The former Walmart CEO warns that consumers could find themselves in a “world of pain” if Biden doesn’t act soon.

Massive layoffs are not just plaguing the big tech industry.

On Sunday, former Walmart CEO Bill Simon joined Fox & Friends Weekend to warn Americans about the detrimental impact corporate layoffs are having on the weak US economy.

“Now this is crazy. We are stuck in this loop of wage inflation, product inflation, and cost inflation. And the cycle just continues. And I think, unfortunately, that this is an inevitable by-product of some of the Fed’s actions and as a necessary remedy that we must take to somehow cool the situation and regain control of inflation during some of these upcoming layoffs,” Simon said co- host Will Kane.

While the labor market remains healthy and one of the few bright spots in the economy, there are signs that it is starting to soften. In addition to a string of high-profile layoffs in the tech industry over the past month, the economy added 223,000 jobs in December, the smallest gain in two years.

Federal Reserve officials said they expect unemployment to rise as a result of their aggressive campaign to raise interest rates. Updated forecasts from the central bank’s December meeting show that officials expect unemployment to rise to 4.6% by the end of this year, from the current level of 3.5%.


Bill Simon says this country is stuck in this loop of wage inflation, food inflation and cost inflation.
Bill Simon says this country is stuck in this loop of wage inflation, food inflation and cost inflation.
Corbis via Getty Images

Kane pointedly remarked that unemployment “has to happen” to effectively bring down inflation, prompting him to ask the former Walmart president if he thinks the layoffs will get the country “on track” to get the economy back on track.

“Theoretically, yes, I agree with you, Will. But the problem is that at the same time there is wage inflation. For example, last week Walmart announced it was raising the minimum wage, starting wage, to $14 an hour. That’s 17% more,” Simon replied.

“Over the past two years, food prices have risen by 23%. So now wages are up 17% at Walmart, 25% at Delta for pilots, 25% in the rail industry. And the wage increase sort of counteracts the layoffs that we’re starting to see. And there’s so much going on.”

The former Walmart president went on to highlight the unique challenge that the US immigration issue has placed on the workforce.


Bill Simon, CEO of Walmart US, speaks at a Walmart US employee meeting in Fayetteville, Arkansas on June 4, 2014.
Bill Simon, CEO of Walmart US, speaks at a Walmart US employee meeting in Fayetteville, Arkansas on June 4, 2014.
REUTERS

We need workers, but we need workers that we can hire and are legally in the country. What’s happening now is that you’re allowing people who can’t participate in the labor force but are increasing the demand. So you have increased demand, which has driven up prices without the labor force to service it. So, the hard factor. Certain inputs are trying to solve the problem of inflation, but you have opposing forces that spoil everything,” he said.

Simon also warned that consumers could find themselves in a “world of pain” if the Biden administration does not act on the country’s inflation problem soon.

“I think the most important thing that will happen on the 23rd is that we have to get inflation under control. Another year of high single-digit and low double-digit inflation and we will be in a world of misery because inflation is hurting 100% of the population,” Simon said.

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texasstandard.news contributed to this report.

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