Women with young children have hit their stride in America's workforce. The ability to work remotely has given these women the flexibility to make money while raising children.

 

A new report in June 2023 by the Hamilton Project at the Brookings Institution indicated that prime-age women (ages 25 through 54) had a labor force participation rate of 77.8 percent.

 

What was even more surprising was that women whose youngest child is under the age of 5 are the main locomotive behind this upward trend. Prepandemic, this group's participation in the workforce peaked at 68.9 percent but has now jumped to 70.4 percent. No other category of women has surpassed their prepandemic level thus far.

 

This is a far cry from the predicament women faced during the pandemic-induced shutdown of schools and the inability to find day-care services. At that time, working women were forced to choose between taking care of the kids or employment. Those who tried to do both, like my daughter, were under enormous pressure on both ends.

 

How bad did it get? In 2020, about 113 million women aged 25-54 with partners and small children were out of the workforce, according to the International Labor Federation. In that year, more than 2 million mothers left the labor force. That compares to 13 million males out of work.

 

Two factors conspired to get these women back in the workforce. The supply/demand imbalance of workers in the U.S. has resulted in the present-day historically tight labor market. Possibly even more important was the introduction of remote work. More research needs to be done, but one idea is that women who were highly educated and allowed more flexibility to work remotely rejoined the labor force. For those like my daughter who works in a high-level, high-demand management job in the retail sector, adding remote flexibility allowed her to retain her stressful job and care for her 8- and 11-year-old children.

 

The ability to tend to a child's needs, whether to pick up or drop off from school, make a doctor's appointment during work hours, or handle playdates during the summer allows mothers to juggle both jobs. If that is not possible, many moms are forced to throw in the towel on jobs like my daughter's and either quit or go part time. 

 

There does seem to be a cut-off point where women with very young children remain less likely to work than women with older kids or no kids. Normally, childbirth is when a woman's career path changes in the U.S., which impacts the rest of their economic life. It usually limits income, job selection, promotions, and fringe benefits.

 

For decades, women advocates have lobbied for more flexibility in the workplace that would allow women with children to remain in the workforce. COVID-19 and the subsequent remote work policies could have major implications for women and their future ability to hold careers and all that comes with it.

 

But there are still bumps in the road for working women. Indeed, the job search company, surveyed more than 1,000 stay-at-home moms, who re-entered the workforce only to find a good deal of bias in their job search. About 73 percent reported some bias due to the employment gap on their resumes. Many found difficulty in obtaining a flexible position.

 

Unfortunately, as the risk of contagion recedes, an increasing number of employers (mostly males) are clamping down on remote work. Many large companies are insisting on at least three days in the office per week. Employees are pushing back, but if the labor market weakens, workers may not have the leverage to resist the curtailment of remote work, at least for now. Longer-term, however, the aging of American workers should mean that labor shortages will continue and with it, remote work. That would be a big plus for women.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Decades after the first lunar landing, the space race has come back into vogue. Driving the competition is the potential value of the moon's economic, scientific, and even geopolitical promise.

 

Dominance in space, while I was growing up, was something confined to comic books and sci-fi movies. In 1969 that changed. Three astronauts from the U.S. made "one giant leap for mankind" by walking on the Moon. As a high school student, I marveled that Mars would be next, but space exploration quickly took a back seat to other issues like Vietnam, Civil Rights, and the arms race.

 

Fifty-four years later, space is back, and it is now a real proposition. Countries like China, Japan, India, Russia, and the U.S. are looking to stake claims in this new extraterrestrial frontier. 

 

The current thinking is that the moon is a great place to test out the technology needed to further explore the universe. In addition, those that can establish a presence, and mine for water and other resources, will have the necessary ingredients to travel deeper into space to destinations such as Mars. In short, the Moon is the most obvious place to jump off into infinity and beyond for the winners.

 

NASA's launch of the un-crewed Artemis 1 last year was the opening shot in a long-range plan to send people to the lunar surface by 2025 and, in time, establish a sustained lunar presence. Other nations have a similar mindset and are not far behind the U.S.

 

Much of the world's attention has switched to a specific area of the Moon after researchers discovered water on the Moon in 2008-2009. The existence of water is key to sustaining human life on the surface and it appears that the South Pole of the Moon contains quite a bit of it.

 

Russia, which made history in 1966, when the Soviet Union's Luna-9 touched down on the Moon's surface, has been racing against India to be the first to land in that area. However, their Luna-25 vehicle crashed into the lunar surface earlier this month. That allowed India's Chandrayaan-3 vehicle to touch down a few days later. India became the first nation to reach the moon's South Pole.

