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Can the West’s perplexing employment miracle continue?

economist.com

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Re: Can the West’s perplexing employment miracle continue?

#261

Post by acuozzo »

gabythenerd wrote: post #30
sillybov3456 wrote: post #27

I think it can but I wouldn't call it a miracle. The "boomer bulge" in the workforce is in the process of entering retirement en masse. The generations replacing them are smaller. This will contribute to higher inflation (lots of money that was sitting in real estate and 401ks being withdrawn to compete over a limited supply of basic goods and services like healthcare), and also to lower unemployment. It doesn't nece…

> I promise it is quite possible for a nation to banish unemployment but still have a majority of people struggling to get by. You can always end up having a bunch of low paying jobs that don't allow for a good standard of living. Everyone will be employed but I'm sure no one will end up enjoying that.

> You can always end up having a bunch of low paying jobs that don't allow for a good standard of living.

Indeed, but this will gradually kill all but the most essential industries. "Consumers" won't have the funds to "consume" and the 21M US citizens with a net worth of $1M or more won't pick up the slack. 21M people don't purchase 15 Gameboys each when they go to the store.

If it gets bad enough, then the risk is that mutual aid networks will enable "opting out" en masse like during the depression: tents and washboards by the river.

Once things at that point, getting the opt-outs back to play the game requires big promises ala The New Deal.

Re: Can the West’s perplexing employment miracle continue?

#262

Post by gadders »

snowwrestler wrote: post #259
gadders wrote: post #210

Earlier quoted context omitted.

Immigration is a method of wage suppression. The issue is that the businesses don't want to cut into their profits to raise wages to attract native/local workers.

Immigration can be used to suppress wages, if there are way more workers than jobs. The other end of that balance produces high inflation, as employers have to continuously raise wages to recruit from competitors, and continuously raise prices to cover increasing wage expense.

Maybe a rule that says "Companies can only hire non-native workers if their profit is below XX%." (I realise this is a game-able statistic so would need to be a bit more complicated than that).

Of course, the other option that companies can take is to increase productivity by investing in automation, training etc so each worker provides more output to justify their higher cost.

Re: Can the West’s perplexing employment miracle continue?

#263

Post by marcosdumay »

ajross wrote: post #124
marcosdumay wrote: post #89

Earlier quoted context omitted.

Still "elevated inflation disrupts the purchase power of most of the population" is a perfectly real phenomenon. It's not an "specific population", unless you think "almost everyone" is "specific". And yes, the disruption tends to pass after the inflation goes away. But none of that makes the argument specious.

"Elevated inflation reduces the impact of credit card and mortgage debt" is an equally real phenomenon, though. Without numbers your argument is specious. There are winners and losers. Whose losing and by how much? I'll give you a few losers: retirees on fixed incomes, and investment employees working on commission. And a few winners: homeowners, and young professionals with significant credit debt. There are lots of…

> "Elevated inflation reduces the impact of credit card and mortgage debt" is an equally real phenomenon, though.

Yes, and it has a different temporal behavior from the impact on the purchase power. The same person can be affected by both.

As a rule, inflation infuriates people because almost everyone jut wakes up some day and discover they are much poorer than they used to be. You can't dismiss this by pointing that their net-worth improved. (But yes, the net-worth of a lot of people improves.)

Re: Can the West’s perplexing employment miracle continue?

#264

Post by anonymouskimmer »

roflyear wrote: post #237
anonymouskimmer wrote: post #139

Earlier quoted context omitted.

> Have you personally already purchased your first home? Without family assistance, it would be absolutely brutal and untenable for my children to enter into in this domain at present. I haven't, but I'm not a DINK, and have never broken six figures. The right credit union will make a home loan with no money down, which might help your kids and their spouses. I'm currently paying $3k/month for rent. Zillow says that…

Hardly possible in my state! $350k gets you a fixer upper 2br 1bath

That's basically what I'm paying $3k rent for here. Sounds nice. Buying a house like that outright is probably in the $500k+ range here.

Re: Can the West’s perplexing employment miracle continue?

#265

Post by HDThoreaun »

gadders wrote: post #210
snowwrestler wrote: post #95

Earlier quoted context omitted.

I agree with most of this, but birth rates are not relevant. Note that Japan has had a very low fertility rate for years but still has folks for all those make-work jobs. In the U.S. what changed over the past 5 years is legal immigration: it was drastically cut and has not been restored. So as citizens and existing long-term residents pursue better jobs or time at home, there are far fewer new residents eager for lo…

Immigration is a method of wage suppression. The issue is that the businesses don't want to cut into their profits to raise wages to attract native/local workers.

The issue is people aren't willing to pay for services when they have to employ native workers with high salary expectations. If childcare can't find cheap workers the price will go up and many people will decide to quit and raise their kids themselves.

Re: Can the West’s perplexing employment miracle continue?

#267

Post by roflyear »

anonymouskimmer wrote: post #264
roflyear wrote: post #237

Earlier quoted context omitted.

Hardly possible in my state! $350k gets you a fixer upper 2br 1bath

That's basically what I'm paying $3k rent for here. Sounds nice. Buying a house like that outright is probably in the $500k+ range here.

Yeah it sucks.

Re: Can the West’s perplexing employment miracle continue?

#268

Post by pclmulqdq »

red-iron-pine wrote: post #241
pclmulqdq wrote: post #68

Earlier quoted context omitted.

Here's a theory for you: the increased cost of capital doesn't cause people to stop seeking or loaning out capital, it just directs that capital toward shorter-term projects. A bridge or a skyscraper pays off a lot faster than a startup.

How long do you think it takes to build a skyscraper? Cuz it ain't short. Just he zoning, funding, and pre-project tasks can take years.

Well, that's why basically nobody builds them in places like New York or SF. Even so, I think you're underestimating how long it takes to make it to a net profit as a startup. Even in one of these cities, the planning-to-profit timeline is under 5 years.

Even 432 Park Avenue, the new huge luxury tower in NYC, took 3 years. A random startup takes a lot longer to get to the money.

Re: Can the West’s perplexing employment miracle continue?

#270

Post by frumper »

nightski wrote: post #204
selcuka wrote: post #125

Earlier quoted context omitted.

> Is the norm really that home loans are unaffordable even to first-time-buyer DINKs with good-to-decent six figure jobs who just want a place to live? The home loans are unaffordable because the house prices are too high. The median house price in 1989 was around $95K ($230K adjusted for inflation). Today it's about $400K.

Are houses today the same as houses in 1989? Seems like you'd need a much more detailed analysis than median price to compare apples to apples.

Those same homes you bought in 1989 are still around. Home construction at the time it was built has little to do with home prices.
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