Published on: November 16, 2021
Weighing in on our inflation conversation, one MNB reader wrote:
Today's inflation surge can be tied right back to the "Green New Deal" so every supporter of eliminating carbon emissions in the near future, has to accept this unintended consequence. It takes time to move the industrialized world to carbon neutrality efficiently, the momentum is strongly in that direction, but to force adoption in a short time frame causes severe disruptions.
Lower coal output and exports to China from the US and Australia are contributing to the power shortage in China that is limiting factory production there, causing shortages resulting in higher prices for the fewer goods available. Goods for major Holidays in the US for all of 2022 are already affected because Chinese manufacturing is under such pressure already and alternative sources are not ready to take up the slack.
Limiting truck driver hours of service, the move to electronic log books, rise in diesel fuel cost, and long delays in unloading at warehouses have contributed to the reduction in attractiveness of being a truck driver causing the truck shortage we now have. The effect is the back-ups in our ports and dramatically higher costs for each truck that moves goods from point to point in our supply system because every load has a premium to the normal cost now attached.
Limiting oil production in the US with increased methane gas emission regulations and limits on new production, has reduced oil supply affecting everything from fertilizer to inbound raw material transportation, production costs(heating, cooling cooking and refrigeration), outbound finished goods transportation, plastic & corrugated packaging and others I am sure. The point is that we are dependent on fossil fuels throughout our manufacturing and transportation industries today, and to strangle the fuel that we are dependent on ripples through the economy quickly. All of these costs increases are at the root of price increases from manufacturers and inflation to consumers.
Every major recession since the 70's has been started by a precipitous rise in oil prices because it drives inflation and reduces household disposable income so quickly. An increase in gas prices of $1.00 per gallon, an 18 gallon fuel tank and two cars takes $1,872 of disposable income out of the family budget, and is the equivalent of a $.93 per hour pay cut.
I take your point, but let me offer a brief reaction.
First, you blame the "Green New Deal" for today's inflation surge. I may be wrong about this, but I don't believe that the "Green New Deal" has been enacted as legislation - it exists as a set of goals, but I'm not sure it is fair to blame it for all our inflationary problems.
Second, I understand everything you say about fossil fuels. What worries me is that some very smart people - admittedly, not everyone agrees with them - would argue that in terms of the survival of the planet, we have two choices - we can do enough, or not enough. But if we don't do enough, it may be as bad as not doing anything.
Does this mean we have to make hard decisions and live with major repercussions from those decisions? Sure. But I'm not sure what the legitimate options are … unless, of course, one believes that all the climate change discussion is hyperbolic and that everything is going to be just fine.
Also on the subject of inflation, from MNB reader Mike Carter:
One of your readers tries to make this point –
There are really only 3 ways to make up the increase in costs: 1)Raise retails, 2) Negotiate lower cost of goods, or 3) Become more efficient (which means fewer employees).
And I have heard others make similar claims that being efficient always means less labor dollars/people. I would like to point out the efficiency can be creating more output with the same or less resources (people and technology). Think Chick Fil-A drive thru operation as an example. They have added people and technology, and are providing better service, and handling more cars.
It is a real challenge with minimum wages going up, no doubt. But it is a flimsy excuse that the only way to make up for increased payroll is to raise prices.
Regarding Albertsons' new in-house media venture, MNB reader Bob Wheatley wrote:
It will be interesting if Albertsons is able to break with the norm of devoting content to overt product promotion. We know that engagement occurs in direct proportion to the relevance and also entertainment value of the communication on offer.
ALDI did just that with their latest holiday spot, a delightful and remarkable story with a message. Appetite appeal is in there but in the best way possible.
Yesterday we reported that the US Department of Labor said on Friday that 4.4 million workers quit their jobs during September, up from 4.3 million people who quit in August and the highest resignation rate during the 20 years that the government has been tracking these numbers.
I have to admit that I have trouble wrapping my head around this.
