Latest / Bloomberg Intelligence / LaSalle's Gimbel: Overtime Rule May Boost Unemployment (Audio)

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LaSalle's Gimbel: Overtime Rule May Boost Unemployment (Audio) · Bloomberg Intelligence

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  Speaker 1: Broadcasting live to New York, Bloomberg eleven, Rio to Washington,
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  Speaker 1: d C, Bloomberg to Boston, Bloomberg twelve, under to San Francisco,
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  Speaker 1: Bloomberg nine to the country Studies Exam Channel one nineteen,
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  Speaker 1: and around the globe the Bloomberg Radio Plus athen Bloomberg
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  Speaker 1: dot com. This is taking stock. Look like we might
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  Speaker 1: have a deal in the making. Today we learned that
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  Speaker 1: mondal Is International, a global food and snack maker, was
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  Speaker 1: making a takeover offer for hers she uh and it
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  Speaker 1: was according to a person familiar with the matter. We
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  Speaker 1: were waiting to have it confirmed. It would have made
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  Speaker 1: the world's largest candy maker. Instead, we are learning that
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  Speaker 1: that deal has been rejected by Hershey. Catherine Cadriell have
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  Speaker 1: more on that in just a minute from the newsroom.
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  Speaker 1: I'm Kathleen Hayes, my co host Pim Fox on vacation,
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  Speaker 1: and we are going to be speaking in this half
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  Speaker 1: hour to Bloomberg's deal maker correspondent Alex Sherman. He'll talk
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  Speaker 1: to us about what was behind the Mondelez bid and
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  Speaker 1: what means what it means now if Hershe has said no,
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  Speaker 1: thank you, well I'm not gonna say no Thank you
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  Speaker 1: to Katherine carry. I'm getting right over to her in
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  Speaker 1: the Bloomberg newsroom for a Bloomberg Business Flash. Thank you, Kathleen,
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  Speaker 1: and let me see if I can give you a
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  Speaker 1: little more information about that Hershey story. Well, Hershey has
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  Speaker 1: confirmed that it received preliminary non binding indications of interest
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  Speaker 1: from Mondelis to acquire the company for a mix of
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  Speaker 1: cash and stock consideration and a total about one seven
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  Speaker 1: dollars a share for her She shares. Now hers She
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  Speaker 1: had been up as much as earlier today and it's
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  Speaker 1: stock is still halted pending more news. Hershe um had
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  Speaker 1: Hershey Trust owns one of the Class B shares which
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  Speaker 1: hold ten voting rights per share, and that's according to
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  Speaker 1: Bloomberg datam And we will of course have more information
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  Speaker 1: as it becomes available. Well, the global rally continues today.
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  Speaker 1: Is policymakers signal further steps to buff the impact of
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  Speaker 1: Britain's decision to leave the European Union. Mark Kearney indicated
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  Speaker 1: the Bank of England would cut interest rates within months
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  Speaker 1: as a central bank tries to shield the UK economy.
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  Speaker 1: David Kelly, chief global strategist at JP Morgan Funds, on
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  Speaker 1: the impact of the Brexit vote. I think there's still
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  Speaker 1: a lot of negativity in global markets. One of the
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  Speaker 1: things we've seen as we've seen a bounce back in
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  Speaker 1: US stocks, but we're still seeing very low yields on
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  Speaker 1: US bonds of anything. The bond markets, which was out
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  Speaker 1: of whack to start with, is even more out of
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  Speaker 1: whack right now. I think what people are missing is
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  Speaker 1: that there is a pickup going on in the US
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  Speaker 1: economic growth right now. Ten Your treasury is currently up
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  Speaker 1: ten thirty seconds with the yield of one point four
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  Speaker 1: seven percent. And now let's get an update of some
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  Speaker 1: of the other stories were following today on Bloomberg Radio.
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  Speaker 1: Thank you, Catherine from the Bloomberg Newsroom. I'm Julie Hyman.
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  Speaker 1: One week after the Brexit vote, former London Mayor Boris
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  Speaker 1: Johnson says he will not run to succeed David Cameron
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  Speaker 1: as Conservative Party leader and Prime Minister. Outing consulted and
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  Speaker 1: in view of the circumstances in Parliament, I have concluded
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  Speaker 1: that person Johnson helped lead the campaign for Britain to
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  Speaker 1: leave the EU. He was considered a favorite to replace
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  Speaker 1: Prime Minister David Cameron, who was resigning in a few months.
