Latest / Bloomberg Intelligence / September Jobs Report, Health Care, and Trade

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September Jobs Report, Health Care, and Trade · Bloomberg Intelligence

• 0:02
  Speaker 1: Welcome to the Bloomberg Penl Podcast. I'm Paul swing you.
• 0:05
  Speaker 1: Along with my co host Lisa Brahmas. Each day we
• 0:07
  Speaker 1: bring you the most noteworthy and useful interviews for you
• 0:10
  Speaker 1: and your money, whether at the grocery store or the
• 0:12
  Speaker 1: trading floor. Find a Bloomberg Penl podcast on Apple podcast
• 0:16
  Speaker 1: or wherever you listen to podcasts, as well as at
• 0:18
  Speaker 1: Bloomberg dot com. Well, it is Jobs Friday. There's something
• 0:21
  Speaker 1: for everybody in there. The unemployment rate, that's what Larry
• 0:24
  Speaker 1: Cudlow lad with falls to three point five despite missing
• 0:29
  Speaker 1: the hiring in September. To get dig a little deeper
• 0:32
  Speaker 1: into the jobs data, we welcome Tom Gibble. Tom's a
• 0:35
  Speaker 1: founder and CEO of lasal Network based in Chicago. Tom,
• 0:38
  Speaker 1: thanks so much for joining us. Again, there's probably something
• 0:41
  Speaker 1: in this report for uh fed, dubs and hawks alike.
• 0:45
  Speaker 1: What were your key takeaways? I have to agree with
• 0:49
  Speaker 1: what Larry Cudlow lad with, and that is the drop
• 0:51
  Speaker 1: down to three point five. And while economist for predicting
• 0:55
  Speaker 1: a hundred thousand, a hundred and thirty six thousand is
• 0:58
  Speaker 1: nothing to sneeze at, the e onomy is still jugging.
• 1:01
  Speaker 1: And you know everybody wants to be the forecaster for
• 1:04
  Speaker 1: when the right of when the quote unquote slow down
• 1:08
  Speaker 1: our recession hits. But things are really good right now.
• 1:10
  Speaker 1: So trying to square the idea of this lowest unemployment
• 1:14
  Speaker 1: rate in fifty years with this idea of wage growth
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  Speaker 1: that is slowing down, the two ideas seem to kind
• 1:21
  Speaker 1: of contradict each other. I totally disagree. I think that
• 1:25
  Speaker 1: it makes sense because we're in a global economy right now,
• 1:28
  Speaker 1: and if we were just doing jobs in America for
• 1:32
  Speaker 1: American companies, then having low unemployment and no wage growth
• 1:36
  Speaker 1: wouldn't make sense. But we're not competing against UH, your
• 1:39
  Speaker 1: neighbor for a job. If companies can make more money
• 1:42
  Speaker 1: for their shareholders, UH, increasing shareholder value is what the
• 1:46
  Speaker 1: job of a company is to do, what the CEO
• 1:49
  Speaker 1: is to do. Then finding somebody who's talented to do
• 1:51
  Speaker 1: it in a global economy in India or Pakistan or
• 1:55
  Speaker 1: China or wherever makes a lot of sense. And that's
• 1:58
  Speaker 1: what we're competing against, all right. So if that's the case,
• 2:01
  Speaker 1: then even if we continue to see job gains, is
• 2:04
  Speaker 1: that that you're expecting wage growth to continue to slow
• 2:08
  Speaker 1: down as we did UH in the past reading. Well,
• 2:11
  Speaker 1: if the cycle we're looking at is probably three five
• 2:15
  Speaker 1: seven years off for real wage gain, and that is,
• 2:18
  Speaker 1: as these underdeveloped countries catch up with the rest of
• 2:21
  Speaker 1: the world, then their wages will will grow, and then
• 2:25
  Speaker 1: American companies will have to look and say, doesn't make
• 2:28
  Speaker 1: as much sense to offshore jobs when I can get
• 2:31
  Speaker 1: it done here with more control and more oversight, you know.
• 2:34
  Speaker 1: And we'll see what happens in the geopolitical climate and
• 2:37
  Speaker 1: in Washington, d C. Next year, and where regulations are.
• 2:40
  Speaker 1: We're a very loose regulation government and economy right now
• 2:43
  Speaker 1: for business, So it makes sense to do what's in
• 2:45
  Speaker 1: the what's in the immediate best interest to shareholder versus
• 2:48
  Speaker 1: long time value. Tom So, the manufacturing economy is slowing.
