When a month ago we basked in the glow of what we dubbed the "Waiter and Bartender Recovery", highlighting that while the US is about to see the best performing, highest paid job sector in the last decade, i.e., those in the energy field...
... get the axe as a result of the shale collapse and the "secret" US-Arab deal to make Putin beg, even if tens if not hundreds of thousands of well-paid (not retail, leisure, hospitality and temp workers), are about to get a pink slip as a result, one other job sector is seeing unprecedented gains, namely the US "waiter and bartender industry"...
... whose total workers are soon set to surpass the entire US manufacturing sector...
... little did we know that some would not grasp this was pure sarcasm. One place this was clearly missed is the WSJ, which in a front-page article today praises the "Wages Rise at Restaurants as Labor Market Tightens." No really, to the WSJ "wage" increases for minimum-wage line cooks and burger flippers is what is now considered the sign of the recovery.
We are not kidding. Some excerpts:
Wage growth is breaking out in an unexpected corner of the U.S. economy: the nation’s restaurants and bars.
Many restaurant owners are now scrambling to hire and retain workers, a potential precursor to widespread wage gains if it signals diminished slack in the labor market.
They are also considering hiring "smart restaurant" minimum wage-crushing, burger-flipping robots, ordering tablets and implementing countless other automation processes which assures thousands of fewer carbon-based lifeforms will serve your fast food sandwich in the years to come, as those jobs that are paid the least of all for the simple reason that they provides virtually zero value, and are thus expendable... but don't let that get in the way of a good narrative.
So back to the lovely bedtime story of the minimum-wage bartender and waiter recovery:
Food-service employment has surged since the recession ended nearly six years ago, growing twice as fast as overall payrolls. But those gains had largely failed to translate into better wages in the sector, until recently. Restaurant wages zoomed up to an annualized pace of more than 3% in the second half of last year from below a 1.5% pace in the first half of 2013, according to the Labor Department. Private-sector wages across the overall economy have grown at about a 2% pace for the past five years.
Oh wait, that's actually part of the reality. Let's go back to the mythical world where bartender job gains are a leading indicator to soaring wages.
Driving the brisker wage growth are a number of factors, including a higher minimum wage in many states, falling unemployment and stronger demand for meals outside the home, fueled by growing disposable incomes. Other sectors also may be feeling pressure. Big retailers such as Wal-Mart Stores Inc. and TJX Cos., the parent company of T.J. Maxx, for example, recently announced raises.
In past economic cycles, low-skilled workers have been among the last to see a pickup in wage growth. But the latest gains suggest a consumer-driven recovery could draw more Americans back into the job market and further bolster consumption, a key driver of economic expansion.
Nobody mention the imminent mass energy layoffs, please, and the hundreds of thousands of high-paying jobs that are about to bit the dust: jobs where one energy contractor makes as much as 10 minimu wage line cooks. Just... be quiet.
Meanwhile, in the waiter "industry"...
“A lot of new [establishments] are popping up and those restaurants want experienced people,” said Patrice Rice, chief executive of Patrice & Associates, a restaurant staffing firm. “There is fierce competition.” Some of her clients are offering significant raises, paid vacation time and even free meals for spouses to attract workers. A national pizza franchise recently paid her $5,000 per position to place managers. Her fees are up 25% from a year ago.
Sure, why not: go get that Ivy league degree because there is "fierce competition" for experienced waiters. One doesn't know if to laugh or cry at this hallmark of the weakest US "recovery" in history (which according to many others is merely the longest depression in US history, swept under the rug of $3 trillion in Fed excess reserves).
And then, inexplicably, just as things were getting good, as seen by the following quote...
“After a few hard years, customers are treating themselves again,” said Jennifer Durham, vice president of franchise development at Checkers Drive-In Restaurants Inc. Higher sales led the burger chain to add 20 stores last year, hire hundreds of employees and raise its wages—with wage growth twice as fast in 2014 as it was in 2013.
... reality crept in.
Outsized growth in restaurant wages might not be an entirely positive sign for the broader economy. In the previous two cycles, pay gains for restaurant workers peaked very late in the expansion, after broader wage growth plateaued. If escalating restaurant wages mark the end, rather than start, of wider wage growth, that would limit the economy’s ability to accelerate.
