Latest / The Financial Exchange Show / What should you know about your salary heading into 2025?

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What should you know about your salary heading into 2025? · The Financial Exchange Show

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Speaker 2: Good morning, and welcome back to the Financial Exchange. It
1:15
is Mike Armstrong, Paul Lane, and Tucker Silva with you
1:18
on a Tuesday morning. After yesterday's all time highs, We've
1:22
got equity markets largely in negative territory here. Dow is
1:25
off one hundred and sixteen points a quarter of a percent,
1:27
SMP's off twenty a third of a percent. Nasdak leaned
1:30
the way down, off one hundred and fifty six points
1:33
or eight tenths of one percent. Bond market ten year
1:37
treasury yields sitting steady at about four point zero five percent.
1:41
I'm rounding there slightly. Oil markets back down five percent
1:46
after the announcement or not announcement, but report from the
1:49
Washington Post that Israel is not expected to strike Around's
1:52
oil industry. Prices on West Texas Cruse sitting at seventy
1:56
dollars flat at the moment, with a again three dollars
1:59
eighty cent drop or five percent drop this morning. In trading,
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Gold sitting at twenty six seventy eight per ounce. Anything
2:09
else catching your eyes this morning Paul market wise.
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Speaker 3: No, the biggest thing for me, I was just noticing
2:16
that that dropping oil is notable. I'll see in a
2:19
little bit of a relief there five percent drop, So
2:22
that to me was probably the biggest standout.
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Speaker 2: We'll be joined in the next segment by Corey Adams
2:26
from Robert Half as folks head into that all important
2:30
year end time where salary negotiations kickoff, So giving us
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a twenty twenty five salary guide. That'll be, like I said,
2:37
after the next break, right after trivia. But our first
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story today is from Alice Schreger, columnist at Bloomberg, and
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I don't know jumping on the Mark Fandettian bandwagon here.
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Jerome Powell is not the greatest FED chair ever. This
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comes amidst I think, you know timely report here with
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JP Morgan Chase, I think on Friday publishing a piece
2:59
basically calling it for the for the soft landing, saying, look,
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you know, by our own metrics and our own definitions
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here we believe the FED has orchestrated a soft landing
3:08
of this economy. We are not in a free fall
3:10
for unemployment, inflation, prices have calmed down, and calling it
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for the soft landing, which you know, we ourselves on
3:19
this show, we've apparently a slightly different definition of it
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than JP Morgan Chase. We've been saying, look, if the
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economy gets to a point where both inflation and unemployment
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finished the year under four and a half percent, then
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we'll give it to them. So thereby we can't really
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grade it until January, but certainly we seem to be
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heading in that direction. Unemployment is still below four percent,
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well below it now at four to one, and inflation
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is sitting around three. So that would that would class
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categorize as a soft landing by our own definition if
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we get there. And I have to say that I
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think that's fairly remarkable in terms of an achievement based
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on history. History has been that inflation is very volatile,
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has a lot of points where it comes back, and
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in almost every instance it's taken a recession to get
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rid of inflation. So far inflation's coming way down. We
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don't have a recession on our hands, and I think
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that is something to applaud. Allison's point is not about that.
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I think she too would applaud the actions of the
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FED over the last year or two. Her point is
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merely we could have avoided a lot of this had
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the FED acted differently in twenty twenty one and twenty
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twenty two. Where do you buy in where do you
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diverge from Allison's opinions on this stuff?
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Speaker 3: I would diverge because people She's not the first one
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to make this point. A lot of people have played
4:38
Monday Morning quarterback on the decisions made in twenty twenty one,
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in particular, where we were coming off of a pandemic
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that no one had seen the likes of in one
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hundred years, and there wasn't a playbook on how to
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properly operate the economy to maintain full employment and keep
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you know, interest rate or keep inflation under control when
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you have an economy that was shut down in the
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midst of reopening. And I wouldn't be overly critical of that.
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The piece that I would agree with her is in
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twenty twenty two, how long the support continued for That's
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where I think you and I share that view that
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it continued longer than necessary. There was clear signs that
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the economy had avoided any substantial recession. It was a
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very quick one that occurred in twenty twenty and it was.
