Comments on Fund My Mutual Fund: USA Today: Debt-squeezed Gen X Saves Little

nl thinker,import some Americans. They will do th...

2008-05-26T17:00:00.000-04:00

nl thinker,

import some Americans. They will do the work that Canadians won't stoop to do. (Inside joke, we say that about Mexicans now in America - but maybe like us, you will import labor or as you say it labour? from "down south") ;)

I do think as energy costs rise you will have a re...

2008-05-26T16:58:00.000-04:00

I do think as energy costs rise you will have a return to more localized mfg and producing BUT some things (especially services) are borderless - i.e. you can have an architect design your house in Budapest just as easy as Atlanta. Further, in a slack economy with 11-14% unemployment (if truly measured) people will be happy to work for most any wage. In Michigan for example, as auto suppliers cut wages by 50% it still pay $14/hr instead of $28. Versus Walmart at $9-$12. So people "line up" for either job. The opposite is "nothing". But keep in mind $14/hour is about $30K a year - for people who used to make $55-$60K (before overtime)

So it is all relative. But I do agree a secondary effect of higher energy prices will be the transport issue - already in the fall we were reading that it was costing more to SHIP iron ore from Brazil to China, than the iron ore COST. But one could argue this would also rip away some of the last mfg here in the US as well - i.e. we still do make some cars for Brazil, China, India here - if fuel were extraordinary expensive, you move those last plants directly into those countries. Etc. As with all these economics - there are hundreds of moving parts. I could see a lot of this happening in the food chain as well - food is becoming very costly to move 1000s of miles - strawberries grown in South America versus somewhere in America - the costs start to add up. When one sits back and details how petrol is literally the lifeblood of modern society it really makes you think about all the potential ill effects it could have on prices.

Upgeya, I agree that outsourcing labour will make ...

2008-05-26T09:43:00.000-04:00

Upgeya, I agree that outsourcing labour will make local labour more attractive again. BUT that depends on local labour continue to be willing or able to work for "old wages" as inflation drives North American cost of living through the roof. I live in a boom area of Canada and of my retail biz, I am paying wages about 40% higher than 3 yrs ago, otherwise, people cannot afford to work for me (ie paying 1000$ -1600$ of rent for a 2 bedroom, plus high gas, food, insurance increasing etc, I am looking at having to pay even more in the near future. Luckily I can afford to pay it because people still have $$$ as we are in a boom, so retail still rocks, but I will have to shut down if things should slow down if i cannot find "cheaper " workers.

I believe that global wage arbitrage is about to r...

2008-05-24T22:35:00.000-04:00

I believe that global wage arbitrage is about to reverse, as the cost of 10000 mile supply chains increase with peak oil driven transportation fuel price increases.

Remember, 401ks would be considered saving. Just ...

2008-05-24T15:55:00.000-04:00

Remember, 401ks would be considered saving. Just be default probably 50% are "saving" that way. Maybe 1-2% of salary.

A lot of companies, seeing how few people contribute to 401k are now setting by default 3% of salary into 401ks. So you have to take action to opt out. Versus before, you had to take action to opt in. Which many chose not to do because it required over 10 minutes of thinking. ;)

Among those ages 25 to 34, 45% aren't saving.I...

2008-05-24T15:32:00.000-04:00

**Among those ages 25 to 34, 45% aren't saving.**

Implying that 55% ARE saving? I find that very hard to believe, with national savings rate below zero.