A hodge-podge: California, Walmart, Jobs, Georgia and The Beetle
The Job Market
Even with 6,000,000 unemployed people in the United States, there are still 10,500,000 job openings.
As part of that 10.5 million number…
Last month, 6.1 million were hired.
But, 5.9 million were separated, a euphemism for quit or fired.
4.2 million quit and 1.4 million were fired. I know it doesn’t add up, but there are other things in those numbers.
With 4.2 million quitting, there is confidence they can find another job. I guess that makes it a good job market; not what the fed is counting on.
Small Businesses
The good news is that small businesses in the United States are leading the way when it comes to job openings. They have accounted for 4 out of 5 job openings.
Since February 2020, businesses with less than 250 employees have had a positive net hire of 3.7 million people while larger business have had a net negative 800,000.
All small business owners on this email: Thank you. It’s not easy taking the lead and competing with the big guys – see Walmart below.
California Taxes - Follow closely, folks. It’s a very bouncy ball when you put together a wealth tax.
Tax payers, particularly wealthy tax payers, are leaving states with high tax rates and going to states with low tax rates.
Hogwash, you say, that is only urban legend!
Well, yes and no. I’m digging into it, and there is a LOT of data to parse through, but I will tell you this:
California politicians have put together a bill – not likely to pass - requiring taxpayers with over $50 million of assets (real estate, boats, cars, art and stocks) to pay 1% of the value of those assets AND to file yearly reports on their holdings and eventually pay the capital gains tax even if they move out of state.
If people weren’t leaving, why would they do that? Things that make you go “Hmmmm.”
10 years ago the California budget was $100 billion. This next fiscal year, the Governor is proposing a $300 billion budget. As a California tax payer, are you getting three times your monies worth now than you did 10 years ago? And do they really need to raise taxes? No wonder people move.
Illinois is just one of the states that are part of this cabal. They are proposing a 4.95% tax on the unrealized capital gains of billionaires. The key word is unrealized. There is no gain because it hasn’t been sold.
Well, who cares about billionaires anyway? They can afford it; not my problem. Perhaps not, but here are two examples of a possible impact:
It’s a good thing Bill Gates doesn’t live in Illinois. He gave away $5 billion last year to non-profits. As Milton Friedman would say: Do you think the government can spend your money better than you can?
Hedge fund founder Ken Griffin left Illinois last year. Perhaps it was the windy, cold weather, because he moved to Florida and purchased a mansion (of course) for $107 million.
Well, that’s a bit much, you would think. However, his annual state tax bill to Illinois was $200 million. In Florida, it’s $0. He’s still ahead $93 million. In one year.
That’s a big, tax paying customer to lose.
Part of the California package is to put together a proposition to eliminate the 2/3 majority needed in Sacramento to raise taxes and make it a simple majority. Yeesh.
Yep. Time to write a letter to your state representative.
Walmart increased its minimum wage to $14.00/hour.
Not much impact in California, but there are plenty of states that do not have a state minimum wage and people still get paid $7.25/hour. I’ve seen the paystubs.
Target has a $15/hour minimum wage.
If you are in a state with a low minimum wage, you’ll be competing with Walmart for your workers.
And as always, the market is determining the minimum wage, and for anyone within 20 miles of a Walmart, it’s $14/hour.
Georgia Again?
A South Korean solar company just committed to spending $2.5 billion to build an entire solar manufacturing supply chain in Georgia.
This is on top of a $5 billion commitment last year from Hyundai to build a factory in Georgia.
Somebody is doing something right in Georgia.
If you want to be part of this supply chain, I would call the Georgia State Chamber of Commerce.
Who was Carl Hahn?
He was a car guy. That alone will cause some of you to skip to the end of this Report and some of you to snap awake and read on.
He arrived in the United States in 1959 – Clue #1.
The job was considered a dead-end job. The US market for a German car company? Where is the future there?
At HQ in Germany – clue #2 - you needed permission from the CEO to make a long-distance call. In the US, he was in charge and made his own rules.
Today, he’d fit right in with the tech titans: Steve Jobs, Reed Hastings, Jeff Bezos because of his ability to ‘disrupt’ the status quo.
Ironically, he left Germany because nothing ever changed at headquarters and he wanted to change things. In the US, he made his fame by promoting a car that really didn’t change, the opposite of what he wanted to do.
That car? The Beetle.
When he came to the US, annual sales were 61,507 cars. By the time he left in 1965, it was over 300,000.
He was CEO of Volkswagen from 1982 until 1993. His lessons:
New isn’t always better.
Think small when others think big and think big when others think small.
Figure out what people want and give it to them.
Mr. Hahn died this month at the age of 96.
If the quotes from Mr. Hahn weren’t good enough, here is one that has been making the rounds lately:
You either change your dreams or change your habits.
It’s never too late to change your habits so you can keep your dreams.
Have a good week, and if you are going to see Manfred Keil on Thursday, see you there!
