somewhere where upper management shares your opinion and attitude about the workforce would definitely be a feat worth rewarding.

My views and the views of a corporation looking at their margins shrinking aren’t necessarily the same thing.

 

[Nick Vermeil]

This must be a naive question, but: Why is the glass ceiling on wages so strong?

It seems like almost all employers consider annual or biannual cost-of-living raises to be crazy talk. What made wages rise between, say, the 1970s and 2007 or so? And are similar forces just not around today?

I have no idea.

My best guess is 2 things:

1. All the other inflation. I'm a tiny business owner, and while my people were making good money before all of this and now. Going up further is hard because every other business expense outside of labor has skyrocketed. And then it's hard to raise prices too much as all consumers are already feeling the crunch.

None of that is new to this era of inflation, but it's a very hard puzzle to solve for employers. It's never just as simple as "well let's just raise prices and pay every body more".

2. Technology. Given the struggles figuring out the above, having fewer employees is always going to be an attractive option. Employers that can figure out how to use tech to elimimate payroll will do that. There are just more options to do that now than there were in the 70's/80's/90's/00's. And there's the promise of even more.

Businesses can't solve #1, and they are leaning on more tech and automation to help them figure out a solution where they don't need to solve #1.

Great post. I have cost pressure in every single area of the business and the only one I have some control over is payroll. Retention is a concern, we’ve lost 3 key employees since March and we gave decent bonuses. But people need the salaries bumped and we just can’t keep raising our prices to cover it all.

 

[KGB]

What's the unemployment rate? Still near historic lows. I'm seeing a little slowdown in Florida due to the rising interest rates, but developers are still building like crazy in Florida. Skyscrapers, warehouses, single family homes, you name it. Urban areas like Miami and Ft. Lauderdale, smaller cities like Palm Coast on the east coast and Naples on the west coast. Tourism keeps setting prepandemic records due primarily to domestic travel, as international travel is still down. The flight of capital and people from colder higher tax states could make Florida immune from the next slowdown.

I think the historic lows are because people are "employed" by uber and wallmart part time

 

[Bracie Smathers]

There's nothing stopping CEOs, Board members, or whatever combination thereof combines to control 51% of a company from voting themselves larger shares of revenue and giving nothing to the workers below...

More Perfect Union
@MorePerfectUS
The CEO of Conagra, maker of Slim-Jims and Birds Eye vegetables, admitted on an investor call that the company is using COVID as an excuse to permanently raise prices.
This quarter, the company posted profits nearly 60% higher than the same time last year.

 

[FairWarning]

There's nothing stopping CEOs, Board members, or whatever combination thereof combines to control 51% of a company from voting themselves larger shares of revenue and giving nothing to the workers below...

More Perfect Union
@MorePerfectUS
The CEO of Conagra, maker of Slim-Jims and Birds Eye vegetables, admitted on an investor call that the company is using COVID as an excuse to permanently raise prices.
This quarter, the company posted profits nearly 60% higher than the same time last year.

A lot of corporations are doing this, squeezes the little guy in the long run. I have lost half of my accounts since COVID started.

 

[McBokonon]

One of my favorite stocks and therefore a company I follow pretty closely, CDW, is down premarket because their preliminary sales came in below their own forecasts. This is a company that never misses estimates and is very well-managed. The fact that they DID miss does not bode well for companies that make software and IT hardware. (CDW sells that stuff to businesses and governments and does extensive servicing.)

Their clients are mostly small and mid-sized businesses, too, which probably means these businesses are really feeling the pinch and cutting spending wherever they can.

 

[-OZ-]

I guess it depends on industry. I’m a federal civilian, so we don’t live the cycles like y’all do. But one of the things I do is provide advice to those leaving us and going to work for DoD contractors. Our numbers have increased significantly over the past year and the offers they’ve been getting are ever increasing. So we sure haven’t seen any drawdown, but that might very well be a unique situation and defense tends to not be impacted (immediately anyway).

Housing continues to increase in price here (again, we might be somewhat insulated) but I have noticed prices falling a little at the location we’re considering buying a second home / STR. If the economy does slow big time, those STRs will be hit too.