Friday, April 24, 2015

Through Even These Good Times, Technology’s Effect on Jobs Continues

It’s been quiet.  The American work situation, except for conservatives emphasizing its bad aspects to carp about Obama and liberals trying to use its good side to push a minimum wage higher than latent demand for employment can justify, has just about dropped out of the press.  There haven’t been many reports of automation-related work losses.  However, we've been seeing technology-progress accounts that effectively predict them.

One was published Tuesday in The Wall Street Journal.  Titled “These Robots Serve Up Cocktails, but Can They Tell if You’ve Drunk Too Much,” it gives the status of something I predicted two years ago, in Choosing a Lasting Career, when I gave bartenders poorer prospects than other food service jobs, pointing out that automated drink mixing and serving would not only save labor but reduce legal liability, and that a “thoroughly automated bar” would be around long before the book’s 2033 horizon.  In the article, we learn about a variety of these cocktail robots (an already established name), and how they are being developed to be more interesting than just generic machines, with one a “rocket-shaped device with a large red start button that releases steam,” another with flashing lights, and one more with “plastic crystals and a fake flame.”  Giving them entertainment-machine bells and whistles may help with customer acceptance, a potential problem I noted before, and they are already in use for customer-facing applications on a Royal Caribbean cruise ship, along with, no doubt, large numbers of service bars.  The story makes clear that cocktail robots figure to proliferate, and replace many jobs.

A second article came out Thursday, in the Detroit Free Press.  It was a note on one area on which has strengthened since 2013, self-driving cars.  That year I gave taxi drivers and chauffeurs Very Good prospects for lasting 20 years, and said they had a “low automation threat.”  The story described discussion opening the Society of Automotive Engineers World Congress, in which a panel speaker, and prominent industry figure, talked about the need to reduce the one million-plus people dying annually, worldwide, due to car crashes caused by driver error.  The software for self-driving cars has been in development for over a year now, and although perfecting it has been challenging, another panelist said that laws, not technology, could ultimately hold back its use.  It is clear that driverless cars will be ready, and demonstrably an improvement over human-operated ones, before the decade is out, meaning that anyone who drives for a living may have his or her livelihood imperiled sometime in the next one.

Third, there was a story on Sunday’s New York Times, “The Machines Are Coming,” by Zeynep Tufekci.  It was not chosen for publication in the Times’s op-ed section by presenting the old issue of automation costing jobs, but for its reminder that work replaced by technology will not all be at or near the minimum-wage level.  Despite its future-leaning title, capabilities the article attributes to current machines include diagnosing medical test results, emotion detection, making hiring decisions, and providing accurate and spoken responses to people calling help desks.  There have already been many cases of what we would call good jobs being swept away by automation, especially in electronically-compatible areas of analysis that turn out to be completely algorithmic, and evidently there will be many more. 

These three articles show that further technology-caused job losses are, if not with clear timetables, on the way.  A major point Tufekci makes is that rising automation takes away workers’ power, in ways such as facilitating employers to “”optimize” worker schedules in a way that devastates ordinary lives.”  That brings us a fourth piece from the past week, a column by Robert Reich.  Its title, “America’s “flexible” economy is making worker’s lives hell,” published in Salon, nearly says it all, with its contents describing how software helps companies determine when employees are not needed – information some, such as Target and The Gap, now use to call off workers only minutes before their starting times.  The idea of what Reich said could be called “just-in-time scheduling,” “on-call staffing,” or “on-demand work” is nothing new – I experienced it, along with many of my scheduled work times being cut short, in a restaurant job 30 years ago, but the practice now seems more widespread, and fits with the ethics of the sharing economy in which income is irregular. 

What we can learn from these articles is not that automation will cost employment.  We knew that already.  It is that, despite relatively peaceful times on the number of jobs, technology, and our ways we are using it to that end, are still marching along.   

Wednesday, April 15, 2015

AJSN: As Unemployment Has Fallen, Latent Demand for Jobs from Others Has Risen

A week ago Friday, the most recent American Job Shortage Number, or AJSN, showed that almost 18.6 million more American positions could be quickly filled, if getting one were routine and easy.  I noted that, although the number of those officially unemployed dropped once again, the count of people with other statuses, other than jobless or working, was staying about even.  As a result, in March 2015, if jobs were truly plentiful, only 42% of them would be filled by people technically unemployed. 

