Economic Slowdown?

People often focus on the wrong stats when they judge the economy.

I hear a lot of arguments saying headline unemployment rate is low so the economy must be robust. This is very misleading. We are better off using stats like labor force participation rate which is actually at decade low.

94% of jobs created between 2005-2015 were temp gig workers or contractor jobs without benefits. Real wages has been flat or even declining.
 
The broader problem is labor share of income has been falling for decades now. Asset owners are keeping an ever larger share of national income given asset prices have far outpaced wage growth.

And don?t anyone give me the b/s about average American ?owning? equity assets through 401ks . That?s peanuts and nowhere near compensates from the massive decline in bargaining power since the 90s .

But I do think the pendulum is about to swing he other way , even if slightly . Watch corporate profit margins - they are about to shock you ... (in a negative way) .
 
Irvinecommuter said:
I also agree with AI hitting white collar jobs...just look at tax preparation or low level attorney work...you simply do not need a real person to do those things any more.
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It's interesting you say this because all the tax software companies now advertise how you can talk to real people as an advantage to using their software. We had to do that a few years ago because we sold a rental and we had to recapture depreciation on our filing.

I'm still of the opinion that people will prefer to talk to people when the automation fails or the situation is more complex (this just happened to me when I was trying to make a phone order at Corner Bakery, the computer couldn't understand "Extra Cheese").
 
irvinehomeowner said:
Irvinecommuter said:
I also agree with AI hitting white collar jobs...just look at tax preparation or low level attorney work...you simply do not need a real person to do those things any more.
Click to expand...

It's interesting you say this because all the tax software companies now advertise how you can talk to real people as an advantage to using their software. We had to do that a few years ago because we sold a rental and we had to recapture depreciation on our filing.

I'm still of the opinion that people will prefer to talk to people when the automation fails or the situation is more complex (this just happened to me when I was trying to make a phone order at Corner Bakery, the computer couldn't understand "Extra Cheese").
Click to expand...

The Software allows you to fire many tax preparers and replace (or keep) with a lot lower number of employees who assist with questions, so you come out ahead. The software for HR block allowed it to scale. Services business can rarely scale efficiently because to serve more customers you need more people (consulting businesses, big 4, etc). So HR block is/has moving from more of a services company to more of a software company that provides services. Intuit/TurboTax did this from the get go.
 
qwerty said:
irvinehomeowner said:
Irvinecommuter said:
I also agree with AI hitting white collar jobs...just look at tax preparation or low level attorney work...you simply do not need a real person to do those things any more.
Click to expand...

It's interesting you say this because all the tax software companies now advertise how you can talk to real people as an advantage to using their software. We had to do that a few years ago because we sold a rental and we had to recapture depreciation on our filing.

I'm still of the opinion that people will prefer to talk to people when the automation fails or the situation is more complex (this just happened to me when I was trying to make a phone order at Corner Bakery, the computer couldn't understand "Extra Cheese").
Click to expand...

The Software allows you to fire many tax preparers and replace (or keep) with a lot lower number of employees who assist with questions, so you come out ahead. The software for HR block allowed it to scale. Services business can rarely scale efficiently because to serve more customers you need more people (consulting businesses, big 4, etc). So HR block is/has moving from more of a services company to more of a software company that provides services. Intuit/TurboTax did this from the get go.
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That's exactly right...it's just extra sources of revenue now...It cost more to do access a live person and so they can package the software differently.  It's like how airlines are selling luggage fees and seat choices fee..."Hey not every one need to take luggage!"

The bottom line is that you are replacing professional (tax preparers and lawyers) with cheaper service workers that are centralized and beholden to the employers.  Those workers often just reference manuals or FAQs that the company create and may have a few professional acting as managers/QC people  just in case.  Those workers are also seasonal so companies no longer have to keep them on the payroll or offer them benefits. 

AI/robots don't always have to eliminate jobs...they just have to reduce the human element required to do it.  This is why manufacturing jobs are not coming back...you need like one person to manage the production line filled with robots...rather than 10 or 15 people.
 
Kenkoko said:
qwerty said:
They will adapt by going on unemployment and us paying even more taxes to support all of them.
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I think this is the most likely outcome and frankly a bit worse. Not just unemployment.  Substance abuse, suicides, crimes will all go up. Will cost us more than just unemployment benefits.

