It’s a bird…It’s a plane…It’s a labor shortage!
There is little doubt the Millennial generation has been reshaping our world. One of the most remarkable aspects of this demographic group is a preference for experiences over consumer goods. “Three out of four millennials would rather spend their money on an experience than buy something desirable. This “experience generation” is now a third of the U.S. population,” reported Eventbrite.
Well, a new experience has arrived – a labor shortage in the United States.
Last week, Barron’s reported, “Across the nation, in industries as varied as trucking, construction, retailing, fast food, oil drilling, technology, and manufacturing, it’s becoming increasingly difficult to find good help. And, with the economy in its ninth year of growth and another baby boomer retiring every nine seconds, the labor crunch is about to get much worse…This, of course, is how a labor market works: Production rises, workers get scarce, and employers raise wages to attract employees.”
Currently, the population of the United States is growing faster than the U.S. workforce, reported Barron’s. It’s a state of affairs that occurred twice during the last century (1948 through 1967 and 1991 through 1999) and was accompanied by labor shortages both times. This time, Baby Boomers’ retirements may exacerbate the situation. Some estimates suggest the current labor shortage could last through 2050.
Despite low unemployment and high demand for workers, wage growth slowed in February.
There is a wild card in play, however. Many Americans prefer to participate in the workforce through the Gig economy. Gig workers have temporary jobs or freelance rather than working for an employer. MBO Partners reported, “Independents are the nearly 41 million adult Americans of all ages, skill, and income levels – consultants, freelancers, contractors, temporary, or on-call workers – who work independently to build businesses, develop their careers, pursue passions, and/or to supplement their incomes.”
The government has yet to figure out how to measure the Gig economy. When it does, a clearer employment and wage picture may emerge.
|Data as of 3/9/18||1-Week||Y-T-D||1-Year||3-Year||5-Year||10-Year|
|Standard & Poor’s 500 (Domestic Stocks)||3.5%||4.2%||17.8%||10.3%||12.4%||8.2%|
|Dow Jones Global ex-U.S.||1.8||0.5||19.6||5.2||4.1||1.1|
|10-year Treasury Note (Yield Only)||2.9||NA||2.6||2.2||2.1||3.4|
|Gold (per ounce)||-0.1||1.9||9.5||4.2||-3.5||3.1|
|Bloomberg Commodity Index||-0.2||-0.2||4.0||-4.3||-8.5||-8.6|
|DJ Equity All REIT Total Return Index||3.3||-7.5||1.5||4.0||6.9||7.8|
S&P 500, Dow Jones Global ex-US, Gold, Bloomberg Commodity Index returns exclude reinvested dividends (gold does not pay a dividend) and the three-, five-, and 10-year returns are annualized; the DJ Equity All REIT Total Return Index does include reinvested dividends and the three-, five-, and 10-year returns are annualized; and the 10-year Treasury Note is simply the yield at the close of the day on each of the historical time periods.
Sources: Yahoo! Finance, Barron’s, djindexes.com, London Bullion Market Association.
Past performance is no guarantee of future results. Indices are unmanaged and cannot be invested into directly. N/A means not applicable.
it’s not just for millennials! While the emergence of the Gig economy often is attributed to Millennials, MBO Partners’ 2017 survey found the full-time Gig workforce is a generational mash-up. It includes:
- 38 percent Millennials (ages 21 to 37)
- 27 percent Gen Xers (ages 38 to 52)
- 35 percent Baby Boomers (ages 53 to 72) and Matures (ages 72 and older)
Full-time independents work at least 15 hours per week and average 35 hours per week.
While the term ‘Gig economy’ may conjure images of ride-sharing drivers and homeowners who rent to vacationers, it includes a much broader swath of careers and many people who earn six figures. So, what do Gig economy jobs look like? According to Entrepreneur.com and Forbes, some of the top gigs include:
- Deep learning professionals. Facilitating machines learning by developing neural networks similar to those of the human brain.
- Robotics designers and programmers. Responsible for building and designing mechanical elements and machinery to streamline operations.
- Ethical hackers. ‘White hats’ help companies evaluate systems for security vulnerabilities.
- Virtual reality freelancers. They develop algorithms and have 3D modeling and scanning skills.
- Social media marketers. Understand platform algorithms and create engaging content to help companies develop their brands and market their products on a platform.
- Multimedia artists. Employ technology to create designs and special effects for digital media.
- Broadcast and sound engineering technicians. Sound is a vital part of radio programs, television broadcasts, concerts, and movies.
- Carpenters. Demand for carpenters is expected to grow by 6 percent through 2024.
- Delivery truck drivers. This may change with the debut of self-driving delivery trucks.
If you’re a risk taker looking for a flexible career or a retiree looking to supplement your income, a job in the Gig economy may be just the ticket.
Weekly Focus – Think About It
“You don’t concentrate on risks. You concentrate on results. No risk is too great to prevent the necessary job from getting done.”
