More labor market blues

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0:44With Grainger's supplies and solutions for every challenge he faces, plus 24-7 customer support, his venue never misses a beat. Call QuickGrainger.com or just stop by. Grainger, for the ones who get it done.

1:02We'll do some labor market, we'll do some bond market, and then we're going to talk condiments. From American public media, this is Marketplace.

1:23I'm Kyle Rizdahl. It is Tuesday today, the 11th of November. Good as always to have you along, everybody. If we are lucky, and believe you me, we are as ready as you are not to be talking about private data anymore. But if we're lucky, this will be the last week or so we're going to have to do that. Today's installment comes to us in the form of the National Federation of Independent Businesses Small Business Optimism Index, down just a hair in October, though still more optimistic than not. Dig down a bit, though, and there are some cracks. 32 percent of small business owners say they've got jobs they cannot fill.

2:0027 percent said labor quality is their single most important problem, the highest that's been since right about now, back in 2021. Marketplace's Kristen Schwab gets us going. Of all the things on business owners to-do lists, hiring is not usually anyone's favorite, says Aaron Sojourner at the W.E. Upjohn Institute for Employment Research. Employers, especially small business employers, are perennially upset about their struggles to attract talent. It's partly because the smaller the business, the more intimately the business owner feels the frustrations that come with hiring. Also, the smaller the business, the harder it is to hire, period.

2:41You know, they're competing against larger employers who have bigger scale, more benefits. And higher pay. And the kind of security bigger businesses can offer may be more attractive than usual to job seekers now because of all the layoff buzz that's been happening. Holly Wade runs the research center at NFIB. It's a bit of a pretzel because you have two sides of the labor market that are kind of pushing in the same direction. One side is companies, which aren't doing a lot of hiring. The other is prospective workers, who know companies aren't doing a lot of hiring, so if they already have a job, they're less likely to be looking for a new one.

3:21And all of this makes it harder for businesses to attract strong applicants. Industries that rely on immigrant workers are having a particularly hard time, like construction. We are also seeing some challenges in transportation, some service sector industries and manufacturing. Sojourner at the Upjohn Institute stresses that this is just one report from one organization with a narrow set of survey respondents. But if you add in data from ADP and Indeed and regional federal reserve banks. They all point to basically weakening in the labor market, you know, slower job growth, higher unemployment rate, you know, stagnant wages.

4:06And expectations among both firms and workers that it's going to get worse. I'm Kristen Schwab for Marketplace. Wall Street today. Blue chips were up. The rest were kind of mixed. We will have the details when we do the numbers.

4:40Hey, what are you doing 50 years from now? I ask because President Trump floated the idea of a half-century-long home loan this past weekend. And 50-year mortgages may or may not come to pass, in part because, as Marketplace's Rebenishore reports, the math on this idea doesn't really math. A 50-year mortgage would mean you get 20 more years to pay off the house. It also means you get 20 more years of paying off the house. David Reese is a professor at Cornell Law School. The average age of a first-time homebuyer is now 40 years old. The notion that you'd finish paying off your mortgage at 90 is probably not something that most people contemplate when they want to buy a home.

5:25Still, in the short term, a 50-year mortgage would appear cheaper, slightly. Robert Bridges did the math. He's associate professor emeritus at the Marshall School of Business. The payment on a 50-year mortgage, for instance, for a$200 ,000 loan at 6 % would be about$1 ,052, where a 30-year loan would have a payment of$1 ,199. So that's a difference of$147 in that example. But it comes with costs to the borrowers as well. For starters, the interest rate would be higher, says Cornell's Reese. You pay more for a 30-year mortgage than you do for a 15-year mortgage. So you will probably pay more for a 50-year mortgage than you would for a 30-year mortgage.

6:10According to the American Enterprise Institute, a 50-year mortgage would initially increase a homeowner's buying power by 8%.

6:22Edward Pinto is a senior fellow at the American Enterprise Institute. Basically, if everyone's buying power goes up, so does the price of housing. And a longer mortgage also means it takes longer to build up equity. Then you're really left with not much advantage and you become really a renter with a mortgage. A longer loan where it takes longer to build equity also leaves homeowners more vulnerable to risks in the market if home prices stagnate, which Pinto predicts they will in coming years. This has been tried with 40-year loans before, and every time it's been tried in the United States, it's failed.

6:56Failed because they're too risky, he says. That's one reason we don't already have 50-year mortgages. Again, Robert Bridges. It doesn't seem like this is really the remedy for the housing problem that we all know we have in this country. Which is first and foremost, he says, that we don't have enough of it. In New York, I'm Sabree Beneshore for Marketplace.

