I was in a Del Taco drive-through this morning, waiting for my breakfast burrito order, when I noticed one of those ubiquitous “Help Wanted/Hiring” signs that seem to be everywhere these days.
Del Taco was offering $13 to $20 per hour for pimply-faced high school dropouts to come and help them roll tacos. My breakfast burrito cost me almost six bucks.
Wow, have times changed!
I vividly recall working at a Broasted Chicken joint in L.A. back when I was in college. I swept floors, cleaned restrooms, made cole slaw (after washing my hands!) in a 30-gallon plastic bin, and delivered meals in my car. The year was 1966 and I was paid $1.25 per hour. That was pretty easy work. However, in 1967, while still in college, I earned the same $1.25 minimum wage working HARD four hours per night at a shipping company. I would go home exhausted from that gig, five nights a week. It’s no wonder that my grades sucked.
Of course, money went a bit further in those days. Gasoline routinely cost $0.25 per gallon and a brand spanking new Ford Mustang cost around $2,500. Nowadays, fuel will cost in the $3 to $5 range, depending on how greedy the oil cartel is this month, and a new Mustang will set you back “from $27,205”. (Of course, at that rock-bottom price, you might not get tires or a steering wheel!)
We seem to be in an inflationary spiral lately, probably the result of (a) too much easy money in the economy, (2) pandemic-related manpower shortages, and (3) supply-chain issues. The stock market has been on a roll for about a dozen years now, which is highly unusual and inflationary, as has been the housing market. Too much money floating around, courtesy of the Federal Reserve’s near-zero prime rates, which results in prices being bid up.
At some point, the bottom is going to drop out of the housing market: it always does.
Charlie had a small house (less than 1,000 s.f.) when I met her in 1973. We sold that home for less than $30K, as I remember, and bought a larger home for $56K in a nicer areas of So Calif. After three years in that home, we purchased a new-build, two-story home in Riverside for around $119K. We were there for ten years. Then we bought a condo in Bear Creek (Murrieta) for around $200K. Ten years later we moved up to a larger condo in Bear Creek that we purchased for $237K. Twenty years later we moved to Mesquite, Nevada where we bought a new 2,500 s.f. home for about $450K.
As I recall, housing market values slumped several times during this almost-50-year period. It seems as though it occurs about every ten years. The last two, the one in the early 90’s and “The Great Recession”, about ten years ago, really pulled our pants down: our home wasn’t worth what we paid for it for quite a while, until the economy recovered! That was scary.
At this point in our lives, we don’t anticipate selling our house (it’s our “forever home” until we croak), and we can easily afford our mortgage, so I’m pretty sure we can ride out the next recessionary or “stagflation” episode. Many Americans will not be so fortunate.
Right now, there’s a glut of job openings, like those at Taco Bell. However, when money gets tight, demand for goods and services will drop, and there will be a glut of labor seeking employment. At that point, Taco Bell will be offering entry-level jobs, if there are any, at a significantly lower hourly rate. My breakfast burrito might cost me half as much.
We can probably expect this reversal in the next few years… no matter who’s President.
As much as some people hate to admit, the world economy isn’t managed in Washington D.C. The United States doesn’t control the price of oil, industries in other countries, shipping on the Seven Seas, and conflicts among nations. We are a big player in the world economy, but not as big as we used to be. Our stature and reputation have suffered in the past three decades from mis-adventures and mis-management by Democratic and Republican Administrations alike. Other nations are feeling their oats.
The fragility of the world economy was exposed for all to see by the Pandemic. Like Humpty Dumpty, “all the King’s horses, and all the King’s men” are having a heck of a time putting it back together… the way it was before, when we were riding high.
In the meanwhile, what is scarce is dear, so prices will go up.
It’s going to be a bumpy ride, Folks.