A Quite Scary Step in the 401k World via IBM

I wanted to re-post this piece courtesy of Mark Hanna at Market Montage regarding the 401k changes that IBM is looking to make.  I briefly read about this situation in the WSJ as did Hanna but as he states it did not receive a lot of media attention.

Bottom line, IBM is looking to change the 401k contributions it matches for employees to pay out only once per year during the month of December.  In addition an employee who left before the match was paid would no longer be eligible to receive that match.

Not only does this likely have a severe impact upon the employees, it could also have an impact on the overall markets with a flood of activity driving the movements of the markets.

Full story here

Apple CEO Says Mac Production Coming to U.S.

Here are two sources of information from the WSJ and a post by Mish Shedlock featuring a piece in The Fiscal Times regarding the announcement by Apple to begin making a small portion of Mac computers here in the states.  With a $100M dollar investment, Apple plans to relaunch part of it's manufacturing operations here in the states although locations have not been disclosed.

Having just released a post regarding the rise of automation and a flux of manufacturing coming back to the states, Apple's move plays right along these same lines.  Rising labor costs in China, higher transportation costs, and shorter supply chain lines to the consumer, are all factors playing into this resurgence of manufacturing coming back to the states.

However, none of this would be at all possible without the rise of the machines.  The ability for a robot to do the job s of what used to be 3 or more people is at the heart of this renaissance.  As we have continued to point out although this means less manufacturing jobs per say, it does increase the need for a highly skilled worked force to maintain the machines.  But if you go step further, this increase in commerce also aids the communities where these businesses are supporting schools with higher tax revenues and by supporting other local businesses.  So while there may indeed be less jobs than before there should be an overall pickup in economic activity.

Robots to Rule the World? Taking All Jobs? Replace Women?

These two posts here and here by Mish Shedlock offer additional insight into the world of robots and their impact on the economy and labor markets.  We have discussed the rise of productivity in America and the movement of work back to the states that creates work but with less people (see our posts here, here, and here).

With the rise of robots actually performing the manufacturing there is a need for less people but also a rise in the need for people with advanced skills to maintain the robots.  This is where a structural shift in labor markets is occurring and frankly it appears that the US is behind the curve.



You can see from the two charts below the impact all of this automation and productivity increases are having on the manufacturing labor sector.

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