"We Track the Financial Collapse For You, so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

Safeguard your financial future. Get our crucial, daily updates.

"We Track the Financial Collapse For You,
so You'll Thrive and Profit, In Spite of It... "

Fortunes will soon be made (and saved). Subscribe for free now. Get our vital, dispatches on gold, silver and sound-money delivered to your email inbox daily.

This field is for validation purposes and should be left unchanged.

A Different Kind Of Wage Inflation Heralds This Cycle’s End

Towards the end of long expansions (this one is the longest on record) things get tight. Factories operate flat-out and start raising prices. Good workers become harder to find and companies start competing for them with higher wages and other perks.

This story is about the “other perks” which, because they don’t show up in wages aren’t directly inflationary. But they do cost money, which means they shrink corporate profits nearly as much as would a big wage increase. From today’s Wall Street Journal:

Factories Tire of Wage Wars; Give Fridays Off, Spiff Up Bathrooms

Five years ago, entry-level candidates could expect to earn nine bucks an hour at a Haworth Inc. office-furniture factory. The economy was humming, but job growth was choppy, and wage gains anemic.

Things changed, though, as average unemployment in the counties where Haworth makes products like movable walls, desk chairs and storage cabinets tumbled from 6.3% in 2014 to 3.6% last year. Today’s newcomer makes $12.50 an hour.

Pay increases have become table stakes for those doing battle in this tight labor market. Consulting firm Mercer LLC found in a February study that the No. 1 human-resources risk executives face is excessive time required to fill open positions. The median cost to recruit an employee is $1,300, according to recent data.

If you’re a hiring manager and not prepared to pull out your pocketbook, prepare to suffer. And even if you are, prepare to suffer.

“This wage war isn’t winnable,” Ann Harten, Haworth’s human-resources chief, told me at the company’s Holland, Mich., headquarters. It’s simple arithmetic: Haworth’s revenue grows at about a 5% annual clip, trailing the approximately 8% in entry-level increases it has been dishing out.

The wage wars aren’t going away. As we chatted, a construction company offered jobs paying $13.50 an hour, a $500 signing bonus, benefits and a car to drive materials around the Grand Rapids area. A farm in nearby Zeeland offered $14 an hour to load turkeys into cages during the overnight shift.

Nonetheless, Haworth thinks it can respond without going broke, and a growing number of companies agree. By shaking up shift scheduling, investing in amenities for workers or offering more flex time, companies believe that treating blue-collar workers more like white-collar counterparts may convince them to sign on or stick around.

Haworth will put this theory to the test on May 19. That’s when about 300 employees at a plant that makes laminated tops of desks and conference tables in Holland start working a new schedule that allows a three-day weekend every other week, a golden benefit for people living near Lake Michigan during the summer.

“We’ve been desperately seeking the ideal of sustainable workloads,” Ellen Kossek, a professor at Purdue University’s Krannert School of Management, said. But “people always said in manufacturing you can’t do work-life balance.”

Her research indicates a similar logic is applied to sectors like retail, logistics, hospitality or transportation. You can’t assemble John Deere combines in your home office or serve a hamburger to a hungry customer after you pick up the kids. Conventional wisdom tells us the only way to improve your lot at a job that strictly adheres to a time clock is to demand a raise.

Workers have different ideas. Homebase, a San Francisco company helping local business manage time sheets, hiring and payroll, polled 2,000 hourly employees about important factors in deciding where to work. Pay ranked near the top, but respondents gave about equal weight to a positive work environment and schedules that fit their lifestyle.

Haworth has been experimenting with friendlier shifts, Ms. Harten said, as a way to attract workers as unemployment sank. The company found it worth its while.

Big changes aren’t simple or smooth. Haworth’s scheme includes 20 different shift patterns and a variety of pay variations, adding complexity when most firms seek simplicity. For example, one pattern has employees working a 36-hour week—three 12-hour shifts on Sunday, Tuesday and Wednesday. Then, they get the rest of the week off, before working four 12-hour shifts, Monday through Thursday, the next week and receiving eight hours of overtime pay. Rinse, repeat.

The trend towards more reasonable working environments in blue-collar industries is both a good thing and long overdue. But companies aren’t doing this because they want to. The alternative is an empty factory floor.

Flexible schedules and nicer bathrooms are expensive and their spread is an indication of how tight labor markets have become.

In other words, late-cycle dynamics are now in play, as wages and better-but-more-costly working conditions produce lower corporate profits which then collide with record high stock prices and soaring debt (both of which are also signs of late-cycle excess) to bring the expansion to an end. After ten straight years of debt-fueled growth, this shouldn’t surprise anyone.


Emigrate While You Still Can

11 thoughts on "A Different Kind Of Wage Inflation Heralds This Cycle’s End"

  1. Thanks to the real estate market the real cost of hiring someone to live anywhere with in commuting distance of a job is the price of a home divided by equal to or less than 6,000 man hours. Big coin per hour indeed.

