UPS Laying Off 12000 Workers After Union Wins Historic Raises… Salesforce Google Amazon Too: The Millionaire Morning Show w/ Anton Daniels

So major companies are laying off. And I got a lot to say about this, but make sure y’all hit a like for the algorithm. Subscribe to the channel and turn on your notifications. Let’s get to it, y’all. UPS announced Tuesday it will lay off 12,000 employees. That’s about 2% of its workforce, according to figures from the Wall Street Journal. The Journal reports most of the layoffs will affect individuals in contract and management roles.

UPS joins several high profile companies that have recently announced layoffs. Among them, Xerox, Wayfair, and Amazon. Amazon and UPS are also among companies mandating office employees to return to in person work. To understand these events in the context of the labor market, we’ve asked Guy Berger to join us. He’s the director of economic research at Burning Glass Institute, which focuses on policy and research related to american workers.

So guy, how should we think about these layoffs at these big companies? Names people know seems like big numbers. But the unemployment rate is 3. 7%, which is low. How should we think about these? Well, John, I think the main thing to remember to start with is the US economy is really big. The flows are enormous. 2023 was the year with the third lowest layoffs on record. And we still had 1.

5 million layoffs a month, almost 20 million for the whole year. So within that context, these numbers alone are high profile, but they’re small. And I think the question which we haven’t seen it materialize is whether these sort of drip of high profile layoffs start adding up to a bigger wave of layoffs. But we don’t see it yet. Now they’ll tell you, okay, well, we got 9 million job openings, right? And let’s also take into consideration that major contract that UPS negotiated for its drivers that continue to escalate year over year.

So it doesn’t all go into effect at one time, but it escalates over a period of time that brings them up to a certain amount. But where did you think that they was going to get the money from? If you actually do some research to understand these delivery companies such as FedEx and UPS, you’ll realize that their margins aren’t that great. But then they were against the wall because the solidarity came along with the union representation.

They wind up giving in before strike because they didn’t want to have to disrupt whatever it is that’s happening from a logistics perspective. And then they had to start cutting costs right after the Christmas season because that’s when companies start to realize, okay, things are slowing down. We need to make sure that we do the things that’s in the best interest of the shareholders. We need to pass some of these costs over to the consumers, and then we’re going to lay people off.

And then they’ll say, well, listen, the layoff rate is only 1%. That’s huge. That is massive. Now, it may not be massive when you look at it from a numbers and overall perspective. And then they’ll also tell you, well, unemployment is at historic lows at 3. 7%. Well, guess what? Two things. Inflation is up, so your dollar doesn’t go as far. And then on top of it, when we talk about job openings being 9 million, what job openings are there? Because there’s a lot of people that’s underemployed.

There’s also a lot of people that can’t make what they were making before. And then on top of that, when you talk about job openings, are these jobs that you actually qualify for? I was looking on Instagram, and I was scrolling up through the reels yesterday, and it was a woman I was sitting there talking about, she got a degree and she’s getting so desperate, literally, and I’ll share it with you.

She said, yo, I’m getting so desperate. Oh, my God, I’m getting desperate. And I’ve never actually had to physically go out here and wear the degree. Oh, I don’t have it on his phone. I don’t got Instagram on his phone. I’ve never had to go out here and go out here and job hunt in person and actually carry physical resumes and stuff. Having multiple streams of income don’t look so bad no more.

Do it. Not being interdependent on one job, hoping that you don’t get laid off don’t seem so bad no more. Do it. Lowering your lifestyle in order to make sure that you’re not affected. If something that was to ever happen don’t look so bad now, it do it. Having somebody that you in a household with that you married to that can help you carry this burden when you get laid off don’t seem so bad.

Do it. See, a lot of people also like to talk about what the problems are when it comes to marriage, right? But when you marry successfully, you also marry into a situation to where you don’t always have to be only dependent on yourself because two people can pull ten times a weight. It allows for you to be able to bridge the gap. It allows for you to also bounce ideas off of each other to ensure that you’re making the best decision possible.

And not only be making a decision based off of what you think makes the most sense, but also using your community, which can be the person that you lay next to you, that can also support you in that time of need. So that’s what it means to be successfully married. Also, there’s so many factors that go into mitigating the results of what could happen when you get laid off.

And I’m telling you, there’s always going to be ebbs and flows. There’s always going to be good times, bad times. You’re going to be up. But it’s lessons that’s even in the Bible that when they were up, God was preparing them for famine. He was preparing them. So if anything was to ever happen, they will be the ones that’s walking around with the bags. If anything is to ever happen, you should be protecting yourself, and you should not be ever interdependent on a job in order to survive at all, ever.

When you up, that is not the time to stunt. When you start getting money, that is not the time to stunt. That is the time that you start to put yourself in a position to where you don’t have to ever worry about getting laid off, or you can stunt for the rest of your life. This is why I tell you all to stay down for ten years. I don’t tell you all to stay down for ten years in order to get the job or to get the position that you want.

