SYLVIE DOUGLIS, BYLINE: NPR.
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SALLY HERSHIPS, HOST:
This is THE INDICATOR FROM PLANET MONEY. I'm Sally Herships in for Stacey Vanek Smith. And TGIF - it is indicators of the week.
ADRIAN MA, HOST:
DARIAN WOODS, HOST:
We love our acronyms here.
HERSHIPS: Adrian Ma, Darian Woods, so good to have you here. As we do when thinking about indicators of the week, I know we have all been keeping an eagle eye on the numbers in the news to see what we can learn about the economy and what is getting weird.
MA: That's right. We're going to visit ghost towns in China, then head over to California and scope out a massive traffic jam unlike any you have probably ever experienced.
HERSHIPS: And then it is time for everybody's favorite topic - municipal management. Get ready, people.
MA: Bureaucracy - woo (ph). Don't worry. It's going to be good.
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HERSHIPS: Darian Woods, tell us about your indicator of the week.
WOODS: So my indicator is about the Chinese real estate developer Evergrande Group. You might have heard about this massive Chinese real estate company Evergrande in the news. It caused stock prices in the U.S. to drop earlier in the week. And look. I'll be honest. I never heard of the company before this week, but it is the second-largest real estate company in China, which is a big deal because real estate is a big deal in China. So Evergrande was building a lot of apartment buildings, so many that I'll let a video do the talking.
MA: Oh, my God.
MA: That is crazy. Seeing, like - what looks like a dozen giant buildings just collapsing simultaneously in a giant cloud of dust.
WOODS: Yeah, it's pretty amazing. This is a scene from August, when Evergrande decided to do a controlled demolition of a bunch of their apartment buildings because they'd just been sitting empty for years, which is actually part of a wider trend. Estimates vary, but there seems to be roughly 20% of apartments unused in China. So this is my indicator - about 20% of Chinese apartments, 1 in 5, lying empty.
MA: And just to be clear, this isn't happening in the big, big cities. We're not talking about Beijing or Shanghai.
WOODS: That's right, so these ghost apartments are typically in medium and smaller cities. And this growth in apartment after apartment being built, even if there wasn't a huge number of people living there - this growth went on for so long because Evergrande could keep borrowing even if their business model wasn't actually that good. People assumed that the government would bail them out. And for a long time, the Chinese government was encouraging Evergrande and other real estate companies to keep building because all of this construction creates jobs and keeps economic growth high.
HERSHIPS: But there is always a limit to how much debt you can keep taking on.
WOODS: And that's what we saw happen this week. With too many apartments and no new loans coming in, Evergrande was put in the position where it finally wouldn't be able to pay what it owed. On Monday, U.S. stock markets went down about 2% as people were worried about Evergrande. And just yesterday, Evergrande failed to pay a huge bill that came due on its loans. And while all of this might make you think of the real estate collapse in the U.S. that led to the global financial crisis in 2008, 2009, there is a difference. The difficulties that Evergrande is having in getting new loans is a deliberate choice by the Chinese government. They know there is a real estate bubble, and they're trying ever so delicately to try to slowly pop it.
HERSHIPS: And now from China, let's take a boat - actually, a container ship - all the way across the Pacific to Southern California and to Adrian. What is your indicator of the week?
MA: I have a number for you. But before we get to that, I also have a little visual aid.
WOODS: All right. I'm seeing a lot of arrows in the ocean outside of LA, and there's a lot of emerald kind of dots.
MA: This, by the way, is from a website called Marine Traffic. It's kind of amazing. You could waste a lot of time on there. Basically, what it shows is these ships hovering right outside the Port of Los Angeles and Long Beach. And so each of these little dots is essentially waiting to dock and unload their cargo, you know, like furniture and clothes and auto parts. But earlier this week, there were as many as 73 cargo ships just waiting outside the port. Normally, there would be maybe one ship just anchored there, waiting to park. Now there are dozens. Port officials say that is a record. And what that means is if you are on one of those ships, you could be waiting as long as a week just to get in.