How has that changed since the AJSN started in August 2012?  Here are a series of charts to show that. 

To start, this graph recaps the drop in official joblessness during the past 31 months.  It has been quite steep, as made clear by the trend line which evens out seasonal effects.  Note that the unemployment rates used here, as well as all other numbers in this post, are seasonally unadjusted:

The AJSN includes shares of 11 different employment statuses.  In the case of those officially jobless, it assumes about 90% would take readily available work.  Taking 90% of the actual number of unemployed, month-by-month, gets the following:

As above, the number of positions that could be filled by those technically jobless has fallen, irregularly but ultimately consistently, from over 11.8 million in January 2013 to 7.5 million in December 2014. 

Although the number of officially unemployed has fallen a great deal, that is not the case for the most significant other work statuses.  Between 600,000 and 1 million Americans, during this time period, have reported that they would like to have jobs, but think there is too little a chance of actually getting one to justify search efforts.  As per this chart, their number has also fallen, but not as much:

A similar and much larger category is those who do not report discouragement, but have put themselves out of the technically jobless group by not looking for at least a year.  Although unemployment as such has dropped, their numbers, and accordingly the AJSN share of 80% of them, has stayed about the same, as follows:

The largest employment set of people is those claiming no interest in working.  Many, especially those over 80 years old, are firmly fixed to that conviction, but some are not, as has been shown by the count of this group sometimes falling.  The AJSN’s conservative share of 5% of them taking readily available jobs shows an increase of about 275,000 more positions fillable by those in this group:

When we combine all the categories other than officially unemployed, the number who might work has gone up, per the trend line, almost 1 million:

Here is a pictorial view of how the shares of the AJSN from official joblessness and other statuses has changed:

That brings us to what has happened to the share of the AJSN from the above:

This trend line starts out at about 52% of American latent job demand as of August 2012, and ends up at about the 42% actually reached by last month’s data. 

It is easy to see what is happening here.  When we think about who would fill open jobs, we should know that those officially unemployed would take only a plurality of them, not a majority any more.  The need for new opportunities goes way further.  That trend is continuing, as the numbers of those with other statuses, despite more work being out there, continue to rise.  That is why we are much farther from full employment than many think, and, accordingly, why public policy should still be encouraging job creation.  Therefore, by inference, these charts have bad things to say about both higher interest rates and mandated higher wages, among other viewpoints.  The jobs crisis may have dropped off the headlines, but it is continuing – under the surface.    

Friday, April 10, 2015

3D Printing and its Jobs – Oversold, On Schedule, or Just Delayed?

Consider the following, and note they are in chronological order:

Three-dimensional printing makes it as cheap to create single items as it is to produce thousands and thus undermines economies of scale.  It may have as profound an impact on the world as the coming of the factory did...  Just as nobody could have predicted the impact of the steam engine in 1750—or the printing press in 1450, or the transistor in 1950—it is impossible to foresee the long-term impact of 3D printing.  But the technology is coming, and it is likely to disrupt every field it touches. – "Print me a Stradivarius – How a new manufacturing technology will change the world," Economist Technology, February 10, 2011.

The prediction that 3-D printers will become a part of our daily lives is happening much sooner than anyone anticipated. – Nick Bilton, “Disruptions:  On the Fast Track to Routine 3-D Printing,” The New York Times, February 17, 2013

Americans expect access to almost-free drinking water, clean air, a fine highway system, and at least some measure of personal safety – it may well come to pass that food and shelter, both possibly provided by 3D printers, and medical care, provided by software-driven robots, will be added to that list.  – I wrote this around September 2013

Are we expecting too much from these 3-D printers? – Title of article by Christopher Gregory, The New York Times, August 11, 2014

Items printed from a 3-D printer are unlikely to ever match the quality and strength and surface finish of mass manufactured goods… Printing is amazing… but do we print out our newspapers every morning on our inkjet printers? – Nick Allen, “3-D Printers are No Rival for Mass Production,” The New York Times, August 11, 2014

Gartner recently said that worldwide sales of 3-D printers will be about 217,000 units in 2015.  By contrast, in the United States alone, shipments of regular printers are typically about 24 million units a year. – Quentin Hardy, “HP Unveils Plan to Make 3-D Printing an Everyday Thing,” The New York Times, October 29, 2014

What’s happening here?

