Speaker 1: You're listening to the Bloomberg Opinion podcast counts Saturdays at
Speaker 1: one and seven pm Eastern on Bloomberg dot Com, the
Speaker 1: iHeartRadio app and the Bloomberg Business App, or listen on
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Speaker 2: Welcome to Bloomberg Opinion. I'm Amy Morris. This week we
Speaker 2: look at the impact of a judicial review of MiFi
Speaker 2: presstone the abortion pill. Can that ruling have an influence
Speaker 2: on the future of pharmaceutical research and development and what
Speaker 2: would it mean for medications currently on the market. Plus,
Speaker 2: we'll look at the softening labor market. You might think
Speaker 2: it'd be easier to hire more workers, but some companies
Speaker 2: will continue to have trouble until they start to consider
Speaker 2: how that hiring process is conducted. And as summer approaches,
Speaker 2: we'll look at the cost of a quickie getaway Dirt
Speaker 2: Cheap airfares are pretty much gone, especially in the UK
Speaker 2: and the EU. We're going to find out why. But
Speaker 2: first we begin with the FED. As we are seeing
Speaker 2: hints of disagreement bubbling up at the Federal Reserve of Late,
Speaker 2: policymakers are being pulled in different directions. Former Treasury Secretary
Speaker 2: Larry Summers has noticed it, and we talked with him
Speaker 2: about it on Bloomberg TV.
Speaker 3: I think we're still looking at a very hard to
Speaker 3: read economy. I don't see inflation as on a secure
Speaker 3: path down to the two percent target unless the economy
Speaker 3: turns turns over a bit. So I think the FED
Speaker 3: has very difficult choices ahead of it.
Speaker 2: Let's find out more now, Bloomberg Opinion columnist Jonathan Levin.
Speaker 2: Jonathan has worked as a Bloomberg journalist in Latin America
Speaker 2: and the US, covering finance, markets and m and A,
Speaker 2: and most recently, he has served as the company's Miami
Speaker 2: bureau chief. And he joins me, now, now, Jonathan, you
Speaker 2: say in your column on the Bloomberg Terminal, if you
Speaker 2: think the debate seems firing, now just wait until the
Speaker 2: third quarter. What's happening in the third quarter.
Speaker 4: Yeah, Well, a lot of people think that's when I'm
Speaker 4: potentially going to see the start of a recession in
Speaker 4: the United States. And what's particularly interesting about a lot
Speaker 4: of these calls is that a lot of people are
Speaker 4: saying it's going to be a quote unquote mild recession.
Speaker 4: So when you think about how monetary policy works and
Speaker 4: sort of rules of thumb of monetary policy. Everybody sort
Speaker 4: of knows what you're supposed to do when you have
Speaker 4: really hot inflation and a pretty strong economy.
Speaker 2: And everybody sort.
Speaker 4: Of knows what you're supposed to do when the economy
Speaker 4: is tanking and you're in a crisis. You just cut
Speaker 4: rates to the bottom, right, But what exactly are you
Speaker 4: supposed to do when inflation is still pretty sticky and
Speaker 4: you're in a quote unquote mild recession. And the way
Speaker 4: I sort of think about it is, you know, you're
Speaker 4: going to have some pain in the labor market, but
Speaker 4: perhaps the recession just isn't so deep as to extinguish
Speaker 4: that inflation that we're talking about. That, to me is
Speaker 4: a real recipe for policy squabbles over at the Federal Reserve.
Speaker 2: Now, when did we first start seeing some of the
Speaker 2: descent within the Fed?
Speaker 4: Yeah, I think it's been bubbling up more over the
Speaker 4: past few weeks. I think, you know, there there's no
Speaker 4: question it's not a coincidence that this coincide with with
Speaker 4: Austin Goulsby being a voter this year. You know, he
Speaker 4: came in for the Chicago Fed. He has a reputation
Speaker 4: as a Dove, and I think, you know, he also
Speaker 4: he feels he'sn't important and smart and influential economist, but
Speaker 4: he also seems to have this outsize influence because he's
Speaker 4: a very good public speaker. You know, he has this
Speaker 4: a lure to him. He's he's kind of funny, right,
Speaker 4: He tells dad jokes when he's out there talking about
Speaker 4: monetary policy, and I think that makes us listen to
Speaker 4: him a little bit more. And so in recent weeks,
Speaker 4: you know, we had a major speech from Austin, Austin
Speaker 4: Goulesby which sort of no surprise, came off as very
Speaker 4: very delviish. There was a big focus on the risks
Speaker 4: going forward, especially after the banking crisis that we've seen
Speaker 4: over the past month and change. And then you sort
Speaker 4: of hold that up against another speech, for instance, the
Speaker 4: one given by Governor Waller, where Governor Waller says, in
Speaker 4: no uncertain terms, look, there's still there's still some heat
Speaker 4: out there, and we've got a raise rates. He doesn't
Speaker 4: specifically say how much more, but his starting point is
Speaker 4: we've got a raise, and you could even go a
Speaker 4: little bit further. I didn't talk about Bullard in my
Speaker 4: column because of course he's not a voter this year,
Speaker 4: but he is at the far other side of the spectrum,
Speaker 4: and he's essentially talking about we probably need to go
Speaker 4: to something like five point seven five percent at the
Speaker 4: top end of the range. And Buller's rationale basically is
Speaker 4: he doesn't see the recession that everybody's talking about.
