Category: Economy

About a month ago William sent me an article about the high turnover in minimum wage jobs, specifically the service sector. The numbers in it were staggering. Per this report, over 100% employee turnover is the norm at most restaurant chains! You read that correct. On average, the entire crew and then some turned over throughout the course of a year. Panera Bread, viewed by the left as a great establishment to work, saw just over 100%.

The case of Panera Bread shows just how deep the employee turnover issue is for restaurant companies. Panera loses close to 100% of workers every year, and by fast-food industry standards that’s considered good.

The official Bureau of Labor Statistics turnover rate for the restaurant sector was 81.9% for the 2015–2017 period, but industry estimates are much higher, reaching 150%, and the problem has gotten worse in recent years. “It’s definitely been going up,” said Rosemary Batt, chair of HR Studies and International & Comparative Labor at the Cornell School of Industrial Labor Relations.

Panera is losing nearly 100% of its workers every year as fast-food turnover crisis worsens

McDonalds and Burger King’s turnover is north of 130%!!!!! The Bureau of Labor Statistics puts this number around 150% annually. That is absolutely mind boggling.

Keep in mind we have raised the minimum wage to a now “living wage” so that these people could be happy and live long prosperous lives working at these entry level starter jobs. Why are they leaving? Well the answer is complicated so I asked a friend of mine who runs a theatre for their thoughts. Basically there is lots of competition at the lowest levels. There is a need to hire 4 people to actually fill one position. Of the 4, 1 will not show up, the 2nd one will be tired of it after a couple hours, the 3rd will finish the day and never come back, and you just hope the 4th will stick around a little while. People in these jobs are fickle. If the GAP is paying $0.05 an hour more…they are taking that job. They may be treated like dirt, but that comes with the territory for a minimum wage gig. This causes a nightmare for my friend since the theatre operates on a tight budget and even a $.50 an hour increase could put them up against a wall.

Against the backdrop of struggling to hire and retain people for entry level jobs comes AOC plus 3, known here as “The Broad Squad.” These babes, voicing socialist and economic enlightenment, are now promising up to 100k a year to everyone. Surely this promise of universal income will fix the issue!

In addition to providing “economic security for those unable or unwilling to work,” the plan also promises to create “millions of good, high-wage jobs” for willing Americans.

AOC Green New Deal Promises ‘Economic Security for Those Unable or Unwilling to Work’

Never mind the accompanying price increases and inflation that go along with it! Have no fear, we will legislate our way out of this one; our country has always found a way. Under their tutelage, America may one day be as economically enlightened as Venezuela.

In reality, it must stink working at jobs like these; you are treated like trash, you work among some of the least desirable people, and worse yet, you have a manager that keeps telling you work harder. You literally see your job being automated with each passing day, be it mobile ordering, a touch kiosk, or an employee free kitchen.

However, in reality you have no one to blame but yourselves. Politicians goaded you into believing a $15 an hour wage would magically lift you from poverty, but instead it promises to doom you to a life of drudgery and servitude. Your job is being automated, and eventually eliminated. A high minimum wage means a higher required skill set, you won’t get 90 days to learn on the job, the franchisee or manager won’t stand for it. The 90 day calendar types are innovating constantly, looking to cut any expense…. news flash labor is the highest non-fixed cost. Now you are being told aim for higher wages and employer required health care, don’t fall for the bait, it will hasten your demise.

In closing, our country no longer views the college degree as a positive, it’s now required. In reality, a college degree nowadays means less than a high school diplomat did in the 1950’s. If you don’t have one, find a trade to work in, if you have a degree and are having a hard time finding work, get an MBA, but be forewarned this is a fake economy we are currently in….the crash will be rough. Oh, and you can’t file BK to get out of paying back your student loans.

You have been warned.