 

For India and its people, it was the crowning achievement in becoming a new power in space. It had already succeeded in sending its landers to the lunar surface and deploying a space station. India now joins the U.S., China, and Russia as the only nations that have succeeded in accomplishing a controlled landing on the Moon. Many have tried over the years without success, most notably both Israel and Japan.

 

But giving up is not an option in the race for the moon's economy. Several nations, as well as private companies, have plans to explore the lunar surface. Japan's Aerospace Exploration Agency, for example, is launching a craft in a few weeks. Private companies such as Ispace and Astrobotic are also planning to send missions to the lunar surface with the intent of delivering cargo for governments. Altogether, there are more than 22 companies that have set their sights on the Moon.

 

Private companies are expecting this new space race, fueled by government competitors, will be a fertile field for future profits. Communication, defense, and data requirements are accounting for the largest share of private sector purchases right now. Entrepreneurs hope that products and services unique to the moon will soon follow.

 

In the case of NASA, supporting private industry is now part of their space program. Buying services from the private sector to support Earth orbit programs are already in place. Eventually, other business lines that could include transportation, water extraction, mining, and construction are contemplated. The fact that Boeing and Northrop Grumman (among others) built the Space Launch System rocket lends credence to these beliefs. In addition, several private companies are already working on spacesuits and Moon landers.

 

Critics worry that private companies may be putting the cart before the horse in investing in a new space industry at this early stage. Planning for the economic exploitation of the moon might happen, they argue, but it could be years away. 

 

Spending billions now to develop the technology that would enable the delivery of payloads to the moon, with no sure customer, or even a human presence on the lunar surface is risky at best. But risk has always been the price for innovation, for breakthroughs, and for building a better future. Governments are betting that space and the exploitation of the moon could spark new industries, more economic growth, and plenty of new jobs, so it is worth the risk. 

 

As for me, it's simple. I'm in for the long haul. If you have doubts, you only need to ask what would Buzz Lightyear do?

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Henry Ford must be rolling over in his grave. His vision of making an automobile that would be accessible to all Americans was embraced by the car industry for decades. That era has come to an end.

 

The demise of the reasonably-priced auto is happening before our eyes. The last car with an average price of less than $20,000, the Mitsubishi Mirage, a compact, is being discontinued. It joins models such as the Honda Fit, Chevrolet Spark, and Volkswagen Beetle in the graveyard of small, affordable cars.

 

Over the last few years, Americans for the most part have forsaken "small" for "big" vehicles like the SUV, pickups, and crossovers. For every Mirage sale in the second quarter of 2023, Ford sold 108 F-series pickups. The big auto companies claim that the U.S. consumer is not interested in buying small cars anymore. That may be true, but the reality is that fewer consumers than ever can afford to shell out $48,000 to $50,000 on average for a new vehicle.

 

Many blame the COVID-19 pandemic for the death knoll of affordable autos. At that time, used and new car prices spiked higher as global supply change shortages disrupted production. The microchip area was especially hard. The scarcity of chips forced car makers to ration, reserving this precious commodity for their most profitable, high-end autos. Supply of vehicles overall fell, while consumer demand throughout the country continued to increase. This led to an inflationary spiral in vehicle prices.

 

As in many other areas of the economy, there is a wide disparity between the haves and have-nots in this country. The ability to purchase an auto has suddenly become a luxury problem. This year, for example, the bottom 20 percent of workers reduced their purchases of new cars to its lowest level in more than a decade, according to the most recent Consumer Expenditure Survey, while the top 20 percent of earners spent more on new cars than any time since 1984.

 

Adding insult to injury is the rise in interest rates that have pushed car loans into the stratosphere. The number of motorists paying more than $1,000 per month for a new car loan is almost 16 percent, which is a record. The average monthly payment, according to Edmunds.com, is well over $700 per month. That means if you took out a car loan at 4 percent a few years ago for a $40,000 car, and now must pay 8 percent in interest over five years, for a similarly priced car that would add $4,463 to the total cost of the vehicle.

 

Most of us believed that once the pandemic was over, car prices would return to normal instead, manufacturers continued to raise prices. Why, you might ask, have auto manufacturers forsaken Ford's goal of building "a motor car that the everyday American could afford?"

 

The truth is simple. After the pandemic, car manufacturers realized that selling fewer vehicles at higher prices was good for both sales and profits. Last year, for example, only 13.9 million units were sold in the U.S. (versus 17 million in 2019), but sales were $15 billion higher.