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It was very clear that we had sort of rounded
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out of that, and the continuing purchases of mortgage backed
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securities and other inflows of dollars into the economy could
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have been shut off a little bit quicker. That's where
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I would agree, but I would diverge on being overly
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critical of the actions in twenty one.
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Speaker 2: Yeah, So to remind folks of all the actions, I
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mean very obviously, the Federal Reserve was bring rates to
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zero immediately when the when COVID became clear what was
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happening there. So that was one action they took, and
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I think totally justifiable in the face what we were
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dealing with. Very justifiable. They also then went on a
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bond buying spree. They ended up buying I don't know
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how much a month. It was something I think eighty
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billion a month. Rings familiar to me, but I could
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be off on that figure. Of both mortgage backed securities
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as well as government securities. Why would you do that, Well,
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it builds an additional a new buyer into that market,
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and when you have a limited number of buyers buying bonds,
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what happens Prices go up and yields come down. It
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also effectively by doing so, backstopped the bond market as
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a whole. So if you remember the early stages of COVID,
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like April of twenty twenty, I remember one of the
6:39
major cruise lines basically on the cusp of taking a
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deal with some private equity and hedge funds that was
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just going to kill them. It was like a sixteen
6:48
percent interest rate on debt and convertible into stock, and
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that was announced on like a Thursday. The FED stepped
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in on a Friday, and then that same company went
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and financed debt at like nine percent or something like
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that the day after. So the risk of going out
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of business in twenty twenty was very low for large companies.
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Different story for small ones, but for big businesses, really
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tough to go out of business. I'm of opinion that
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you can basically justify everything the FED did in twenty twenty.
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You can make an argument that it was overdone, but
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I think anything that the FED did in twenty twenty
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to save this economy was relatively justifiable. The further away
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you got from the COVID lockdowns, the less justifiable it became.
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And to your point, still buying bonds at a relatively
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big clip in twenty twenty two, completely unjustifiable in my view,
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and led to what we're seeing in the housing market
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right now, which is large swasts of the country home
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prices having appreciated thirty forty percent over the last five years,
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and no one wanting to sell because you could get
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a hell of a deal on a mortgage over the
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last you know, in that twenty twenty to twenty twenty
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two time period when the Fed was artificial suppressing mortgage rates,
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because make no mistake, that's what they were doing. They
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were artificially suppressing mortgage rates to make it easier for
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people to get cheap debt, led to what we see now,
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which is housing being extraordinarily expensive, And if you couldn't
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get into a home during that period of time, you're
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kind of locked out at this point to a degree.
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So I think there is a compelling argument that, yeah,
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keeping going with these bond buybacks. You know, Congress has
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places to blame here too, Right, Should they have been
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paying unemployment at such an elevated level through twenty twenty two?
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Should they have been waiving payments on student loans until
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twenty twenty four? No? Probably not plenty of blame there too,
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But I think the FED again to get these mistakes
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are justifiable and understandable. I think don't think they should
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have been made. They were too slow to raise interest rates,
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too slow to cut out the bond buying programs, and
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I think that led to much of the inflation that
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we saw in twenty twenty two. All I think that
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does is keeps them from the top list of best
9:06
federal reserves that we've ever seen. You know, a lot
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of their actions over the last few years have turned
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out to be outstanding. I would have been so, you know,
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if you're looking back on this period of time, I
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think there's lessons to be learned here. It's tough. It's
9:20
pretty easy to play Monday morning quarterback. I will admit
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that that. You know, we have a lot of hindsight
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now of how this all played out, but it did
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seem obvious in twenty twenty two that rates need to
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be higher and these bond buying programs probably needed to
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come to an end before they actually did. I agree.
9:38
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Speaker 2: Corey Adams from Robert Half joins US now to talk
10:51
about their twenty twenty five Salary Guide. Corey, thanks has
10:54
always for joining us.
10:55
Speaker 5: My pleasure good to be here.