Chief

By Chief

William wrote a great article about the debt the other day and it got me thinking, which is quite dangerous by the way. The debt is absolutely insurmountable and as a millennial, it’s my future, so I asked quite a few friends of mine, for their thoughts. The answers will likely not surprise any reader of this site.

To put it bluntly, they do not care. Most of them work for the state/city/county and view their jobs and pensions are guaranteed. That should scare everyone, regardless of your thoughts on pension guarantees. The general approach by my generation to debt is one of apathy and compassion.

I’ll start with the latter first; it’s borne out of feelings and wanting to throw money at a problem in hope good will come from it. For example, healthcare for literally everyone and continued support of government run programs such as: food stamps, and other social justice programs into infinity. We want to give the homeless guy/girl/it a place to live, and 3 square meals a day along with spending money in hopes he will get a job…it doesn’t happen. However, we will keep trying because, we’ll just throw more money at it, and it eventually works itself out right?

Now to the apathy part; debt is already a large part of our lives, mostly via student loans. We just view all debt as, well it’s there and as long as I make the payment, I’m good till next month. We see ourselves in massive debt and just assume we will eventually take care of it…. or we petition the government to get rid of it. Much like the 65,000 people who have applied for their loans to be forgiven only to be rightfully denied by the government. We know it’s there and it’s a part of our lives, but we don’t take it seriously.

However, the ones most at fault are the older generations (55-75). They are responsible not just for running up the tab on generations not yet born, but for installing in us a belief that debt is not a big deal. They removed any personal finance/budgeting classes from our school system, and never really gave us an allowance or anything while we grew up. They also, claiming it was for our own good, outlawed minors from virtually every type of work they did when they were growing-up.

For my generation, our budgeting consisted of, hey dad I need $100 for jeans, and you gave it to us. We never had a checkbook just plastic, which again allows you to run up debt at an alarming pace under the guise of buy now, pay later. You told us college was an investment in our future, so we went to college and ran up six figure student loan debt. We needed a car and instead of getting an economical used vehicle, we got a sporty type car fresh off the lot, and a loan to boot. Credit card, auto loans, and student loans created a toxic cocktail that is just starting to show its affects.

Just to be clear here, I’m not placing the blame of the debt on anyone, just the attitude of the millennials. We do not view a paycheck as wages for services rendered, we view it as money to spend. We don’t view credit cards as for emergencies only, we view it as a means of satisfying ourselves with short term happiness. We do not see this as money being spent, it’s just the swipe of a card, then the bill comes. But that’s ok, because we only have to pay a very small portion of the bill, then we keep spending. Our debts? Well almost every liberal politician, and probably some so called Republican ones, talk about wiping out our debts…therefore we vote for them. Debt to us is just a way of life, and we see a paycheck and annual mandated cost of living raises as a way by which to pay for it.

In closing, I will add this, I am a 33-year-old millennial who has no student loan debt, never had any, and I have no credit card debt. I own a house so there is debt there; however, I see it as at least having equity as opposed to paying a landlord in exchange for nothing. I am very lucky but none of my friends choose to live their lives like me; instead, they have mountains of student loan debt, credit card debts, and expensive car payments to boot. They make minimum payments, and all have nicer stuff than me. Their attitude is the government will bail them out at some point, or just wipe away the debt.

Owe money to the IRS just call a number…poof gone. Too much credit card debt…. personal bankruptcy…poof gone. Mortgage on a house you don’t like anymore…. walk away. Best of all regarding the last 2, (credit cards and mortgages), in several years you can do it all over again. However, my generation, like many others, is in for a real wakeup call soon because those rules do not apply to our nation’s debt. Your pension is not likely to be guaranteed–at least not at the levels they predict. Your government job may be cut, and Social Security for those of us in the private sector, is likely a figment of our imagination or soon will be.

Feel more secure yet?

Chief

Assembly Bill 1482 a.k.a. Tenant Protection Act of 2019 has gained traction as is worked its way thru the “Bill Mill.” It would impose a statewide rent control scheme for all of California. It has passed both the Assembly and Senate and is back in the Assembly to reconcile Senate amendments. Final passage could be as early as tomorrow. Its next stop is the Governor’s desk.

