General A thread to discuss and follow the incoming inflation bomb

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Hauler said:
You can say it's not an issue all you want.
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who said its not an issue? We are talking cause -- is it market forces or unemployment the main driver of labor shortage.

Hauler said:
here's an Arby's I drive by every day that is only open via drive-thru. The sign on the door says "walk-ins closed due to not enough staff"

They've had a "now hiring" message on their sign since October.
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Are you paying a Arbys wages? I would expect a place that typically pays minimum wage to have a hard time hiring when there are non-skilled jobs across the board paying 15+/hr at hotels and what not.
94% of people are working. That's only a 2-3% difference in our max employment expectations. You might question the unemployment numbers, but they are apples to apples to the 3-4% unemployment pre-pandemic in their math.
 
Hauler

Hauler

Been fallin so long it's like gravitys gone
Feb 3, 2016
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Splinty said:
who said its not an issue? We are talking cause -- is it market forces or unemployment the main driver of labor shortage.
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Don't know. I don't think there's a single cause, but people being paid to not work is certainly a factor.


Splinty said:
Are you paying a Arbys wages? I would expect a place that typically pays minimum wage to have a hard time hiring when there are non-skilled jobs
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Of course not. And I will have to see what they are paying, but most of the fast food joints around here are at $15. It's not minimum wage. That will all be automated soon anyway.


Splinty said:
You might question the unemployment numbers, but they are apples to apples to the 3-4% unemployment pre-pandemic in their math.
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I've been a hiring manager in some form or another for 20+ years and I've never seen it this bad. It feels like the unemployment number is 0% because nobody is looking for a job - which circles me back to why the need for the extra $300 unemployment benefit?

The only thing left to do is to continue to raise the hourly rates, but that eventually hits the end user with higher prices...and that falls right in line with the subject of this thread.
 
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But are unemployment payments the culprit here? “It doesn’t stand up to scrutiny as a real driving factor,” said Heidi Shierholz, senior economist and director of policy at the Economic Policy Institute. “There is basically a lever employers can pull if they truly are facing a labor shortage of some kind: They can pay more to either attract new workers into the labor force or poach workers who are already in the labor force.”

Shierholz noted there have yet to be signs of significant wage growth in the industries where workers are purported to be in severe shortage, and that previous data during the pandemic and the 2008 economic recession demonstrated that expanded unemployment benefits had minimal to no impact on whether workers returned to work.

A Yale University report published in July 2020 found there was no correlation between the expanded unemployment benefits and whether workers returned to their jobs. More recently, the number of Americans relying on unemployment benefits continues to decline significantly even as extended benefits remain in place.

Rather than raise wages, some restaurant chains have offered hiring bonuses to try to incentivize workers to fill open positions. The sandwich chain Jimmy John’s has been offering $100 sign-on bonuses for new employee recruits.

For many Americans relying on unemployment insurance, the low wages in the food service industry aren’t a viable replacement for the job they lost.
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April Marit worked at a Jimmy John’s location in Florida for five years before she recently quit due to the working conditions she experienced throughout the pandemic, and the low pay.

As an assistant manager, Marit worked throughout 2020 making just $9.50 an hour, and received a pay increase to $11 an hour in March 2021, she said, after several employees quit.

A few months into the pandemic, Marit noted demand started to increase and understaffing became the norm. Some customers were aggressive in ignoring COVID-19 safety protocols.

“I stayed because the store had no other staff. New employees would come in, work for a day or two, and then never show back up—and I don’t blame them,” said Marit. “Nobody deserves to be treated the way that customer service staff is these days. Not even for a $15 an hour minimum wage. I sure as heck wouldn’t go back to Jimmy John’s for that, and I loved my job before this.”

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For many Americans still relying on unemployment insurance, the low wages in the food service industry aren’t a viable replacement for the job they lost in another industry where pay is much higher.

“I’ll admit I’m being slightly picky on where I work. I want a good job, but the jobs I’ve been applying for, I’ve not even been getting callbacks,” said Josh Kelly of Seattle, who lost his job in insurance at the onset of the pandemic.

The fast-food and restaurant industry was already experiencing the highest turnover rates of any U.S. industry before the pandemic, when restaurant employers also struggled to find workers while avoiding pay raises to do so. According to the Bureau of Labor Statistics, the average wage for workers in food preparation and serving-related occupations was $13.30 an hour in May 2020, and for fast-food workers the average was $11.80 an hour, among the lowest hourly wages of any industry.
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liquid cash = demand = more dollars chasing same product = inflation? That would cause your price increases and labor shortage.

