Electronics Boutique (ELBO) Message Board

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Technology Stocks : Electronics Boutique (ELBO)

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To: Madharry who wrote (453)	7/29/1999 11:58:00 PM
From: Mad2	Read Replies (1) of 779

Armin, I'm from the Chicago area and we are hiring. Two years ago no problem getting a secretary for 22k now having trouble getting qualified canidates at 25+ Story is the same for factory workers in the 10-15/hr catagory....its getting difficult to find good help in what we would define is the entry level range. Normally we evaluate and institute annual increases (cost of living and merit) at year end). Right now we are reviewing all employees against their job class and Hewett's published wage scale with the purpose of idenitifying "underpaid workers" that we don't want to risk loosing.....we'll put merit increases through next month for those we feel need to be moved along. Of course our motive is selfish in that we want to retain good help. this is the market today.....very unlike anything of the past 20 years. From a practicle view consider a worker at 20/hour or a supervisor at 40-50k/yr. I'll tell you that in a city like Chicago unless you have a 2 income family it is tough to raise a family of 4 on that income alone. In our business we'll eat the increases we dole out as our buiness isn't labor intensive (its mfg were our revenue is 300k per employee, i e capital intensive). It's got to be tougher on businesses where labor is a larger component of revenue. The reason is the tight labor market and I would add that the "business in the form of shareholder earnings" has been the main benificary of productivity improvements of this decade as well as the growth of the economy. The next year or so, assuming the economy continues to grow (albiet slower) I see wage inflation within the lower ranks (hourly and front line supervision) being a new factor in our economy. That said business that can continue to improve productivty will continue to thrive (with slower earnings growth). In a overall sense as I previously pointed out this could be a non-issue or even a benifit if (big if) the wage inflation stimulates business to strive for offsetting productivity improvements to dampen the effect of prices. the Big three are: cost - material and labor revenue - price and unit shareholder equity - earnings Right now material costs (commodity) are starting to rise with Asia on the rebound. Labor for the above mentioned reasons. Unit growth is dependent on economic growth and exports. Prices is what the fed will watch very closly in form of inflation. Of course if they go up then AG will raise rates and we know what that will do to equities. What's left is earnings, dependent on productivity. If Productivity doesn't offset the wage and material effect then prices go up or earnings drop. Again this macro picture is important to the extent if effects fed action. To the extent it effects individual stocks is company dependant. IMO it will be harder to find the winners of the next 6 months compared to the past 6 months. This of course applies to Domestic companies. Multinationals become a bit more complicated due as one needs factor, exchange, production cost (overseas) and the fact many of their markets are outside ours Best Regards, Mad2

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