I tell you to stay down for ten years so that when you get the job and you get the position that you want and you get the money, that’s when you start making all of your investments, so you can do what you want to do for the rest of your life. That’s when you want to invest in yourself, invest in your portfolio, invest in your real estate, invest in your stocks, invest in everything that then continues to build up your net worth.

We don’t care over here at the millionaire morning show about money, we care about our net worth. As long as we’re liquid, we’re good. As long as we’re liquid, we’re good. We don’t care anything about that. We want to make sure that we making as much money as possible so that we can fund the things that we really want to do for the rest of our life. And the decisions that you make today is largely going to influence or impact what it is that you’re doing for the rest of your life.

And when the Federal Reserve started raising interest rates to slow economic activity, was the expectation that by now, a good while after that rate rising period began, that expectation would be where it is, or is it lower than people expected because there was some expectation would go up as the economy cooled, right? Yeah, I think we’ve been amazingly lucky that inflation’s come down. It’s basically in recent months where the Fed wants it in the long run.

And at the same time, the impact on unemployment rate has been very small to nearly negligible. Now, the risk is that we’re sort of near a tipping point and we haven’t seen it yet. But in early this year, maybe it starts creeping up. But I’m really crossing my fingers that we get lucky. And instead of it being just a small positive impact on influence, we don’t see any at all.

Let’s cross our fingers. That’d be amazing. Now, inflation didn’t come down. This is what I like to call a white lie. Let me get my notes out because I’m going to have to take notes as I watch this stuff. Inflation did not come down. That is what’s called a white lie, ladies and gentlemen. What happened was inflation is not accelerating at the rate that it was before, meaning that the cost of your, or the value of your dollar did not continue to start being depreciated.

Right. The value of the dollar is still going down. It’s just not going down as fast as it was before. Right. So let’s say, for example, inflation was at 9%, which it was at one point, and then it goes all the way down to what it is the government thinks is reasonable as far as inflation, and it goes down to two and a half percent, 3%, 4%. Right.

The long term version of what we want inflation to look like, it never retracted from where it was. As far as your dollar getting more value, it’s still becoming more devalued over a period of time. It’s just comparative to the same time last year. It’s not accelerating at the rate that it was before. So you still can’t afford whatever it is that you wanted to afford. You still can’t do whatever it is that you want to do.

You still going to be under duress. You just out here looking like a fool. And so when they say this, you got to be able to read the context, you got to be able to read between the lines, because inflation is not down. Inflation will be forever. Your ability to be able to pay and you continuing to beat the rate of inflation when it comes to your investments, we can start having that conversation.

But inflation is not down at all. Let me ask you about these policies of having people come back to in person work is kind of a point of friction that I think tells us something about the labor market. You tell me because when employees are hard to find, employers say, sure, work from home, do what you need. I want to keep you. But when jobs are hard to find, employees say, okay, I’ll show up all day long because I may not be able to get another job or go somewhere else.

Do you see these companies that are saying, you got to come in and work full time as illustrative of anything in particular that’s happening in the labor market? I think you’re absolutely right. I think that if you think about it, working from home, remote hybrid work was this benefit that’s highly desired by employees that became prevalent during the pandemic and stuck around afterwards. Employers seem, and bosses seem more reluctant to hand it out.

But it’s part of this bargaining that’s going on between workers and employers. And as the labor markets cooled somewhat with hiring coming down, employers are becoming less generous offering that. And so employees are finding that it’s harder for them to keep hold of that benefit. And employers do have a leverage to bring people back. So as we look ahead through this year, what else should we, what trends are you looking at in terms of the employment market, the labor market? What are you looking for to tell us how it might be faring? Well, on the optimistic side, we’ve seen hiring come down a lot.

It’s been fortunate. We’ve seen it through the lens of hiring, coming down, out layoffs, picking up. But this is not a great time to be looking for a job. And hopefully we see that stop. That, to me, will be a very good sign that in some sense, employers have right sized their workforces and we can start being really optimistic about the labor market and not just kind of holding on to our seats.

And on the flip side, I think if we start seeing that the layoffs are so far just mostly headlines and relatively small numbers, start moving the meter on aggregate layoffs, that will make me a little more worried that policymakers are falling behind the curve in terms of loosening the pressure they’re putting on the labor market. Do you see, listen, everything is cyclical. Everything is cyclical. It’s a lot of people that’s watching this right now, right.

And if you are one of the people that unfortunately lose your position or lose your job or whatever, you have to understand this, that it’s not going to be forever. And we got to learn the lessons of, yesteryear, in order to understand how we supposed to move tomorrow. And you don’t always have to go through it in order to make sure that you’re doing the thing that you’re supposed to do.

Okay. What I want you all to start doing is making more informed decisions and making sure that you’re not crashing out. Right. One of the things that I want you to do is understand that hiring will always come back. It is never going to be a possibility for you to not lose your job again. But how do you put yourself in a position to where you never, ever have to worry about or you’re not making decisions under duress? Because when you make decisions under duress, right.