7:35however long the term of a mortgage is our ability to afford it depends a whole lot on how much we make. Data out from the J.P. Morgan Chase Institute not too long ago shows that growth in real incomes, that's incomes once you take inflation into account, is stuck at around 2 % a year, just about as low as it's been in a decade. I would give you the latest government data here, but, well, you know. Here, though, is an observation from the Federal Reserve Bank of Philadelphia in the most recent Beige Book. For some entry-level positions and some workers, the Philly Fed wrote, wage increases are no longer keeping pace with price increases, especially as firms adjust both workforces and prices in response to tariffs.

8:23Marketplace's Samantha Fields has more now on what that means in real life. If you walk into town center music in Suwannee, Georgia, in the suburbs of Atlanta, you'll see all sorts of guitars hanging from the walls. And if you ask, you can probably get someone who works there to take one down and play it for you, or let you try one yourself. Aaron Brown has owned the shop, which sells and repairs instruments and offers music lessons since 2012, and has worked there even longer. I have one guy that's been here for eight years, and then I've got another guy that's been here for 20 years. Which is why it kills him that he probably won't be able to give them pay increases this year, like he usually does.

9:02Between the numbers that I'm seeing of money coming in and just the uncertainty of everything, I've just kind of told everybody to hang tight for this year. It's been a rough seven months for the business, mostly because of inflation and tariffs. Brown has had lots of inventory held up in ports, and his suppliers have raised prices, so he has too. Due to tariff confusion and just tariffs in general, I lost out on what I calculate to be upwards of 15 grand in sales. He just doesn't feel like he has the money to give his staff raises this year. And he's also holding off on hiring a salesperson he needs.

9:38The music is slowing across the economy. Hiring has been cooling for months, and now it's clear that wage growth is too, for some workers more than others. Wages at, let's say, the bottom of the American economy are actually growing more slowly than wages in other parts of the economy. Andrew Stettner at the Century Foundation says that's a notable shift from the last few years coming out of the pandemic, when wages were rising fastest for the lowest paid workers. Tail end of last year and really early this year, I think that's when you really kind of saw the labor market shifting. From one where companies couldn't hire fast enough and were raising wages to compete to one where there's very little hiring happening at all.

10:23in general when there's more workers available, companies are going to feel this pressure to increase wages. And that's the moment we're in now. In that kind of environment, Elizabeth Jacobs at the Urban Institute says it's common for workers in the lowest-paying jobs to be hit first. And folks who may be looking for work, may be trying to figure out how to get a foot in the door and haven't been able to figure it out. Data from the JPMorgan Chase Institute shows wage growth is slowing the most for workers in their mid to late 20s. There are a lot of factors at play here, including immigration policy and artificial intelligence.

10:56But Jacobs says tariffs are the big one. We have good reason to think that they will put a drag on the labor market that is not good for low-wage workers, fewer jobs, lower wages, vicious circle kind of situation. Tariffs put a lot of pressure on small businesses in particular, Jacobs says, which tend to have more trouble absorbing higher costs. Small businesses are a huge part of the economy. they are a particularly big part of the economy that employs folks working for low wages. So all of the pressure that small businesses are feeling from tariffs, that is not good news. Aaron Brown is feeling it at Town Center Music in Georgia.

11:36I like to take care of my folks here. They work hard and I want them to take in some of the reward of that. But right now it's, I just don't know. He's not comfortable sharing how much he pays the people who work at the shop, but... No one's making a lot of money. Brown says he'd like to be able to pay them more, but because customers don't have the money right now, he doesn't either. I'm Samantha Fields for Marketplace.

12:19Got your mustard. You got your ketchup. Increasingly, though, you've also got your chili crisp, your avocado mayonnaise, your pickled ketchup, your steak sauces of various varieties. Our refrigerators overflow with sauces. According to the market research firm Mintel, the condiment market is now a$12 billion industry, up more than 50 % in the past five years. Dina Shanker covers food for Bloomberg Business and Businessweek. She wrote about the topic at hand just the other day. Welcome to the program. Thanks so much for having me. So I mentioned that Mintel report on the growth in the sauce market.

12:57Why? Well, you know, I think there's a number of things going on. The first is that we're just a lot more adventurous in our eating than we were even just a few years ago. We also, in some ways, are more restrictive with our eating. So some people don't want any sugar and some people don't want any carbs. There's also cooking at home, which really jumped, of course, during COVID, but has stayed elevated from pre-COVID levels, particularly lately as people are going out to fewer restaurants because prices are so high. There are more ways than ever to buy your condiments as well. Things can just become viral hits online.

