I have gotten a little jaded about money. I am running a project for a 501-3c that is pending a 1.3 million dollar grant and has blown through 300k to rebuild one old boat. (Can buy aa dozen boats for what we are spending on this one).
Then I see 600 billion dollar bailout, 50
billion dollar write downs, micro cap companies with billion dollar market caps.
Then on a personal level, I have a hard time pulling the trigger on a 250 dollar initiation fee and 88 dollars a month to join a sailing club.
So, sometimes I have to work the numbers down to see what 15 billion really is.
The population of South Korea is 50,000,000 people. Or another way to
see it, the population of South Korea is 0.05 billion people. So as the 15 billion is over several years, it works out to 2 billion a year, or 40 dollars a person per year. That doesn’t seem like much.
But wait! There’s more! Have you looked at the population pyramid for South Korea?
The majority of the workers are over 40. These will not be available for a new industry. So the 2 billion a year will end up
going to early career people.
What is more, the entire
Korean battery industry has about 20,000 people. Or roughly 0.00002 billion people.
When you look at it that way, this 2 billion a year works out to 100,000 dollars a person per year. That will definitely pay for a sailing club membership!
But wait there’s more!
This 2 billion a year in domestic (Korean production) is in top of the 5.3 billion that is earmarked for production in the USA. That 5.3 billion works out to 1 billion a year from Korea to the USA, not funds from the IRA.
Currently, all total, there are 30,000 people in the USA engaged in battery manufacturing. My guess is the vast majority of them are either working in legacy lead acid manufacturing or working for Tesla/Panasonic.
Still, if we increased that by 30
percent, we could pay each of them 100,000 dollars a year with Korean funds.
Considering we have no idea where we are going to dig up 10,000 young people this is a bigger challenge than might be expected. What is more, if you add 10,000 high paying jobs to a community, you generally cycle that money 4 times. So you actually need 40,000 new workers.
Just sayin’ 15 billion is a lot.
I don’t even want to think about the numbers in the IRA, which makes me think of Orwellian Double speak.
All this gives me the gut feeling that there will be an excess demand for labor and capital for the rest of the decade. Meaning interest rates will stay elevated and wages will continue to rise.
Cheers
Qazulight