10:56
Speaker 2: So first things first, we're four and a half years
10:59
out from the beginning stages of COVID. I know a
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lot of work is still being done remotely, but I
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know in our own office, and you know, speaking to
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my wife who works in financial services as well, there
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has been a major shift back towards in office work.
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And how big of a differentiator is that from what
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you're seeing both in the hiring and employee side.
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Speaker 5: So where we're seeing it, according to the Salary Guide,
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really follows right now, and it's a little bit nuanced nationally,
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is in the form of compensation, and so what we're
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calling it is in office premium. So for jobs that
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can be done remotely, sixty six percent of managers are
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willing to increase starting salaries for new hires to work
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in the office, and on average we're seeing up to
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about twenty percent more pay to come in four to
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five times a week. And so you know, employers, here's
11:51
the why, right employers are offering higher pay because they
11:54
value team building. They offer face to face collaboration. As
11:58
we've talked about over the past few months, it creates
12:00
at an overall better onboarding experience and new hires, and
12:03
so there's a chance that this trend is likely to
12:06
continue as companies continue to focus on maximizing productivity and
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improving team dynamics.
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Speaker 2: Corey. When it comes to you know, the other big
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trend obviously, you know in office work has been one.
12:19
Artificial intelligence seems to be the only thing that people
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are talking about these days. Chuck and I were talking
12:25
last week or the week before, both of our all
12:27
the matters are offering artificial intelligence courses at their schools.
12:32
How big of an ask is this for new hires?
12:36
How big of an expectation is now built in that
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you're going to have some level of expertise in white
12:43
collar work for artificial intelligence.
12:46
Speaker 5: Yeah, I would categorize it as it's moving almost to
12:49
a necessity. And so the research that we have shows
12:52
that more than half of hiring managers say that advancements
12:56
in AI and automation is basically reshaping the skill set
13:00
that's needed to operate on a day to day basis.
13:02
So additionally, thirty seven percent are bringing contract down to
13:06
actually help support AI related projects. And then this is
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actually from a separate research project that we did. Ninety
13:14
percent of tech leaders plan to implement initiatives involving AI
13:18
this year, but ironically a little bit less than half
13:21
site that they actually lack the AI experience as one
13:25
of their biggest barriers to success. So bottom line is this,
13:28
I think many of the top skill sets that are
13:32
in demand right now have one thing in common. It's AI.
13:36
So tech leaders of all sizes cited AI and machine
13:40
learning as the top area with the skills gap is
13:43
most evident.
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Speaker 2: What industries do you think are going to be, you know,
13:49
looking for the biggest increases when you take a look
13:51
at at your surveys and what you're expecting for twenty
13:53
twenty five, Obviously there's been a lot of pressure on tech.
13:56
You've seen I would say, you know, the biggest announced
13:59
layoffs that I've seen in any way have been in
14:00
the tech sector. So I would imagine, you know, salary
14:04
increase anticipation are pretty low there. But what other industries
14:07
are you seeing that are expecting some big bumps in pay?
14:11
Speaker 3: Yeah?
14:11
Speaker 5: So just real quick too, before we give you the
14:13
we'll call the top four growers. And I think some
14:15
of your listeners will be happy to see where accounting
14:17
and finance falls. But when we talk about wage growth,
14:20
I mean it's basically been moderate, right, So the Uereau
14:22
of Labor Statistics reported that wages and salaries increased four
14:25
point one percent year every year, and that's from last
14:28
June to this June. However, and you guys mentioned this
14:31
quite a bit, the inflation has had an impact on
14:33
the significance of those increases, So adjusted for inflation, wage
14:38
and salary increase end up being on average about one
14:40
percent for the same period. But to answer your question,
14:43
the top four industries that we saw the most significant
14:46
increase in salaries from last year going into next year,
14:49
Accounting and finance came in at three point six percent.
14:52
That was followed closely behind administrative and customer support at
14:56
three point five percent, and then your last two that
14:59
I'll give you is marketing, creative was three point four percent,
15:02
and then human resources was four. Into your comment, technology
15:06
was certainly towards the bottom of the run.
