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On this episode of First Ring Daily, chips are not coming soon, the economy is weird, and drywall is the future.
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wright_is
Premium Member<p>Germany also has a lot of problems with wood. We have had drought summers for the last 3 – 4 years, problems with bark beetle and other countries have been buying up all the lumber that is available.</p><p><br></p><p>Now, local carpenters are having to import more expensive wood from elsewhere.</p>
crunchyfrog
<p>I have to believe that this chip shortage will have smoothed out by the end of summer, at least to a degree. There’s just too much demand riding on big tech not to get this sorted out.</p>
srrlx1986
<p>Its not just big tech, Auto companies are getting hit hard Ford has 10s of thousands of cars sitting. The only major Manufacture not having issues is Toyota. They stock piled the necessary chips. I hope auto manufacturers learn from this, they probably won’t because that would hurt bottom line. </p>
jbinaz
<p>A huge problem with the pandemic relief funds is that people were given an extra $300/week in unemployment. Say you’re working a job that pays $10/hour (short-order cook), and you work 40 hours/week, that’s $400. Unemployment doesn’t usually pay the full amount of what you made, so let’s say you collect 25% of your regular earnings in unemployment: $100. Add in the $300 pandemic relief payment, you’re now making $400/week.</p><p><br></p><p>So, you now have a choice: go to work at a job that requires a lot of physical work, and earn $400/week, or sit at home, claim unemployment, and make $400. You’ve disincentivized work.</p><p><br></p><p>Take the same example, but instead put the pay at $15/hour, because that seems to be what people are pushing for. At that rate, you now earn $600/week. If you collect 25% of your earnings on unemployment, that’s $150. Add in the $300 "bonus" from the pandemic rescue plan, you’re now making $450 per/week. There is probably a significant, non-zero number of people who’d rather stay home for $450 than work for $600. And that’s assuming you collect 25% of your earnings when collecting unemployment. Bump it to 50% in this example, and now you’d make exactly the same on unemployment as you do working. No incentive to work.</p><p><br></p><p>And I understand there are people who are afraid to go back to work. But, there are free vaccines available, and all the studies have shown that you’re not likely to get Covid, and even if you do, you’re not likely to get nearly sick enough to be hospitalized, and that you’re not likely to spread it, either.</p><p><br></p><p>We need to accommodate for those who can’t get the vaccine and for some reason can’t go back to work, but giving those people who can work the same amount of money to stay home is bad policy.</p><p><br></p>
stvbnsn
Premium Member<p>Blech politics, if you can’t figure out how to get employees to work at your crappy job you probably aren’t actually that great a businessman. If as soon as the plebs are a little bit comfortable they refuse to work for you, you should probably be doing some self re-examination and figure out how you created such a crappy place to work. </p>
crunchyfrog
<p>There might be a little more to it than just that.</p>
jbinaz
<p>Blech, politics? It’s reality. If you want to argue about the minimum wage, fine. But right now, businesses are having trouble getting people to come back to work because they can get paid more by the government than having to work.</p><p><br></p><p>And define a "crappy" job? All work is honorable. Some is a LOT harder than others, but the reality is that some jobs just don’t require skilled labor, and they will get paid less.</p><p><br></p><p>Of course, I’m an "evil" conservative who believes the real minimum wage is zero, as Thomas Sowell argues so well, so take what I </p>
stvbnsn
Premium Member<p>No I meant the argument that people are making more money "sitting at home" than they would otherwise is an argument that has been politicized. We have a real life demonstration of why our minimum wage is actually way too low, and that we’ve been subsidizing a ton of businesses that haven’t in reality been paying their employees a livable wage. If it took only $2,400 (now only $1,200) a month to make people comfortable enough that they aren’t coming back to work for you, that’s a very low amount of money by the way, and that’s all it took for them to abandon all these jobs. The problem isn’t the people who were staffing these jobs, the problem is the business environment that treated and wants to treat employees as disposable resources. </p><p><br></p><p>And I understand this is just the way the economy was set up, and they’re trying to cope, and that’s ok, but the smart ones will figure it out, and the ones that can’t evolve will go by the wayside. Creative destruction, it sucks but sometimes your business just can’t run because it can’t be profitable. It doesn’t mean you shouldn’t try again and start something new, it just means that you can’t operate the way you used to.</p>
jbinaz
<p>But my problem is that the government is interfering with the system as the system is returning to normal in many parts of the country. There’s room for debate on whether some states are opening too fast, but that’s a different argument.</p><p><br></p><p>And maybe the system does suck – and there’s room for reasonable discussion about whether it’s broken and if so, how to fix it – but right now, in the system we have, businesses are competing with the government. The additional unemployment benefits implemented during the early phases of Covid are now making it harder for businesses to find workers as they start to move towards fully open because they can get more by staying at home than working. And that is because of the government’s additional money.</p>
jbinaz
<p>And it’s not a businesses concern to pay someone a livable wage. Their concern is to pay someone to do a job at what they think it’s worth, and someone is willing to accept to do that job. It’s a private contract between two entities – a person and a business.</p>
stvbnsn