Speaker 2: All right, So then would this be a manifestation of
Speaker 2: the failure of Silicon Valley Bank and Signature Bank. You
Speaker 2: mentioned that this has sort of started a few weeks ago,
Speaker 2: and that would coincide with that event.
Speaker 4: I think a major reason why a lot of economists,
Speaker 4: including at the FED staff, started to write in a
Speaker 4: second half for session with a bit more certainty is
Speaker 4: because of what went down at Silicon Valley Bank and
Speaker 4: Signature Bank, right. And the thinking is that this is
Speaker 4: going to lead over the medium term to tighter credit
Speaker 4: conditions going forward, but it's going to take some time
Speaker 4: for it to really play out. So you know, when
Speaker 4: you think about the math of that, people think that
Speaker 4: that credit conditioning tightening actually substitutes for for FED hikes, right,
Speaker 4: And there's a great degree of discrepancy as to the
Speaker 4: extent of that effect.
Speaker 5: Right.
Speaker 4: Some people think it's negligible. Some people think it's twenty
Speaker 4: five basis points. Some people think it could be seventy
Speaker 4: five basis points. So to your point, Amy, that very
Speaker 4: much goes to the uncertainty around policy right now. You know,
Speaker 4: Bullard is saying we've got to go to five seventy five.
Speaker 4: But if you're the type of policy maker who thinks
Speaker 4: that what happened at Silicon Valley Bank just substituted for
Speaker 4: seventy five basis points of hikes, obviously you're going to
Speaker 4: be at the other end of that argument.
Speaker 2: Now, Jonathan, what's the big deal if there's a disagreement
Speaker 2: within the Fed? Why is that an issue? Why would
Speaker 2: that be something to be watching for and be concerned about.
Speaker 4: The big deal is that policy is essentially transmitted through
Speaker 4: rhetoric these days. Right ever since Bernanki came into the FED,
Speaker 4: you know, rhetoric and quote unquote transparency has been a
Speaker 4: big part of how the FED manages financial conditions, especially
Speaker 4: further out the curve. Right when we talk about the
Speaker 4: FED funds rate, that's really just policy makers controlling the
Speaker 4: short rate. But as we learned in the Great Financial Crisis,
Speaker 4: you can't wield a lot of influence unless you're also
Speaker 4: controlling those longer rates, especially like the ten year, which
Speaker 4: has a tremendous influence over what mortgage rates are, what
Speaker 4: auto loans are, what corporate borrowing costs are, and so forth.
Speaker 4: And so you need to convince the market that your
Speaker 4: policy is going to be a certain way two years
Speaker 4: from now, three years from now, five years from now.
Speaker 4: It's not enough just to convince the market of what
Speaker 4: your policy is going to be tomorrow or in three months.
Speaker 4: So when you have sort of all these different narratives
Speaker 4: spinning out there, you know, at on these financial television shows,
Speaker 4: or at these speeches that these FED governors love to
Speaker 4: give at universities and at their local economic clubs, it
Speaker 4: becomes problematic. It becomes dissonance. People lose the lose track
Speaker 4: of the narrative, and they no longer have a feeling
Speaker 4: of what the FED is thinking in terms of where
Speaker 4: we're going to be three years down the room.
Speaker 2: Is there a risk of too much transparency? Is that
Speaker 2: even such a thing?
Speaker 4: I think that there is a risk of too much cacophony,
Speaker 4: you know, you know, like we think about even how
Speaker 4: democracy works in our congress, right there are lots of
Speaker 4: different voices, but you want the parties to have a
Speaker 4: coordinated strategy. And I think it's essentially the same at
Speaker 4: the Fedsparency in and of itself is certainly a virtue
Speaker 4: and a democratic society, I think in the long in
Speaker 4: the long run, monetary policy has definitely benefited from this.
Speaker 4: You want accountability in an organization as powerful as the FED,
Speaker 4: but you also want coherence because transparency and messaging is
Speaker 4: not just about accountability. It is about it is about
Speaker 4: financial conditions at the end of the day as well.
Speaker 2: And having dissension within the FED or watching these disagreements
Speaker 2: bubble to the surface. Have we seen that before historically?
