Port of Los Angeles Backup Increases
When it comes to shipping, things are heading in the wrong direction, according to this Bloomberg News article: “Los Angeles Port Progress Reverses as More Ships Join the Queue.” The article’s author, Brendan Murray, reports that:
Ship congestion outside the busiest U.S. gateway for trade with Asia worsened over the past week, as the number of container vessels queuing off the coast of Los Angeles reached the most in two weeks.
Port traffic hit a high in April and had been heading down. Still, it’s better than it was at the peak when it took eight days to get a berth as opposed to the current 5.9 days.
Is There a Labor Shortage?
I have just spent the last four days in central North Carolina. Everywhere I went I found a notable lack of workers. Those that were on the job were new in their positions and not yet trained.
That was why I found a New York Times piece by David Leonhardt to be of interest. Entitled “The Myth of Labor Shortages,” the article explains the causes of the shortage and how to cure it. He writes:
Some Americans appear to have temporarily dropped out of the labor force because of Covid-19. Some high-skill industries may also be suffering from a true lack of qualified workers, and some small businesses may not be able to absorb higher wages. Finally, there is a rollicking partisan debate about whether expanded jobless benefits during the pandemic have caused workers to opt out.
For now, some combination of these forces — together with a rebounding economy — has created the impression of labor shortages. But companies have an easy way to solve the problem: Pay more.
Mr. Leonhardt states that like in any shortage in a capitalist economy, the best way to cure it is to offer more money, in this case, higher wages. And that is what is happening.
Bank of America announced Tuesday that it would raise its minimum hourly wage to $25 and insist that contractors pay at least $15 an hour. Other companies that have recently announced pay increases include Amazon, Chipotle, Costco, McDonald’s, Walmart, J.P. Morgan Chase and Sheetz convenience stores.
Entertainment vs. Consumer Products
The masks are coming off, and people are traveling again. The question we in the toy industry will face is what impact renewed spending on experiences will have on toy consumption.
The Wall Street Journal writer Paul Hannon has something to say about it in his article, “Grand Reopening to Test Consumers’ Appetite to Keep Spending.” The gist of the article is that many families have accrued savings during the pandemic and, as a result, will continue to spend on goods while they enjoy haircuts, movies, and travel.
In normal times, a surge in spending on services would require a slowdown in spending on other things, unless people were willing to borrow a lot more. Usually, people don’t have much money to spare, and they have to cut back on some spending to increase their other purchases. But the buildup in savings changes that calculation.