It has received the blessing of many outside groups including the California Business Roundtable.

The CBRT is touting its support with statements like:

AB 1482 will provide certainty to tenants.
AB 1482 will keep families in their homes by tying caps on annual rent increases to the regional consumer price index (CPI) plus 5%, implementing California’s first-ever statewide rent control.

AB 1482 will encourage new homebuilding.
AB 1482 will also provide certainty to developers by exempting new construction for the first 15 years. This rolling exemption will address the acute supply shortage by encouraging developers to build more critically needed housing, while also ensuring we are adding new units under rent control protections.

AB 1482 will protect tenants in California.
AB 1482 will enhance safeguards for tenants statewide by ensuring they receive a 60-day eviction notice and a 1-month relocation fee if they are evicted after the first 12 months of a lease.

AB 1482 will prevent rent gouging.
AB 1482’s statewide rent cap applies to all multi-family housing over 15 years old covering more than 95% of all multi-family housing units, and all single-family homes that are corporately owned, ensuring landlords cannot take advantage of tenants through rent gouging.

Source: Tell your legislator to vote yes on AB 1482

I find myself in agreement with former CRA member and political curmudgeon Steve Frank who wrote recently:

This is another example of the business community deciding to “compromise” with a totalitarian State. The California Business roundtable formed by the California Chamber of Commerce has AGREED to the first step of government take over of housing. In AB 1482 it allows the State to set the rules and caps on rent increases. While this bill sets the limit at 7% a year, nothing stops government from making it 2% next year. It is the slippery slope to the State OWNERSHIP of housing—and those who claim to love freedom have given up the fight.

Exemptions today, can be ended tomorrow—by legislation or an activist court—and these folks claiming to represent capitalism have instead supported socialism. Of course, most of the Chamber folks donated to the Democrats.
There is an old saying that fits this situation: “An appeaser is someone that feeds his friends to the alligators, hoping they eat him last.” The alligators just killed off the Roundtable—the Chamber is next.

California Business Roundtable Moves In Support of AB 1482 (Chiu) –Opposes Private Property Rights

This is a huge power grab by the State and way outside the legitimate boundaries of a lawful government. Sadly, this act of tyranny will be met with hardly a whisper of opposition. We don’t normally talk this way but the truth is that in the final analysis, it’s all the king’s land, we are but the humble vassals. If you really owned your property then the government couldn’t take it away. Both rent control and property taxes are based on the premise that you don’t really own anything tangible.

In my mind, I keep harkening back to the story of H.L. Richardson recounting a conversation with Democrats in a back room of the State Capitol many decades ago. When asked about why the Democrat felt he had the right to tax something, he responded with the quip, “But look what we let them keep.” Translation, the Democrats think they are entitled to all that you have, but only take what they need at any particular time. Please note that this redistribution of your stuff only works in one direction.

The only lingering question is will supporters of the ballot initiative to impose statewide rent control pull their initiative when Governor Newsom signs this legislation?

I keep telling people that the debt obligations of our country including all the big ones like Social Security, Medicare, Federal Deficit, State, County & Local pensions, etc. are more than all the wealth on the planet but even I was surprised when I saw the latest calculation. You see, some enterprising folks on Wall Street ran the numbers and the story was published yesterday. Instead of being the lead story for the whole week, it was on Drudge for a few hours and then was bumped to the recycle bin.

If you thought politicians spend like drunken sailors, I can assure you that the boys in Crackerjack Uniforms only spend their own money, not that of your great grandchildren, yet to be born.

Real US debt levels could be 2,000% of economy, a Wall Street report suggests

Total potential debt for the U.S. by one all-encompassing measure is running close to 2,000% of GDP, according to an analysis that suggests danger but also cautions against reading too much into the level.