15:07
Speaker 2: Here are we finally seeing some trends in you know,
15:11
I don't know how old the youngest baby boomer is
15:14
these days. I know we've talked about this, Tucker. I
15:16
don't know if you know off the top of your head,
15:17
I would think early sixties. You've got the youngest baby boomers,
15:21
the largest generation of workers that has now been moving
15:23
into retirement. How have managers been handling this? Is it
15:27
playing a big role in hiring plans for twenty twenty five?
15:32
Speaker 3: It is?
15:32
Speaker 5: And I'm glad you brought this up. And the reality is,
15:35
like we knew we were going to get here at
15:36
some point. So a retirement has basically sharpened organizations priorities.
15:40
So retirement is a top concern and reality for a
15:44
lot of managers, and many of them are implementing strategic
15:47
measures to bridge the resulting skills gap. So forty five
15:51
percent are investing in training and upscaling their current workforce,
15:55
and another forty one percent are actually leveraging the expertise
15:59
or retire retires by rehiring them as a part time consultant.
16:03
So I thought that was interesting, something we haven't seen
16:05
too much in the past.
16:06
Speaker 2: Yeah, that's a huge number. And I do know a
16:09
lot of you know, retirees out there who are being
16:12
offered that part time gig and finding it quite attract
16:14
I've speaking to somebody just yesterday actually who has been
16:17
out of the workforce for a good year and a half.
16:19
I think he's in education. They had a departure there
16:22
and was offered this kind of part time gate to
16:25
fall out the year, close out the year, and didn't
16:27
have much to do with the pay, but something about
16:29
it was appealing enough, and I think, you know, hiring
16:31
managers should be aware that their workers might be open
16:34
to that type of arrangement if the companies can get
16:37
around it and get comfortable with it, which again is
16:40
a big shift, but I think it's a compelling option. Corey,
16:44
I really appreciate you joining us as always. That's Corey
16:47
Adams from Robert Half talking to us about the twenty
16:49
twenty five salary Guy that they put together. Corey, thanks
16:52
so much, appreciate.
16:53
Speaker 5: It, Thank you, sir.
16:54
Speaker 2: Soon. Taking a look at markets as we head towards
16:58
eleven thirty here, the Dow remains in negative territory, off
17:01
seventy nine points one fifth of one percent, the S
17:05
and P still off seventeen points a third of a percent.
17:08
In the Nasdaq off one hundred and thirty five points
17:10
three quarters of one percent. Here yield attend your treasury
17:14
sitting at four point zero five percent. And then the
17:17
big story of the day. Oil price is off more
17:20
than five percent this morning, as The Washington Post reported
17:24
that Israel has no intention of intentionally striking Iran's oil industry,
17:29
obviously a lot of conjecture around what that will look
17:33
like over the coming weeks, but nonetheless dragging down oil
17:36
prices this morning. We'll be right back with the trivia
17:39
winner after this.
17:49
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18:12
Speaker 2: In what has to be the most disappointedly unexciting actual
18:19
article with the most exciting headline, the battle between dock
18:22
workers and robots isn't over. I'm just picturing a dock worker,
18:26
you know, with a cutoff T shirt and like a
18:30
thick mustache, chasing a robot down with a wrench. But
18:33
that's unfortunately not even close to what we're describing here.
18:36
Rather you have the dock workers who are back to
18:38
work after I think was it just a two or
18:40
three day strike strike, pushing off those negotiations until after
18:45
the election in January when it'll probably come to a
18:48
head to some degree again, but giving some time to
18:50
negotiate here. And one of the big pieces that they
18:54
know I still don't know, is it struck struck over
18:58
was the automation piece. And this article I think goes
19:03
on to talk about how really this is inevitable, and
19:07
you might have periods like this where tensions flare up
19:11
and you get another strike, but inevitably automation is coming
19:17
for you know, every different job and will eventually replace
19:22
most of what we do today in one way, shape
19:24
or form, or augmented in some way, shape or form.
19:27
New jobs will be created on the backs of all that.
19:29
But I think doc work is almost certainly going to
19:33
continue to be automated and there's almost nothing the union
19:35
can actually do about it.