As the above sequence implies, once 3D printing began getting attention outside the technical community, it seemed that it would be so significant that it was almost scary.  Its machines could be producing just about everything, at home, in the office, and in what once were people-dense factories.  Not only price but speed would improve astronomically, and everything from hamburgers to skyscrapers, all with superb quality as well as unbeatable cost, would come out of the things.  And all of this would arrive stunningly quickly even by recent technology standards.  Although one estimate from last fall had 275 companies working on 3D printing as of four years ago, the 217,000 production could well have turned out to be close to that 24 million.

Now it is 2015, and, some real medical-related successes, a modest set of other niches, and a lot of gee-whiz stunts such as building a house notwithstanding, we’re still waiting.  Why, when 3D printers can now cost as little as $200?  I see four related reasons:

First, the printers now lack a killer app that would put them in ordinary people’s homes.  True, the novelty of making small things you can show off to people, and sometimes even use, is fun, but it isn’t enough to justify even the new lower prices, not to mention the cost of materials and supplies.  The closest they have is their physical prototype capability, which works of course superbly with CAD, but that’s not for the rank and file.

Second, large-scale use, as Allen wrote above, is not cost-effective.  Even if its expenditures were further slashed, the time 3D printing takes is still a huge problem for making large quantities of almost anything.  That and the first point mean that its major uses, for a while anyway, will be for small numbers of things, and otherwise around the fringes of routine manufacturing.

Third, while the technology is extremely promising, its real value may turn out to be, fast recent progress notwithstanding, far in the future.  Larry Niven’s science fiction stories set in 2800 or so referred to an organic soup of some sort, from which organs and other body structures were made.  That has already started, with replacement limbs, primitive though they may be by future standards, made that way.  One responder to the Gregory article above mentioned how much 3D printing will facilitate both the cost and the practice of space travel.  Those are two massive reasons to keep developing knowledge, and they provide reasons for companies to continue with it despite the return being maybe decades off, but neither offers widespread or extensive value now.

Fourth, and probably the most important to understand why expectations have lagged, is that when we were becoming aware of 3D printing we didn’t think much about exactly how it would be transformative.  I, for one, plead guilty to becoming intoxicated with the concept without projecting either what capability would arrive when, or what, after the novelty wore off, would get people to keep buying it. 

So how and when will 3D printing affect American employment?  It should contribute positions, mostly in design, maintenance, and research and development for the next 20 years or so, even with some of these and virtually all manufacturing being done in other countries.  After 2035 or so it will eliminate many, many more.   With that said, though, there is no new field, and certainly not anything else electronic, that projects to add more United States jobs over the next two decades.    

Friday, April 3, 2015

America Now Almost 18.6 Million Jobs Short as AJSN Drops Over 700,000

This morning’s employment data was expected to disappoint – and it did.  There were only 126,000 net new jobs added, the lowest since January 2014 and only enough to cover the monthly population increase.  The American Job Shortage Number, which gives how many additional new positions that could be quickly filled, improved greatly.  Why?

First, the AJSN is not seasonally adjusted, and, as virtually always, more people worked in March than in the previous February.  Second, a key set of people marginally attached to the labor force, those not working but not officially unemployed either – Americans wanting to work but not having looked for at least a year – dropped a surprising 420,000 to 3,320,000.  Not much else changed greatly, so the AJSN came out for March’s data as follows:

For other numbers, the official, seasonally adjusted, jobless rate held steady at 5.5%, while the unadjusted version fell from 5.8% in February to 5.6% in March.  The four key secondary indicators were mixed.  The number of people officially unemployed for 27 weeks or longer was down from 2.7 million to 2.6 million, and those working part-time for economic reasons, or wanting a full-time job and not finding one, rose from 6.6 million to 6.7 million.  The remaining two, the best measures of how common it actually is for Americans to work, the labor force participation rate and the employment to population ratio, were down 0.1% to 62.7% and unchanged at 59.3% respectively.  Average wages increased 7 cents per hour, for an annually compounded rate of about 4% – hardly a windfall, but still much more than inflation.