• 2:54
  Speaker 1: We had a negative manufacturing pm I you know, I
• 2:57
  Speaker 1: guess forty seven point eight that second month rough so
• 2:59
  Speaker 1: put even more pressure on the consumer. And the consumer
• 3:02
  Speaker 1: has been really strong in this economy, really supporting uh
• 3:05
  Speaker 1: this economy, and a large part of that support for
• 3:09
  Speaker 1: the consumer comes from the fact that the consumer has
• 3:11
  Speaker 1: a job and wages are going up, maybe not as
• 3:14
  Speaker 1: much as people would like. Is there a level of
• 3:16
  Speaker 1: job creation um that would get you worried about the
• 3:20
  Speaker 1: overall jobs picture. That's an interesting dynamic. You know, we're
• 3:26
  Speaker 1: at three point five percent unemployment and historically the number
• 3:30
  Speaker 1: of full employment is about two and a half percent.
• 3:32
  Speaker 1: And while that you know, doesn't necessarily make direct sense,
• 3:35
  Speaker 1: but there is a certain percent of the population that
• 3:37
  Speaker 1: can't hold a job. And so when you're looking at
• 3:40
  Speaker 1: the development and the growth of the economy, I've never
• 3:43
  Speaker 1: really understood the separation of consumer versus business growth. They
• 3:47
  Speaker 1: are I agree with what you said, they are on
• 3:49
  Speaker 1: a line and that when people have full jobs, uh,
• 3:53
  Speaker 1: and there's low unemployment, then of course the consumer is
• 3:55
  Speaker 1: going to be a strong purchaser of goods and services.
• 3:58
  Speaker 1: What we have to be careful of is paying too
• 4:01
  Speaker 1: much for wages for a job that doesn't deserve right.
• 4:05
  Speaker 1: If anybody can do it, it shouldn't pay a lot
• 4:08
  Speaker 1: of money. And that's the dynamic wherein now is there
• 4:12
  Speaker 1: aren't a lot of people to do the jobs. And
• 4:14
  Speaker 1: this is why there's the CEO outrage of are they
• 4:17
  Speaker 1: making too much money? Well, as the business world gets
• 4:20
  Speaker 1: such so much more complex and it's global that the
• 4:23
  Speaker 1: jobs of CEOs are going to be paid more and
• 4:26
  Speaker 1: the fact is is that the baseline worker that job
• 4:30
  Speaker 1: is becoming more simplistic and those jobs are not going
• 4:33
  Speaker 1: to grow at the same rate. And no one wants
• 4:35
  Speaker 1: to say that in Washington, d C. But that's the truth.
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  Speaker 1: And that's where the crux is coming of an economic
• 4:39
  Speaker 1: disparity between the average worker and the executives. So do
• 4:43
  Speaker 1: you see a time in the United States or a
• 4:46
  Speaker 1: sector where there could be more investment that could produce
• 4:51
  Speaker 1: jobs that pay upper level kinds of salaries, albeit not
• 4:55
  Speaker 1: the top and CEO, but something that would cause a
• 4:58
  Speaker 1: more meaningful shift up board in average wages. Absolutely, And
• 5:02
  Speaker 1: I think where that is going to be is in
• 5:04
  Speaker 1: the area of companies doing their own training and development.
• 5:08
  Speaker 1: Allah General Electric in the mid eighties with their campus
• 5:12
  Speaker 1: and learning is when companies realize that they're going to
• 5:15
  Speaker 1: have to start developing their own talent, whether it's in
• 5:18
  Speaker 1: blue collar unskilled jobs or skilled jobs or white collar
• 5:22
  Speaker 1: that whether it's college graduates UM or under under employed population,
• 5:28
  Speaker 1: that they've got to do their own training. And that's
• 5:30
  Speaker 1: the next phase. And whether it's done digitally UM through
• 5:34
  Speaker 1: computer learning and what have you, or it's done in
• 5:37
  Speaker 1: face to face traditional teaching. Companies have to reinvest in
• 5:41
  Speaker 1: their training and development. We haven't seen that to the
• 5:44
  Speaker 1: level that it needs to be. My guess is over
• 5:46
  Speaker 1: the next two to four years that will be what
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  Speaker 1: separates high growth companies from low growth companies are the
• 5:51
  Speaker 1: ones that that invest in training and development. Tom Gimble,
• 5:54
  Speaker 1: thank you so much for your thoughts after this job's
• 5:57
  Speaker 1: report that we got earlier today. Tom Gimble, founder and
• 6:00
  Speaker 1: chief executive officer of LaSalle Network. Well, I think it's
• 6:12
  Speaker 1: safe to say that there was something for everybody in
• 6:14
  Speaker 1: this morning's job report. We had a fifty year low
• 6:17
  Speaker 1: and the unemployment rate at three point five percent is
• 6:19
  Speaker 1: as has been reported, but job growth is slowing, wages
• 6:23
  Speaker 1: a little bit lower than people would expect. So what
• 6:26
  Speaker 1: are investors to do. Our next guest hopefully can help
• 6:29
  Speaker 1: us out there. Doug Cohen, Managing Director portfolio manager at
• 6:32
  Speaker 1: Athena Capital Advisors. Athena has about five point eight billion
• 6:35
  Speaker 1: dollars assets under management. He joins us here in our
• 6:38
  Speaker 1: Bloomberg Interactive Broker Studio. Thanks so much for joining us.