Speaker 2: Is this unusual?
Speaker 4: Well, I think the circumstances are unusual in the era
Speaker 4: of the modern transparent FED, because it's it's important to
Speaker 4: remember that this is such a new, such a new
Speaker 4: phenomenon in the United States. Right, Alan Greenspan famously said, uh,
Speaker 4: you know, since I've become central banker, I have learned
Speaker 4: to mumble with great incoherence. Right in the olden days,
Speaker 4: opacity was kind of part of the model, and it
Speaker 4: wasn't really until we saw Bernanke come in in two
Speaker 4: thousand and six that he really brought the values of
Speaker 4: transparency to the FED, and of course he used messaging
Speaker 4: and transparency as a major tool during the Great Financial Crisis.
Speaker 4: But we haven't lived through an environment quite like this
Speaker 4: with almost nineteen seventies like inflation in this modern transparency era.
Speaker 2: All right, Jonathan, thank you so much for taking the
Speaker 2: time with us. This was a really great discussion. I
Speaker 2: appreciate you taking the time.
Speaker 4: Thank you very much, Jamie.
Speaker 2: Bloomberg Opinion columnist Jonathan Levin, And coming up, we're all
Speaker 2: take a look at concerns within the medical research sector
Speaker 2: after a judicial ruling on mifiprestone. Could judicial review have
Speaker 2: a chilling effect on pharmaceutical research and development? You're listening
Speaker 2: to Bloomberg Opinion.
Speaker 1: You're listening to the Bloomberg Opinion podcast. Catch us Saturdays
Speaker 1: at one and seven pm Eastern on Bloomberg dot Com,
Speaker 1: the iHeartRadio app, and the Bloomberg Business App, or listen
Speaker 1: on demand wherever you get your podcasts.
Speaker 2: Hi, Amy Morris, and you're listening to Bloomberg Opinion. A
Speaker 2: judge in Texas ruled Miffa prestone should be removed from
Speaker 2: the market and while the Supreme Court briefly preserved the
Speaker 2: broad availability of the abortion pill, there are other issues
Speaker 2: to consider. Let's talk about it with Lisa Jarvis. Lisa
Speaker 2: is a Bloomberg opinion columnist covering biotech, healthcare, and the
Speaker 2: pharmaceutical industry. And Lisa, you have a column on the
Speaker 2: Bloomberg terminal and it looks at the different impacts of
Speaker 2: the Texas Court decision, not just the impact on a
Speaker 2: woman who may be looking for this pill.
Speaker 6: That's right, I think.
Speaker 7: While obviously a lot of people are concerned about the
Speaker 7: impact on abortion and on mif ofpristone access because that
Speaker 7: now represents up to fifty percent of abortions in the
Speaker 7: US right now, there could be much broader implications for
Speaker 7: the pharmaceutical industry. Inventing a new drug is a very
Speaker 7: expensive and timely process, and companies want certainty. And the
Speaker 7: way that the judge ruled in the Smith of pristone case,
Speaker 7: it essentially undermines the FDA's authority. The judge essentially said,
Speaker 7: I have gone through the data myself, and I have
Speaker 7: decided that your ruling was your decision on the drug
Speaker 7: was incorrect, and I'm going to remove it from the market.
Speaker 7: That's unprecedented and it's making the drug industry very nervous.
Speaker 2: So we're not just talking about the impact of not
Speaker 2: having the drug or the impact of the drug being
Speaker 2: on the market as far as women are concerned, but
Speaker 2: also the effect on the innovation within the pharmacy sector.
Speaker 2: Let's talk about that specifically. How much does it cost
Speaker 2: and how long does it take? Typically? I know every
Speaker 2: drug is going to be different, but typically to bring
Speaker 2: just a new drug to market.
Speaker 7: Typically it costs about one to two billion dollars on
Speaker 7: average to bring a new drug to market, and it
Speaker 7: takes ten years. That's just the clinical component. You know,
Speaker 7: that's not even counting the discovery stage when you're looking
Speaker 7: for the new drug. So you know, companies are looking
Speaker 7: for certainty in that process that when they get to
Speaker 7: the end, to the finish line, that the FDA approves
Speaker 7: the drug and they can sell it everywhere in the US.
Speaker 2: So companies that make that investment, we're talking billions of dollars,
Speaker 2: and when they make that investment, they assume that their
Speaker 2: drug will then be available because they're going to want
Speaker 2: to return on that investment.