When you make decisions under duress, what happens a lot of times is you wind up making some of the worst decisions of your life. And the reason that that is, is the same reason why they got payday loan places in places that may be underserved or underprivileged, is because you’d be willing to take on a huge percentage of debt, or you’d be willing to mortgage your future paycheck in order to meet a certain expectation, because you’re desperate.

And when people get desperate, they start devaluing whatever it is that their skill set is. There’s people, right, that do a phenomenal job in carpentry or construction. But if you get them in the wintertime or you get them at the right time, boy, because they did not plan in order to be successful, they did not leverage whatever they did in the summertime in order to make sure that it carried them through the winter.

They can’t hibernate the way that they want to hibernate. And so now a lot of these other people are now in a position to where they got to go back into the office. You know why? Because the employers know that they have leverage over the employees. Because now you desperate for a job, and the market is only going to be able to substantiate whatever it is that is available.

So if there’s an overabundance of a bunch of different people, then that’s what dictates what the market can hold or what it bears, right? I’ll give you an example. If there’s a whole lot of fast food workers that’s available, then that then drives down the price of what we have to pay fast food workers in order for them to be able to come in and work for us.

Conversely, if you have a whole lot of people that in tech, for example, or specific position that they can’t fill these positions, guess what they going to do? Because they value that position. They’re willing to overpay for somebody to come in above whatever the market rate is, especially if you’re good at what you do in order to have somebody to be able to do that job effectively and keep and hold on to them for a longer period of time.

It’s the reason why I believe that, or one of the reasons why I believe that the migrant crisis is happening the way that it’s happening. Because if you can get a whole lot more workers in, especially when we’re having a situation where it’s a lot of Americans that don’t want to do the regular jobs because everybody is too good and we all on Instagram now, and you can get a whole bunch of people in here to fill these positions.

Guess what? It drives the cost of labor down. And you don’t have to worry about the same things that other people have to worry about as an employer. Because the first thing that come to my mind when I’m starting a new business is, well, how many employees do we have to have? And then how do we have to compete against other people that want these same employees? That’s what drives up the cost.

That’s what real capitalism is. Capitalism is not this manufactured thing that the government then sets in a place and say, well, minimum wage is supposed to be this amount in California. It’s got to be $25 an hour. That’s not what true capital, that’s not what market conditions. And capitalism really is. Capitalism is the market dictates where the jobs go. So wherever it is that we have to fill these positions, that’s where we then get the training.

That’s where it is that we then fill this void and then the market dictates it based off of what consumer habits are. Right? It’s the same thing that we’re talking about when it comes to evs. It’s the same thing that we’re talking about when it comes to cars, same thing when it comes to come to restaurants. Same thing when it comes to Airbnb. We just did an article on quick hits where we were saying that Super bowl ticket prices is up.

Why are Super bowl ticket prices up? Because it’s the demand. The demand then determines how high the ticket prices is going to go. Because if people really want to get there, then they’ll sell their left nut in order to get into Vegas so that they can lose all of their money. The government’s role is supposed to be to provide the incentives for the companies to then create the jobs, right.

For them to give the opportunities to get people a leg up. But it’s not supposed to determine and dictate what happens within that industry, because then that’s not really a free market. That’s not really being determined by what it is that you can do. It’s the same thing with dating. Let me break it down from a c students perspective for you. When you think about the dating market, right? And you say, well, the sexual marketplace value of a person is determined by whoever it is that’s desiring them, right? And so if women’s marketplace value is based off of the things that men desire the most, and let’s say, for example, that desirability is based off of peace, femininity, your weight, young ability to bear children, all of that, right, then that means that you have a window of opportunity at a certain time in your life where you’re the most desirable.

And that may be in your mid to late or early twenty s or something like that. But then conversely, if you take men and you say, well, men’s sexual marketplace value is based off of their ability to provide and protect, because that’s the thing that’s at the top of the list of what women want, then that means that his value goes up as his net worth goes up.

And then if you also compare that to how much money men make at later points in their life, that means that men get more valuable as they get older, because you’re not even at your peak earnings until you in your late 50s, early 60s, based off of what the market conditions are, meaning that the women are willing to go more fervently over to the guy that can provide and protect the best, right? And so it’s the same thing when it comes to the market.

It’s the same thing when it comes to jobs. Everything is going to be cyclical. There’s going to be times as bad, it’s going to be times as good, but you’ll be able to find another position. But you got to learn a lesson from yesteryear in order to really compete against the person that you want the job from. And we are in competition. Make no mistake about it, we are in competition.

That means that the same man that you want, she want him, too. And you keep saying you want 1%. Well, then that means you got to be the thing that that 1% man wants in order for you to be able to compete against the person that want that same guy. Same thing when it comes to the labor market, right? If he wants that job and you want that job and they got to go through and they’re not having to be required to pick you based off of diversity, equity and inclusion, then that means that you’re going to have to outcompete that person and make yourself more marketable to whoever the employer is in order for you to get your bag so you can make your investments and do the things that you want to do in order to be successful long term.

That’s the rules of the game. .

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