Unemployment VS Increased Prices due to shortage

People out of work due to current situation (recession looming) yet prices are increasing(Notably Elektrons). Where is this all heading?

3 Likes

I don’t think prices will stay high for long. The second hand market is about to be flooded. I feel for people being forced to sell their gear.

If people are forced to sell their gear due to personal circumstances. Will the shops go bust?

1 Like

Some probably will.

1 Like

Small business seem to be hit the worst I think in US, so naturally some shops will go under I imagine. Harder for them to stay afloat.

4 Likes

Absolutely. Small business in the US got completely nuked by all of this. I can’t imagine that it’ll be much longer before we see a massive spike in mortgage defaults. We know this to be true because the Federal Reserve has been buying up MBS recently and several megabanks have essentially made an exit from the mortgage business.

A wave of defaults are coming and it didn’t have to be this way. I think it would have made good sense to temporarily suspend all mortgage and lease payments, nationwide and without penalty, for a number of months while this blows over. Had this occurred, nobody would have had to take the losses, either as a lender or a borrower. Sadly, this did not happen and I see it as a policy misstep.

I think it would be foolish to assume there won’t be long term changes to our economies at a local and international level. I believe there is a good chance this event will hasten the demise of globalism which seems to want to encourage dependence and to depress labor. Labor and “localness” may well gain more bargaining power from here on out.

12 Likes

And yet you see huge increases in business for Amazon, Walmart and Target online. 100% increase at Amazon. At the same time bankruptcy at JC Penney, J. Crew, Neimann Marcus, and in the music business likely Guitar Center / Musician’s Friend and others. That’s called consolidation.

Many people can’t feed themselves and are hungry, losing their homes, having utilities cut-off, cars repossessed, unable to take care of a medical problem, dropping out of school, even high-school because of this.

I guess we all know this, and i am just stating the obvious.

5 Likes

It’s all pretty sad really. I’ve read analysis that states the number of truly unemployed individuals in the US is probably around 50 million persons.

Those that reside outside of the US may not realize that the majority of US workers receive their healthcare from their employer, which means that many tens of millions are now also without health care. Should they become ill, they will likely lose their home and all of their possessions. A simple hospital stay in the US can cost $2000-5000 per day and a brief ICU stay could run $100,000 without health coverage.

8 Likes

Some local music shops have gone bust here already

1 Like

Agreed that the freezing of mortgage payments + rental payments would’ve helped quite a bit, for business and residential loans. The bills ain’t stopping. And then deferment angle just exacerbates the problem by stacking multiple mortgage / rental payments on top of eachother.

3 Likes

And now to add insult to injury, many US states are allowing partial occupancy for businesses. The issue here for many is that they can’t afford to open at 25% capacity because then their costs are higher than if they had just remained closed.

7 Likes

You also have an added component that unemployment here is paying some more than what they were getting paid while working before, so no incentive to actually redeploy back at their normal jobs. Why would they if they get paid more with the economic uncertainty? This might prevent businesses from re-staffing to an appropriate headcount.

2 Likes

I’m one of the few who has a good job that is deemed necessary. Despite that, health insurance costs, while being subsidised by employer, are crushing my family budget while also being total shit in terms of actual coverage, and I mean literally shit!! I have to shell out Thousands before anything kicks in.

It’s despicable the state of our healthcare in the US, and again, I’m a fortunate one who is lucky enough to not be at total risk of losing everything…other than risking my and my family’s health by going into work everyday.

We Americans are an embarrassment on so many fronts politically in the world today and health is right up at the top

Edit: sorry I derailed from the main topic, just stressed about keeping family healthy

15 Likes

yep, both of my brothers are getting more on unemployment then if they were working.

I work in commercial insurance in WA & we have business’s that are unable to reopen due to not being able to get their employees back. Why work if they get paid more doing nothing.

3 Likes

We might need to create a whole different thread on this topic, otherwise we may be drifting far from the original topic here.

Increased prices might also have to do with people trying to get more cash for the gear now, simply due to the economic uncertainty ahead.

3 Likes

Well, maybe they should pay their employees more.

17 Likes

I will add that I feel for anyone who has to sell their gear right now. My Elektrons give me a lot of joy in these dark times and I would be crushed to have to let them go

3 Likes

Plus at least in most states in the US, if you are called back from temporary layoff or furlough – or you refuse to take equivalent work, you lose your unemployment benefit. The unemployment benefit is also only temporary, you loose it after a few months, again depending on the state.

Here’s a notice for the Vermont Department of Labor as for instance.

2 Likes

To get back on topic, I do think we’ll see supply shocks for awhile which can lead to more volatility in pricing. Factors that play into this include issues with component availability leading to a jump in the newer used market, as well as potential for a drop in some used pieces due to desperate sellers needing to quickly offload to keep a roof over the heads of their kids, etc.

1 Like
off topic

People who are receiving more in unemployment benefits than they were paid were not being paid enough.

“Why would they return to work?” is a good question but the implication should be that they should be paid more. It shouldn’t be a question of their intrinsic motivation.

EDIT: stashing off topic response to respect effort to return to topic

4 Likes