Speaker 7: Right exactly, right, So right now you get a drug
Speaker 7: approved and that's you know, national approval. And we've seen
Speaker 7: in the past in one example of a state that
Speaker 7: tried to challenge a drug approval in a state that
Speaker 7: was in Massachusetts, and they tried to challenge the approval
Speaker 7: of an opioid drug that they didn't want to sell
Speaker 7: in their state, and the courts pushed back on that
Speaker 7: because they said, you know, the FDA's authority preempts your
Speaker 7: state authority. And so seeing you know that the FDA
Speaker 7: has generally had a lot of leeway in terms of
Speaker 7: their you know, decision making and the authority given to
Speaker 7: them around their decisions.
Speaker 2: So could this have a chilling effect then on the
Speaker 2: development of new drugs? I mean, is that where this
Speaker 2: could be going.
Speaker 7: I think that's really a concern, a valid concern, you know.
Speaker 7: I think the first more immediate thing to worry about
Speaker 7: is drugs that are already approved, because the way that
Speaker 7: this ruling was worded, it could be sort of a
Speaker 7: roadmap for how to take other drugs off of the market.
Speaker 7: We see a lot of areas of science right now
Speaker 7: politicized HPV vaccines prep, which is the medicine that you
Speaker 7: take to prevent HIV covid, vaccines, birth control. There's sort
Speaker 7: of a short list you can imagine, and then when
Speaker 7: you sort of extend that out to innovation, you think about, well,
Speaker 7: a company is only going to invest the money to
Speaker 7: invent a new drug if they think they can sell it,
Speaker 7: So you can imagine that immediately these areas that already
Speaker 7: are kind of being politicized might be places they wouldn't
Speaker 7: want to put their R and D dollars. And then
Speaker 7: if this roadmap is very broad, you know, there could
Speaker 7: be anyone who decides to challenge anything. I think people
Speaker 7: aren't assuming that everything is up for grabs and there's
Speaker 7: no reason. But at the same time, I do think
Speaker 7: there's plenty of areas that could legitimately, legitimately be you know, harmed.
Speaker 2: Well, I want to talk about that too, the stifling
Speaker 2: of innovation, judicial review, and questioning of other drugs that
Speaker 2: already exist. You mentioned yourself how science is already becoming
Speaker 2: a polarizing, politicized thing. Science and certain drugs. Clearly, we
Speaker 2: all lived through covid and should we vexxed should we not?
Speaker 2: We've all seen that already be politicized. Can you politicize
Speaker 2: just about any drug out there.
Speaker 6: I mean, it seems possible.
Speaker 7: You know, I think we heard from HHS Secretary, you know,
Speaker 7: Javier Basara mentioned a few drugs that he thought could
Speaker 7: be at risk.
Speaker 6: One of those was Alzheimer's drugs.
Speaker 7: Because they were their approval was controversial, and they're very expensive.
Speaker 7: So you know, one could pull any number of, you know,
Speaker 7: reasons to challenge the approval of a drug if you're
Speaker 7: the right person and you pick the right judge. I
Speaker 7: think that's the key here, is that you know, you
Speaker 7: would have to pick the right judge who has decided
Speaker 7: that they can undermine the FDA's authority.
Speaker 2: Okay, well, let's talk about that for a minute. The
Speaker 2: undermining of the authority of the FDA. Was this an
Speaker 2: undermining of their authority? Is their reputation somehow damaged by this?
Speaker 7: Well, I would say that the reputation is not necessarily
Speaker 7: damaged unless you're someone who probably walked in not respecting
Speaker 7: the FDA's authority.
Speaker 2: I already had that leaning.
Speaker 7: Exactly, But I do think that it undermines their authority
Speaker 7: significantly if it stands, Because you know, we typically considered
Speaker 7: the agency to have a lot of discretion and their
Speaker 7: authority over the safety and efficacy of our drugs. There's
Speaker 7: a good reason for that. You know, there was a
Speaker 7: time where we didn't have an FDA. You know, we
Speaker 7: weren't assured as consumers that their drugs were taking were
Speaker 7: safe and that they worked. You know, we look to
Speaker 7: the agency for that. I'm happy that when I, you know,
Speaker 7: take a prescription, I know that someone has made sure
Speaker 7: that I'm not going to die from it or have
Speaker 7: side effects, and that it's.
Speaker 6: Going to help me.
Speaker 7: And so I think, you know, the broadness of this
Speaker 7: decision and this idea that the FDA had reviewed the data,
Speaker 7: and that a judge could look at just components of
Speaker 7: the data, not even the full data set, and say, well,
Speaker 7: I know better, that's alarming.
Speaker 2: I think that would put a chilling effect not just
Speaker 2: on the innovation that we talked about, but also on
Speaker 2: what the FDA decides to do. Like it might I
Speaker 2: don't want to say paralyze them, but it might definitely
Speaker 2: slow down the process, which is not a fast process
Speaker 2: to begin with. Do you follow me?
Speaker 6: No?
Speaker 3: No.
