Mass layoffs are plaguing greater than just the Big Tech industry.
On Sunday, former Walmart CEO Bill Simon joined “Fox & Friends Weekend” to warn Americans of the detrimental impact that corporate layoffs could have on the U.S.’s feeble economy.
“It’s crazy without delay. We’re stuck on this loop of wage inflation, product inflation and value inflation. And it’s just that cycle keeps going. And I feel, unfortunately, an inevitable byproduct of a few of the Fed’s moves and because the vital medicine we’ve to take to sort of cool things down and get the inflation back under control on a few of these layoffs which can be coming,” Simon told co-host Will Cain.
Although the labor market stays healthy and certainly one of the few brilliant spots within the economy, there are signs that it’s starting to melt. Along with quite a few high-profile tech layoffs over the past month, the economy added 223,000 jobs in December, the smallest gain in two years.
Federal Reserve officials have said they expect unemployment to climb consequently of their aggressive rate of interest hike campaign. Updated projections from the central bank’s December meeting show that officials expect unemployment to rise to 4.6% by the top of this 12 months, up from the present rate of three.5%.’
Bill Simon says this country is stuck on this loop of wage inflation, product inflation and value inflation.Corbis via Getty Images
Cain pointedly remarked that unemployment “has to occur” with the intention to effectively cool inflation, leading him to ask the previous Walmart president if he believes layoffs put the country “further down the road” to getting the economy back on course.
“Theoretically, yeah, I agree with you, Will. But the issue is, at the identical time, there’s this wage inflation that’s occurring. For instance, last week, Walmart announced they’re raising their minimum wage, their starting wage to $14 an hour. That’s a 17% increase,” Simon replied.
“Food costs have gone up 23% within the last two years. So now, wages have gone up 17% at Walmart, 25% at Delta for pilots, 25% for the rail industry. And wage increases like that kind of counteract the employment layoffs that we’re beginning to see. And so there’s so much occurring.”
The previous Walmart president continued, bringing to light a novel problem that the U.S.’s immigration problem has imposed on the workforce.
Bill Simon, CEO of Walmart U.S., speaks at a the Walmart U.S. associates meeting in Fayetteville, Ark. on June 4, 2014. REUTERS
“We’d like employees, but we’d like employees we are able to employ which can be within the country legally. What’s happening now’s you’re letting people in that may’t take part in the workforce but do increase demand. So, you may have increased demand driving prices up without the workforce to have the opportunity to service it. So, it’s an advanced factor. Certain inputs are attempting to resolve inflation, but you may have counteracting forces that sort of mess that up,” he said.
Simon further warned that customers may very well be in a “world of hurt” if the Biden administration doesn’t take motion on the country’s inflation issue soon.
“I feel probably the most critical thing that’s going to occur in ’23 is we’ve to get this inflation under control. One other 12 months of high single-digit, low double-digit inflation, and we’re going to be in a world of hurt because inflation hurts 100% of the population,” Simon said.