HERSHIPS: And this is why when we order things online and we are told there are going to be shipping delays, this is the problem - actual ships that are delayed.
MA: Yes, literally delayed ships. And for these ports, it has gotten epically bad. And it's sort of the confluence of a few different things. First of all, this time of year is normally a high-traffic time for ports. You have back-to-school season. You have stores trying to stock up their inventories for the holidays. And you have so many merchants who are just trying to restock their warehouses. And so more stuff than usual is trying to flow through these ports. Also, people are buying lots of stuff. Consumer spending is way up compared to what it was before the pandemic. And then on top of all of that, ships have been really hard to get, especially the big container ships, which means that the companies who move stuff have to resort to using smaller ships. But since there is the same amount of stuff to move, they have to use more of them, and that just means more ships trying to crash the ports.
WOODS: That doesn't seem efficient.
MA: Not at all - so, you know, in addition to just expecting a lot of delays in stuff that you're buying, one thing to think about here is how this is going to affect the price of stuff because more expensive shipping means companies may pass that costs on to consumers in the form of higher prices.
WOODS: All right, we have finally reached the end of this shipping journey. Thank you, Adrian. Now we're in the U.S.A. Sally Herships, tell us about your indicator.
HERSHIPS: My very exciting indicator of the week is $115,000. That is the new higher salary for the job of town manager in Southwest Harbor, Maine.
WOODS: Not bad.
MA: Yeah. Are they taking applications?
HERSHIPS: Yes (laughter). Southwest has been looking for someone to fill the job for half a year. They've not been able to find anyone, so they are offering an additional $15,000. By the way, in case you don't know, town or city manager - that person's job is to allocate the town's money efficiently to make sure your trash is picked up on time, to make sure residents have a working sewer system. It is like Ben's job in "Parks And Recreation."
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ADAM SCOTT: (As Ben) OK. You need to understand that just to keep this town afloat, we probably have to cut the budget of every department by 40- or 50%.
AMY POEHLER: (As Leslie) You're a jerk.
HERSHIPS: Have you seen "Parks And Rec"?
KENDRA STEWART: Yes.
STEWART: That is always the question of our graduate students in our field because that is a stereotype certainly of the local government worker.
HERSHIPS: Kendra Stewart is the past president of the American Society for Public Administration. Kendra says, for example, in South Carolina, where she is, this shortage of these workers has been a problem for at least the past decade. And she says this is also a national trend. One reason why is that fewer young people see the government as the answer to solving problems, so they're less interested in working for the government. And there are also more problems leading to this shortage. Fewer people, for example, want to work in rural areas like small towns. And then we come to the good old glass ceiling.
STEWART: Ninety percent of city managers traditionally were male. Today it's still pretty high. It's around 83% are men, and that's because that type of model works well if you have one household income and can easily move around. And in a lot of fields, we're seeing that has become more difficult, that families are no longer as relocateable (ph) as they once were with two incomes or two jobs.
HERSHIPS: Finally, it is a really hard job. Kendra says one of the No. 1 thing she hears is how hard it is to have your work scrutinized and criticized on social media.
STEWART: And it's become even more challenging with the rise of polarized politics and that managers are the people who have to buffer the staff or the city or county employees from the politics of a council.
HERSHIPS: But Kendra says she has hope. She says she has seen a lot more small towns recruiting managers locally from the private sector, where pay is typically higher, which creates a higher salary expectation. You know, salaries are still market-driven, so there is hope.
MA: Get those applications in, people, to - what was the name of the city again?
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HERSHIPS: This episode of THE INDICATOR was produced by Brittany Cronin with help from James Willetts. It was fact-checked by Kaitlyn Nicholas. Alex Goldmark edited the show, and THE INDICATOR is a production of NPR.
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