Speaker 7: In fact, one of the things that's been pointed out
Speaker 7: that we haven't talked about is the FDA does have
Speaker 7: authority to withdraw a drug from the market, and that's
Speaker 7: a very slow process. It's been criticized for how slow
Speaker 7: it is, but there are you know, really avenues in
Speaker 7: place to take a drug off the market if it
Speaker 7: truly is not safe or effective. And this judge has
Speaker 7: sort of come in to say like, well, I've decided this.
Speaker 7: You know, we're not going to go through this process
Speaker 7: that FDA would normally go through, where it's very public, transparent,
Speaker 7: people have an opportunity to weigh in on the importance
Speaker 7: of the drug in the market place. Patients can win instead,
Speaker 7: you know, this is what's happening. So I do feel
Speaker 7: like it has a chilling effect, and it does, you
Speaker 7: know sort of as a consumer, I worry about what
Speaker 7: that means, you know, for people's attitudes about the safety
Speaker 7: of their drugs.
Speaker 2: I would think as a consumer, as a stockholder, uh,
Speaker 2: members of you know, people who work in big pharma,
Speaker 2: independent medical research, all of those would be impacted by
Speaker 2: a judge stepping up and going.
Speaker 7: No, oh, definitely, And we are finally starting to see
Speaker 7: pharma come off the sidelines.
Speaker 6: I mean it's taken a while. Obviously.
Speaker 7: When Roe was overturned last summer, you know, there were
Speaker 7: concerns from the outset about some of these lawsuits that
Speaker 7: could emerge to challenge the status of mifipristone, and they
Speaker 7: did finally file a group of companies and Bio, which
Speaker 7: is one of the industry you know, sort of lobbying organizations,
Speaker 7: filed an amicus brief last week pointing out all of
Speaker 7: these things that this is really undermining the authority and
Speaker 7: you know, expertise, signed typic expertise that we all rely
Speaker 7: on as consumers, as investors, as inventors.
Speaker 2: Lisa Jarvis is a Bloomberg Opinion columnist covering biotech, healthcare,
Speaker 2: and the pharmaceutical industry. And now stay with us. Coming up,
Speaker 2: we're going to take a look at the softening labor market.
Speaker 2: Will that make it easier for you to hire new employees?
Speaker 2: It turns out there are more complications you'll have to consider.
Speaker 2: And don't forget. We're available as a podcast on Apple,
Speaker 2: Spotify or your favorite podcast platform. This is Bloomberg Opinion.
Speaker 1: You're listening to the Bloomberg Opinion podcast Countess Saturdays at
Speaker 1: one and seven pm Eastern on Bloomberg dot Com, the
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Speaker 2: This is Bloomberg Opinion. I Maymy Morris. Executives have been
Speaker 2: looking forward to a softening labor market when labor terry
Speaker 2: Gina Raimondo delivered the news.
Speaker 5: This is an excellent jobs report. You're seeing record low
Speaker 5: black unemployment. You're seeing record low unemployment among people who
Speaker 5: have been left behind. And the best news for me
Speaker 5: is higher percentage of people working in the workforce.
Speaker 2: And while executives have been waiting for some relief, they
Speaker 2: might be in for an unwelcome surprise. Now you might
Speaker 2: think it would be easier to hire people, but not necessarily.
Speaker 2: And a survey released April fourth by the Conference Board,
Speaker 2: fifty seven percent of chief executives said they were having
Speaker 2: problems attracting qualified workers. And while that number has declined
Speaker 2: from the final quarter of twenty twenty two, it still
Speaker 2: means that more than half of companies are finding it
Speaker 2: hard to hire. So why is this so hard? We
Speaker 2: turned to Bloomberg Opinion editor Sarah Green Carmichael for some insight. Now, Sarah,
Speaker 2: we usually see fingers of blame pointed at the economy
Speaker 2: or the workers themselves for creating a tight job market.
Speaker 2: What else is going on here?
Speaker 8: Yes, I think that companies actually need to look a
Speaker 8: little bit at themselves in the mirror. Bad hiring practices
Speaker 8: are also contributing to the problem. Part of it is
Speaker 8: that companies are potentially doing too much outside hiring right
Speaker 8: now rather than promoting from within and compounding the problem.
Speaker 8: And really the heart of the problem is that job interviews,
Speaker 8: hiring processes, vetting processes just take too long and are
Speaker 8: too involved. So it's hard to hire because companies have
Speaker 8: made it hard to hire.
Speaker 2: Yeah, you say in your piece that companies just simply
Speaker 2: don't hire. Well, is that what you mean? That they
Speaker 2: just take too long and they give you too many
Speaker 2: hoops of fire to jump through.
