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What Happens To High-Wage Jobs Next?
Yesterday, during his conference call, in the context of the collapse in the US shale industry, DoubleLine's Jeff Gundlach said something that we first noted over a month ago: that "all of the job growth in the (economic) recovery can be attributed to the shale renaissance." He was likely looking at the following chart from a Manhattan-Institute report:
And while he added that if low oil prices remain, the U.S. could see a wave of bankruptcies from some (or most) leveraged energy companies which we also observed two months, there is a different and perhaps far more important tangent to the above chart.
Wages.
Because recall that now that the unemployment rate is an artificially low 5.6% thanks to a record number of Americans out of the labor force (all that would need to happen for the jobless rate to double is for 8 million of the 93 million American not in the labor force to return to it for whatever reason), the one key indicator that the Fed is focusing on, is average weekly compensation. And as those who followed last Friday's jobs report recall all too well, in December nominal wages saw their biggest monthly plunge in years.
So our question is this: if indeed the shale boom is now turning to bust, and if indeed the vast majority of jobs created were thanks to the shale revolution (which is about to go in reverse), what happens to the primary source of high-paying jobs: the energy sector?
Before you answer, take a look at the following chart, courtesy of the Dallas Fed.
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$15hr fast food jobs? At least until Robby the burger flipper shows up.
Let's see...oil up 6% today. Watch how quick gasoline goes up. Probably already being raised.
We fired some folks..........
Pretty soon po people will be swimming the RioGrand the other way to steal some beaner jobs.
Oh wait, steal is raccist
When you are on the losing end of a bet, try to hide behind "jobs".
These "jobs" were created by malinvestment, which is bad, right?
If it's all about jobs, let's print money and hand it to people to dig ditches and then fill them in @ 30/hour.
Note that this scheme doesn't allow for parasite speculators, so I suppose it might be the dreaded "socialism".
"$15hr fast food jobs?"
Most fast food employees would drool over a $15/hr wage. Where are these?
Back to school, proles.
learn to go analog in an increasing digital world
The most important thing I have learned from the affirmative action criminals is that you don't have to be the best, you just have to eliminate everybody better than you. Remember this as you watch the charts depicting all sectors and entities and test scores going down in flames...
Well, they've had it coming. Grunt labor shouldn't be paid $20-$30-$40/hour anyway...and if it weren't for social welfare payments, minimum wages and union "recognition" laws - all enforced by the government gun - those characters would have found A LOT of cheaper competition out there bidding for their jobs, even before this...
Hope they didn't spend it all on RVs, quad bikes, hot tubs, cell phones for every kid, alcohol and trips to Mexico...
they should be paid a living wage. And by the way, you're not too bright.
Remove all minimum wages! But redefine the homicide rules and lighten sentencing guidelines.
Strange, isn't it, how the free market is doing my dirty work for me...! Sortng out who getsa job and at what salary.
The oil patchers got too expensive and now they're losing their (overpaid) jobs as a result...
Define "Living wage" please?
Grunt labor has to be paid $20-$30-$40/hour in order for the skims to work.
Better to pay desk jockeys millions to speculate.
Bribes to government employees are cash under the table, and don't necessarily add to the economy.
You might recalculate. $20/hr is below median. Assuming some of these jobs are a step or two above grunt they should pay median anywhere in the country, and in a boom town for a profitable industry they can easily pay more.
You've just gotten accustomed to the slave wage regime we've been in increasingly the last twenty years or so, real wages for the 99% going down every year.
In their defense, at least an RV is mobile, and alcohol can be used for barter.
Surprised your post got so many down votes. I would venture they are either in denial, or ....in denial. Take your pick.
High-Wage Jobs? Given the salary levels of AAPL system programmers, I assumed "High-Wage" was the middle name of Steve, their former chairman ...
Is it me or are those charts from like 2-3 years ago? Someone show me a current chart of sectors where jobs are being created.
High-Wage Jobs? What is this, a joke?
Hmmm, I wonder what could possibly get the price of oil to go back up?
Maybe a war in the middle east. Yeah, that would do it. I wouldn't be suprised if they dug up old Cheney for this one.
A couple of well placed generic cruise missiles to some refineries in Saudi Arabia ought to balance out the dip in oil prices.
Or maybe because Russia just cut off more than half the natural gas supply through the Ukraine to the rest of Europe.
Only in a perfect world....given his heart issues.
Is Mooktada Al Solder still running around in Shiite Iraq?
BHO could just call him up, and say "Mookie old buddy old pal, how about stirring things up a little for old times sake?"
"You get more money, I get more money... It's a win win!"
Henny Penny got hit by the falling Yenny. Meanwhile Loosey Goosey put her head in a Euro Noosey. Turkey Lurkey ate tainted Yuan Beef Jerky with Foxy Shy-Loxy who financed the whole deal with stolen bitcoins bitchez.
Earth to Google? Please don't start charging me for my email accounts.
