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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?

#171

Post by IAmGraydon »

metadat wrote: post #105
bluGill wrote: post #20

Earlier quoted context omitted.

This isn't a high interest rate ecconomy, this is normal interest rates. Rates have been absurdily low for a while so you may not remember it, but history provides a record.

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? (not an investment property) Currently the mortgage rates are the highest ever since 1989. 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 prese…

Upper middle class starts at $156,000. They can’t afford a home at that income level?

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

#173

Post by eru »

happyjack wrote: post #165

I think the honest reality is that the game is rigged and dependent on a perpetual 7% growth type cycle. We have indebted future generations so much that it's going to crumble or the next 200 years of western civilization will be held to debt service. Millennials in western countries aren't having kids, and are stuck paying student loans (and other debt) while a 2 bedroom home in some suburbs that doesn't have a rott…

A debt contract always has a debtor and a creditor.

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

#174

Post by diceduckmonk »

astrange wrote: post #170
diceduckmonk wrote: post #153

Credibility of the author is out the door when they are using strawman comparisons with Japan (Tokyo) indicative of someone who spent a week there as a tourist and had to shoehorn this experience in. It's like a foreigner traveling to America, and by that I mean LA or NYC, and talk about how fashionable people in SoHo were or how vibrant Time Square is, meanwhile 99% of Americans aren't in this way of life. I'm almos…

> Not having a permanent place to be during the 9-5PM, whether that is school or work, is a badge of shame in Japanese society. …in some social classes. What are the freeters and retirees doing? Night workers? > This is one reason why, quantitatively atleast, Japan has one of the lowest productivity rates of developer countries. Everyone has to appear working diligently, regardless if they've past the point of produc…

> Night workers?

Do you mean nightshift workers or mizu shobai workers? If you are talking about nightshift workers, then that's just a matter of semantics (9-5PM == full time employment, even if that means two part time jobs ).

As for mizu shobai workers, I think would it be disingenous to suggest this is somehow more honorable and respected by society and older generations/parents than saying being a certified professional. Sure, the male hosts in Shinjuku are making multiples more than a FANG employee in the states, but part of the pay is the judgement by societal at large. Yes, in some social classes being a suit-wearing office worker with a stable income is respected, and in Kabukicho circles drinking with lonely and emotionally vulnerable clients until you cough up blood is respected.

Japan's most recent revision to the visas allowed tech workers who make over 20 million yen (~$150k usd) a year to skip the regular lines at the airport, and use the line reserved for government diplomats and ambassadors. The other requirement is that you have a masters degree. Point being, there is a strong emphasis on pedigree in Japan.

https://www.japantimes.co.jp/news/2023/02/17/national/new-vi...

> retirees

Retired. But if you're talking about elderly people, Japan also has a larger percentage of the elderly working. https://www.jil.go.jp/english/jli/documents/2022/039-04.pdf

> freeters

A subset of this will wear it as a badge of honor, but another subset can't get hired. One reason for not being able to get hired is that Japanese companies want to hirer young, straight out of school, and invest in the long term. Freeters are excluded from this cohort, and also because employers feel this is a red flag.

Even from Wikipedia, the negative perception from Mass Media and society is clearly laid out, so bringing up freeters and attitudes towards them only furthers my claims. https://en.wikipedia.org/wiki/Freeter. The ones that are subsidized by their parents are referred to as "Parasite Singles" by the Japanese.

> This has been changing, it's not as true of newer companies and startups.

Not as true, but still true.

White collar workers still have to clock in and clock out.

I will believe this when people Wordpress dominance starts trending down and people stop holding meetups in every city. There are even consultancies for Squarespace. Meanwhile, less developed countries in the region such as Indonesia has an order of magnitude healthier startup ecosystem, including more unicorns. Banks and traditional industries have begun their DX (digital transformation) but it's long way to go when the most foreigner friendly bank's website goes down for a day of maintanence every month, and require strange login rules such as usernames having to have no more than 3 consecutives alphabetic or numbers. Meanwhile, passwords can't have special characters.

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

#175

Post by teekert »

ethbr0 wrote: post #16
mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

> to a high interest one We're at 4.50–4.75, no? That's not low, but it's not high either. https://en.m.wikipedia.org/wiki/Federal_funds_rate#Historica...