Speaker 8: Yeah, I'll give you an example of something that I
Speaker 8: think companies get wrong, right at the start with the
Speaker 8: job description. It's natural if you're bringing someone on board
Speaker 8: to start out with a wish list of forty two
Speaker 8: different attributes of what you want in a candidate.
Speaker 6: But that's not realistic to find in one person.
Speaker 8: The less companies will often insist that no someone has
Speaker 8: to be able to hit the ground running and do
Speaker 8: the job on day one, and they really need all
Speaker 8: these qualifications, but they actually don't have the budget to
Speaker 8: pay for someone with all of those qualifications, so qualified
Speaker 8: candidates are turning them down or not applying for that job.
Speaker 6: They're looking for other jobs. So right from the outset,
Speaker 6: companies have sort of hamstrung their effort to hire people,
Speaker 6: and then they make it worse by having people you
Speaker 6: know interview with dozens of internal you know people, not
Speaker 6: just HR or the hiring manager, but colleagues. It's sort
Speaker 6: of three sixty process that could drag on for months.
Speaker 6: Or they ask people to complete sample projects that not
Speaker 6: only are difficult for candidates to complete, but also take
Speaker 6: a huge amount of time for the hiring manager to review.
Speaker 6: So by sort of loading up the process at every
Speaker 6: phase of the way, they really are making it incredibly
Speaker 6: burdensome to apply for a job, but also for them
Speaker 6: to vet the people who've applied for the job.
Speaker 2: But you do still want strict vetting, right, You do
Speaker 2: want the best person for the job. You don't just
Speaker 2: want to grab the first guy who walks through the door.
Speaker 8: You don't want to grab the first person who walks
Speaker 8: through the door unless that person's really good, in which
Speaker 8: case you're done. But I think that sometimes companies get
Speaker 8: a little bit out over their ski tips with this
Speaker 8: phrase the best person for the job. Most companies are
Speaker 8: not actually rank ordering the millions of people on the
Speaker 8: planet and finding the one best person for the job.
Speaker 8: You know, they're looking through their networks. They're hoping someone
Speaker 8: will apply. They're hiring recruiters to help them. It's a
Speaker 8: bit random, and they're looking for someone who can do
Speaker 8: the job and do it well at the price they
Speaker 8: can afford to pay. The very best person for the
Speaker 8: job probably will have a better offer that pays more, so,
Speaker 8: you know, it's a little bit of a judgment call.
Speaker 6: It's a little bit of.
Speaker 8: A dance they have to do to say, you know,
Speaker 8: here's what we can afford, and here's the kind of
Speaker 8: person we'd like to hire. And I think that more
Speaker 8: companies should probably be a bit more realistic about what
Speaker 8: are the core skills this job really needs and what
Speaker 8: can we actually teach someone that they could learn in
Speaker 8: the first two three six months on the job that
Speaker 8: would actually then make them great once we onboard them properly.
Speaker 2: Let's look at another angle that you mentioned in your column.
Speaker 2: Just full disclosure, I'm a gen Xer and I remember
Speaker 2: right out of college in the nineties we had the
Speaker 2: whole you're lucky to be here attitude. We got that
Speaker 2: a lot. It was really prevalent. Is that still the
Speaker 2: message that companies send? Have they gotten away from that?
Speaker 8: I think that, you know, there are definitely times when
Speaker 8: companies have realized that that you're lucky to be here.
Speaker 6: Is not a strong selling point.
Speaker 8: I think the last couple of years companies really did
Speaker 8: take maybe a more we're lucky to have you approach
Speaker 8: when the labor worket was really tight. But I think
Speaker 8: companies have gotten a little fed up with that, and
Speaker 8: I do sense that this sort of you're lucky to
Speaker 8: work at our wonderful company is still very much the
Speaker 8: dominant attitude.
Speaker 6: So I think that it's something where.
Speaker 8: You know, I'm glad that I guess executives feel so
Speaker 8: good about their companies, like Morales high More, that's great,
Speaker 8: but it's a little bit I think maybe of a sense.
Speaker 8: I think there needs to be maybe a bit more
Speaker 8: realism that talented people always have options, and what you're
Speaker 8: really looking for is a match where like, yes, someone
Speaker 8: feels lucky to have that job, but also you should
Speaker 8: feel lucky to have them.
Speaker 6: You really wanted to be felt on both sides.
Speaker 2: So, Sarah, you also suggest that executives should look at
Speaker 2: the application process from the prospective employee's point of view.
Speaker 2: How would they do that?
Speaker 6: Yeah, So there was a great example of this recently
Speaker 6: where the CEO and other top executives at Uber had
Speaker 6: decided that actually it was too difficult to bring on
Speaker 6: new drivers, so they actually started driving for Uber themselves
Speaker 6: to find out what some of the pain points were.
