Who's got the pricing power?

Overview

This episode explores the economic dynamics of pricing power amid persistent inflation, the implications of changes to the H-1B visa program, cautious behavior among home sellers, challenges in passing the new farm bill, and efforts to address the manufacturing labor shortage by engaging younger workers.

Notable Quotes

- Not having those workers in this country means that we miss out on kind of the technological advantages that those workers bring. – Sabri Benishor, on the impact of H-1B visa restrictions.

- Trying to control the export of math is really hard. It's like trying to nail Jell-O to the wall. – Stephen Weber, on regulating algorithms as restricted technology.

- Over the last 30 years, manufacturing was seen as a second-class job. But that is starting to change. – Peter Hancock, on the evolving perception of manufacturing careers.

💼 H-1B Visa Fee Changes and Economic Impact

- The Trump administration proposed a $100,000 fee for companies hiring foreign workers through the H-1B visa program, aiming to boost American employment and wages.

- Sabri Benishor highlighted research showing that restricting H-1B visas could slow productivity, shrink firms, and harm startups, particularly in tech.

- Britta Glennon noted that companies unable to hire foreign workers often shift jobs overseas rather than hiring more Americans.

- Concerns were raised about the lottery system being exploited by firms seeking lower-paid IT workers, potentially sidelining highly skilled applicants like AI PhDs.

📈 Inflation and Pricing Power

- Persistent inflation has allowed businesses to raise prices without losing customers, particularly those catering to wealthier demographics.

- Joellen Deepak Akibbo, a coffee shop owner, shared how she adjusted prices based on rising costs and customer tolerance.

- George Perks explained that pricing power is strongest among businesses serving asset-owning households, while those targeting lower-income consumers face challenges.

- Examples included luxury home staging businesses thriving with price hikes, contrasted with preschools struggling to maintain enrollment due to economic pressures.

🏠 Housing Market Trends

- Mortgage rates have declined slightly, but home sellers are pulling back due to shifting market dynamics.

- Elizabeth Trovall reported that sellers are holding out for higher prices or delaying sales, contributing to tight housing supply.

- Real estate agents noted that sellers with paid-off homes or lower-rate mortgages are less motivated to sell quickly, further complicating inventory issues.

🌾 Farm Bill Challenges

- The farm bill, which funds nutrition programs and farm subsidies, faces delays and political hurdles.

- Daniel Sumner emphasized that most of the bill’s funding goes to non-farm-related programs like SNAP.

- Congressional Republicans have pushed for crop insurance and commodity price floors while cutting SNAP funding, reducing bipartisan cooperation.

- Experts warned that rebuilding coalitions to pass future farm bills could take years.

🔧 Manufacturing Labor Shortage Solutions

- Manufacturing companies are addressing labor shortages by recruiting high school students through apprenticeship programs.

- Genesis Gomez and Andrew Sutliffe, young apprentices, shared their enthusiasm for hands-on work and the opportunity to earn competitive wages.

- Sean Grubb and Peter Hancock discussed efforts to improve the industry’s image and attract younger workers, noting the shift from outdated perceptions to modern, tech-driven roles.

- Colorado has expanded manufacturing programs in high schools, with partnerships between schools and industry helping to fill the skills gap.