19:37
Speaker 3: They did a great job in this piece, some bloomberg
19:39
of raising the parallels to the late nineteen fifties where
19:43
basically Malcolm MacLean came up with the idea behind the
19:46
container ship that is used so frequently today. You had
19:49
fifty thousand longshortmen work in the docks of New York
19:53
in the nineteen fifties. You now have forty five thousand
19:56
long shoremen all throughout the coast from Maine to Texas.
19:59
So this shows you how the industry evolved over time,
20:03
and a similar thing could very well occur in this
20:06
instance where in the late nineteen fifties, what they ultimately
20:09
came to an agreement on is that they would not
20:12
guarantee all the jobs of long shortman, but rather keep
20:15
a small workforce on at a higher paid level. You
20:18
could very much see the parallels in today's world with
20:21
as automated automation picks up, you're still going to need
20:24
a contingency of workers at the particular porks to make
20:27
sure everything is running appropriately. But ultimately it's not going
20:31
to be the same number of employees that is going
20:33
to be required. And this is just the way industries
20:36
and businesses evolve to increase productivity. This comes with it.
20:40
You can't fight back against technology and it evolving over time.
20:45
Speaker 2: Yeah, and I'm not trying to be anti union or
20:47
anything with all. This is just the fact I mean
20:49
even let's assume that they did get some commitment from
20:52
the ports to not automate further, which again I think
20:55
is unlikely. But let's say you did it, and across
20:57
the entire easterncy board there's no further automate. What that
21:01
means is it's just more expensive and more costly and
21:05
more time intensive to get your stuff loaded up and
21:08
offloaded at US ports. We're a world economy here, so
21:14
if that happens, what am I going to do? Well?
21:17
If the Port of Saint John in New Brunswick decides
21:21
to automate and make it cheaper and easier to offload goods,
21:24
then I'll do it there and I'll drive the stuff
21:26
down through Maine. If Mexico suddenly becomes far more effective
21:32
at offloading goods in I don't know where's the closest
21:36
port to the US border. I don't even know the
21:39
name of it because it's irrelevant because we automate here.
21:41
Nobody delivers their goods to Tampico, Mexico and drives them
21:46
up the border because it's not necessary. But guess what
21:48
if we become non competitive because of union contracts in
21:52
the Eastern United States, they will find other ways to
21:55
get goods into the US and deliver them to households
21:58
at a cheaper, more effective cost. So again, automation, it's
22:03
coming for all of our jobs. It just depends at
22:05
what pace and to what degree we're able to retrain workforces.
22:10
And that's admittedly an area that we have been abysmal
22:13
at for decades in the United States, like whether it's
22:17
through outsourcing to other countries and job loss throughout the
22:20
Rust Belt, whether it's you know, automation of jobs in
22:23
auto manufacturing, like all those things are necessary. What the
22:26
United States has really failed to do is come up
22:28
with a comprehensive retraining policy to get people back in
22:32
the workforce in other areas. Folks want to talk to
22:35
you about the live broadcast of this show. We're going
22:38
on the road. We did one in Springfield a few
22:40
weeks ago. We're heading to Hyanas on October twenty fourth.
22:44
We'll be doing a live broadcast of the Financial Exchange
22:46
on October twenty fourth of the Double Tree Resort in
22:49
Suites and Hyenas will be then hosting a seminar after
22:53
the show. So live show from ten to twelve. You
22:55
can sit in on it and talk to us. Between breaks,
22:59
we'll be doing the live podcast from the hotel, and
23:01
then at noon we'll be doing a free lunch with
23:03
the Armstrong Advisory Group. Really a Q and a session
23:06
about whatever you want to get into with the folks
23:08
here at Armstrong, but I'll certainly be talking about the
23:11
upcoming election economic policies that the two candidates have proposed.