Speaker 6: Probably most CEOs cannot go through their own hiring process,
Speaker 6: but there are other ways to kind of get that information.
Speaker 6: So you might interview candidates who've dropped out of the
Speaker 6: process or withdrawn. You could keep some data, for example,
Speaker 6: on how many people start the process but don't finish,
Speaker 6: or how many offers you've made that have been declined,
Speaker 6: how long has the job been open.
Speaker 8: You know, if you've had a job open for six months,
Speaker 8: you really might need to rethink it. So there are
Speaker 8: other ways short of going through the process yourself, that
Speaker 8: you could put yourself in candidates shoes and.
Speaker 2: Can I just add as part of the application process,
Speaker 2: when you as a company decide to go a different
Speaker 2: direction and not hire someone who has jumped through all
Speaker 2: the hoops, do them the courtesy of letting them know.
Speaker 2: I happen to know that a lot of times they
Speaker 2: just ghost them. That's not cool.
Speaker 6: One hundred percent agree with you.
Speaker 8: One of the things that I found very frustrating over
Speaker 8: the last few months is I keep seeing headlines in
Speaker 8: different newspapers and websites about applicants who ghost the employer
Speaker 8: and don't show up for the job or don't show
Speaker 8: up for the interview. But the stories that I hear
Speaker 8: from people in mind my network are much more of
Speaker 8: the reverse. You know, someone who has taken the time
Speaker 8: to go through the application process, do a bunch of interviews, and.
Speaker 6: Then they just don't hear back.
Speaker 8: I mean that sens a terrible message about your company
Speaker 8: and what you value. And hopefully, if you don't hire someone,
Speaker 8: you still would want them potentially as a customer or
Speaker 8: a client or maybe a future hire. So it's really
Speaker 8: important to put your best foot forward.
Speaker 2: Right to keep those relationships strong. So, Sarah, let me
Speaker 2: ask you, how are you going to turn this ship around?
Speaker 2: I'm not you specifically, but how does the ship turn around?
Speaker 2: Because you were talking about an enormous part of the economy, right,
Speaker 2: people who hire, I mean that's everybody, and you've got
Speaker 2: to sort of get the message to them that maybe
Speaker 2: they needed to look at their hiring practices.
Speaker 3: How do you do that?
Speaker 8: Yeah, I think one is keeping that data on how
Speaker 8: the process is going, how long it's taking, and also
Speaker 8: looking at what happens after you've hired someone. Was the
Speaker 8: herculean effort worth it? Did the person you hire do
Speaker 8: well in the job. So one is just paying attention
Speaker 8: to that data. I think another one is doing that
Speaker 8: gut check at the beginning of what does this job
Speaker 8: really entail?
Speaker 6: Let's be realistic.
Speaker 8: Another is maybe expecting to do some hiring when you
Speaker 8: hire some sorry, expecting to do some onboarding and training
Speaker 8: when you hire someone from outside. But I do think
Speaker 8: that one way companies could make this much easier on
Speaker 8: themselves is if they put more effort into hiring and
Speaker 8: promoting from within. One of the experts I talked to
Speaker 8: for this column, Peter Capelli, who's a professor at the
Speaker 8: Wharton School, said that, you know, decades ago, most companies
Speaker 8: were hiring five to ten percent of people from outside
Speaker 8: the organization, and that was mostly entry level jobs. So
Speaker 8: they got very good at saying, Okay, this is what
Speaker 8: we need in an entry level candidate. Now it's eighty percent,
Speaker 8: eighty percent of jobs are being filled from outside the organization.
Speaker 8: So it's a huge burden on HR departments, it's a
Speaker 8: huge burden on hiring managers, and you end up hiring
Speaker 8: people who do take a long time to settle into
Speaker 8: their new roles. You know, most us learn when we
Speaker 8: stay with a company and advance in that company. The
Speaker 8: transferable skills like they're transferable, but there's always a longer
Speaker 8: OnRamp period than you think when you switch companies. So
Speaker 8: I think hiring more people internally and then paying a
Speaker 8: little bit more attention to the process, and then having
Speaker 8: a whole process take less time. We'll just make companies
Speaker 8: suffer less as they try to hire people.
Speaker 2: That's really great advice, Sarah. Thank you so much for
Speaker 2: taking the time with us.
Speaker 6: Thank you so much for having me.
Speaker 2: You're listening to Bloomberg opinion, I, Mammy Morris, Absurdly cheap
Speaker 2: short haul flights in Europe are coming to an end,
Speaker 2: and if you would hope to save some money on
Speaker 2: the cost of a last minute quick getaway, that's not happening.