The worst part about all this to me is that the "us" paying for it won't even include the real winners of AI/automation. Big tech companies like Amazon will make continue to rake in record profits and pay zero federal taxes.
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Totally agree...Yang actually talked about that and how we need to add a VAT or some sort of surcharge on use of AI/robots.
 
qwerty said:
irvinehomeowner said:
Irvinecommuter said:
I also agree with AI hitting white collar jobs...just look at tax preparation or low level attorney work...you simply do not need a real person to do those things any more.
Click to expand...

It's interesting you say this because all the tax software companies now advertise how you can talk to real people as an advantage to using their software. We had to do that a few years ago because we sold a rental and we had to recapture depreciation on our filing.

I'm still of the opinion that people will prefer to talk to people when the automation fails or the situation is more complex (this just happened to me when I was trying to make a phone order at Corner Bakery, the computer couldn't understand "Extra Cheese").
Click to expand...

The Software allows you to fire many tax preparers and replace (or keep) with a lot lower number of employees who assist with questions, so you come out ahead. The software for HR block allowed it to scale. Services business can rarely scale efficiently because to serve more customers you need more people (consulting businesses, big 4, etc). So HR block is/has moving from more of a services company to more of a software company that provides services. Intuit/TurboTax did this from the get go.
Click to expand...

From what I remember, Intuit didn't have live instant access support in the beginning. They added it later because HR Block had it, that was actually the reason why I bought HR's TaxCut over TurboTax years ago.

But I agree, technology can reduce jobs but doesn't it also create other ones? And it's not an instant cut, it's gradual which will allow society and economy to adjust.
 
irvinehomeowner said:
But I agree, technology can reduce jobs but doesn't it also create other ones? And it's not an instant cut, it's gradual which will allow society and economy to adjust.
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First problem is the ratio.  The number of old jobs destroyed to the numbers of new jobs created.  Experts have it currently between 10 to 1 and 100 to 1. As the technology improves over time, the replacement ratio will get even worse.

Second problem is that people who had their job automated have close to zero chance of accessing the new job being created by automation/ AI.

30% of American malls are set to close within the next 4 years. Thanks to Amazon.

The average retail worker is a 39 year old woman with a high school diploma. Her job is getting replaced. How is it that she will have access to the new jobs created by AI/Automation ? The new jobs created are software engineers, logistic managers that her skill set are not qualified for.
 
fortune11 said:
The broader problem is labor share of income has been falling for decades now. Asset owners are keeping an ever larger share of national income given asset prices have far outpaced wage growth.

And don?t anyone give me the b/s about average American ?owning? equity assets through 401ks . That?s peanuts and nowhere near compensates from the massive decline in bargaining power since the 90s .

But I do think the pendulum is about to swing he other way , even if slightly . Watch corporate profit margins - they are about to shock you ... (in a negative way) .
Click to expand...

The numbers do back you up.

50% American own 0 stock. The top 20% of Americans own 92% of stocks.   

 
Just in case any of you thought we hadn?t reached peak stupid or still believe that somewhere the emergency brakes would kick in ...

BREAKING: Trump says he will nominate Herman Cain to Federal Reserve Board
 
fortune11 said:
Just in case any of you thought we hadn?t reached peak stupid or still believe that somewhere the emergency brakes would kick in ...

BREAKING: Trump says he will nominate Herman Cain to Federal Reserve Board
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?Politico Article: Romney dings Herman Cain for Trump?s Fed

If Herman Cain were on the Fed, you?d know the interest rate would soon be 9-9-9,? Romney said in an interview on Thursday afternoon.

Cain, who served on the board of the Kansas City Federal Reserve, would make for an unusually partisan Federal Reserve Board pick. He ran against Romney in the 2012 race for the GOP presidential nomination ? touting his ?9-9-9? economic plan ? before being accused of inappropriate behavior and dropping out of the race. He also founded a pro-Trump super PAC.
https://www.google.com/amp/s/www.po...04/romney-herman-cain-federal-reserve-1256260
 
He is more than qualified by education, resume and real economic experience.