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  Speaker 1: A Turkish official says the death toll from a triple
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  Speaker 1: suicide attack at Istanbul's at a Turk airport has climbed
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  Speaker 1: to at least forty four. The country's interior minister says
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  Speaker 1: nineteen four nationals were among the victims. More than two
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  Speaker 1: hundred and thirty others were wounded. Secretary of State John
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  Speaker 1: Kerry unveiled the twenty sixteen Trafficking in Persons Report at
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  Speaker 1: the State Department today. The report assesses government efforts around
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  Speaker 1: the world to combat human trafficking. We're talking about slavery,
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  Speaker 1: modern day slavery that still today claims more than twenty
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  Speaker 1: million victims on any given time. This year's report includes
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  Speaker 1: narratives for one and eighty eight countries and territories include
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  Speaker 1: being the United States. A New Siena College pole has
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  Speaker 1: found New York voters are unimpressed with a series of
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  Speaker 1: ethics reforms pushed by lawmakers and Governor Andrew Cuomo. More
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  Speaker 1: than half said the measures, which include new rules on lobbying,
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  Speaker 1: disclosures and spending by independent political groups, will not reduce
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  Speaker 1: state government corruption. Global News twenty four hours a day,
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  Speaker 1: powered by more than twenty six hundred journalists and analysts
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  Speaker 1: in more than one hundred twenty countries. From the Bloomberg newsroom.
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  Speaker 1: I'm Julie Hyman. This is Bloomberg Catherine, thank you, and
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  Speaker 1: now let's get a quick update of the benchmark style
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  Speaker 1: industrial averages up two hundred points one point one percent,
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  Speaker 1: trading at seventeen thousand, eight hundred nine one SMP five
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  Speaker 1: hunded up twenty two points, again at one point one percent.
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  Speaker 1: It's trading at two thousand ninety two naszac hire by
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  Speaker 1: forty seven points, again of one percent, trading at forty
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  Speaker 1: twenty six. West Texas intermediate crude oil down a dollar
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  Speaker 1: fifty five of barrel three point one percent to forty
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  Speaker 1: eight thirty two spackled down five dollars ten cents. Announcer
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  Speaker 1: and that's a Bloomberg business flash. He's taking stock with
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  Speaker 1: Kathleen Hayes and Finn Fox on Bloomberg Radio. The health
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  Speaker 1: of labor market. It will continue to be at the
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  Speaker 1: top of the Fed of Reserves list as it continues
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  Speaker 1: to watch the economy, the impact of global shocks like
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  Speaker 1: the Brexit vote of the UK to leave the European Union.
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  Speaker 1: But again it's the domestic economy. Many say that will
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  Speaker 1: most determine what the FED does next if it's on
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  Speaker 1: indefinite hold, if it even considers a rate hike this
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  Speaker 1: year at all. Let's bring in Tom Gimble now for
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  Speaker 1: a more in depth look at the labor market. He's
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  Speaker 1: founder and CEO of La Salle Network, one of the
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  Speaker 1: leading staffing and recruiting firms in the country, based in Chicago. Tom,
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  Speaker 1: welcome to the show. So, if you were just looking
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  Speaker 1: at jobless claims as a measure of the health of
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  Speaker 1: the economy, you'd say, whoa, they're staying at this and
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  Speaker 1: it's nice low range, you know, anywhere from two D
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  Speaker 1: fifty thousand to you know, over two eighty, but a
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  Speaker 1: very low range. But if you listen to Janet Yale
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  Speaker 1: in the FED chair, if you look at other indicators, uh,
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  Speaker 1: there are more job openings, but somehow they don't get
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  Speaker 1: to field. There's a lack of skilled workers, it seems.
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  Speaker 1: Janet Yellen talks about wages not rising enough to suggest
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  Speaker 1: that the slack is really being taken up. From your
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  Speaker 1: advantage point at a recruiting firm, what do you see, Yeah,
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  Speaker 1: there's definitely a skills gap. There's no doubt about that
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  Speaker 1: that the jobs that are in high demand, as always
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  Speaker 1: in a in an interesting economy like we're in sales,
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  Speaker 1: is always going to be in high demand. But what
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  Speaker 1: we've seen over the past fifteen years is this change
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  Speaker 1: to becoming uh. You know, when it went from uh
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  Speaker 1: fifteen years ago was oh, are we going from a
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  Speaker 1: manufacturing country to a services business based country? And now
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  Speaker 1: it's gone from a services based company to a technology country.