Speaker 2: We'll look at this new reality for flights with Bloomberg
Speaker 2: opinion columnist Lara Williams. Lara also covers climate change for
Speaker 2: Bloomberg and she joins us now. Laura, first of all,
Speaker 2: thank you for taking the time with us. Tell us
Speaker 2: about how the cost of a quick getaway just got
Speaker 2: so much more expensive.
Speaker 9: Flights this summer all over the world have become more so.
Speaker 9: From if you're looking at flights from the UK where
Speaker 9: I live, to Europe, where I often like to go,
Speaker 9: they're about a third higher than they were last summer.
Speaker 9: And that's due to a combination of I think high
Speaker 9: demands because everyone's going back to traveling after several years
Speaker 9: of pandemic, and also the rising across of aviation fuel.
Speaker 2: How is climate change impacting this? That's part of your wheelhouse.
Speaker 2: You can find the connection between these two.
Speaker 9: This is a long term trend. Unfortunately, specifically the ways
Speaker 9: that we're trying to mitigate climate change, which obviously really important,
Speaker 9: it's vital, it's going to mean that we're going to
Speaker 9: have higher flight prices going forward. That's because of two reasons.
Speaker 9: So the number one is that climate compliance rules are changing,
Speaker 9: so aviation in the EU, UK and Switzerland they're subject
Speaker 9: to emissions trading STEAM, so that means that airlines have
Speaker 9: to pay for every turn of carbon dioxide emitted on
Speaker 9: flights within the year Upean area. At the moment, half
Speaker 9: of those allowances are given for free, but as of
Speaker 9: twenty twenty six, airlines are going to be liable for
Speaker 9: one hundred percent of those emissions. So that means that
Speaker 9: carbon costs are going to double and then even beyond that.
Speaker 9: So by twenty fifty European airlines have pledged to try
Speaker 9: and reach net zero and so that's going to happen
Speaker 9: through research and development. They're going to switch to sustainable
Speaker 9: aviation fuel, they don't have to make some investments in
Speaker 9: improving operational efficiency things like that, And a new report
Speaker 9: has put the cost of that at eight hundred and
Speaker 9: twenty billion euros on top of what they'll already have
Speaker 9: to pay for, which is huge. So for those two reasons,
Speaker 9: aviation is going to adapt really expensive.
Speaker 2: Now we're specifically talking about the European Union here. Is
Speaker 2: this happening anywhere else or do you anticipate ripple effects
Speaker 2: throughout the system.
Speaker 9: For now, it's just airlines in the EU the UK
Speaker 9: that have sort of like raised the alarm, like waving
Speaker 9: the flag. But I'd expect similar pressures to be put
Speaker 9: on airlines all over the world because everyone's going to
Speaker 9: have to make the switch to you know, climate compliance
Speaker 9: and not polluting.
Speaker 2: You had mentioned earlier in the interview about how so
Speaker 2: many people are looking to book airlines and to get
Speaker 2: those quick getaways booked in. But it seems like if
Speaker 2: so many more people are doing this and then then
Speaker 2: maybe the airlines could sort of absorb some of this
Speaker 2: cost because they have so many people who are looking
Speaker 2: to fly. But it's not working out that.
Speaker 9: Way unfortunately, not so at the moment, the profit margins
Speaker 9: are really really low. It's a really competitive industry, so
Speaker 9: they've had to keep their ticket prices low. I think
Speaker 9: there's one analyst said if airlines to charge more for tickets,
Speaker 9: they would already be doing that. And when you look
Speaker 9: at the carbon the changes in the carbon market alone,
Speaker 9: that is going to reduce earnings by about seventy seven
Speaker 9: percent across Europe's six largest points point airlines, So you
Speaker 9: can imagine what that looks like for the whole for
Speaker 9: every airline. You know, it's going to reduce operate like
Speaker 9: profit margins by a lot, and then then you add
Speaker 9: in all the other extra investments that they're don't have
Speaker 9: some h and the only option is to raise ticket prices.
Speaker 2: And perhaps fewer flights.
Speaker 9: Yeah, exactly, So they might not even have a choice
Speaker 9: because any increase in ticket prices aren't a result in
Speaker 9: some demand de strutch. And you know people are already
Speaker 9: stretched kind of pay for food and heating their homes,
Speaker 9: so you know, when the holiday becomes that much more expensive,
Speaker 9: that's going to be like one of the first things
Speaker 9: to do. I think.
Speaker 2: Laura Williams is a Bloomberg Opinion columnist. She covers climate
Speaker 2: change and that does it for this week's Bloomberg Opinion.
Speaker 2: We are produced by Eric Mallow, and you can find
Speaker 2: all of these columns on the Bloomberg Terminal. We're available
Speaker 2: as a podcast on Apple, Spotify or your favorite podcast platform.
Speaker 2: Stay with us today's top stories and global business headlines
Speaker 2: coming up. I'm Amy Morris. This is Bloomberg