Compared with a year ago, the AJSN continued its improvement, though this time due only to a drop in official unemployment.  In March 2014, there were 1.85 million more technically jobless Americans, cutting the AJSN down almost 1.7 million, but several other statuses, especially expatriates, those wanting to work but not looking for at least a year, and those saying they did not want a job at all, went up enough to offset more than 500,000 of that.  Although fewer and fewer people indeed are contributing to those officially unemployed, many more who don’t qualify for that would take jobs if they thought they had a chance.

So what do we make of March?  As with the year-over-year comparison, the secondary numbers are not encouraging.  The gap between official unemployment and how many jobs could actually be absorbed continues to grow.  Of the almost 18.6 million new positions that could be filled quickly, only 42% would go to those technically jobless – the rest would be filled by people with other statuses, almost all of which, even in these solidly non-recession times, are steadily growing.  That is something to think about as we look at the turtle, who is now standing still.  

Friday, March 27, 2015

Jobs and our Next President: What, If Anything, Do We Know?

Around the horn in the world of presidential politics, on jobs and beyond:

If you were announcing a run for president as the first major declared candidate, wouldn’t you have a website with your positions on issues ready to go?  Well, Ted Cruz didn’t.  Searches on “Ted Cruz” and “Ted Cruz for President” brought up nothing new, so I can’t say much about what he plans to do about the permanent jobs crisis.  His old stuff, mainly asserting that unemployment benefits are bad, wasn’t too encouraging.  I guess none of the 2.7 million Americans officially jobless for 27 weeks or more and legally required to look for work weekly are in his inner circle. That may be a reason why you can get 40 times your money by betting on him to win a year from November, as you can on, say, Martin O'Malley.

Speaking of politicians making stupid statements, get a load of Ben Carson!  The man is a neurosurgeon.  You can’t get into that specialty by just choosing it – you need to beat out lots of well-qualified doctors (not just medical students) to get the training you need.  Bet that every single neurosurgeon in the country would qualify for Mensa, going away.  I see how he might need to appeal to his base by comparing gay marriage to bestiality, or saying Obama is “like a psychopath,” but how can anyone of that intelligence say that men are gay by choice?  Carson, somehow, makes me want to root for him – he can be partially excused by now being more a politician than anything else, and wrote a good, remarkably thoughtful book about what he thinks – but there’s a difference between routine pandering or spouting ideology you think will go down well, and saying things which are clearly wrong.  Which, since it calls his grip on reality into question, I don’t like at all.  As for Carson on jobs – well, what does he REALLY think?  Will we ever know?

How about Scott Walker?  Radio host Rush Limbaugh has seemed to endorse him, at least for now, and has him as the second most likely Republican to become our next president, at 9½ to 1 behind Jeb Bush at 6½ to 1.  He’s had his doubtful statements too, and his lack of a bachelor’s degree all these years on is strange, but he has the right view on labor unions.  As classic business author Robert Townsend put it, unions served a noble purpose once, but now they’re part of the problem.  There is all the difference in the world between reigning in the abuses of the early (and not so early) Industrial Revolution, when few knew and too many didn’t care how long, hard, and unsafely people could work, and getting the most from governmental employers with little or no incentive to limit pay and perks.  Ultimately, unions cost jobs, which is why Walker did the right thing in leading Wisconsin to right-to-work status.  Could he be good for jobs in other ways too?  We’ll see as the campaign progresses.

Still no word from Hillary Clinton on employment.  Being way in front, Emailgate notwithstanding, with odds of 5 to 3 against in the 2016 election, has made her more noncommittal than ever.  Since she’s moderate, it would be consistent with her views to tone down pushes for higher minimum wages, which are now popping up here and there anyway, and campaign on a national infrastructure project.  But I’m not holding my breath.

Then there is Chris Christie, with both good and bad attributes of being forceful.  He’d love to lead a 1950s Chicago-style “machine,” in which people on his side were assured of decent jobs if they got out the vote, but the time for that sort of thing has passed even in that city – you could have asked Representative Dan Rostenkowski, who tried to reinstate one and ended up wearing stripes.  Could Christie lean on possible employers to make more work available?  That possibility alone could make him a fine candidate – but I don’t know if he would or could.  So I’ll still go with the hope of Jeb Bush, if he’s not too beholden to his fellow one-percenters to realize they can’t make money if the bulk of Americans have none to spend. 