• 6:41
  Speaker 1: What was your take on the jobs data today and
• 6:44
  Speaker 1: is it changed kind of how you guys are looking
• 6:47
  Speaker 1: at the market. Well, first of all, thanks Paul for
• 6:49
  Speaker 1: having me back. Um, my general view on the jobs
• 6:52
  Speaker 1: reports are that every single Friday of the first Friday
• 6:56
  Speaker 1: of every month, we all make the media wilster folks.
• 7:00
  Speaker 1: We make way too much of these jobs reports. I
• 7:02
  Speaker 1: think we don't make enough. They are volatile number get revision.
• 7:07
  Speaker 1: But but I'm going to say something nice. Now. The
• 7:09
  Speaker 1: nice part is this time it really you're right to
• 7:11
  Speaker 1: lead with that question, because this one actually was really important.
• 7:14
  Speaker 1: Just given all the negative the slew of negative data
• 7:17
  Speaker 1: that we've had over the last several weeks and really
• 7:20
  Speaker 1: over the last several months, this one was important. And
• 7:22
  Speaker 1: the reason it was important is that if this if
• 7:24
  Speaker 1: we are truly on the cusp of a recession, we
• 7:26
  Speaker 1: have not seen it yet with the consumer. We've started
• 7:29
  Speaker 1: to see it in the manufacturing sector, but that would
• 7:31
  Speaker 1: be the natural progression. If business confidence really starts to wane,
• 7:35
  Speaker 1: the labor picture deteriorates, that's when the consumer becomes most vulnerable.
• 7:38
  Speaker 1: So today was essentially a sigh of relief. It wasn't great,
• 7:42
  Speaker 1: it wasn't terrible, and that was good enough. Obviously, it's
• 7:45
  Speaker 1: good enough for the market so far in terms of
• 7:47
  Speaker 1: longer term positioning. I don't know that it necessarily matters.
• 7:50
  Speaker 1: I think there's still a tremendous amount of uncertainty out there,
• 7:53
  Speaker 1: and things like trade and even into the election next year,
• 7:56
  Speaker 1: those are going to be paramount. Honestly, I am scratching
• 7:59
  Speaker 1: my head this morning about just the reaction to the numbers.
• 8:03
  Speaker 1: They came in worse than expected. Wage growth came in
• 8:05
  Speaker 1: worse than expected, The trend is down right now. We're
• 8:09
  Speaker 1: looking at a market that does appear to be uh
• 8:12
  Speaker 1: full employment at least when it comes to the three
• 8:15
  Speaker 1: and a half percent unemployment rate, but not great numbers,
• 8:18
  Speaker 1: and it shows a trend of deceleration. So why is
• 8:22
  Speaker 1: this a sigh of relief? Because it really wasn't that bad,
• 8:25
  Speaker 1: and I think the bar had already been lowered the consensus,
• 8:28
  Speaker 1: so there's a formal consensus which this number was just
• 8:30
  Speaker 1: slightly below, but the off talked about whisper number was
• 8:34
  Speaker 1: probably something like a hundred and twenty. But to your point,
• 8:37
  Speaker 1: when you really dig through the numbers, the wage growth
• 8:39
  Speaker 1: was not great. One of the better things we've had
• 8:41
  Speaker 1: going us from the economy is that we've had wage
• 8:43
  Speaker 1: growth over three percent. We dipped slightly below that, but
• 8:46
  Speaker 1: I still come back to my earlier statement, let's not
• 8:48
  Speaker 1: over obsess over a tenth of a point here or
• 8:51
  Speaker 1: they are. You're right, we already accelerating. But at least
• 8:55
  Speaker 1: this report showed that we're not slipping into freefall. It
• 8:58
  Speaker 1: really was relatively stable. So, as you guys think about
• 9:01
  Speaker 1: the next twelve eighteen months with your UH portfolios, do
• 9:05
  Speaker 1: you feel like the Fed has enough ammunition to support
• 9:09
  Speaker 1: this market or is it just law of diminishing returns
• 9:13
  Speaker 1: on kind of what the Fed can really do? Absolutely
• 9:15
  Speaker 1: the ladder, and we're already so low. And you think
• 9:18
  Speaker 1: about a typical recession, A recessions typical. But having said that,
• 9:21
  Speaker 1: you know, a garden variety of recession, you typically want
• 9:23
  Speaker 1: five or six hundred basis points of cushion. We don't
• 9:26
  Speaker 1: have that. And the ultimate kind of irony in some
• 9:30
  Speaker 1: way is that at this point, even if we do
• 9:32
  Speaker 1: cut rates, I think it has the potential unintended consequence
• 9:36
  Speaker 1: of making it easier for this trade ward linger. And
• 9:40
  Speaker 1: that is at the margin, the thing that is holding
• 9:43
  Speaker 1: the global economy back. And um, you know, as you say,
• 9:46
  Speaker 1: if you look out over the next twelve months or so,
• 9:49
  Speaker 1: if there's one thing that would really be a game
• 9:51
  Speaker 1: changer from a macro perspective. It would be getting this
• 9:53
  Speaker 1: trade war behind us. So what are you buying? Well,
• 9:57
  Speaker 1: I can tell you most of our clients, um are.
