Nocco discussed on We Study Billionaires - The Investors Podcast

Automatic TRANSCRIPT

Late in the economic cycle what happens is the reverse where the job market gets pretty tight and bosses employers have to raise wages to encourage people to take a job or to indeed stay in nocco find other jobs so there's a verse strong cyclical element to wages just as there is to inflation if you run a real business for example you don't start hiking your prices now just because you have a good month or two of sales and you don't start cutting prices just because of a bad mother to sales so the these tend to lag the economic cycle considerably in the way ges also tend to happen in annual wage negotiations now it's not quite as bad as the nineteen seventies sixties when you had very high levels of unionization in a win you'd have like one annual agreement between employers everyone at the factory but it still you don't have a discussion about wages every day with your boss so it does tend to be more annual or quarterly than it is daily so because of that for a while over the past few years wages have been low and the expectation was well you know what give it time wages will go up eventually right because the job market's gonna get tight end so at barron perception we have a leading indicators for us wages and so a go visit clients these are some of the best smartest hedge funds in the world some of the wealthiest families and you know the show them the chart had said here's a chart or leading indicator for wages and they look at it and they'd say well wages aren't going up what's wrong with your chart and so while this meeting indicated for wages was turning up strongly and wages just weren't going up and so it was a question that really bothered me it was bugging me quite a bit and so i went away and try to figure out what was going on why were wages is not rise in line with all these historical relationships that you would expect no so if you look at for example the jolts survey which is a survey regarding jobs there questions like the quit rate you know how many people are quitting their job.

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