Cain grew up in Georgia and graduated from Morehouse College in 1967 with a Bachelor of Science in Mathematics. Cain pursued graduate studies at Purdue University and graduated with a Master of Science in Computer Science in 1971,while also working full-time for the U.S. Department of the Navy.

Cain was chairman of the Federal Reserve Bank of Kansas City Omaha Branch from 1989 to 1991. He was deputy chairman, from 1992 to 1994, and chairman, from 1995 to 1996, of the Federal Reserve Bank of Kansas City. In 1995, Cain was appointed by Newt Gingrich to the Kemp Commission,and was a senior economic adviser to the Bob Dole presidential campaign.

CEO of the National Restaurant Association,in which he served as president and CEO from 1996 to 1999.
 
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morekaos said:
He is more than qualified by education, resume and real economic experience.

Cain grew up in Georgia and graduated from Morehouse College in 1967 with a Bachelor of Science in Mathematics. Cain pursued graduate studies at Purdue University and graduated with a Master of Science in Computer Science in 1971,while also working full-time for the U.S. Department of the Navy.

Cain was chairman of the Federal Reserve Bank of Kansas City Omaha Branch from 1989 to 1991. He was deputy chairman, from 1992 to 1994, and chairman, from 1995 to 1996, of the Federal Reserve Bank of Kansas City. In 1995, Cain was appointed by Newt Gingrich to the Kemp Commission,and was a senior economic adviser to the Bob Dole presidential campaign.

CEO of the National Restaurant Association,in which he served as president and CEO from 1996 to 1999.
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forget all his fed experience, npr says he's just a former pizza executive.  obviously a dumbo!  #defundnpr

Trump Considers Herman Cain For Federal Reserve Board

President Trump plans to nominate former pizza executive and GOP presidential hopeful Herman Cain to the Federal Reserve Board. The news comes as the Labor Department releases its monthly jobs report.

https://www.npr.org/2019/04/05/710169574/trump-considers-herman-cain-for-federal-reserve-board
Click to expand...
 
morekaos said:
He is more than qualified by education, resume and real economic experience.

Cain grew up in Georgia and graduated from Morehouse College in 1967 with a Bachelor of Science in Mathematics. Cain pursued graduate studies at Purdue University and graduated with a Master of Science in Computer Science in 1971,while also working full-time for the U.S. Department of the Navy.

Cain was chairman of the Federal Reserve Bank of Kansas City Omaha Branch from 1989 to 1991. He was deputy chairman, from 1992 to 1994, and chairman, from 1995 to 1996, of the Federal Reserve Bank of Kansas City. In 1995, Cain was appointed by Newt Gingrich to the Kemp Commission,and was a senior economic adviser to the Bob Dole presidential campaign.

CEO of the National Restaurant Association,in which he served as president and CEO from 1996 to 1999.
Click to expand...

I know his background and he definitely has a great resume for a business person but his macro economic views are ridiculous...like gold standard and somehow growth does not lead to inflation.  His 9-9-9 plan was also terrible.

Of course, the other choice seems to be Stephen Moore, who is even worse.
 
Irvinecommuter said:
morekaos said:
He is more than qualified by education, resume and real economic experience.

Cain grew up in Georgia and graduated from Morehouse College in 1967 with a Bachelor of Science in Mathematics. Cain pursued graduate studies at Purdue University and graduated with a Master of Science in Computer Science in 1971,while also working full-time for the U.S. Department of the Navy.

Cain was chairman of the Federal Reserve Bank of Kansas City Omaha Branch from 1989 to 1991. He was deputy chairman, from 1992 to 1994, and chairman, from 1995 to 1996, of the Federal Reserve Bank of Kansas City. In 1995, Cain was appointed by Newt Gingrich to the Kemp Commission,and was a senior economic adviser to the Bob Dole presidential campaign.

CEO of the National Restaurant Association,in which he served as president and CEO from 1996 to 1999.
Click to expand...

I know his background and he definitely has a great resume for a business person but his macro economic views are ridiculous...like gold standard and somehow growth does not lead to inflation.  His 9-9-9 plan was also terrible.

Of course, the other choice seems to be Stephen Moore, who is even worse.
Click to expand...

The pizza man I mean pizza executive?  ;)
 
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