23:15
Ed Lambert from WXTK is going to be joining us
23:19
for that live lunch and seminar that will be putting on,
23:23
and so really just an opportunity to sit down with
23:25
the host of the Financial Exchange, host of the Morning
23:28
show down on XTK and ask questions that you might
23:31
have and hell, you get a free lunch out of
23:33
it too. That's nothing to sneeze. That's why I'm going
23:37
anyway about the rest of you guys. Once again, the
23:41
date is October twenty fourth. We'll be doing the Double
23:44
Tree Resort and Suites on Hyanas. You can sign up
23:47
two ways. One go to Armstrong Advisory dot com slash
23:50
events a bunch of information on the event there. You
23:53
can also call us at eight hundred three nine three
23:56
four zero zero one. Seating is limited here, so you
23:59
do need to make a reservation if you're going to
24:01
attend again, you can do that by calling us at
24:03
eight hundred three nine three four zero zero one, or
24:07
go to Armstrong Advisory dot com slash events.
24:10
Speaker 1: The proceeding was paid for by Armstrong Advisory Group, a
24:13
registered investment advisor. Nothing in the ad or in any
24:15
Armstrong guide a specific financial, legal, or tax advice. Consult
24:19
your own financial, tax into state planning advisors before making
24:21
any investment decisions. Armstrong may contact you to offer investment
24:24
advisory services.
24:26
Speaker 2: Sometimes we cover stories on the show that I just
24:28
cannot even begin to relate to, and this next one
24:30
from the journal is one of them. To lure home
24:33
buyers builders still have to help with high mortgage costs.
24:36
It outline stories of builders in other parts of the
24:38
country not here to in New England need to offer
24:41
five percent mortgage rates to get home buyers in there
24:44
and induce them. This seems like a foreign concepts to
24:48
everyone here in New England. I fully understand that. I
24:50
believe Connecticut still has the worst housing inventory levels compared
24:54
to twenty nineteen of anywhere in the country as far
24:57
as I know, But there are seven states that are
25:00
sitting on more housing inventory now than they were in
25:03
twenty nineteen. Those are Tennessee, Texas, Idaho, Florida, Colorado, Utah,
25:08
and Arizona. You can think about those states and really
25:12
I list all of them off as big desirable places
25:14
to move to during the pandemic, right, how many people
25:16
were talking about Nashville or Austin, Texas, big companies relocating
25:21
to those places. Idaho drew a ton of people wanted
25:24
to work remotely from Idaho Florida obvious, but a ton
25:28
of migration to Colorado and Arizona and Utah as well
25:31
for the lifestyle trade off that you had there and
25:34
a lot of building that occurred there as well, and
25:36
now finally starting to catch up with it, it would
25:39
seem here with home builders finally getting some product to market.
25:43
Speaker 3: Yeah, this is one that I was diving into all
25:45
sorts of different metrics because to your point, Mike, it's
25:48
just unfathomable to have a buyer around the Greater Boston
25:52
area offering you a lower mortgage rate just to buy
25:56
their house because there's so seldom any options around any
25:59
of these towns rounding our studios, And the same applies
26:02
throughout most of the New England area as well as
26:04
you point out with Connecticut. But the fact that it
26:08
is important to note the new home building sector of
26:13
the overall housing market is a smaller portion of it.
26:15
Right Ultimately, the existing home sales inventory is the biggest
26:20
percentage of the housing market that makes transactions and volume
26:24
move on a monthly basis. But still very surprising to
26:28
me to see that you saw an increase and appetite
26:34
for these builders to download homes because people are just
26:36
dying for them in so many different parts of the
26:39
country because of underbuilding over the last fifteen years or so.
26:41
Speaker 2: I still the Connecticut thing, I just cannot wrap my
26:44
head around. So in September, this is according to data
26:47
from the Saint Louis Federal Reserve September of twenty twenty four,
26:51
the level of available housing is twenty eight point six
26:55
percent of what was available in September of twenty nineteen. Wow,
27:00
like mass chuse and stuff, it's half that's bad. Connecticut
27:03
is just a different world right now in terms of
27:06
its housing market. It is just absolutely wild to see
27:09
that twenty eight point six percent of twenty nineteen levels
27:13
just craziness. Let's take a quick break here on the
27:16
Financial Exchange when we come back Stack Roulette.
27:20
Speaker 1: The Financial Exchange streams live on YouTube. Like our page
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Financial Exchange Radio Network.