• 10:00
  Speaker 1: You know, we spend more time talking about the differences
• 10:02
  Speaker 1: and yields on cash versus enhanced cash, really boring stuff.
• 10:06
  Speaker 1: But I think that's indicative of the mindset. I mean,
• 10:08
  Speaker 1: Tom Kane triple levered cash, you know, right, he has
• 10:12
  Speaker 1: been for what ten years now? But you know, but look,
• 10:16
  Speaker 1: having said that, and I think most of our clients
• 10:17
  Speaker 1: understand that, you know, all things pass, and that if
• 10:20
  Speaker 1: you truly do have a long term perspective, US equity
• 10:23
  Speaker 1: markets in particular are not egregiously priced um And it's
• 10:27
  Speaker 1: not terribly difficult to see a scenario where we do
• 10:31
  Speaker 1: get a resolution in the trade, where where we start
• 10:33
  Speaker 1: to get back to a point where hey, it's kind
• 10:35
  Speaker 1: of goldilocks again. We get GDP growth that's around two percent,
• 10:38
  Speaker 1: inflation that's around two percent, interest rates that broadly are
• 10:41
  Speaker 1: around two percent. That's nirvana for equity markets, those that
• 10:44
  Speaker 1: you can get higher multiples than where we are today.
• 10:47
  Speaker 1: If you think that that kind of environment can persist,
• 10:50
  Speaker 1: how worried are you about you know, trade, We haven't
• 10:52
  Speaker 1: really talked about it too much, but we're going to
• 10:54
  Speaker 1: have negotiations again supposedly next week. So it's been something
• 10:58
  Speaker 1: that's been a little bit on the back burner, but
• 10:59
  Speaker 1: you highlighted it as certainly an issue for the global
• 11:02
  Speaker 1: manufacturing and the global confidence of of of corporate UH
• 11:06
  Speaker 1: corporates around the world. What is your view? So my
• 11:09
  Speaker 1: view is, look at two things that are probably most
• 11:10
  Speaker 1: important right now are interest rates in trade and interest rates.
• 11:14
  Speaker 1: As we just talked about, we I think we are
• 11:16
  Speaker 1: getting to that point of diminishing returns. There's only so
• 11:18
  Speaker 1: much lower that we can really go before we start
• 11:20
  Speaker 1: getting into the extraordinary things that Europe and Japan have
• 11:23
  Speaker 1: been doing that frankly haven't worked all that well. So
• 11:26
  Speaker 1: I come back to trade as kind of the marginal driver.
• 11:28
  Speaker 1: I think it's extremely important that we do get some
• 11:31
  Speaker 1: progress next week. It doesn't have to be amazing, No
• 11:33
  Speaker 1: one expects a final resolution, but we're starting to get
• 11:36
  Speaker 1: to a point where if nothing happens by early next year,
• 11:39
  Speaker 1: then the election starts to become meaningfully close. And I
• 11:42
  Speaker 1: think the Chinese in particular are going to say you
• 11:45
  Speaker 1: know what, maybe we should just set this out. So
• 11:47
  Speaker 1: to me, if there's going to be a resolution, even
• 11:49
  Speaker 1: if it's a light resolution, a sort of a token
• 11:52
  Speaker 1: kind of kick the can type of UH interim arrangement,
• 11:55
  Speaker 1: it probably needs to happen in the next four or
• 11:57
  Speaker 1: five months. Okay, Well, you said buy stocks. Basically, what
• 12:01
  Speaker 1: do you sell? Uh? If you have a long term perspective,
• 12:05
  Speaker 1: you sell? You sell fixed income Because there's probably in
• 12:08
  Speaker 1: a world where bubbles are only easily identified after they burst.
• 12:13
  Speaker 1: Fixed income is the bubble we I think at some
• 12:15
  Speaker 1: level we all know that the extraordinary low negative interest
• 12:19
  Speaker 1: rates that we have throughout the world, this is not normal,
• 12:21
  Speaker 1: and folks who try and rationalize it, I think are
• 12:23
  Speaker 1: making a mistakes. So again, over a multi year time frame,
• 12:25
  Speaker 1: I think that's what you do. How does it unravel? Well,
• 12:29
  Speaker 1: in a lot of different ways, you have so um,
• 12:37
  Speaker 1: I think if I had so so. Ray Dalio has
• 12:39
  Speaker 1: written a lot about this Bridgewater, and I think he's right.