    1. Just one yr earlier I decided to just leave my old work and I am very thrilled now…. I began doing business via the internet, for a firm I came across on the internet, for a number of hour or so each day, and I bring home way more than I did on my office workplace job… My pay-check for prior 30 days was 9,000 $… The best thing regarding this is the extra free moments I got for my little kids…and that the single requirement for this job is basic typing and access to broadband… I am also capable to put in quality time with my relatives or buddies and also take care of my little kids as well as going on a family vacation with them very consistently. Don’t avoid this chance and be sure to act quick. Test it out, what it’s about… xnarecipe.and-you.de

    2. When I was working for my earlier employer I was on the search for real work-at-home opportunities where I could receive decent money and also at the same time have sufficient time to commit with my family and offcourse I am not in search of scams that misguide you to make you very very rich in simply few days or more. Ultimately I stumbled upon a great opportunity and I can’t tell you how happy I am nowadays. The best things about working from internet are: Your Office Can Be Anywhere- you’re not tied to your house. You can take proper care of your work on a trip, enjoying the wonderful outdoors , or maybe enjoying your favorite band at a live show. And you can additionally save on food stuff bills since you’ll very easily be able to whip up your own lunch and coffee when you work-at-home. Your Routine Can Be Your Own: Lots of the work that can be done remotely nowadays can also be executed on a very flexible schedule. If you do have to work particular hours, you’re certain to still have some break time—time you can utilize however you’d like! Even if you have just 10 mins, you can do something which just wouldn’t be possible in a traditional office: bust those samba moves, enjoy a few tunes on your guitar, or even take a refreshing power nap. You’re guaranteed to come back feeling much more energized than you would after 10-20 minutes at your computer desk surfing Facebook or twitter. You Can Learn More and Become More Self-dependent:Because you don’t have colleagues just a few feet away or a tech team 1 floor down, you’ll find yourself building the skill of looking for your own answers and becoming more proactive to find what exactly you need on your own. Of course you can still ask questions and get help if you need to. However, a lot of the time, you can do a Google search, download and read a free guide. Here’s the means through which to begin => urladda.com/vDy

    3. Make very nearly $17000 weekly. I left my job after doing the job for the same employer for a long time. When I was being employed by my previous company I was in search of reputable work at home opportunities in which I can acquire decent earnings as well as simultaneously have sufficient time to put in with my family and offcourse I was not seeking scams that misguide you to make you very rich in simply few days or more. Ultimately I came across a terrific opportunity and I can’t tell you how delightful I am nowadays. The advantages of doing work from internet are: Your Office Can Be Anywhere- you’re not bound to your house. That doesn’t mean your only other location will be the coffee shop around the corner. You can take proper care of your work while traveling, having fun in the great out-doors , or even listening to your favorite band at a live show. Here’s how you can start out—> nor.si/00tcJ

    4. Long hours job at the office , handling all the irritating work load. The promotion and appreciation you always wanted. A family gateway you constantly desires for. So, you have the possibility to accomplish almost all and more. An on line profession which ensure that you get anything you ever desired. Liberty to get the job done from anywhere , the salary you always wanted and a valuable time that you can invest with your beloved , You will capable of doing everything. Therefore, do the job towards your dream. A web-based opportunity which makes accomplish all of your desires. Get the job done small amount of hours daily and make lot of cash , approximately $27000 each week. This opportunity really wonderful. So get set go and explore >>> crawnsit.a-loch.de

  2. Time to ask “Will we destroy the culture that built this country just for material things?”

    1. Agreed. Diversity doesn’t help build a strong sense of community. It is just one more thing that frays the social fabric. Where there is a strong sense of community people can enact a “people before things” ethic.

      1. I actually gain close to $6,000-$8,000 every month via internet. It is indeed enough to quite easily replace my earlier workplace salary, specifically thinking about I only just work almost 20 hrs weekly from home.I ended up losing my job after doing work for the same employer for several years, I wanted very trusted source of income. I was not interested in packages that miguide you to make you millionnare within few days you can find online. Those are all sort of ponzi mlm marketing plan in which you have to first create leads then sell something to friends or relatives or anyone to make sure they will be in your team. The most exciting part of working over the internet is that I am always home with the children and also enjoy time with family on different beaches of the world. Honestly,it is easier than you would think, all you need to do is fill out a simple form to receive front line access to the Home Profit System. The guidelines are very easy, you need not have to be a computer whiz, but you must be aware how to use the internet. It is as simple as being on Instagram. Here’s the most effective way to start ==> revealedmudflow.will-dich.eu

  3. Well Trump will flood the labor market with Illegals and suppress those wages.
    More flooding in this year than ever before.

  4. Productivity has been increasing exponentially. Automation, robots on the assembly lines, computer spread sheets and accounting programs rather than accountants doing a lot of data entry Scanning bar codes for inventories.

    Now warehouses are also becoming highly automated, and some warehouses will have robots rather than employees accessing materials, packing, mailing labels.

    Even farm work is becomign more automated, with machines doing harvesting rather than people doing stoop labor.

    Now robots are also coming on the work site to do construction work such as demolition and repetitive jobs like bricklaying.

    Some construction tasks are going to be assembled in the factor, taken to work site and assembled like an erector set with the electrical and plumbing work done in a factory rather than out on the construction site.

    With increases in productivity, increases in wages need to follow suit.

    Business do exploit workers. Uber drivers are going on strike, at least in some cases.

    Probably working doesn’t even pay for their vehicle. It’s a great way to extract money for the wage earner. The system will probably eventually collapse, either due to introduction of self driving cars, or else a competitive business model, perhaps a cooperative for drivers using similar ride hailing technology. The business is making a lot of money now, but actually probably not a sustainable business model. It will expand business exponentially, go public, the IPO making billions, then the company will move on to greener pastures.

    1. “Productivity has been increasing exponentially”
      Sorry I have to challenge this assumption. Here’s a graph:

      Perhaps you may be resting on specific labour areas where perhaps robots are more prevalent and yield a higher productivity locally. But overall, across the western world, the big problem is lack of productivity and economists are lost to describe why this is so.

Leave a Reply

Your email address will not be published. Required fields are marked *

Zero Fees Gold IRA

Contact Us

Send Us Your Video Links

Send us a message.
We value your feedback,
questions and advice.

Cut through the clutter and mainstream media noise. Get free, concise dispatches on vital news, videos and opinions. Delivered to Your email inbox daily. You’ll never miss a critical story, guaranteed.

This field is for validation purposes and should be left unchanged.