AB Bernstein came up with the calculation — 1,832%, to be exact — by including not only traditional levels of public debt like bonds but also financial debt and all its complexities as well as future obligations for so-called entitlement programs like Social Security, Medicare and public pensions.

Putting all that together paints a daunting picture but one that requires nuance to understand. Paramount is realizing that not all of the debt obligations are set in stone, and it’s important to know where the leeway is, particularly in the government programs that can be changed either by legislation or accounting.

The article then goes on to say that we shouldn’t worry because we can afford the payment on the credit card.

The key is not always gross dollar amount but rather ability to pay.

I hope Dave Ramsey blows a gasket when he reads this. I can picture him saying, “The borrower is the slave of the lender.”

“Globally, we have become over-reliant on borrowing as a solution for everything. Political excuses abound for why it doesn’t matter, which just clearly isn’t the case,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a bipartisan committee of legislators, business leaders and economists that counts former Federal Reserve Chairs Paul Volcker and Janet Yellen among its members.

“We are quickly approaching a situation where we have dug ourselves a debt hole which is doing going to have profoundly negative effects on the economy for probably decades going forward,” MacGuineas added.

I corrected typo in the above quote–editor

The article concludes with this wishful thinking:

“First, you start having politicians level with voters instead of promising freebies. Second, you recognize that the time to do that is when your economy is strong,” she said. “When people were arguing for more borrowing they should have been doing the reverse. We’re still not in recession. It’s time to put in long-term strategies.”

Folks, we have hundreds of trillions of dollars in debt obligations and yet we go merrily along thinking as long as the sun rises that everything will be OK. Remember my opening, we owe more money than all the wealth created on the planet. Someday this merry-go-round of debt will stop and then who will pay the Reaper? The emperor has no clothes and as long as we all agree then everything is OK, right?

By Johnnie Does

Greetings folks, I’m taking a break from food reviews as my sodium content has put me almost into “Johnnie Does the ER” levels. So we wanted to report on a conversation with the naïve we had over the past couple weeks with our old friend 90-Day Calendar Guy.

Here are the conversations and my commentary.

The Togo’s experience: So 90-Day Calendar Guy comes into the office and is raging like a great ball of fire, claiming “have you been to a Togo’s lately?” I responded, “negative.” Apparently, he was craving a hot pastrami so he went to Togo’s and was in stunned disbelief that the sandwich was $12. I’m assuming he ordered the large. He complained about how they had to “microwave” the meat and it was a long wait for the sandwich. He remarked, “Only 2 people were working and it was lunch time!” and again he lamented the price. So he said he only ate the meat and threw the sandwich away and walked off in disgust, writing a bad Yelp review to boot. All afternoon he remarked 8 years ago it was $6!

Johnnie Does: Here is the problem with this; he, like usual, overlooks reality as he lives in fantasy land. Where to start? Ok, first you cannot really have hot pastrami sitting in a bin as health department laws make it so you have to throw it out if it’s left out too long. Frankly I prefer them making it fresh as opposed to scooping it out of a vat. I’ve never heard anyone complain of them making it to order (i.e. fresh) but I guess it’s a 90-day thing where profit is above all else? In addition, I’m more grossed out by the extreme amount of grease in the bin they “cook” the pastrami in, but to each his own.

Now on to the comments about pricing and hired help, this sums up his true naïveté. In regard to price, maybe pay attention to the minimum wage…its $11 an hour here. In regard to hired help, well it makes no sense to have extra people standing around twiddling their thumbs at $11 an hour. Service may be a buzz word, but profit is the bottom line and you may need to sacrifice service to make a couple bucks more. The bad Yelp review? No one cares dude. You have already proven your Yelp reviews are pointless as you lit up Red Robin yet visited them again a week later. Get a clue dude!