• 12:42
  Speaker 1: If you have to think about a potential paradigm change
• 12:45
  Speaker 1: for what could take place over the next decade if
• 12:48
  Speaker 1: we continue down this path where globally interest rates continue
• 12:51
  Speaker 1: to cascade lower at some point, debts are gonna start
• 12:56
  Speaker 1: to matter. There's gonna be a race to the bottom
• 12:57
  Speaker 1: on the currencies, and that potend chili could be very,
• 13:01
  Speaker 1: very destructive. And if you do start to see that,
• 13:04
  Speaker 1: that in and of itself would create an environment where
• 13:07
  Speaker 1: um debt does actually begin to matter again and interest
• 13:11
  Speaker 1: rates start to move meaningfully higher. So it sort of
• 13:13
  Speaker 1: gets gets, you know, rates get lower before they break higher.
• 13:17
  Speaker 1: That's the paradigm change. And when you want to when
• 13:20
  Speaker 1: we have more than sixty seconds now probably six seconds,
• 13:23
  Speaker 1: I'd be happy to come back and talk about it more. Cohen,
• 13:25
  Speaker 1: We'll have to do that. Doug Cohen, Managing director and
• 13:28
  Speaker 1: portfolio manager at Athenic Capital Advisors with nearly six billion
• 13:31
  Speaker 1: dollars in assets. Thank you so much. Right now, we
• 13:42
  Speaker 1: are so lucky to have with us our Bloomberg Opinion
• 13:45
  Speaker 1: colleague Max Neeson. As we check in with our opinion
• 13:49
  Speaker 1: calumnists all the time. At this time, Max Neston joins
• 13:52
  Speaker 1: us here covering the biotech, farmland, healthcare sectors for US.
• 13:57
  Speaker 1: And I want to look toward the election and President
• 14:01
  Speaker 1: Trump certainly is doing just that. And recently he started
• 14:04
  Speaker 1: talking in a less discussed than say Ukraine, a less
• 14:08
  Speaker 1: discussed proposal for healthcare. Can you just give us a
• 14:11
  Speaker 1: sense of what that was. Yeah, absolutely, So. This was
• 14:14
  Speaker 1: a speech he gave in Florida yesterday. He unveiled a
• 14:18
  Speaker 1: new executive order, one of many that he's done on
• 14:21
  Speaker 1: healthcare over the past few years. This one focuses on Medicare,
• 14:26
  Speaker 1: specifically on boosting Medicare Advantage, which is sort of the
• 14:30
  Speaker 1: privately administered UM, you know, option for seniors that that
• 14:34
  Speaker 1: don't want traditional medicare UM. And he used to it.
• 14:37
  Speaker 1: You know, it was partially a speech rolling this out,
• 14:40
  Speaker 1: which is, you know, as far as healthcare policy goes,
• 14:44
  Speaker 1: not not the biggest thing we've ever seen, but also
• 14:48
  Speaker 1: use it sort of to preview his campaign rhetoric, which is,
• 14:51
  Speaker 1: anything that Democrats want to do is a socialist destruction
• 14:54
  Speaker 1: of Medicare and um will you know, ruin the American
• 14:58
  Speaker 1: healthcare system forever. So it was a little bit of both, UM,
• 15:01
  Speaker 1: but it's for the policy itself. It basically seeks to
• 15:04
  Speaker 1: sort of advance, you know, give give a boost to
• 15:06
  Speaker 1: these plans relative to to traditional Medicare. It's been a
• 15:10
  Speaker 1: kind of a long time Republican goal. The ideas that
• 15:12
  Speaker 1: you know, competition on that side will bring down costs,
• 15:15
  Speaker 1: boost efficiency. Mixed results on it so far, but but
• 15:19
  Speaker 1: he's trying to give those plans a bigger nudge. So
• 15:21
  Speaker 1: just give us a sense if our summary, if you could,
• 15:23
  Speaker 1: for what is medicare for all, because that's something that
• 15:26
  Speaker 1: we're going to hear a lot about as we head
• 15:28
  Speaker 1: into the election season. Sure most often, especially in the
• 15:32
  Speaker 1: context of the presidential election, it's referring to Bernie Sanders plan,
• 15:37
  Speaker 1: which would basically, over the course of four years, transition
• 15:41
  Speaker 1: all Americans onto a new publicly tax financed, government run
• 15:47
  Speaker 1: program and that that uh, that program, and I think
• 15:51
  Speaker 1: this is an important point relative to this Medicare discussion,
• 15:54
  Speaker 1: would be more generous by a substantial margin than even
• 15:57
  Speaker 1: what Medicare is right now. No premiums, no out of
• 16:00
  Speaker 1: pocket costs, um, you know, no co pays, no coinsurance
• 16:03
  Speaker 1: when you actually go to doctor Philip prescription uh. And
• 16:07
  Speaker 1: instead of these sort of narrowly prescribed networks that you
• 16:10
  Speaker 1: have when you have insurance, now access to theoretically any
• 16:13
  Speaker 1: doctor that you want comes with trade offs, you know,
• 16:16
  Speaker 1: higher taxes, um. You know, if we look at other
• 16:19
  Speaker 1: countries that have single payer systems, potentially longer way times,
• 16:22
  Speaker 1: other cost control manasures, so you know, give and take.