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  Speaker 1: And what I'm seeing is is that the skills gap
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  Speaker 1: in in really educated talented developers and architects and infrastructure
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  Speaker 1: folks in the technology side just isn't there to keep
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  Speaker 1: up with the demand. And that's why those jobs continually
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  Speaker 1: um you'll see on on reports is very high paying,
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  Speaker 1: growth oriented industries where we're not seeing as much as
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  Speaker 1: in the lower level stuff. So now we're gonna end
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  Speaker 1: up happening. My my take is, and for the first time,
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  Speaker 1: I'm getting a little bit more concerned. I don't think
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  Speaker 1: we're going to see interest rate hikes this year. If
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  Speaker 1: we're seeing minimum wage increase in municipality, state level, and
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  Speaker 1: federal level soon, and then we're also seeing in December
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  Speaker 1: one of this year, we're going to see the UM
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  Speaker 1: overtime exemption salary point increase from twenty four thousand and
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  Speaker 1: changed to almost forty eight thousand dollars, and we're gonna
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  Speaker 1: start seeing unemployment creep back up again because companies will say,
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  Speaker 1: I can't afford to pay more. That's exactly right. So
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  Speaker 1: I think that the goal was that the administration was,
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  Speaker 1: let's increase wages for all Americans by saying, if you're
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  Speaker 1: working more than forty hours a week and you're making
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  Speaker 1: over twenty five thousand dollars a year, you should be
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  Speaker 1: getting overtime. What's gonna end up happening is people are
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  Speaker 1: going to keep people at forty hours a week. They'll
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  Speaker 1: maybe higher one or two more at lower level lower salaries,
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  Speaker 1: which won't be a wage increase. Unemployments already at five
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  Speaker 1: percent how much lower connect going with qualified people, and
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  Speaker 1: or they'll lay those people, often the only higher one
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  Speaker 1: person back at a higher salary of fifty. We're not
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  Speaker 1: going to see UH any any huge changes across the board,
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  Speaker 1: and I think the actual end result will be an
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  Speaker 1: increase in unemployment. Is one of the challenges of this
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  Speaker 1: economy as it moves to more UH technology and technology
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  Speaker 1: is now part of everything. Right, it's in how you
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  Speaker 1: might outsource some of your jobs to you know, an
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  Speaker 1: online payroll services firm something like that, right, So eliminates
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  Speaker 1: the need for you to have a certain kind of workers.
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  Speaker 1: And it does that across a lot of companies. So
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  Speaker 1: if everybody is doing that, that's one kind of job
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  Speaker 1: that's gone, right, I mean that is telecon technology has
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  Speaker 1: you know, it's a sort that seems to cut two ways.
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  Speaker 1: How big of an issue is that for labor market, Well,
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  Speaker 1: that's a big issue. But taking even a different approach,
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  Speaker 1: so even if you get to a point where UM
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  Speaker 1: technology go into the retail sector and you get restaurants
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  Speaker 1: that are gonna phase out cashiers and they're gonna have kiosks,
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  Speaker 1: which is already happening. So but then what you have
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  Speaker 1: is that eliminates that job. But now there's service jobs
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  Speaker 1: of people that have to repair those kiosks, right, And
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  Speaker 1: that's a job that that a human being has to do.
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  Speaker 1: But there's a skills gap between somebody who is working
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  Speaker 1: in a factory putting bolts on a car and somebody
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  Speaker 1: you can go in and work at a kiosk and
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  Speaker 1: fix them. Technology, so we're really at a shortage of
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  Speaker 1: training and development in this country, of course. But you'll
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  Speaker 1: find in many factories now though, is those jobs are
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  Speaker 1: very much more sophisticated technologically when you're when you're putting
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  Speaker 1: a cardigo than they used to be. But specifically to
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  Speaker 1: your example, that kiosk and you know iPads instead of
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  Speaker 1: people waiting on you, that replaces what maybe five six
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  Speaker 1: seven workers and you only are you only need one
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  Speaker 1: person to service the kiosk. Seems to me that's the issue.
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  Speaker 1: You don't create as many new jobs as you potentially destroy,
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  Speaker 1: there's actually no doubt about that, but it does create
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  Speaker 1: jobs in other areas, and that's where the skillet skill
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  Speaker 1: gaps are. So you need to have more tablets being
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  Speaker 1: created for those they're gonna wear out more because people
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  Speaker 1: are using them. So there's more development, more technology, more
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  Speaker 1: manufacturing of the actual device in whatever country that's in,
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  Speaker 1: hopefully here but maybe some place else. So there are
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  Speaker 1: jobs that are being created, but they're different job. Okay, Tom,
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  Speaker 1: what would you tell the Federals or what would you
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  Speaker 1: tell Janet Yellen from your vantage point in this in
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  Speaker 1: this labor market industry, what she should have shouldn't do.
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  Speaker 1: You got fifteen seconds to tell me. You gotta keep
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  Speaker 1: you I gotta keep interest rates flat. And so I
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  Speaker 1: was a huge proponent of her raising interest rates at
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  Speaker 1: the end of last year. I'm glad that happened. Now
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  Speaker 1: where we're at, I think we're gonna get an increase
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  Speaker 1: in unemployment and she's got a whole flat Tom Gimble,
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  Speaker 1: thank you so very much, first time on the show.
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  Speaker 1: Thank you for joining me. He's founder and CEO of
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  Speaker 1: Lassalt Network, located in Chicago. He said, because of this
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  Speaker 1: new overtime rule and rising minimum wages, we're going to
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  Speaker 1: see some people out of work. At least that's what
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  Speaker 1: he sees as a head of a recruiting company, one
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  Speaker 1: of the biggest in the country. I'm Kathleen Hayes. This
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  Speaker 1: is taking Stock, and this is Bloomberg Bloomer. Taking Stock
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