Where has the labour gone?

3 million people are Door Dashers.

They average earning $26 per hour.

Depending which U.S. state you may work in, that is much better than the $10-$14 minimum wage.

I learned (in today’s quarterly earnings call) that 90% of Door Dashers work less than 10 hours per week.

This adds up to a lot of people if I extrapolate that across those who ‘host’ or clean AirBnB properties, drive for ride sharing companies, life coaches or any type of freelancer, who are not in ‘traditional’ work force.

After all, why would you work 40 hours per week doing a job that you don’t like and are required to answer to a boss or superior, when you can earn 60% of what you normally would, while working 70% less hours than your ‘previous’ life.

One example is where a local yoga teacher conducts an hour long session at a nearby park, charging $15 and 30 people show up.

$450 on Saturday and $450 on Sunday.

2 hours work


Why would you want to wipe down restaurant tables and deal with customers?

Listening to the quarterly calls or reading the transcripts) of the ‘gig’ related companies may provide clues to when the labour market eases.

I think a good recession will fix the tight labour market.

Perhaps people working in the “gig’ economy may then start to reconsider flexibility and lumpy income for steadier climes and company health insurance?

Especially, if mortgage repayment stress rears its head.

November 4, 2022

by Rob Zdravevski


Trimming public company fat

Why is Elon Musk saying that he may/will cut 5,600 of Twitter’s 7,500 (75%) workforce?

It is simple. Save costs because the company is too ‘fat’.

Because in the absence of a major shareholder or founding executive, public companies are often run with some largesse in attempts to increase productivity or roll out products so to increase revenue, in order to satisfy stock analysts and shareholders.

Musk is gonna trim some fat.

When companies are private, they are run leaner.

There are some conundrums though.

I don’t know why Meta (Facebook) has 72,000 employees nor why Spotify and Airbnb each have 6,000.

The former is cutting 15,000 jobs soon. Airbnb cut 25% or 1,900 employees in May 2020.

All three have majority or a founder as CEO, yet they have more employees than what I think is logical.

I bet if they were private companies, they would have a lot less headcount.

October 28, 2022

by Rob Zdravevski


More Immigration = Lower Wages = Being Competitive

It should be simple to understand.

When the labour market is tight, the price of that labour rises.

Australia along with other countries such as Norway, Netherlands and Switzerland all have low unemployment rates. They also have some of the highest average annual wages and minimum wages amongst OECD member countries.

Tight workplace capacity (whether that means offices, factories or other facilities) and a unionised workforce can also add to the cost of labour.

When people earn more, the prices of other products can afford to rise too, simply because rising disposable income means there is more demand for the staples and non-discetionary items.

But today, Australian business operators are complaining that the cost of paying staff is becoming a heavy burden and nationally, we do understand that high wages are making us uncompetitive. They are asking the government for help.

Government doesn’t control the price of labour, so they can’t actually manipulate this price directly. What is confusing furthermore, is that businesses are happy to benefit from the positives of a free market economy, yet they are not willing to accept the cost that comes from such capitalism.

What needs to be done? What help can government provide ?

I would like your comments too.

If  the labour market is tight, then open it up. Allow more immigration. Australia is so large we can easily fit 100 million people here. Make the labour market more competitive and its price will fall. More people will also send the cost of other products down. If there are more consumers, then supply will meet the demand and price equilibrium will weave its magic.

Government needs to take a stronger line on unions and labour contract employment reform. Employees need to be convinced that the statute law passed which governs our land will be steadfastly upheld. The honouring of these laws doesn’t really require the oversight nor lobbying of a union because the “checks and balances” of democracy, its electoral constituents and the Westminster parliamentary system already exist.

I think its time we spoke truthfully about why the cost of labour is high. The headline unemployment rate isn’t the only things that matters, although government seems to think this is the major topic that will keep them elected.

The United States, Spain, Italy & Korea all have higher unemployment rates, noticeably lower wages, export more product (in dollar value), comparatively similar sized GDP per capita and much larger populations.



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