Premium Member<p>Well turns out that the employee side of the equation finally is able to say, I disagree that that’s a fair wage for doing this job. The local ABC affiliate here in NW Ohio did a story some weeks ago about the "labor shortage" and it included quotes from some bar/restaurant owners who said they needed to tiptoe around their employees to get them to do tasks. They said they needed to say please and thank you, or the remaining employees would walk. If you think needing to ask your employees to do something and adding please is tiptoeing, you’re just proving the point that employers have regarded employees as disposable.</p><p><br></p><p>I’d be willing to wager that even after the additional pandemic unemployment payments stop many of these businesses will still have a lot of trouble finding labor, Amazon is opening "hubs" all over and are starting pay above $15 an hour. Basically overnight the prevailing wage has been increased and we didn’t even need to pass a law to do it.</p>
jbinaz
<p>When somebody is paying me, they don’t need to say "please" or "thank you" – they’re my boss, and they’re paying me to do what I ask. Now, I don’t want to be barked at, and things can be stated in a way that’s not respectful without saying please, such as "I need you to…" or "Can you…"</p><p><br></p><p>And if Amazon wants to pay people $15/hour, that is absolutely their right. And that may raise wages without passing laws, which is how the market should work.</p><p><br></p><p>But that doesn’t change the fact that in the current situation, it’s the government interference in the market that’s messing with the market. It’s not market pressure as in your example of Amazon paying more, it’s governmental pressure. And when people can get paid more to stay at home and do nothing, they will. The fact employers can’t get people to show up to work is proof of that.</p><p><br></p><p>And what happens when the places that can’t get enough people to show up to work and businesses close? Now, that business owner has lost his job, along with the people he employed who did show up and work. Sure, it’s creative destruction, but due to the government’s intervention, not his own choices.</p>
Paul Thurrott
Premium MemberRestaurant owners didn’t create the system we have today. They just have to deal with it.
jbinaz
<p>They do have to deal with the system as it is, but the government is interfering with the system by granting additional unemployment money, making it hard for businesses to compete.</p><p><br></p><p>Plenty of room for respectful debate on whether the system needs changing (i.e., a higher minimum wage, changes in how restaurants pay their workers), but the government money is affecting the system. Maybe that’s the goal, but it’s making it difficult for business owners who can’t find workers. People would rather stay home than work for the same amount, or even slightly less money. Human nature.</p>
Paul Thurrott
Premium MemberMy wife’s income nose-dived last year and she had to get unemployment for several months. (We just did our taxes and it was a huge shortfall from the previous year.) So I find it hard to complain about COVID-era benefits going to those who need it most. Certainly more than we/she did/does.
Regardless, that is not the number one issue here. What’s number one? Fear of COVID, which totally makes sense. Number two? Those jobs just don’t pay enough, especially when you factor in number one. If you’re going to argue for lowering the unemployment benefits that people are getting, you need to explain why those people should put themselves at great risk during a public health emergency for less money.
jbinaz
<p>I don’t begrudge unemployment for anyone who lost their job at all. I even understand how extra benefits were a good thing.</p><p><br></p><p>I think that logic was good for the early stages of the pandemic when we didn’t know how transmissible it was and how to mitigate it. But, we have free vaccines and everyone over 16 in the U.S. is eligible now. I just looked, and I can get an appointment at any Walmart near me for <em>today. </em>And I realize that probably isn’t true for everyone, but I also checked zip codes in NYC, Detroit, and San Francisco, and there’s availability. Given that vaccines a) <span style="color: rgb(0, 0, 0);">reduce the transmissibility, b) </span>make it harder to get a breakthrough case, and c) make it almost completely non-deadly if you do get a breakthrough case, it gets harder to justify continuing the extra benefits. Of course, we need to allow for those who for whatever reason can’t get the vaccine (allergy, health condition, etc.), but most people don’t fall into that category.</p><p><br></p><p>At this point, if you don’t have any reason to not get the vaccine, that’s most likely by choice (at least here in the U.S.).</p><p><br></p><p>To your point about those jobs not paying enough, it may be true, perhaps even more due to the fear of Covid (vaccines should alleviate that fear), but that’s a different debate. At some point, we have to stop incentivizing people to stay at home, and I think we’re reaching that point (albeit at different rates in different parts of the country).</p>
Paul Thurrott
Premium MemberYeah, at some point. But the pandemic rages on and these people would be put on the front line with little pay. That makes even less sense than letting them stay home. This is a global good issue.
wright_is
Premium Member<p>Over here, the money was used to help businesses keep their payroll going, even if they were closed down. The money was supposed to cover up-to the first 2000€ of the normal salary, the company could voluntarily make up the remainder.</p><p><br></p><p>That helped keep a lot of businesses going, although many complained that the relief money was slow to come through. The government also had to battle with fraud.</p><p><br></p><p>But it kept unemployment down to nearly normal levels.</p>
darkgrayknight
Premium Member<p>Here in Cheyenne, Wyoming, there are restaurants offering $14/$15 per hour to hire people (this includes the chains like McDonald’s as well as local restaurants (which are offering more). I thoroughly agree with minimum wage should be $0, as increasing the minimum wage is just shifting the cost of living over time and removes entry level jobs as well as the highest paying jobs. Just like the need for restaurant workers (and hospitality jobs) has increased the pay for these jobs, the market needs can self-adjust without government interference.</p>
jbinaz
<p>Blech…hit post too soon.</p><p><br></p><p>"…so take what I say with a grain of salt."</p>