• 16:25
  Speaker 1: It's impossible because we've never seen in the United States
• 16:28
  Speaker 1: know exactly what it would look like, but it would
• 16:30
  Speaker 1: be a generous step up for most people in terms
• 16:33
  Speaker 1: of their healthcare Max. One thing that you noted in
• 16:35
  Speaker 1: your recent column is that healthcare has been a particularly
• 16:39
  Speaker 1: thorny topic for President Trump, and I wonder how much
• 16:43
  Speaker 1: that stems from, uh, what the Republican view is in
• 16:47
  Speaker 1: terms of what they would like to see. And I'm
• 16:48
  Speaker 1: not talking about Republicans in Congress. I'm talking about voting
• 16:52
  Speaker 1: Democratic resident, voting Republican residents of the United States. Yes,
• 16:57
  Speaker 1: so the sort of the way character as Republican view
• 17:01
  Speaker 1: towards healthcare policy is that it's always oppositional to whatever
• 17:06
  Speaker 1: Democrats are trying to do. We had it with the
• 17:08
  Speaker 1: Affordable Care Act, we have it now with with plans
• 17:11
  Speaker 1: to expand Medicare. There's not really a vision for or
• 17:15
  Speaker 1: at least not a popular vision for an alternative. Always
• 17:18
  Speaker 1: saw this a couple of years back when they tried
• 17:20
  Speaker 1: to repeal and replace the Affordable Care Act, but it
• 17:23
  Speaker 1: became pretty obvious that their plan would erode would have
• 17:27
  Speaker 1: become very popular, protections for people with preteristing conditions, other
• 17:30
  Speaker 1: consumer protections, and roll back the Medicaid expansion, which has
• 17:34
  Speaker 1: has been kind of shown to be highly effective at
• 17:37
  Speaker 1: improving health care outcomes for poor people and has just
• 17:40
  Speaker 1: gotten a lot of people insurance that never had it before.
• 17:42
  Speaker 1: They don't really seem to have a fully fleshed out alternative,
• 17:46
  Speaker 1: and I don't think we saw one from the President
• 17:48
  Speaker 1: yesterday short of if anything, it showed sort of a
• 17:51
  Speaker 1: diminished ambition. Uh, you know, this focus on medicare as
• 17:54
  Speaker 1: opposed to a broader alternative. And at the same time,
• 17:58
  Speaker 1: even as they you know, we pledged yesterday Republicans are
• 18:01
  Speaker 1: going to protect people with prexisting conditions, he's still supporting
• 18:04
  Speaker 1: a lawsuit that would get rid of the a c
• 18:07
  Speaker 1: A and and has not at this point at least
• 18:10
  Speaker 1: revealed an alternative plan that that could kind of live
• 18:13
  Speaker 1: up to that promise that he's making. So when you
• 18:15
  Speaker 1: talk to some big healthcare companies, you know, as part
• 18:18
  Speaker 1: of your coverage, what are they looking for to come
• 18:20
  Speaker 1: out of Washington? Is the status quo kind of okay?
• 18:23
  Speaker 1: Or do they want a radical change? What's the kind
• 18:26
  Speaker 1: of the status quo is fabulous. Yes, yeah, they're they're
• 18:30
  Speaker 1: they're working overtime to preserve it. Um and I think
• 18:33
  Speaker 1: you're seeing right now, and this is sort of the
• 18:36
  Speaker 1: the big issue with proposing any sort of major healthcare
• 18:38
  Speaker 1: reform right now. One of the things, and that's kind
• 18:41
  Speaker 1: of trying to make its way through Covers, is a
• 18:43
  Speaker 1: restriction on what's called surprise building. So basically when you
• 18:47
  Speaker 1: go to a provider that's out of your network, and
• 18:51
  Speaker 1: that happens all the time when it's things like emergency medicine, ambulances,
• 18:55
  Speaker 1: things that you don't really get to pick, and those
• 18:57
  Speaker 1: groups leverage that to charge really really high prices, whether
• 19:00
  Speaker 1: not they're in an insury network. This should be the
• 19:02
  Speaker 1: lowest hanging fruit in healthcare. It's you know, it's an
• 19:05
  Speaker 1: obvious market failure, it's obviously abusive, and if it's no
• 19:09
  Speaker 1: one except for the you know, the private equity firms
• 19:11
  Speaker 1: that have invested in these areas, but um, you know,
• 19:15
  Speaker 1: it just shows how hard it's going to be to
• 19:16
  Speaker 1: have reform and how much people like the status quo.