Amazon is ripping off USPS: 90-Day Calendar Guy ordered something from Amazon.com and when it showed up, it was a pair of shorts inside a USPS bag, inside another USPS bag, inside another USPS bag, inside a USPS box. He said you cannot trust the government to do anything! Saying someone paid for these bags and the USPS lost money. He proudly proclaimed USPS is being ripped off by Amazon, and he told everyone within earshot. Imagine if this guy was a professor, what original thoughts he has.

Johnnie Does: USPS gets ripped off by everyone, it undercharges and over promises. Why do they deliver on Sundays for Amazon only? At a subsidized rate to boot? This has been going on for years, it’s not new. In addition, 90-Day Calendar Guy watches more TV in a week…oh, and cable TV to boot, than I consume in a month. My point being, of all the people that should know about President Trump calling this out 2 years ago, it should be you.

Yet you claim it’s an original idea? You claim to be a bigger Trump supporter than anyone, yet you miss something like this? Maybe it’s because Sean Hannity hasn’t reported on it yet. Trump has been calling out people/corporations ripping off the taxpayers for the longest time, just now you are catching on?

In short, he has turned into a hot take machine, the world has passed him by but he is too scared to admit it. A hamburger used to cost $.25, but how much were the workers making? What was the cost of ingredients? I happen to enjoy Togo’s hot pastrami, but I haven’t had one in a while, too pricey, low quality. My advice…too bad it will never be heeded, cancel cable, go to reputable websites for news. Cable/TV is poison, it inhibits your ability to think clearly.

Johnnie Does

BTW we have exciting series about who has the best chicken sandwich coming soon, and we are officially reviewing the salsa bar Monday! That little minx better be ready.

What do you get when you cross an Ikea display, a tiny house, and the private sector?

That’s the proposal from new startup Rent the Backyard. The company is tackling rising home prices in the San Francisco-Bay Area by building backyard studio apartments, and splitting the rental profits with homeowners.

“This is a long-term partnership that we have with the homeowner,” Rent the Backyard Co-Founder Brain Bakerman told Yahoo Finance during a recent interview.

Homeowners can make $10,000 to $20,000 in additional income each year, according to the company.

Startup’s answer for high-priced Silicon Valley housing: Homes in backyards

So what is the sales pitch?

• We build your unit for free
• We list your unit online
• You get half the rent

If, you own a home in the Bay Area, have a 30 x 30 area, and you live in your home most of the time, then you could take part in this experiment in affordable housing.

Model homes are found on Internet here.

In recent years, math has become a weapon of social and political warfare. Often it is abused to promote junk science like the myth of global cooling, warming, err…climate change or whatever the hell they’re claiming this week. Numerical manipulation is also used as a tool to find new and creative reasons to get more grant money pumped into academia.

68 Percent Error

Here’s an example. Did you know that 68 percent of the universe does not exist and never did?

Remember “Dark Matter”? In 1998, scientists invented it to explain observations made by the Hubble telescope. Supposedly, 68 percent of our universe is made of it. “We are much more certain what dark matter is not than we are what it is.” — NASA

Yes, it’s still the gospel if you look on the NASA website, but there’s no such thing. Two years ago, a study was published that proved it is a false theory but it is still taught as true in schools all over the world.

Scientists believe that enigmatic dark energy make up 68% of the universe. But according to a Hungarian-American team, it may not exist at all. The team publish their results in a paper in Monthly Notices of the Royal Astronomical Society. The researchers believe that standard models of the universe fail to take account of its changing structure, but that once this is done the need for dark energy disappears.

Dark matter is now thought to make up 27% of the content of universe (in contrast ‘ordinary’ matter amounts to only 5%). After observing the explosions called as Ia supernovae, scientists concluded that dark energy, made up 68% of the cosmos, and is responsible for expansion of the universe.

In the new work, the researchers, officially led by PhD student Gábor Rácz of Eötvös Loránd University in Hungary, explained that models of cosmology particularly rely on approximations that ignore its structure, and where matter is assumed to have a uniform density. They questioned the conventional concept of existence of dark energy and suggest an alternative explanation.