Actually, it would also mean the acceleration of robotization of said waiter jobs, and the result will be even more mass layoffs of these lowest paid workers, many of whom are unionized, resulting in even more backlash against big corporations, more strikes, more sit ins, and many more angry minimum-wage workers unable to pay off their jobs.
It also means something else, and far worse: according to a recent Pew survey of 7000 households titled “Americans’ Financial Security: Perception and Reality”, barely one-quarter (26%) of Americans have some notion of retirement in which they plan to stop working altogether when they reach retirement age. As MarketWatch summarizes, when asked about their retirement plans, 21% said they are never planning to retire, while 53% anticipate doing something else, including working at a different job.
Roughly 10,000 baby boomers reach retirement every day, so it’s not unexpected that so many of them are either not willing or able to stop work altogether, says Andrew Meadows, a San Francisco-based producer of “Broken Eggs,” a documentary about retirement. He spent seven weeks traveling around the U.S. and interviewed over 100 people about why they haven’t saved enough money. “You tend to get a negative tone when you talk to people about retirement,” he says.
Even Pew has trouble spinning the data, on one hand eager to report that "Americans are increasingly optimistic about their own finances and the economy", while at the same time admitting that "In an apparent contradiction, most do not feel financially secure." Maybe they haven't heard about the "waiter and bartender recovery"?
In fact, it appears that "most Americans" can't stop worrying about any aspect of their financial lives, starting with lack of savings, not having any discretionary income, paying bills and pretty much everything else:
So why are three-quarters of Americans doomed to working until the day they die? Simple: debt.
One reason fewer people plan to retire is that more families with older breadwinners have debt. The percentage of families with a head of household ages 55 or older that carried debt increased to 65.4% in 2013 from 63.4% in 2010, according to “Debt of the Elderly and Near Elderly, 1992-2013”, released last month by the Employee Benefit Research Institute. Furthermore, the percentage of these families with debt payments greater than 40% of income—a traditional threshold measure of debt load trouble—increased to 9.2% in 2013 from 8.5% in 2010.
The amount of debt shouldered by all families has soared over the last two decades, mainly due to mortgage debt, says Craig Copeland, author of the EBRI report. The median debt level of all indebted families with heads aged 55 and over hit $47,900 in 2013, up from $17,879 in 1992. However, the percentage of families with debt also decreased significantly as the head of household of the family aged: Some 78.5% of families with heads of household ages 55 to 64 held debt in 2013 versus 41.3% of those with heads aged 75 or older.
Of course, every global depression has a silver lining, and here too MarketWatch tries to spin reality:
For some, not retiring may not be such a bad thing. “The idea of just resting is not something a lot people think about anymore,” Meadows says. “It wouldn’t surprise me if those who never plan to retire were the youngest people surveyed. It’s impossible for many people to gauge what their life would be like 30 or 40 years from now.” People are also living longer and staying healthier longer, he adds. “Many people think, ‘I don’t want my life to be over by 65. Maybe I can do that dream job I’ve always thought about.’”
Yes, you can surely have that dream job after you turn 65. Judging by the record number of old Americans, those 55 and over, in the labor force, it is only after you turn 65 these days that one's career prospects really pick up.
The punchline, of course, whether to the real, surreal or purely sarcastic aspects of the above narrative, is that all of this is happening with the stock market at all time highs, at levels which even current and former Fed officials admit the S&P is overvalued. What happens to the "waiter and bartender recovery" after the Fed finally loses control of the most manipulated and massaged "market" in US history, and the S&P suddenly finds itself bidless, the NYSE decides to halt all sales, and all those massive paper profits are nothing but a vague memory.
In our humble opinion, that would be a far more interesting line of investigation for the WSJ or any other mass media to pursue, instead of praising a "barender recovery" thanks to which 75% of Americans don't even dare to retire any more. That, or at least consider the other side of the wage question: what happens to gross US disposable income now that the shale boom has busted, and countless high paying jobs end up competing for the same fast food positions that suddenly are all the rage. Then again, we give the "mass media" the usua 6-9 months before they figure out what is really the key topic for the US economy...