13:39Okay, the whole virality of condiments thing is not a sentence I thought I would ever utter, but as with everything now, there is a social media part of this thing, right? You see a little thing on TikTok or whatever, and you're like, oh, yeah, I'm going to try that. Yeah, definitely. So one of the big ones was a Japanese barbecue sauce. Also, like Fly by Jing is another condiment company. They released a limited edition chili crisp ketchup online, and it sold out in 33 hours. I will say I fell for the whole Fly By Jing thing. I have since moved on, but it was a nice little taste sensation while I tried it.

14:17Let me ask you this, though. Fly By Jing relative newcomer, talk to me about the OGs, and I'm thinking Kraft Heinz here in particular. Where are they? Yes. So Kraft Heinz, of course, is one of the biggest food companies there is and really owes so much of their market cap to ketchup. They have gone well beyond just their regular ketchup. They've added all-natural ketchup made with cane sugar instead of high fructose corn syrup. And they also have these mixing machines that they put in restaurants. They're called Heinz Remix and they come with like just a whole bunch of like bases like the ketchup and the mustard and the mayo, etc.

15:05And then they also have enhancers like caramelized onion and smoky chipotle. And you can make more than 2 ,000 possible combinations. And they use what consumers do to inform future products. And apparently it was some of the insights from the remix machines that yielded Heinz mustard. Yeah, well, it's interesting you said it that way because there are like five, maybe eight A's in that thing. I thought that remix thing was so interesting because fundamentally it's a data play, right? They get consumers to do this and then they learn what consumers want. And then, as you said, they go to market with mustard.

15:43Yes, exactly. It's so smart. To me, it's so American because nobody's being charged for using it, but nobody's getting like a royalty for coming up with the next big condiment either. It's amazing. It's, I mean, brilliant in so many ways. But are we, do you think, at peak sauce? Because as you point out in this piece, the rate of increase has slowed. You know, it's so funny because this was a conversation that I had with my editor several times. about whether we were at peak sauce. And I think what we are is we are going to continue to see more sauces. I actually just saw Chipotle in their recent earnings said that 90 % of Gen Z will go to a restaurant just for a new sauce.

16:35And so people still love sauces, but I think that the growth is just not going to continue at the same rate. I will end this actually the way you ended the piece, which is we all of us have a zillion bottles of opened but unfinished sauces in our fridge, right? And the industry is banking on just adding one or two more and we're all just going to do that, right? I mean, it can be really hard to resist. Sometimes I buy one. I don't even like it that much. But I can't even bring myself to, like, throw it away because, like, maybe it'll taste good on something else. I just have to find the right vector for it.

17:16Dina Schenker, she writes at Bloomberg Businessweek. The piece is called Why America's Fridges, as we were just talking about, are overflowing in sauce. Dina, thanks a lot. I appreciate your time. Thank you.

17:47Coming up. Everyone I know watches with captions. Coming soon to a theater near you. First, though, let's do the numbers. Dow Industrial's up 559 today, 1.2%, 47 ,927. The Nasdaq slipped 58 points, about a quarter percent, 23 ,468. The S &P 500 gained 14 points, two-tenths percent, 68 and 46. Sabree was talking about those 50-year mortgages, or maybe not. Loan Depot gained 3.2 percent today. Bank of America increased four-tenths of 1 percent. Paramount Skydance spiked 9.8 percent today after reporting earnings for the first time since the$8.4 billion merger of those two companies. Airlines, you know where this is going, right?

18:33They're warning that flight disruptions are going to continue even after the shutdown ends. Hello, Thanksgiving. Delta Airlines down 1.4 percent. Today, United Airlines descended 1.25 percent. The bond market closed for Veterans Day. Today, you're listening to Marketplace. This is the story of the one. As head of maintenance at a concert hall, he knows the show must always go on. That's why he works behind the scenes, ensuring every light is working, The HVAC is humming, and his facility shines. With Grainger's supplies and solutions for every challenge he faces, plus 24-7 customer support, his venue never misses a beat.

19:12Call QuickGrainger.com or just stop by. Grainger, for the ones who get it done. This is Marketplace. I'm Kai Rizdahl. Everybody borrows money. That's the way this economy works. People borrow. Those are called loans. Companies and governments and universities and some other nonprofits, they borrow as well. Those are called bonds. And this year, according to Bloomberg, the municipal bond market, that's states and cities along with some other government agencies, that's hit a record more than$500 billion worth of bonds issued. Marketplace's Henry App looks at what's driving all that muni debt. Michael Gahn leads the Vermont Bond Bank, which provides access to the bond market for small cities and towns in the state.