Hauler said:
The only thing left to do is to continue to raise the hourly rates, but that eventually hits the end user with higher prices...and that falls right in line with the subject of this thread.
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Well yeah. That's what I'm getting at. Everybody's offering more competitive wages at the exact same minute.

Yeah see above. I'm not convinced it's the unemployment checks rather than the massive liquidity across all programs driving increased demand all at once.
 
Hauler

Hauler

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Splinty said:
I'm not convinced it's the unemployment checks rather than the massive liquidity across all programs driving increased demand all at once.
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I have no idea. I'm not an economist. I just play one on an MMA forum. ?

I just know it sucks right now.
 
kneeblock

kneeblock

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Apr 18, 2015
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Hauler said:
I don't know that I've heard it at all in the media. Haven't been paying much attention to the talking heads. This is my own personal opinion.

I'm in manufacturing and construction. With that, I do a lot of buying of supplies so I'm in contact with people from all sorts of industries (lumber, windows, doors, adhesives, metal plates, rebar, concrete, heavy equipment, etc)

I don't know what the unemployment rate truly is vs what is being reported, but I can tell you this with 100% certainty - there isn't a single company that I deal with that isn't struggling to find workers. And I'm not talking about "We need to hire another person". I'm talking about truss shops trying to find 40 people and getting ZERO applications. Most of my business calls - which are usually just about product procurement - quickly turn to a discussion of employee staffing. It is a huge, wide-spread problem both here in the States and up in Canada.

Construction companies are busier than they've ever been but supply is a major problem because there aren't enough workers to feed the machines. I talked to a supplier in Minnesota yesterday, and he's about 150 trucks of OSB behind on orders and if he doesn't get product soon he will be completely out next week. That will result in hundreds of jobsites that will come to a screeching halt.

I don't really care about the politics behind minimum wage and extra unemployment dollars or Covid stimulus money - but I've been talking about the labor shortage for a long time now - and it's only gotten worse as we've "progressed" through the pandemnic.

Prices across the board are WAY up because supply is crunched and demand is through the roof because the end user still has money to spend - sooner or later something's gotta give. This isn't sustainable. It's already a bad situation - but it's going to get way, way worse before too long.
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I'm having a hard time getting a grasp of the supply and demand argument you're making here. Supply of what? Demand for what? New construction of properties? Also, what does OSB mean? Just trying to understand some of the technical parts of the industry.
 
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kneeblock said:
I'm having a hard time getting a grasp of the supply and demand argument you're making here. Supply of what? Demand for what? New construction of properties? Also, what does OSB mean? Just trying to understand some of the technical parts of the industry.
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Covid restrictions and labor shortages have reduced supply chains throughout the construction industry.
At the same time Americans have access to huge amounts of liquidity and cheap credit.
Pent up demand following a year of pandemic has essentially been released all at once but the supply throughput has not been able to catch up as fast as the demand has accelerated. There is an enormous demand for housing that is outpacing housing supply. Builders can't build fast enough due to the supply chain issues. Builders are willing to pay huge premiums to not lose existing contracted jobs.

Prices are astronomical due to this.
OSB (oriented strand board) is a type of very cheaply made wood board that is a core component of the construction industry. It is not a finish product. It Should be relatively inexpensive. It's through the roof on prices with no signs of slowing down.
 
M

member 1013

Guest
Hauler said:
I don't know that I've heard it at all in the media. Haven't been paying much attention to the talking heads. This is my own personal opinion.

I'm in manufacturing and construction. With that, I do a lot of buying of supplies so I'm in contact with people from all sorts of industries (lumber, windows, doors, adhesives, metal plates, rebar, concrete, heavy equipment, etc)

I don't know what the unemployment rate truly is vs what is being reported, but I can tell you this with 100% certainty - there isn't a single company that I deal with that isn't struggling to find workers. And I'm not talking about "We need to hire another person". I'm talking about truss shops trying to find 40 people and getting ZERO applications. Most of my business calls - which are usually just about product procurement - quickly turn to a discussion of employee staffing. It is a huge, wide-spread problem both here in the States and up in Canada.

Construction companies are busier than they've ever been but supply is a major problem because there aren't enough workers to feed the machines. I talked to a supplier in Minnesota yesterday, and he's about 150 trucks of OSB behind on orders and if he doesn't get product soon he will be completely out next week. That will result in hundreds of jobsites that will come to a screeching halt.