 

Electric vehicles are also to blame. The industry is in a do-or-die moment as consumers demand companies offer an increasing array of electric vehicle alternatives, while governments offer generous subsidies to manufacturers. This has led to a massive investment drain to the tune of billions of dollars to overhaul factories in a rush to produce EVs. One way to come up with that money was to accelerate the trend toward producing high-margin SUVs and trucks while reducing production in the less profitable affordable car market.

 

As most readers are aware, the skyrocketing costs of new cars have forced many car buyers into the used-car market. At least they are cheaper, if you can find one. The transaction price of a used car is currently $28,381, according to Edmunds.com. That is still up 44 percent over 2018. Add in the interest expense on a car loan and it is still a sizable sum.

 

For many consumers, the only recourse is to keep their aging vehicles, hoping the time will come that this insanity will end, and prices will come down to earth. In the meantime, the average age of a light-duty vehicle on the road stands at 12.5 years in the U.S. That is the highest level of aging autos since the financial crisis and subsequent recession. 

 

By 2028, a recent study of S&P Global Mobility predicts that autos that are six years or older will make up more than 74 percent of the U.S. total vehicle fleet of 2028. If so, and your car falls in that aging vehicle category, it might be a good idea to renew or purchase a five-year warranty on your auto right now.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

Over the past decade, a large swath of the American population has migrated to the Sunbelt in search of a better climate, fewer taxes, and lower costs of living. Unfortunately, this area is among the most vulnerable to extreme changes in climate.

 

In total, nearly 5 million Americans abandoned states in the Northeast and Midwest and migrated to the Sunbelt states in the last 10 years. As such, it has become the fastest-growing region in the country. At the same time, as climate change accelerates, this region has been experiencing higher temperatures, more frequent hurricanes, and in some metro areas a scarcity of water.

 

Of course, this is not the only U.S. region impacted by climate change. The litany of climate disasters impacting this country this summer would just be too long to list.  From raging fires to floods, drought, air pollution, and of course heat. June and July 2023 were the hottest months in recorded history. And where are the highest temperatures occurring -- in the states that attracted the lion's share of new residents in 2022.

 

Florida, Texas and the Carolinas, followed by other states in the South and West. Among the 10 fastest-growing counties in the U.S., two are considered at very high risk for natural hazards and eight are considered at relatively high risk, according to the Federal Emergency Management Agency (FEMA). All of these fastest-growing counties are in the West and South, including six counties in Texas, three in Florida, and one in Arizona.

 

Despite the well-known climate risks, Americans continue to disregard the present and, more importantly, the future dangers to their environment in pursuit of "milder" temperatures, bigger homes, and more reasonable prices now. This has long been the trend among retirees here in the Northeast with coastal Florida and the Carolinas the most popular destinations for snowbirds. In California, Texas seems to be a top choice.

 

It is not completely clear what motivates people to ignore the risks of hurricanes, fire, and the like in their migration decisions. A research article by Frontiers in Human Dynamics, "Flocking to Fire: How Climate and natural hazards shape human migration across the U.S," penned by researchers from the University of Vermont and the U.S. Department of Agriculture indicates that the dangers of climate change (such as wildfires) do not outweigh the perceived benefits of life in a fire-prone area.

 

Moving to a new location is a risky bet at the best of times whether for one who is hoping to find better employment opportunities or simply retiring. Normally, buying a home, for example, is the single largest investment a family will make. And yet, climate change does not even make the list of the top 10 things to consider when relocating.

 

In a recent article, I wrote about the increasing difficulty in obtaining home insurance in many of these areas. Insurance companies are simply refusing to insure homeowners in affected areas. Few migrating families are even aware of this issue until it is too late to do anything about it.

 

Retirees have even more at stake when it comes to climate change. So many of the elderly list a warmer climate as their first or second reason for moving to the Sunbelt. Be careful what you wish for. The older one gets, the more air and water pollution becomes serious health risks and this summer's record-breaking heat is already threatening the health of some of our nation's most vulnerable people.

 

Scientists warn that the prospects for even hotter summers in the future will make certain areas uninhabitable, especially for the elderly. Aside from the present recognized dangers of forest fires, drought, hurricanes, tornados, and flooding, the future danger of these events is not being considered. The violence and frequency of these weather events will increase and encompass a wider and wider area. Settling inland from a coast or a waterway is the knee-jerk answer for some seeking safety. The problem with that approach is how far inland is "safe." 

