Download Jobs + Inequality

War Room 29 August 2012
Jobs + Inequality
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• Update on HiddenLevers Features
• Your feedback welcome
Jobs + Inequality
I.
Jobs Picture: Current Snapshot
II.
Comparative:
Post-Recession Job Recoveries
III.
Market Inequality
IV.
Scenarios
HiddenLevers
JOBS PICTURE: CURRENT SNAPSHOT
Current Snapshot: Long Way To Go
Still 5 million jobs from peak
Current Snapshot: Jobless Claims Now at 2001 Highs
450k
Unemployment claims:
•
decreased significantly since 2009 peak
•
Currently not decreasing
•
Currently equal to peak of 2001 recession
Current Snapshot: Muddling Through
unemployment down
confidence up
upticking unemployment this summer
Current Snapshot: Recovery + Demographics
approaching 2008 lows
Singles
• 5 million jobs lost – 90% recovered
Married
• 6 million jobs lost – 22% recovered
HiddenLevers
COMPARATIVE:
POST-RECESSION JOB RECOVERIES
Comparative: Post-Recession Job Recoveries
Quantitative:
% job loss dramatically more
Qualitative:
Character of recovery similar to 1990 + 2001
source: Bureau of Labor Statistics
Comparative: 2000s = Jobless Recovery
Losers
- Manufacturing
- Automotive
Winners
- Professional
services
- Healthcare
(Rich Kids of Instagram)
HiddenLevers
MARKET INEQUALITY
Inequality – Top 1% versus The Rest
Takeaways
- excluding top 1%, income inequality has not risen over past 20 years
- system that works well for richest, doesn’t for the rest
- Income share for top 1% is at Great Depression era highs
Inequality – Part of General Trend?
Ratio of CEO to Worker Compensation:
1965-present
Source: Economic Policy Institute
Fortune 500 CEOs
•
•
•
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CEO/worker pay ratio has risen exponentially – 20x in 1965 to 200x today
CEO pay has accelerated even faster than top 1% income
Shareholders could affect things – vote down CEO packages
Winner-take-all
Inequality – Part of General Trend?
Baseball Salaries
•
•
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Average MLB salary up 100x since 1970
Median wage across all pro-athletes = 40k (minor leagues)
Winner-take-all
Inequality – Part of General Trend?
12 employees
1b usd acquisition
67 employees
1.65b usd acquisition
Startup Billionaires
•
•
•
Startups not creating jobs, creating wealth for few
Automation = key to many startups success, but eliminates jobs
Winner-take-all
Inequality – Russell 2k vs Mega Caps
Top 8 Firms outperformed over last 20 years


Apple - Outlier or new Paradigm?
Apple demonstrates inequality markets
• iPhone is king of smartphone market
• iPad has even greater share of tablet space
• Winner-take-all
Mega Caps outperformed small caps (and
S+P) over last 20 years.
All but Apple were huge companies 20
years ago – no cherry picking here
Future: Automation + Change in Workforce
Ford Factory 1925 - humans
Tesla Factory 2012 - robots
Technology + Automation = Spoils to go to a few, companies and individuals
Examples:
Tesla - new factory uses robots + few humans
FoxConn - automating iPhone factories in China, use 90% less workers
Amazon – automating logistics, new warehouses devoid of humans
Philips – robots replacing workers to make consumer electronics devices
they don’t
need me
anymore
Future: Optimistic and Pessimistic Scenarios
What are the effects of continued automation on the workforce?
Pessimists: Once a robot can do everything an
unskilled laborer can do, and better, what happens to
mass unemployed? If a robot can serve you fries,
what's the purpose of a minimum wage worker?
Optimists: We've been through this transition before:
19th century Industrial Revolution, 20th century rise of
services and information economy – this is just
creative destruction at its best.
These trends are far reaching – too early to model
scenarios here.
HiddenLevers – Product Update
•
Macro Profile for a Portfolio (print to PDF)
•
War Room – now on iPad
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•
iPad App (beta)
•
Big Screen Presentation (beta)