I don't really care about the politics behind minimum wage and extra unemployment dollars or Covid stimulus money - but I've been talking about the labor shortage for a long time now - and it's only gotten worse as we've "progressed" through the pandemnic.

Prices across the board are WAY up because supply is crunched and demand is through the roof because the end user still has money to spend - sooner or later something's gotta give. This isn't sustainable. It's already a bad situation - but it's going to get way, way worse before too long.
Click to expand...
 
BeardOfKnowledge

BeardOfKnowledge

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Jul 22, 2015
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Splinty said:
Covid restrictions and labor shortages have reduced supply chains throughout the construction industry.
At the same time Americans have access to huge amounts of liquidity and cheap credit.
Pent up demand following a year of pandemic has essentially been released all at once but the supply throughput has not been able to catch up as fast as the demand has accelerated. There is an enormous demand for housing that is outpacing housing supply. Builders can't build fast enough due to the supply chain issues. Builders are willing to pay huge premiums to not lose existing contracted jobs.

Prices are astronomical due to this.
OSB (oriented strand board) is a type of very cheaply made wood board that is a core component of the construction industry. It is not a finish product. It Should be relatively inexpensive. It's through the roof on prices with no signs of slowing down.
Click to expand...
The demand has more to do with renos than it does home building.

It's also not really correct for people to refer to not as a "supply issue" as if we can just ramp up timber harvesting.
 
M

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Guest
Splinty said:
Covid restrictions and labor shortages have reduced supply chains throughout the construction industry.
At the same time Americans have access to huge amounts of liquidity and cheap credit.
Pent up demand following a year of pandemic has essentially been released all at once but the supply throughput has not been able to catch up as fast as the demand has accelerated. There is an enormous demand for housing that is outpacing housing supply. Builders can't build fast enough due to the supply chain issues. Builders are willing to pay huge premiums to not lose existing contracted jobs.

Prices are astronomical due to this.
OSB (oriented strand board) is a type of very cheaply made wood board that is a core component of the construction industry. It is not a finish product. It Should be relatively inexpensive. It's through the roof on prices with no signs of slowing down.
Click to expand...
 
Hauler

Hauler

Been fallin so long it's like gravitys gone
Feb 3, 2016
47,673
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kneeblock said:
I'm having a hard time getting a grasp of the supply and demand argument you're making here. Supply of what? Demand for what? New construction of properties? Also, what does OSB mean? Just trying to understand some of the technical parts of the industry.
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Sorry.
OSB stands for oriented strand board. It's a plywood sheathing typically sold in 48" x 96" sheets used on walls, flooring and roofs in house construction.

Other than guaranteed contracts, nobody can buy OSB right now. Every mill is OTM - which stands for Off The Market - basically offering nothing - or very, very little - for sale other than what you agreed to contractually purchase for the year - which generally represents about 50% of your typical business.

The mills are blaming the labor shortage on why they can't keep up with demand. They can't fully staff their mills - and the logging companies aren't providing enough fiber - again blaming labor shortage. Trucking and rail are also problematic - again...labor.

Meanwhile, housing is as busy as it's ever been. So everyone needs more OSB than what is available for sale. This basically creates a bidding war which has driven the price to ridiculous levels.

7/16" 4x8 in April 2020 was $8/sheet
Today it is $38.50

That's just OSB.
The same principle applies to lumber. And windows. And doors. And adhesives. And fasteners. And etc...

I got word today that a major supplier of subfloor glue - a necessary component for construction - is not taking any orders from now until September. That's how behind they are in keeping up with demand.
 
Wintermute

Wintermute

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Apr 24, 2015
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Splinty said:
Covid restrictions and labor shortages have reduced supply chains throughout the construction industry.
At the same time Americans have access to huge amounts of liquidity and cheap credit.
Pent up demand following a year of pandemic has essentially been released all at once but the supply throughput has not been able to catch up as fast as the demand has accelerated. There is an enormous demand for housing that is outpacing housing supply. Builders can't build fast enough due to the supply chain issues. Builders are willing to pay huge premiums to not lose existing contracted jobs.

Prices are astronomical due to this.
OSB (oriented strand board) is a type of very cheaply made wood board that is a core component of the construction industry. It is not a finish product. It Should be relatively inexpensive. It's through the roof on prices with no signs of slowing down.
Click to expand...
Lumber is up like 350% year over year. I was going to re-do a patio covering that buckled in the Valentine's Day storm- $20K for a wood lean-to design with polycarbonate roofing. 2020 quote was like $11K.

Apparently lumber costs are adding $35K to new house prices.
 
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