 

My own opinion on why people are deliberately putting themselves in harm's way is twofold. Although there is a wealth of information on climate change and its impact on the environment in the future, few have taken the time to read it, and even fewer care to. Unless the water is lapping at our bedroom doors or sparks are falling on the roof, Americans would rather watch the latest episode of their favorite show or tune in to the ball game.

 

My second reason has to do with America's national trait — eternal optimism. It has stood us in good stead for centuries, but in this case, it is our worst enemy. Around 80 percent of people, across all age groups and genders, suffer from what social psychologists call optimism bias.

 

Tali Sharot, a neuroscientist, and professor of cognitive neuroscience at University College in London, brought the theory of optimism bias into popular consciousness. She argued that many of the seemingly unbiased decisions we make every day are influenced by the fact that we think positively about the future. It is one of America's strengths, but it also gives way to that "it won't happen to me" attitude. It leads us all into believing that whatever the disaster or danger that may threaten those around us "it won't happen to me."

 

Unfortunately, climate change overall, in this country is still in the "show me" stage and that show is just beginning. Recall that fewer than half a dozen years ago, many of our politicians in federal, state, and local governments denied even the existence of climate change and there are still a few holdouts today. For people to begin to include the danger of climate change in their future migration decisions, a lot must change. It will. Unfortunately, those changes will be up close and personal for too many of us.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.

August into September are usually difficult months in the stock market. So far, this August is no exception but how you handle it will make all the difference to your investment plan.

 

If you have been reading my weekend columns, you know that I have been warning investors to prepare for a 5-6 percent pullback in the markets. For many investors who have enjoyed more than six months of gains in their portfolios, even a minor decline in the markets will be painful.

 

On average, pullbacks like the one I am expecting last a month or more and then require another month to regain the previous price level. Stocks can repeat this behavior several times a year before regaining losses and moving higher. Every two or three years the markets experience a 10-20 percent correction. Since the year 2000, downturns of 10 percent or more occurred in more than half of those years. Only 20 percent of these corrections have resulted in a bear market since 1974. 

 

The fact is that most people are hard-wired to react emotionally to the ups and downs in the stock market. Scientists believe that it all stems back to prehistoric times when a struggle for survival evoked a fight-or-flight impulse that exists to this day.

 

Those same experts argue that the pain of losing is psychologically about twice as powerful as the pleasure of gaining. This loss aversion principle affects us all. The difference between successful investors and those who are not depends on how we handle these emotional responses.

 

Many times during my career as an investment adviser I found myself talking clients off the edge, especially in bear markets or sharp pullbacks. The longer the downturn the more time I spent just keeping clients from caving into their impulse to sell in many cases simply to stop the pain of losses. These same clients would often set themselves up for a fall by getting too aggressive on the way up or making other rooky mistakes.

 

I asked my former colleague and financial adviser at Berkshire Money Management, Scott Little, for his view on the subject. Scott recently completed a certificate in behavioral finance (BFA) to further assist his clients in times like these. Here are his thoughts on the subject:

 

"When markets gain like they have in 2023 with so many consecutive months of returns since the October 2022 low, it becomes a breeding ground for several dangerous biases. The first is the optimism bias. This is the tendency to overestimate the likelihood of positive outcomes and downplay the possibility of negative ones. The market is going up, I feel great, and everything will continue to be great.

 

"The second is the recency bias which is the tendency to overemphasize the importance of recent experiences or the latest information we possess when estimating future events. Recency bias often misleads us to believe that recent events can give us an indication of how the future will unfold. Because the market was positive last month, I should add to my stock position so I make more money next month.

 

The last is the confirmation bias. This is the tendency to search for, interpret, favor, and recall information in a way that confirms or supports one's prior beliefs or values. Because I just invested a bunch of money in the market, I begin reading all the analysts and reports that support what I did while I ignore those with a contrarian position. They don't know as much as the other people.

 

"To avoid falling prey to these biases try to keep emotions in check. Avoid chasing stocks when arrows are green and stick to your long-term plan. Be open to differing opinions about the market and weigh each equally. Finally, understand that human's ability to predict the future has never been greater than zero. Stay diversified within a portfolio that suits your risk tolerance and will help you achieve your long-term goals."

 

Amen to that.

 

Bill Schmick is the founding partner of Onota Partners, Inc., in the Berkshires. His forecasts and opinions are purely his own and do not necessarily represent the views of Onota Partners Inc. (OPI). None of his commentary is or should be considered investment advice. Direct your inquiries to Bill at 1-413-347-2401 or email him at bill@schmicksretiredinvestor.com.