27:57
Speaker 2: Paul, low cost airlines have one job and they're failing
28:01
at it. That's the piece from Bloomberg. Here Thomas Black
28:04
wrote the piece, and here's the premise. If you're a
28:09
low cost airline, you need to do really just one thing,
28:13
and one thing well, no frills, cheap airfare that's at
28:19
least reasonably on time, so that you can expect to
28:22
get where you're going. They are delivering on the low
28:26
cost no frills piece. I will give them credit there,
28:30
Spirit Frontier, Allegiant. These these budget carriers, the seats are tiny.
28:36
You barely get a drop down what is that called
28:41
trade table, barely get a drop down tray table. No
28:44
Internet on these flights, like they're not a lot of
28:47
bells and whistles, and you get charged for every other thing.
28:50
But as I was sitting in the airport this morning,
28:52
I was flying from Indiana to Boston this morning, and
28:56
I flew Delta mainly because that was the cheapest flight
28:59
available for the times that I needed. There are like
29:02
four people in the check in line. We walked up there,
29:05
we nicely checked our car seats and walked over to
29:12
CSA pre check and flew through security like it was
29:15
a very pleasant experience. And right behind me was the
29:18
line for Frontier Airlines, which you know, based on my
29:22
rough estimations, looked to be about two days long. It
29:25
was enormous. There were hundreds of people sitting in line
29:28
to check their bags on Frontier because, by the way,
29:31
check the luggage is cheaper on some of these airlines
29:33
than carry on luggage. And beyond that, what they seem
29:36
to be really failing at, beyond the customer service piece,
29:40
is on time performance and reliability. And I guess furthermore
29:46
would be confidence that they can even continue to exist
29:48
because they keep losing money. Spirits been talking about declaring bankruptcy,
29:52
and that becomes a bit of a self fulfilling prophecy,
29:54
right Like if you another example here, I was looking
29:58
at flights for February, Bak, we're not really planning on
30:01
going anywhere that's they would fly a floor, But I
30:03
was curious and Spirit was by five hundred by fifty
30:08
percent was the cheap now thirty percent was the cheapest
30:10
airline out there to get where we were looking like
30:12
a Caribbean type vacation. Spirit was five hundred dollars cheaper
30:16
per seat than the next low cost airline. And I
30:20
personally looked at that and said, would you be willing
30:23
to roll the dice on whether or not Spirit will
30:26
I be able to actually get you down there? By
30:28
February they're talking about bankruptcy. I doubt they're going to
30:30
cease to exist, but I wouldn't book a ticket on
30:33
a company that's talking about bankruptcy. Sure, sure, I'd be
30:36
quite nervous about that. And if that actually maybe I'm
30:38
alone in that. But if that continues, then Spirit can't
30:42
book revenue. That's our real problem.
30:45
Speaker 3: It seems like some people have questioned whether or not
30:47
there can be these discount air flyers out there, but that's.
30:51
Speaker 2: Just there's demand for it.
30:53
Speaker 3: Like you mentioned, there's always going to be demand to
30:55
find the cheapest flight out there. Ryanair is a good
30:58
example of a company that has done well with this
31:01
business model over time. Their on time performance is much
31:05
stronger than that of Spirit and some of the other
31:07
discount airlines here Frontier as well. So whether those two entities,
31:13
Spirit and Frontier need to adjust some of the airports
31:16
that they fly into or create a buffer between flights,
31:20
there's something that needs to be done on that end
31:22
of things to get execution to a better point.
31:26
Speaker 2: It could just be this market right now, like people
31:29
have been willing to splurge over the last four years.
31:32
I wouldn't have necessarily thought that that would follow through
31:35
to airline fair because look, the experience of Americans buying
31:39
airlines has been give me the lowest marketed sales price,
31:43
and that's what I'm going to book. I don't care
31:44
if it's a dollar cheaper. If you know, one airline
31:47
is cheaper than the other even with all the other fees,
31:49
they book the cheapest possible flight. Either A that's changing
31:53
or B. Americans have been so flush with cash that
31:57
they've just said, now you know I've flown Spirit before
32:00
or didn't love the experience, I'm going to book on
32:02
Delta instead. And that's kind of where I've gone to. Right, Like,
32:05
I'd be willing to book Spirit were it myself flying
32:10
somewhere if I was just the only one reliant on
32:13
getting there and in you know, worst case scenario, I'm
32:15
late to a business trip. Okay, I'll deal with that.