For reference, my mortgage from 13 years ago was 4.85%, the one I got 6 months ago was 4.25%, about 1.5 years ago we got 2%. When I was born in the early 80's, my parents were doing 12%. Of course, housing prices adapt so that banks always extract a nice, steady amount from the people. Even more nowadays, when there's more to extract because more women started working. More to the daycare, more to the banks, the American (and European now as well) dream of barely making it!

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

#176

Post by hgomersall »

opportune wrote: post #42

I think what we’re seeing is that the NAIRU (non-accelerating inflation rate of unemployment) model continues to be correct in some cases but fall apart in others. This model has traditionally been based more on empirical data than a strong theoretical basis (although anybody could tell you that is reasonable for low unemployment to lead to wage inflation) and, most notably, is an aggregate measure. Certainly you can…

Economics has the tools to post hoc explain anything. It's amazing!

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

#177

Post by nohuck13 »

hayksaakian wrote: post #155
jaggederest wrote: post #117

Earlier quoted context omitted.

To parallel the other comment with a wiki leak, the short version is the risk-free interest rate (e.g. treasury bills) minus the rate of inflation. So if you have 6% inflation, and the return on e.g. the 1 year t bill is 4.75%, you have -1.25% "real" interest rates, because your money at the end of your year of investment will be worth ~1.23% less than it was at the beginning of the year. I'm not sure I completely ag…

does that really work? inflation is a backward looking metric and interest rates are forward looking. this is just about making a prediction of the future. if you believe that inflation will decrease then your guaranteed rate of return from interest rates is great. if you believe that inflation will increase or stay the same, then yes we have "negative interest rates" I don't think it's reasonable to call it a "real"…

"Real" is a term of art for something inflation-adjusted, as opposed to nominal. That's it. Scare quotes and metaphysical discussion of realness are inferring deeper meaning that isn't there. Of course you can have expectations about real interest rates: if expected real and nominal interest rates are about equal, you'd tend to feel that keeping your money under your mattress is about as attractive as keeping your money in treasuries.

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

#178

Post by epolanski »

happyjack wrote: post #165

I think the honest reality is that the game is rigged and dependent on a perpetual 7% growth type cycle. We have indebted future generations so much that it's going to crumble or the next 200 years of western civilization will be held to debt service. Millennials in western countries aren't having kids, and are stuck paying student loans (and other debt) while a 2 bedroom home in some suburbs that doesn't have a rott…

Student loans are an American thing.

I paid 500€s/year to graduate in chemistry in Italy and have not incurred any debt.

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

#179

Post by satellite2 »

ethbr0 wrote: post #16
mkl95 wrote: post #9

We have gone from a zero interest rate economy to a high interest one within months. Whoever claims to accurately predict what's going to happen in the next few years is talking out of their ass. We know inflation should start decreasing within a year or so, but you cannot predict how millions of people will react to suddenly not being able to afford stuff.

> to a high interest one We're at 4.50–4.75, no? That's not low, but it's not high either. https://en.m.wikipedia.org/wiki/Federal_funds_rate#Historica...

Interpreting interest rates linearly is a fallacy.

As we have seen the asset markets have adapted to low rates by increasing assets prices. Thus an increase in interest rates to what historically has been low does not offer a great way to analyze its effect.

The question we should rather answer is by how much the assets will lose in value and what are the options of people depending on this value (retirement, disability funds etc...) and for people indebted, did they forecast and are they able to stomach an increase in interest spending of roughly an order of magnitude?

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

#180

Post by actionfromafar »

midasuni wrote: post #161
sdenton4 wrote: post #157

Earlier quoted context omitted.

Absolutely. The mainstream economists are wringing their hands over full employment and rising wages, the first time in decades that we might see the middle class grow, because production isn't sufficiently meeting demand. We should be producing more stuff - especially housing - instead of trying to keep people from earning more.

We’ve had unaffordable housing in the U.K. for a generation and haven’t built because of nimbys. Housing costs thus increase to suck all income. It’s a great way to return to feudalism.

At least you guys can have the bona fide real feudalism. We others have to pretend the Lords are just accomplished citizens, only a bit more equal than others.
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