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Keeping Up With The Waltons
More pressure on the Fed to hike rates.
That was the consensus takeaway from the December jobs repo
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The current state of affairs in the labor market is not all that unique. I moved to the Waterloo, IA area in 1974. At that time the dominant employer was Deere and Company. They employed 16,500 and payed much more than anyone else. If you were a service or small business that payed lousy wages you could hire people when Deere had no openings but you always knew that any one with skills on your employee rolls was continuously looking for an opening with the big guy. In 1982, or so, that all changed. The farm economy collapsed, Deere cut back something like 10,000 workers. Bank and S&Ls died, the population shrunk by 15%, housing prices collapsed, malls and other retailers closed and the comeback took many years. The good news was that things were so bad that my wife and I built our dream house and we were the only residential building permit issued in the county for that year. We got some great deals on everything. Meanwhile the labor market normalized and everyone could find folks to work. Anytime a major employer pays more and hires more than the average for various skill levels you will get the same look we are starting to see today. By the way, when the gorilla is a company like Deere you also see housing prices skyrocket and the proportion of two income families rises (it was 65% in 1974 where I went).
I have witnessed this in my family. A family member graduated from high school. Dropped out of college got a job in a Walmart warehouse . He has been getting $2 an hour raises every quarter. He told me because it is so hard gorythem to retain help. Most new hires don’t last a month once they realize they have to work hard. He had even told me that most new hires leave at lunch time the first day and don’t come back.