Fear and loathing in Lululemon

Gen Z has enough fanny packs. [Bloomberg]( This is Bloomberg Opinion Today, a supply chain of working stiffs who toil at Bloomberg Opinion’s opinions. [Sign up here](. Today’s Agenda - [Lululemon]( needs to grow. - [AI workers]( deserve more dough. - [UK students]( are in the know. - [MAGA]( isn’t the status quo. Reporting From the Front Line of Lululemon Have you ever wandered into a store and been, like, what is going on here? That’s how I felt walking into Lululemon last weekend with my friends. Not only was it selling a $48 [“wundermost ultra-soft”]( tube top that certainly wouldn’t hold up on the tennis court, it also had a 7-pack of “[uplifting scrunchies](” for the same price. Don’t get me wrong: They come in pretty, rainbow colors! But since when did our accessories promise emotional support? And who is shelling out $50 (after taxes) for a handful of polyester hair ties? Don’t bother checking the “Why we made this” section on the website — it tells you everything but why they made it: Source: Lululemon.com Here’s the thing: Plenty of people still love Lulu. It “continues to have huge brand recognition,” Andrea Felsted [writes](. “And though it has been discounting to shift excess inventory, it remains firmly premium. And, most importantly, it has successfully made the transition to workout gear that can pass for more formalwear.” On Wall Street, you can’t walk a block without spotting a finance bro sporting a pair of [“ABC” Pants]( (which, incredibly, [stands for]( “Anti-Ball Crushing” technology). Then there’s the Everywhere Belt Bag, which [went viral]( for being a non-negotiable [on trips]( to Italy.[1](#footnote-1) (Lulu just released [a new clear version](, which is sure to be a hit with the EDM festival crowd.) But how many fanny packs does Gen Z really need? “The company is still facing a raft of challenges and must stretch further,” Andrea argues. Better-than-expected first-quarter earnings are a start, but that doesn’t change the fact that Lululemon is one of the worst [performers]( in the S&P 500 Index this year: Bloomberg A big reason that the legging-maker continues to struggle is that it’s getting squeezed from competition on all sides. Upscale customers prefer Alo Yoga and Vuori for their trendier styles and superior fabric. And more price-conscious shoppers appreciate that Gap and Old Navy make high-quality dupes in a ton of different colors and sizes. Hell, even Shein sells [activewear](! (Speak of [the devil](: In [a second column](, Andrea says “the UK shouldn’t be accepting the US’s sloppy seconds,” referring to the fast-fashion company’s potential IPO.) To stave off the copycats, Andrea thinks Lululemon should branch out beyond athleisure: “It has some more formal styles, yet wider-legged pants, dresses, jumpsuits and smarter jackets could make up a bigger proportion of the range,” and “it could do more with its fabric technology and design skills to create moisture-absorbent work attire.” You won’t see me rocking a tube top at the Bloomberg office anytime soon, but a moisture-wicking dress? I could work with that. The AI [Sweatshop]( Meanwhile, over in the virtual world, Parmy Olson [says]( the tech industry’s shiny new toy, artificial intelligence, is being fueled by a supply chain of “working stiffs who toil at screens training algorithms.” Scores of humans — that’s probably an undercount, estimates of online gig workers range [between]( 150 million and 430 million — spend all day in front of the computer, annotating text and audio, drawing boxes around objects in images, and writing [haikus](, essays and short stories. And they make next to nothing doing it, even though the end customers are firms such as Microsoft and OpenAI. As a result, workers often have to take on side hustles or work the night shift to make ends meet. “It’s like the factory worker in the Philippines who doesn’t realize the dress they’re stitching is going to be a $3,000 gown,” Madhumita Murgia, author of [Code Dependent](, told Parmy. Parmy also spoke with Milagros Miceli, an AI researcher who has worked with data workers across the world. In 2019, a dozen data-labeling workers living below the poverty line in an Argentina slum earned about $1.70 an hour. By 2021, none had moved on, and their wages had barely budged. “Training AI is already horrifically expensive due to the cost of chips and cloud computing,” Parmy explains. “That spells fewer opportunities for the people underpinning the AI revolution and shows [yet again]( that the technology’s true transformative effects have been in entrenching economic power.” Read [the whole thing](. Bonus Side Hustle Reading: Jobs statistics are [wildly at odds]( with popular perceptions of the rise of the gig economy. — Justin Fox Telltale Charts If our [new series]( on 14 years of Tory rule is causing you to lose hope in the UK, you’re not alone. Brits feel [worse off](! Financial markets are [adrift](! They’ve lost faith in [the NHS](! But there is one bright spot, says Chris Bryant, and that is [education](. “To improve reading in primary schools, the Tories promoted phonics — recognizing the sounds that letters make and how to blend them; England now ranks [fourth out of 43 countriesÂ](for reading proficiency for 9- and 10 year-olds,” he writes. We could really use some of that magic [over here]( in the US. Believe it or not, there are still some Republicans in this country who aren’t crazy about MAGA. In fact, a new [Pew Research Center poll]( on American cultural values says a sizable cohort of Trump supporters agree that undocumented immigrants living in the US should be allowed to stay and apply for US citizenship or legal residency. “That’s a long way from Trump’s charge that immigrants are ‘[poisoning the bloodÂ](of our country,’” Francis Wilkinson [writes](. Source: Pew Research Center Further Reading Exxon says the right things about [climate change](. And yet … — Bloomberg’s editorial board President Biden is wrong: The world doesn’t have [enough solar](. — David Fickling The Philippines, Singapore and Timor-Leste [need more]( from Zelenskiy. — Karishma Vaswani Black women receive less than 1% of VC money. [The Fearless Fund]( should keep fighting. — Stephen L. Carter The [safety “scandal”]( that’s embroiled Toyota is little more than a nothingburger. — Tim Culpan Mexico City won’t [run out of water]( in a few weeks, but the situation is getting dire. — Juan Pablo Spinetto ICYMI Steve Bannon has a [prison deadline]( of July 1. NBA stars are on their way to netting [nine figures](. Suicide Squad is the year’s biggest [video-game flop](. Real estate investors are getting [wiped out]( by bad bets. Barcelona has the [best restaurant]( in the world. Kickers We’re getting [Haymitch’s]( Hunger Games story. What it was like [to sketch]( Trump in court. Scott Disick drank way too much [ginger ale](. The AFL’s 2024 [mullet landscape]( is vast. (h/t Jennifer Ryan) [Jelly shoes]( and [influencer gifts]( are ruining the environment. Notes: Please send Hawaiian rolls, ginger ale and feedback to Jessica Karl at jkarl9@bloomberg.net. [Sign up here]( and follow us on [Threads](, [TikTok](, [Twitter](, [Instagram]( and [Facebook](. [1] If you're ever bored in a foreign city (which, to be clear, you shouldn't be), try playing "who can spot the Lululemon bag first?" with your travel companion. Loser buys gelato!!! Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. Before it’s here, it’s on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can’t find anywhere else. [Learn more](. Want to sponsor this newsletter? [Get in touch here](. 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