32:18
If I'm flying with my three kids and I need
32:21
to wait in an hour and a half line to
32:22
check a stroller, forget it. I'm never flying that again.
32:26
Speaker 3: It's interesting Delta's done really well on the premium side
32:29
of things. It seems like they've really had some strong
32:32
growth on offering the premium cabin versus the main cabin
32:36
that in a recent earnings call they mentioned has performed
32:39
stronger than just that sort of regular cabin. So there
32:42
is that you have to be on one side of
32:43
the other, right, you either have to be catering to
32:45
premium or you need to be catering to sort of
32:48
the discount.
32:50
Speaker 2: And I think, you know, Spirit and other airlines have
32:52
been talking about going upmarket with you know, different offerings.
32:55
You know, Jet Blue did that years ago. Southwest is
32:58
now talking about doing that with some you know, premium
33:01
booked options on there. I don't know, I see that
33:04
as a mistake. Like again, for a lot of flyers,
33:07
it's a prerequisite to have somebody like a Delta, like
33:10
an American, like a United, where you know, worst case scenario,
33:13
if this flight gets canceled, I can fly out tomorrow
33:16
because they've got fifteen flights a day between you know,
33:18
Boston and JFK, and I'll be fine. You don't have
33:22
that confidence when you're looking at a Spirit and so
33:24
you can offer me all the bells and whistles you
33:26
want that business traveler on average, where the company is
33:30
paying for it, I'm not sure they're going to book
33:31
the Spirit flight. That's true. That's true.
33:34
Speaker 3: Simple economists can help cut healthcare costs. This is a piece,
33:37
an opinion piece out of I believe this is Bloomberg
33:41
here where they discuss just cutting down some of the
33:44
healthcare costs. We spend four point five trillion dollars a
33:47
year on healthcare, and about a third of it goes
33:49
to hospitals. One of the ideas mentioned in this piece
33:52
is during COVID, there is a bunch of red tape
33:56
and bureaucracy as it comes to what type of healthcare
33:59
professionals can admit certain types of services, and we can
34:02
all agree that those need to be in place. You
34:03
obviously don't want a nurse performing open heart surgery, you
34:06
need some expertise in training behind it. However, they mentioned
34:09
here loosening some of the restrictions like they did during COVID,
34:12
having physicians' assistants and Minister of Vaccines and some other
34:16
simple treatments out there allowed for some savings on the
34:20
healthcare side of things. I'm for anything that could potentially
34:23
improve or make our healthcare system more efficient. To be clear,
34:26
this is not my expertise, and I'm just relaying an
34:29
opinion piece here, But I did find the thought exercise
34:32
interesting because it's an area of the market that we
34:35
can all agree is a bleep show.
34:37
Speaker 2: Yeah, you know, I think there's a number of areas
34:39
of licensure that we take issue with. Now. You know,
34:44
it's one thing when states regulate barber's state by state
34:47
and you have to go get a new license when
34:49
you go from Massachusetts Rhode Island. It's definitely a different
34:52
story when you're talking about as heart surgeon that's going
34:54
from state to state. But you know, the example that's
34:58
given here is that foreign trained doctors must overcome a
35:01
wall of state and federal restrictions before they can practice,
35:05
even those with decades of experience, have to pass a
35:07
standardized exam, and then they have to repeat their residency
35:10
program and apply for state licensure. Some of these things
35:14
do seem extreme to me from an outside perspective here,
35:17
and there's gonna be huge resistance to changing them because
35:19
it brings down wages. To be clear here, but there's
35:23
some stuff here that looks like unnecessary bureaucracy. All the
35:27
time we have for today's addition to the Financial Exchange,
35:29
will be right back at it tomorrow. Folks, have a
35:31
great rest of your day.