A bit of personal truth here - I've been laid off from five different jobs in my life. Four of the five times, the company was going out of business or shifting to a contractor-only business model because of lousy management. (I'm apparently not a good luck charm.) And even when I got laid off from jobs I didn't really like, or companies that I didn't really like, or by employers that I didn't really like, I was bereft when I didn't have a job. Which actually is why, the last time it happened, I said screw it (using a different verb), and started MNB.
So I have problems grasping the great resignation.
That doesn't make me right, though. It just means I have to work harder to understand the motivations behind people who leave their jobs without solid prospects. As, I think, we all do.
People want to feel greater investment in their careers, no matter where those careers happen to be on the food chain. I happen to believe that money is important, but so are other things - not least the desire to feel like one is contributing, having a sense of common cause.
I do worry, however, about what happens when the current pendulum swings the other way … how will management react to greater leverage, and what will labor to in response?
Maybe a time for common cause? What are the odds it happens?
One MNB reader wrote:
The retirement factor is huge. I am 60, worked 40 plus years for my current company, my wife and I are finished at the end of this year. I have seen many co-workers in this store and company-wide retiring. Whatever the reasoning, baby boomers continue to leave. Many companies have made it known (not by words but actions) they are ready for the younger workforce. Experience=expensive. Not to mention every organization has been successful in eliminating the fun out of work. Retail in this day and age is very difficult, the hours, the schedule, the workforce. Good luck to the next generations, everything and everyone changes, if it doesn't you become a dinosaur, and we all know what happened to them. EXTINCT!
From another reader:
I'll share my personal story, simply one among the million in the wave of the 'great resignation'.
I quit my job in July. I'm 59. I thought that I would work a few more years, maybe to 65, but given all the disruption, social unrest and uncertainty wrought not only by Covid, but also the election of 2020, I decided to end it. At first I joked that I was taking a gap year (who says it's only for young adults?). But the longer I'm away from Corporate America, the more I realize that I'm not going back and I made the right decision.
I had a good job. But like all jobs it was just a job, with the usual drama of reorgs, quota pressures, ineffective communication and disconnected management.
Did the paycheck outweigh the stress? For me the answer was no. Not when I had so much lost time to make up for.
And from MNB reader Keith Jones:
You are correct, it is hard to understand. But then, I had a learning moment. My 27 year old son is walking away from his job with the prospect of moving home to recuperate for a month or two. You see, he is so burned out by his current position he cannot contemplate where he is going career wise, and he was very successful in his career. He is burned to the point he is not sure if he will continue in his current profession or change.
I believe, and what I have read from several WSJ articles, during Covid people realized there is a life outside the office. They are now looking for a better work-life balance.
So, as we see this happen, we just need to be patient and help them along their journey. Sooner than later they should re-engage into the workforce but it may be in a different area. I think the idea of job revitalization within the retail industry, making the jobs more intriguing and less mundane and 'military drill Sargent', is a necessary issue for management to address.
And, on another subject, one MNB reader wrote:
Now we still have to hear how covid is back on the rise? Enough already. Get your shots. Then move on. The purpose of the vac is to lessen the effects of covid. Nothing will irradicate the disease, but the shots will most likely keep you out of the hospital and lessen remaining effects. That is the win. So please stop all the fear tactics and trying to control many aspects of our lives. The masks? Unless they are N-95’s, forget them. They are not affective, but rather, they just make you feel good. I heard the other day that all the cloth masks, paper masks, gators, etc are about as effective at stopping the virus, as trying to catch a mosquito with a chain link fence. So what is the real purpose?
First of all, ther Mayo Clinic would dispute your mosquito analogy. But let's let that go.
Telling people that ther virus is resurgent - that more infections are being reported and that, potentially, this could enable new variants that might be resistant to current vaccines - strikes me as being the responsible thing to do.
That's my story … it has been my story since March 2020, when I did my first Covid-19 update … and I'm sticking with it until it isn't a story anymore.