• 19:18
  Speaker 1: Max Neison, thanks so much for joining us. Max Neisson
• 19:20
  Speaker 1: is Bloomberg Opinion columnists covering all things biotech for Bloomberg Opinion.
• 19:24
  Speaker 1: You can read Max's work and other great work from
• 19:26
  Speaker 1: our Bloomberg Opinion columnists at Bloomberg dot com, Slash Opinion,
• 19:30
  Speaker 1: or on eternal Typing. An O P I n Go.
• 19:43
  Speaker 1: Joining us now is Becky francoit's president of Manpower Group
• 19:46
  Speaker 1: North America, joining us from Chicago and Becky. Earlier we
• 19:50
  Speaker 1: were speaking with Tom Gimble from LaSalle and he had
• 19:53
  Speaker 1: a very positive view of this job's report. Do you
• 19:56
  Speaker 1: agree that it really is the very low unemployment right
• 20:00
  Speaker 1: that we should be kind of highlighting here? Yeah, so,
• 20:02
  Speaker 1: I would say the talent squeeze definitely showed up in
• 20:05
  Speaker 1: today's jobs report. You know, unemployment at three point five
• 20:08
  Speaker 1: percent continues to defy the economic definition of full employment. UM.
• 20:13
  Speaker 1: So I would celebrate the addition, the continued addition to jobs.
• 20:18
  Speaker 1: You know, it is a very very tight labor market
• 20:20
  Speaker 1: and the future of our company or our country's economic
• 20:23
  Speaker 1: growth depends on us having you know, skilled talent to
• 20:26
  Speaker 1: put into these jobs. So, Becky, the wage increase came
• 20:30
  Speaker 1: in a little bit below expectations two point nine percent. Um.
• 20:34
  Speaker 1: How do you view the wage growth? Is it healthy
• 20:37
  Speaker 1: or would you be expecting higher wage growth given that
• 20:40
  Speaker 1: we're at our near full employment. Yeah, so of course
• 20:43
  Speaker 1: I would expect wage growth too. I was surprised that
• 20:45
  Speaker 1: it went down. You know, we were coming off the
• 20:47
  Speaker 1: back of thirteen months at three percent or higher wage growth.
• 20:50
  Speaker 1: I was surprised and a bit disappointed in the decline.
• 20:53
  Speaker 1: What I would tell you we're seeing, you know, in
• 20:55
  Speaker 1: the conversations we're having with clients across the country, is
• 20:58
  Speaker 1: that they're continuing to turn into non wage benefits. You know,
• 21:02
  Speaker 1: wages are are growing a bit, but they're turning to
• 21:04
  Speaker 1: non wage. The fastest growing non wage benefit in the
• 21:07
  Speaker 1: country today is remote working. UM. So we're seeing flexibility
• 21:11
  Speaker 1: come front and center UM to try to attract talent.
• 21:14
  Speaker 1: So going forward, where do you think the momentum is.
• 21:17
  Speaker 1: Is it to the slowing downside or is it to
• 21:19
  Speaker 1: the increasingly tight and we're going to get higher wages side. Yes,
• 21:23
  Speaker 1: I think we're going to see both. You know, we're
• 21:25
  Speaker 1: living in unprecedented times and we haven't seen this kind
• 21:27
  Speaker 1: of unemployment in fifty years. UM. So we did see
• 21:30
  Speaker 1: some softening and manufacturing UM retail, while softened transportation, warehouse,
• 21:36
  Speaker 1: you know, was up sixteen thousand jobs. We've seen significant
• 21:39
  Speaker 1: growth fare as the growth shifts to e commerce. And
• 21:43
  Speaker 1: that's interesting because the season, the retail hiring season for
• 21:46
  Speaker 1: seasonal has started much earlier than we've seen in the past, so,
• 21:49
  Speaker 1: you know, indicating people are truly shifting to a calm.
• 21:52
  Speaker 1: So I think we'll see you know, further I mean
• 21:55
  Speaker 1: three point five. I hesitate because what does further tightening
• 21:58
  Speaker 1: look like. I can tell you that we feel it.
