1 big thing: The two-sided jobs picture
Work in the United States is a mixed bag: in many cases, you can get a job if you want one, even if you're a convicted felon, a former opioid addict, or have no resume to speak of. But if you are outside higher-skilled occupations, don't expect much in the way of outsize wages — or pay increases as time passes.
What's happening: In reports today, the government said the U.S. economy is roaring into 2019 — but not wages.
- Month-to-month employment growth, at 304,000 in January, was some four times the 60,000-80,000 required to absorb new entrants to the work force, the Bureau of Labor Statistics reported.
- That was the 100th straight month of job growth — by far the longest streak since the number has been tracked in the 1930s.
And the economic expansion is now just five months shy of a record. As one example, factory production picked up steam last month, rising to 56.6 on the Institute for Supply Management Index (above 50 means expansion), up from 54.2 in December.
- "Usually, as expansions go on, they slow down a little bit. But it's really unclear when that is going to happen," said Martha Gimbel, research director at Indeed's Hiring Lab.
- "Job seekers are still in the driver seat," said Andrew Chamberlain, chief economist at Glassdoor, the jobs site.
But, but, but: Though wages grew by 3.2%, or 1.3% after accounting for inflation, that is about half what it should be, said Joe Brusuelas, chief economist at RSM.
- "At this point in the business cycle, we traditionally have 4% to 5% nominal wage gains," he said, and about 2.5% after inflation.
- "It was another month of anemic gains in hourly wages," Brusuelas said.
Like a growing number of economists, Brusuelas blames monopoly wage-setting power enjoyed by large companies that dominate metropolitan population areas. "They are so large, they are able to set a prevailing wage" that other companies then follow, he said.
The bottom line: "Large behemoths essentially set wages," Brusuelas said. "This creates a ceiling that wages are simply not going to move above."
2. A final humiliation for malls
In a twist of the knife, developers are turning defunct malls and failed big-box stores into warehouses — for e-commerce businesses, among other uses.
Erica writes: Since 2016, 7.9 million square feet of U.S. retail space has been turned into warehouses, according to a new analysis from CBRE, the research firm.
- These redevelopment projects span the country, impacting cities in every region. But, per the report, they are especially prevalent in lower-income areas.
- As we've reported, retail options are vanishing disproportionately in poorer parts of the country.
"We’ve got a recession coming, and that’s likely to further widen that gap," says Ellen Dunham-Jones, a Georgia Tech professor who tracks obsolete malls. "I expect we’re going to see more malls and strip malls go under."
The big picture: At 28 square feet per capita, the U.S. has 20 times more mall space than the world average, and the repurposing of dead malls goes beyond warehouses. Of the 1,000 or so malls open today, around a quarter are at risk of shuttering in the next five years, per Credit Suisse's analysis.
- These old structures are turning into community college campuses and doctor's offices, and even Amazon is reportedly looking at turning old Sears stores into Whole Foods outlets. Amazon did not immediately respond to emails seeking comment.
3. What you may have missed
Feel like you ran a marathon this week? Catch up on this week's Future.
4. Worthy of your time
Companies draw up Brexit emergency plans (Ruth Bender — WSJ)
Tech giants are the new gatekeepers (Scott Rosenberg — Axios)
Australia sheds money in politics ("Reportermate" - The Guardian)
The white flight from football (Alana Semuels — The Atlantic)
Vaccinating mice may slow Lyme disease (Angus Chen — Scientific American)
5. 1 imaginary thing: The AI dystopia
The first four times I tried to leave the apartment this morning, I was arrested for sleeping in, killed by food poisoning, possessed by the ghost of Mark Zuckerberg, and attacked by the flat itself.
Kaveh writes: No, this didn't actually happen — this was a game. These are but a handful of the perils of getting ready for work in a fictional AI-run mini-world constructed by The Verge's Adi Robertson.
Explore the dystopia in Robertson's old-school text adventure.