Burger flippers serve mostly their own socio-economic group. Look at the prices in the grocery stores for even basic fruits, vegitables, staples and decent meat. I make home made pizza with all fresh foods as far as I can. The pizza I serve costs three times this fast food Pizza Hut stuff. Naturally the poor are going to feed their kids on Pizza Hut. I buy nice chuck roast and grind it for hamburgers, bakery buns and all the fixings, a home burger costs 3 times what the McDonalds does, naturally Mom is gonn stuff her kids faces with Big Macs. Same, even down to a bowl of chile, i buy and grind chuck roast, nice fresh oinions, celery, tomato, beans, the lot. A bowl of my Chile cost again, 3 times what these chain restaurants will feed you on. I see the poor using fast food for it's cheapness. Real decent foods from the store bot seperatly will cost much more than the fast food non-food products. The poor not only flip burgers, they feed that shit to their familes on account of cheap price. Ever wonder what goes into two pizzas for $10.99? Since I am a scratch cook, I can easily figure what goes into pizza at 1/4 the price of high quality pizza from scratch.
LOL. Fast Food is not cheap.
I can easily cook a meal with no processed/packaged foods for a fraction of the cost of fast food.
Grinding your own burger is expensive, but better.
No pink slime. No grissle. Only as much fat as you want.
Your 3x sounds a little high JB, the Mrs. usually figures 2x or less when she cooks and compares, but perhaps food is a bit less around here? I get, for instance, organic grass fed beef for $4.75 pound, less than the corn fed cattle lot shit in the stores.
With that said, our kids rarely go to the Dr. for problems, and I am convinced...rather I know that it's becuase we eat much healthier than many others do. Does it cost more? Sure as hell does, but then we are not taking time off of work to tote kids to the med clinic, missing work to care for sick kids....the problem I see is that most folks can't see the long term benefits. Yes, it is extra work, no doubt..but we are to the point where we can hardly stand to eat out somewhere unless it's a place we know uses real foodstuffs. Call us food snobs, but it never fails, the minute someone here eats fast food or other crap, we end up feeling like ass the next day.
Do you buy wholesale in volume ?
I was with you until you tried to include beans in chili.
The swill the poor eat is part necessity, part scam. I shop almost exclusively at the lowest-price grocery store in my town, which also has the lowest price on some local organic foods and imports from Europe, a growing part of their business. But overall I see people loading up on cheap swill, especially the ones who need the good stuff most, those with children. The ones with cars sometimes come is a family and fill two large carts. There is a steady stream of people at the closest bus stop with as many bags full as they can handle.
The problem is not just cost, but ignorance and misinformation. We have been sold an astonishing bill of goods about the superiority of vegetable oil over animal fat, the superiority of a high-carb wheat-heavy diet to a high-fat diet, the safety of the additives they put in our food, the equivalence of farm-raised fish to wild-caught, the supposed health value of soy products, the equivalence of fructose and sucrose, the list goes on. And don't get me started on the lies and ignorance about GMO technology and chemical farming. When I have this conversation with my friends (virtually all, like me, in the burger-flippers socioeconomic category, I get a strong resonance, but our survival wages and income are based on swill. The natural working of the economy seems to drive us to that level.
I just got out of the hospital, and while it was overall a surprisingly pleasant experience the official ignorance about nutrition was on full display. The diet was loaded with high-fructose corn syrup, wheat, "sugar" and vegetable oil, low in animal fat, virtually devoid of sodium and probably of any other essential salt, and not a trace of cultured or fermented food. The ignorance of the medical staff on nutritional matters was as far as I could tell absolute.
Our best hope lies in the movement to grow food locally, organize and use urban gardens and patronize local farmers' markets. There will be a crisis when the money fails however. A means to move large quantities of food from other states will have to be organized quickly. Food will be power and control. Local and cooperative efforts to secure it will undoubtedly have to be defended against efforts of the state to monopolize the food distribution. Our most important weapon for survival will be knowledge, and the time to spread that is now.
I have come to trust Dr. Mercola, www.mercola.com, as a main source of nutrition information. Not completely - he has become more of a self-promoter since beginning to market his own line of products, and his ignorance of physics gives me pause - but he seems to be looking at the data and scientific evidence with a serious but skeptical eye, he clearly has a large staff and circle of trusted associates, and he shows a deep understanding of the role of agribusiness in the unfolding disaster. I would welcome other folks' insights and suggestions on this.
Excellent point.
In normal times, the money that comes out of the oil patch would raise other sectors, but today, the money that is saved by cheaper gas and energy goes to consumption, and all of that money goes to China, the US economy will be hosed bigtime.
Don't fret, FEDGOV will just print moar and re-initialize UE for another 4 or 5 years...and everyone gets a free EBT card. Happy daze are here again. Then FEDGOV can take up the slack and double the employment rolls of DHS. See? There's lots and lots FEDGOV can do.
i use 35 percent food grade hydrogen peroxide to cure high blood pressure diabetes and all sorts of illnesses. dont belive me look it up smarty pants, ben around for more then 100 years
I get my advice from Captain Morgan.
Look out. Captain Morgan works on commission.
Oh boy the strippers are coming back to LA.
Law school enrollments will start to climb again.