Trouble ahead for those who haven't gone back to work yet? The Wall Street Journal says yes... 👇👇
It's the usual thing you always see coming out of a downturn.
Companies are trying to save money so they're cutting back on labour, and investing in automation.
Always reminds me of Charlie & the Chocolate factory: Near the beginning of the story Charlie's Dad loses his job to a machine (it's a mind numbing job putting the lids on toothpaste tubes). By the end of the story he gets a new job repairing the machines that replaced him by the end of the story.
It's a great analogy for the re-skilling that each economic cycle produces, and we'll most likely see the same again.
A couple of examples that the article focuses on:
Hotels are going to change...
A large operator of Hyatt and Marriott hotels, described the pandemic “truly as an opportunity to redefine the hotel operating model.”
CEO Jim Risoleo said the hotel chain planned to limit housekeeping at many of its properties and reconfigure its food and beverage operations.
“It is really going to be opt in to housekeeping services as opposed to opt out going forward,” he said during a November call with analysts and investors.
Last week Hilton Worldwide Holdings Inc. announced a CleanStay program, saying that most of its U.S. properties are adopting “a flexible housekeeping policy,” with daily service available upon request.
“Full deep cleanings will be conducted prior to check-in and on every fifth day for extended stays,”
Daily housekeeping will still be free for those who request it. But Hilton businesses “will be higher-margin and require less labor than they did pre-Covid,”
Daily cleaning is an easy 'excess' for hotels to cut back.
The Unite Here hotel workers union estimate 180,000 industrywide job losses on the back of it.
💡 What if... Unite Here flip from being a Union and become a non-profit freelance cleaners online platform?
People/businesses will always need cleaners right?
Alternatively, that's a load of people that could be changing industry and re-training.
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Restaurants are headed for more automation too...
At restaurant and entertainment chain Dave & Buster’s Entertainment Inc., customers now use digital tablets to order food and drink, allowing managers to schedule fewer servers, the company’s chief operating officer, Margo Manning, said on a call with investors in June.
Applebee’s is now using tablets to allow customers to pay at their tables without summoning a waiter. The hand-held screens provide a hedge against labor inflation, according to John Peyton, CEO of Applebee’s parent Dine Brands Global Inc.
Since the likes of Deliveroo and Just Eat came along, everyone's got used to ordering food on their phones and paying electronically now.
We've all complained before when a waiter has been slow to take our order or we've struggled to catch their attention to get the bill after the meal.
That 'problem' is getting solved
Fewer jobs now though...
And is that necessarily a bad thing?
Obviously less people being employed is not ideal.
But most of the jobs that get automated away are (bluntly) not great jobs.
They're grinds, often with low pay, long hours, and little appreciation or satisfaction for the workers.
So, new skills for new jobs is a big positive IF the training and work is available.
According to the data there are plenty of job openings to fill... 👇👇👇
Today's Continuing Claims data showed 126,000 had left the unemployment line (3.241M vs 3.357M the previous week) and as more states open up that number should continue falling.
Research from the St Louis Fed paints a pretty comprehensive picture of the impact it has had 👇
By the end of the year, the employment picture should be far clearer.
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Are equities about to dip? 👇👇👇
When macro fundamentals can't explain price action, markets are at the mercy of more volatile drivers such as positioning & sentiment. As diversification falls, market become increasingly beholden to just one driving factor.
Such concentration risk often provides an early warning of a ‘risk off’ event.
Highly recommend this excellent podcast with Brent Donnelly & Srivatsan Prakash.
Lots of focus on the importance of adaptation, using technicals purely for risk management and understanding the macro picture 👇👇👇