–Chuck Yeager, retired United States Air Force officer, flying ace, and test pilot
Value vs. Growth Investing (3/9/18)
|US Large Cap||3.61||5.06||6.74||5.97||21.11||12.89||14.94|
|US Large Core||3.45||2.47||5.75||2.84||16.93||12.45||14.98|
|US Large Growth||4.38||11.09||9.14||12.19||34.43||14.67||17.88|
|US Large Val||2.93||1.52||5.15||2.76||12.48||11.55||11.92|
|US Mid Cap||3.68||3.71||6.84||4.82||18.47||10.66||13.90|
|US Mid Core||3.37||1.74||5.43||2.77||15.62||9.50||13.31|
|US Mid Growth||4.65||8.10||9.86||9.14||27.96||10.81||13.89|
|US Mid Val||2.96||1.21||5.10||2.42||12.05||11.58||14.43|
|US Small Cap||3.79||2.46||7.24||3.71||16.10||9.76||12.25|
|US Small Core||3.81||1.54||5.74||3.14||14.07||9.67||12.22|
|US Small Growth||4.62||7.69||11.10||8.70||28.49||11.83||13.77|
|US Small Val||2.90||-1.71||4.92||-0.69||6.45||7.62||10.66|
2004 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) is not warranted to be accurate, complete or timely. Morningstar is not responsible for any damages or losses arising from any use of this information and has not granted its consent to be considered or deemed an “expert” under the Securities Act of 1933. Past performance is no guarantee of future results. Indices are unmanaged and while these indices can be invested in directly, this is neither a recommendation nor an offer to purchase. This can only be done by prospectus and should be on the recommendation of a licensed professional.
Medicare Card Change
If you are a Medicare beneficiary, you will soon see a change on your Medicare card beginning this April. From now on, new cards will not contain Social Security numbers.
Instead, new cards will display a unique, randomly-assigned number called a Medicare Beneficiary Identifier, or MBI. The reason for the change is to protect seniors from fraud and identity theft. For years, the prospect of losing your Medicare card was enough to make anyone shiver – because it contains information that can affect your finances. Now, the new cards should make it much easier to keep your identity safe while still enabling you to check your eligibility and claim status.
A few things to know about this change:
- You do not need to take any action. The Center for Medicare Services (CMS) will send you a new card automatically.
- The new cards do not affect your Medicare benefits in any way.
- Once your new card arrives, you should destroy your old card so that it doesn’t fall into the wrong
- Be wary of thieves trying to take advantage of this change. Specifically, watch out for anyone who calls asking for your personal data or requesting payment so they can send you a new
If you would like more info on this change, visit https://www.cms.gov/Medicare/New-Medicare-Card/.
Protecting your identity is a crucial part of working toward your financial goals. Keep an eye out for your new Medicare card, and be sure to destroy your old one when it arrives! In the know if you have any questions or if there is anything I can do for you.
Michael L. Schwartz, RFC®, CWS®, CFS
P.S. Please feel free to forward this commentary to family, friends, or colleagues. If you would like us to add them to the list, please reply to this email with their email address and we will ask for their permission to be added.
Michael L. Schwartz, RFC, CWS, CFS, a registered principal offering securities and advisory services through Independent Financial Group, LLC., a registered broker-dealer and investment advisor. Member FINRA-SIPC. Schwartz Financial and Independent Financial Group are unaffiliated entities.
This information is provided for informational purposes only and is not a solicitation or recommendation that any particular investor should purchase or sell any security. The information contained herein is obtained from sources believed to be reliable but its accuracy or completeness is not guaranteed. Any opinions expressed herein are subject to change without notice. An Index is a composite of securities that provides a performance benchmark. Returns are presented for illustrative purposes only and are not intended to project the performance of any specific investment. Indexes are unmanaged, do not incur management fees, costs and expenses and cannot be invested in directly. Past performance is not a guarantee of future results.
* The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general.
* The DJ Global ex US is an unmanaged group of non-U.S. securities designed to reflect the performance of the global equity securities that have readily available prices.
* The 10-year Treasury Note represents debt owed by the United States Treasury to the public. Since the U.S. Government is seen as a risk-free borrower, investors use the 10-year Treasury Note as a benchmark for the long-term bond market.
* Gold represents the London afternoon gold price fix as reported by the London Bullion Market Association.
* The DJ Commodity Index is designed to be a highly liquid and diversified benchmark for the commodity futures market. The Index is composed of futures contracts on 19 physical commodities and was launched on July 14, 1998.
* The DJ Equity All REIT TR Index measures the total return performance of the equity subcategory of the Real Estate Investment Trust (REIT) industry as calculated by Dow Jones.
* Yahoo! Finance is the source for any reference to the performance of an index between two specific periods.
* Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance.
* Past performance does not guarantee future results.
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