19:57He's working with pretty much the same number of communities this year, he says. What is different this year is that the project size is definitely larger, and that's a continuation of last year's trend. As in, the amount of money each community is looking to borrow is going up because costs of concrete and steel are going up. Higher costs now are driving the volume we're seeing. Higher costs and interest rates from a few years ago are also why we're seeing more bonds issued now. Because a lot of communities put off projects as costs rose, says Abby Ertz at FHN Financial. So a lot of what we've seen, honestly, this past year and even in 2024 was just catch-up issuance.

20:41Municipalities are also finally issuing bonds for some projects partly funded by federal pandemic-era aid. Some of that money during the Biden years went to projects that weren't, as developers say, shovel-ready. Justin Marlowe is director of the Center for Municipal Finance at the University of Chicago. And it took, in many cases, three, four, five years to do all of the background work to get to the point that you borrow money to actually begin the project construction process. Cities and states are finally doing the work and taking on the debt. And for now, they're in good financial shape to do so, thanks to stronger economic growth a few years ago.

21:19because rising incomes and higher property values take a while to translate into tax revenue, Marlow says. I think what we're seeing, especially in 2025, is the comparatively very strong economy that we saw in 2023 and 2024 finally appear on state and local government income statements and balance sheets. Making them feel a bit better about taking on new debt. But the feeling might not last if the economy takes a turn for the worse. Plus, a lot of municipal bonds need to be approved by voters. always a wild card. I'm Henry App for Marketplace.

22:11Not that it's necessarily any of my business, but when you sit down at home to watch something, — TV, a movie, YouTube, whatever— are you captions on or are you captions off? Turns out, and this is from a new poll from the Associated Press, 40 percent of adults in this country under the age of 44 always watch at home with captions on. And now, theaters are getting in on that trend. WPLN's Justin Barney went to the movies. In the parking lot of the Belcourt Theater in Nashville, Tennessee, I caught Amelia Van Howe, who loves watching all movies with captions. I feel like COVID was maybe the time that I started watching everything with captions, and I think that that was just because I was living in a perpetual couch state.

22:58Once she started watching Netflix with the captions on, she just never turned them off. Everyone I know watches with captions, and maybe this is because I'm a millennial, but why not have it in theaters as well? The executive director at the Belcourt, Stephanie Silverman, decided to run open caption screenings for the many people who need them. One in seven Americans have hearing loss and other challenges, and that's the community that we're really trying to make sure has easy, open, accessible screenings available to them. It's part of a growing accessibility movement in theaters across the country.

23:33In 2021, AMC, the country's biggest movie theater chain, added open caption screenings to 240 theaters across the country. Since then, they've increased that number. Regal, the second largest chain, added screenings too. And now small independents like the Bell Court are dedicating entire days to open caption screenings. Film critic and professor Walter Chow says that there's a reason that captions are showing up everywhere these days. It's streaming. And he pinpoints the change to AT &T's takeover of HBO in 2018. Before, there was a standard from the Golden Age of Broadcasting where the volume of a piece was always grounded on dialogue being the loudest noise.

24:19But AT &T changed the standard to ground the loudest sound in a movie. So all of a sudden, when you had a gunshot or an engine revving or a crash or an explosion, that became the upper register. So everything else was considerably quieter then. That is when so many people got in the habit of following along with the dialogue by reading the words on the screen. But Chow says that we kind of lose something by watching movies like this. I think maybe that is just making us a little bit lazy and beholden to a plot. I'm not sure every word is sacrosanct. I think you actually lose more by having subtitles on that are not necessary.

24:59This captions-on, captions-off debate is even playing out at open captions night at the Belcourt Theater. Trey Johnson and Holly Field, a couple in their early 20s, are about to watch one battle after another. So here's the thing. If it were just me in the theater, I would say no. Because I feel like it draws my eyes to the bottom of the screen. Standing in line for popcorn, they're a house divided. I wish I had subtitles in real life. I feel like I'm just prone to not paying attention if I'm not reading something, honestly. Soon, AI Transcription will make virtually every movie available for captions in the future.

25:40So, whether you want to, need to, or see it against your will, everyone will be able to read lines like this from one battle after another on the screen. Viva la revolution! In Nashville, I'm Justin Barney for Marketplace.