Dr László Dobos, co-author of the paper, and currently working at Eötvös Loránd University, explains: “Einstein’s equations of general relativity that describe the expansion of the universe are so complex mathematically that for a hundred years no solutions accounting for the effect of cosmic structures have been found. We know from very precise supernova observations that the universe is accelerating, but at the same time we rely on coarse approximations to Einstein’s equations which may introduce serious side-effects, such as the need for dark energy, in the models designed to fit the observational data.”

New Study Suggests 68 Percent Of The Universe May Not Actually Exist

If you keep rooting around on the subject, what you find is that scientists studying the universe rounded the speed of light and took other shortcuts in their math that introduced an error so big that they had to invent 68 percent more mass in the universe called “dark matter”; theoretical stuff that could not be observed in any way, just to account for the error.

Labor Department Revision

The US Department of Labor this week offered their own version of “Dark Matter” revisions to their universe.

This week, the US Department of Labor did some similar math adjustments and made 501,000 jobs that they said had been created by the Trump Administration disappear.

The Labor Department revised down total job gains from April 2018 to March 2019 by 501,000, the agency said Wednesday, the largest downward revision in a decade.

The agency’s annual benchmark revision is based on state unemployment insurance records that reflect actual payrolls while its earlier estimates are derived from surveys. The preliminary figure could be revised further early next year.

US has half a million fewer jobs than believed after big government revision

Labor revised down leisure and hospitality payrolls by 175,000 and business services by 163,000. Retail employment was revised down by 146,400.

U.S. Payrolls Count Reduced by 501,000 in Year Through March

The Department maketh up and the Department taketh away, blessed be the math of the Department.

Folks, color me skeptical about this revision. I think the Labor Department has been cooking the books since Bush was President and they certainly were when Obama was President so why the change in methodology for just one year? Oh, coincidentally, this revision comes when Democrats finally figured-out that the only prayer they have in 2020 is if the economy goes down before the election—which they also are coincidentally trying to make happen.

“What’s good for the goose is good for the gander” as my dear departed granny used to say. Why stop at one year? If the Labor Department wants to change their methodology let’s go back, say ten years and see what has really been going on.

Bureaucracy First

Folks this is an illustration of what some folks dumbly call the “Deep State”. Personally I hate that term. I think what they are trying to say is that, in a sense, the government bureaucracy is so large and unwieldly that it is a force unto itself that can’t be led anywhere its career management is unwilling to go. Above all things, they are statists and will defend their institution from any outside forces of change.

Trump is an insurgent and as such needs to be taken down a few notches and shown who is running things. The boys in Labor decided that the time is ripe to make their contribution to the cause and it’s substantial. Trump has wed his fate to that of the economy and now is the time to stick him with it.

As I have stated before Trump is more of a cheerleader for the economy than he is an actual owner of its success or failure. The Market is overvalued and needs correction but how and what will trigger that is yet to happen. Sadly, the possible catalysts of correction are a target rich environment. The real question is will Trump advocate interfering with the Market (like Bush) or allow it to correct itself. Given that Democrats will not willingly help Trump, as Republicans were willing to do for Obama, Trump may have no choice but to let the Market correct naturally —which in the long run is the best outcome.

I’m just surprised that this story has gotten so little attention. Are Democrats really so busy fighting amongst themselves that they can’t take time to pummel Trump on his claim that “this is the greatest economy ever” or are they just so tone-deaf that it doesn’t matter to them. On the other hand, in the Dem’s defense, the revision was a loss of private sector, non-union jobs so maybe they don’t count anyways.

From my point of view, this was a real body blow to the President but I can’t find anything from pundits on either side of the political divide make hay about this revision.

So if Trump doesn’t lash-out at his own Dept. of Labor on Twitter then the media doesn’t care? What gives with that?