Life is filled with dichotomies. One of the dichotomies facing American businesses right now is the high unemployment rate coupled with the inability to find workers. One would assume that if there were jobs on offer, people would come out looking for work. That has not happened.
US Jobs
Donald Trump had presided over the best jobs market in a long long time. George Bush the last republican president handed an absolute shit-show to Obama before he departed. The 2008 recession was just getting started when Obama stepped into office in Jan 2008.
Obama handed over an economy that was in great shape to Trump and thankfully Trump was only focused on building the wall and female reproductive rights (read supreme court). As a result, the tailwinds carried the economy all the way till COVID, that is.
The lockdown precipitated huge job losses and also furloughs (Unpaid leave). Restaurants, Cafes, Hotels, Amusement Parks, all businesses that had a physical interface with the customer laid of people like crazy. Then, the COVID situation got worse because nobody would listen to the president and drink bottles full of Clorox. His wisdom fell on deaf ears.
Biden moved in – pushed the vaccine agenda and America is open to business again.
But…
The number of corporate calls with at least one mention of “labor shortage” is surging, according to transcripts collected by Sentieo, a financial research company. Up until 2021, there had been fewer than 60 mentions per quarter of the phrase “labor shortage.” In the second quarter of 2021, “labor shortage” was referenced 136 times.
“You certainly can’t have a conversation with any business person across America, certainly, [and] I think fast coming across the globe, without labor shortages and tightness in markets coming up,” said Marie Robinson, executive vice president and chief supply chain officer of food-distributing giant Sysco, on a May 20 analyst call.
Source: Quartz
There are a few things at play over here. There has been a huge push to try and raise minimum wages in the United States to $15 per hour. Currently, it is stuck at $7.25 per hour.
Source: Wikipedia
The green line represents the actual minimum wage as advertised. Which seems to have gone from $1 per hour to $7.25 per hour. The blue one represents the inflation-adjusted purchasing power as per 2020 dollars. It is obvious, being part of the labour force in 1970 was far more rewarding than in 2020.
This is precisely what makes those obnoxious CEO salaries possible. They are pinching 10 dollars each hour from those serving at the frontline and putting it in their pockets. That is how Jeff Bezos earns $149,353 a minute.
At $7.25 an hour, working 10 hours a day, 25 days a month (Sunday off), one would make $1812.5.
The Republicans have been quick to place the blame at the Democrats’ doorstep. The $2 Trillion aid package sent out a $1400 cheque to the poor, which Biden enacted as soon as becoming President. First of all, if $1400 is keep people away from jobs, you really need to consider how much you are paying them. In large cities in America, rent alone can be $500 – $1000 in poorer neighbourhoods.
But there is more than that!
Three million Americans retired during the first six months of the coronavirus pandemic in the US, and that could make returning to full employment in the US more challenging.
The US labor market is like a complicated, sophisticated house party: It’s not just one-in, one-out at the main entrance. People are switching rooms, popping in the side-door, falling out the windows and sneaking in again through the back. Americans have been quitting at the highest rate in decades as the pandemic recession spurred them reevaluate what they want from their employers, even as record-high job openings entice them with new opportunities.
If more workers are demonstrating the leverage they now hold by quitting, many are also showing their independence from the labor market by retiring. During the pandemic, the share of Americans in retirement jumped from about 18.5% to 19.5%:
Source: Quartz
America is ageing. The median age was 30 in 1980, it has slowly crept up to 39 by 2021. Youngsters are unwilling to start families because it is very expensive and the disparities they have inherited make it harder and harder for them to cover the costs.
Several immigrants, especially the undocumented ones who would have worked the seven dollar jobs most probably left the country during the lockdown, unable to cover costs in the US.
Most importantly, these people who work low wages were the first ones to be exposed to COVID and also died by the hoards. They also were in no position to afford care for themselves. There is bound to be fear about exposing themselves once more.
Also, irrespective, if the businesses are desperately looking for people, this is the time to ask for more. This is when they can hope to get ahead. So many are probably just playing hardball.
As a result,
“As you know, we are experiencing one of the greatest hiring challenges in the history of DFW Airport,” wrote Ken Buchanan, executive vice president of revenue management and customer experience at DFW airport, in a May 27 letter to concessionaires. “As we prepare for a busy summer, please continue to practice DFW Airport’s high standards of hiring operations and refrain from soliciting employees from other DFW operations (‘poaching’).”
Source: Quartz
Anti-poaching agreements are illegal. Apple and Google settled their case by paying $415 Million back in 2015.
Space Race
The term Space Race was coined during the cold was to describe the competition that was unleashed between Russia and the US to reach space. The fear at the time was that whoever had control of space, would be able to look into another country and control them just by having the capability to attack them at will.
Russia armed some German documents built their rockets. At the same time, Americans ran ‘Operation Paperclip‘ and smuggled all of the German scientists waiting to go to trial at Nuremberg to America to build their rockets.
Today, capitalists who have squeezed so much money out of people, as cited above, are taking that money to engage in some ego wars by going to space.
Jeff Bezos announced at the end of last month that he was going to go to space on July 20th with his brother on the Blue Origin spacecraft.
Richard Branson who has been working on Virgin Galactic since 2003 announced that he would be going to space on 11th July using a craft that is first flow under a plane to the upper reaches of the atmosphere before being released to launch to about 60 km above the earth.
Not only are they waving it at each other, but they are also trying to turn it into a mission to habilitate their image and get as much PR as they can.
Sirisha Bandla, a Telugu-origin woman, is all set to realise her childhood dream of going to space. With Virgin Galactic launching its crewed test spaceflight on July 11, Bandla will be the backbone of this operation and accompany company’s founder Richard Branson to space.
Source: New Indian Express
and
An 82-year-old woman who has spent six decades trying to reach space will join Jeff Bezos on the first human flight by his space company later this month.
Wally Funk, who underwent training in the 1960s, will become the oldest person to ever fly to space.
Mr Bezos has invited Ms Funk as an “honoured guest” and shared video on Instagram of him telling her the news.
She will join the Amazon founder, his brother Mark and a mystery person who paid $28m (£20m) at auction for a seat.
Source: BBC
Rich people. 🤦🏽♂️
Corporate Tax
Three issues back, I had explained the tax deal being entered into by the G7 and what that meant for the rest of the countries. I had ended that piece by saying – let the intimidations begin.
Turns out 130 countries have already fallen in line.
Officials from 130 countries, including G20 nations and OECD members, agreed on Thursday in Germany’s business hub of Frankfurt to the broad outlines for an overhaul of rules for taxing international companies.
“The principles underlying the solution vindicate India‘s stand,” the government said in a statement.
It listed advantages such as a greater share of profits for the markets, consideration of demand-side factors in profit allocation and tax rules to stop treaty shopping.
Source: The Wire
Given that India is not a tax haven and we “try” to tax corporations at a rate that is double what this agreement requires, I do not even know what this means for India. Also, given that the Prime Minister was casually joking about India’s commitment to “defending democracy, freedom of thought and liberty”, I don’t even know how serious they really are.
Also
The American oil & gas industry delivers one thing without fail – Catastrophe.