• 22:00
  Speaker 1: We continue to have high demand, increasing demand UM, but
• 22:03
  Speaker 1: it is becoming harder to fill job to job because
• 22:06
  Speaker 1: we have you know, we need to bring more people
• 22:07
  Speaker 1: into the workforce. That's that's the solution. So Becky Lesha
• 22:11
  Speaker 1: and I we speak to UM a lot of corporate
• 22:13
  Speaker 1: executives and business owners and they say that, you know
• 22:16
  Speaker 1: that one of the biggest challenge is in fact finding
• 22:19
  Speaker 1: qualified UM employees for their businesses. What's is the sense
• 22:24
  Speaker 1: that the job creation here we're seeing our companies that
• 22:28
  Speaker 1: you talked, are they finding the right types of people
• 22:32
  Speaker 1: that they're looking for? Yeah, So we do. We do
• 22:34
  Speaker 1: a survey every year. So this year when we looked
• 22:36
  Speaker 1: at what we call talent shortage of American executives said
• 22:40
  Speaker 1: they can't find the talent they need. So that and
• 22:43
  Speaker 1: I anticipate when we repeat the survey, that's going to
• 22:45
  Speaker 1: become even a stronger indicator because it is difficult to
• 22:49
  Speaker 1: find skills. At the same time, I would say, we're
• 22:52
  Speaker 1: talking to clients around you know, what is truly required
• 22:56
  Speaker 1: for a position versus desired for a position, And those
• 22:59
  Speaker 1: are the conversations that say, you know, do you do
• 23:01
  Speaker 1: you truly need a master's degree to do this position?
• 23:05
  Speaker 1: Do you truly need you know, ten years experience and engineering?
• 23:09
  Speaker 1: And we're having to engage in that detail of conversation
• 23:11
  Speaker 1: to make sure that our clients are opening their aperture
• 23:14
  Speaker 1: to the talent that you know could come into the market.
• 23:17
  Speaker 1: And you know, the client of the candidates that we're
• 23:20
  Speaker 1: placing now are coming from another job. So I t
• 23:22
  Speaker 1: there's one percent unemployment in it. So you know, if
• 23:24
  Speaker 1: you have an interest in it, there are jobs out there.
• 23:27
  Speaker 1: The challenges how do you attract talent, you know, from
• 23:29
  Speaker 1: one place to another. So it raises the question of
• 23:33
  Speaker 1: investing in training programs. And even though that that kind
• 23:36
  Speaker 1: of expenditure has picked up a bit over the years,
• 23:40
  Speaker 1: it's still is well below where it was, say, twenty
• 23:42
  Speaker 1: thirty years ago in the United States. And I'm just
• 23:45
  Speaker 1: wondering whether you think that companies are getting more amenable
• 23:49
  Speaker 1: to the idea of spending on training programs. Yeah. So
• 23:52
  Speaker 1: we've seen more commitment to up skill in the last
• 23:56
  Speaker 1: two months, and we've seen in the last two years.
• 23:58
  Speaker 1: And so when you say getting more and then bowl
• 24:00
  Speaker 1: the the conversation is accelerating. The time is now now
• 24:04
  Speaker 1: the time for action. The other challenge that I think
• 24:07
  Speaker 1: American employers are having is the way we've done training
• 24:10
  Speaker 1: in the past is more at a point in time
• 24:12
  Speaker 1: and the return is expected to last over you know,
• 24:15
  Speaker 1: three to five years. Now that skills are changing at
• 24:18
  Speaker 1: the pace of technology, that return, the investment has to
• 24:21
  Speaker 1: be at a shorter period of time, just in time,
• 24:24
  Speaker 1: and it's going to have to be more frequent. So
• 24:26
  Speaker 1: we we are engaged in conversations now around that the
• 24:29
  Speaker 1: way the actual fashion of training has to change in
• 24:31
  Speaker 1: our country because you know, the return is not going
• 24:34
  Speaker 1: to be over three to five years, it's going to
• 24:35
  Speaker 1: be over one year and then it's going to change again.
• 24:37
  Speaker 1: So Becky, just finally, just are you starting to see
• 24:40
  Speaker 1: people that maybe we're sitting on the sidelines starting to
• 24:43
  Speaker 1: come back into the workforce and looking for jobs given
• 24:46
  Speaker 1: how strong the market is. Yes, I would say that's
• 24:49
  Speaker 1: the single biggest challenge for our country is we need
• 24:51
  Speaker 1: to bring people off the sidelines. You know. BLS this
• 24:53
  Speaker 1: morning said labor force participation. Remain flat um that that
• 24:56
  Speaker 1: is what we have to do. And part of that is,
• 24:59
  Speaker 1: you know, looking went again what's desired versus what's required,
• 25:02
  Speaker 1: Helping clients as well as candidates understand that you don't
• 25:05
  Speaker 1: have to have all ten boxes checked on before you
• 25:09
  Speaker 1: apply for the job. The time is now. If you
• 25:11
  Speaker 1: have six of the ten, lean in, lean into your
• 25:14
  Speaker 1: skills and what you bring to the table versus the
• 25:16
  Speaker 1: specific experience it's required, and put yourself forward for a job.
• 25:20
  Speaker 1: Thank you, Franko Witz. Thank you so much for joining us.
• 25:22
  Speaker 1: We really appreciate you taking the time out today. Becky
• 25:24
  Speaker 1: is the president of man Power Group North America. Thanks
• 25:27
  Speaker 1: for listening to the Bloomberg P and L podcast. You
• 25:29
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• 25:32
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• 25:35
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• 25:40
  Speaker 1: can always catch us worldwide. I'm Bloomberg Radio