As for political views, America’s problem goes deeper than anything above.  Why is it that the combinations of opinions are as set as they are?  Why do almost all of those who think there is no human-caused climate change also oppose gun control?  Does it make sense that those against capital punishment are consistently in favor of more spending on social programs?  Would someone from Mars see it as logical that humans seeing government as more of a problem than big business tend heavily to see abortion as murder?  Can’t be.  The answer is that most of us make complex realities easier by going with, in effect, a slate of opinions.  That is unexamined, and, if Socrates said, the unexamined life is not worth living, we are falling short.  If Americans were more independent in chosen views, we would reach the right answers more often as a country.  We are not doing well at that now, and, strangely enough, think almost everyone on both sides, and in the middle would agree.  Will we ever be up to that challenge? 

Friday, March 20, 2015

Yes, the Pay Gender Gap is Real – But It’s Not All from Discrimination

One work-related issue seems to have perpetual press coverage.  Consider the following:

Men and women must be paid equal wages if they perform substantially the same work under the Equal Pay Act.  “Equal pay” refers to more than just your paycheck.  Under this law, all employers must provide employees within the same establishment whose jobs require substantially equal skill, effort and responsibility, and are performed under similar working conditions “equal pay.” – U.S. Department of Labor Website

In 1951, women made about 64 cents for every dollar earned by men.  The wage gap has narrowed over time, with today’s women (age 15 and over) earning 77 cents for every dollar earned by men, for year-round, full-time work.  –

How can we reconcile the above two statements?

In 2005, to answer that question, author Warren Farrell published Why Men Earn More:  The Startling Truth about the Pay Gap – And What Women Can Do About It.  Per its subtitle, the book also included constructive ideas on how women can avoid getting less than men.  The way they can do that, the author wrote, is for them to make more of the same choices as men.  And what are they?
Note that none of these are about acting differently in the workplace, or fighting remaining sex discrimination.  Such things would help, but are hardly the whole story.  So what did Farrell, backed with documented statistics, come up with?
First, women can choose from the 25 worst positions, as assessed by the Jobs Rated Almanac on quality of work environment, employment prospects, physical demands, job security, and related stress.  As of 2002, 92% of workers in these 25 jobs were men.  Only one position, dancer, had more than 32% female workers.  Some of the better paying ones in this list were carpenter (99% male), boilermaker (100% male), and the overall lowest-ranking one, lumberjack (98% male).

Second, Farrell recommended that women opt for careers with lower personal fulfillment, such as being a tax accountant instead of a child-care professional.

Third, on the lower-qualification end, women are likely to be paid more if they end up with jobs outdoors, such as package deliverers, instead of those only requiring work inside.

Fourth, if women seek positions in which they “can’t psychologically check out at the end of the day,” such as corporate attorney, instead of working as, for example, librarians, their earnings will tend to be higher.

Fifth, being more willing to take the most extreme physical risk, being killed on the job, of which 92% suffering that early last decade were men, can help women’s pay.

Sixth, female workers can help themselves by putting in more hours.  According to a 2004 Department of Labor survey, women were less than half as likely than men to work over 50 hours per week.

Seventh, gaining more experience, by not being among the 50 times as many women as men who are full-time homemakers, the 8 times as many who take at least four years out of the labor force, or the 9 times as many who leave work for six months or longer for family reasons can boost expected income.

Eighth, simply getting to work more often, and not contributing to women’s averaging twice as much time away from it as men, can help.

Ninth, being more willing to take nonphysical as well as physical risks, such as joining heavily male fields such as venture capitalism, generally pays more.

Tenth, taking jobs requiring working at inconvenient times, such as being a doctor in private practice instead of working for an HMO, can shrink the income gap.  

These ten were only those I chose from one old book – many, many more are out there. 

Despite sex discrimination laws in effect for half a century, there are reasons for women still being paid less, overall, than men.  There are certainly men in positions of power who would prefer their subordinates to be the same.  But that sort of thing is nowhere near the whole story.  Choices matter too, and mean enough that no simple assertion of broad-based pay differences should be taken as being caused by other reasons.  The issue of average pay differing by sex, as is the case for many, is far more complicated than it looks. 

Friday, March 13, 2015

The Sharing Economy and Jobs – II

Now, back to the phenomenon I wrote about two weeks ago.  Why is it not as great as its believers claim, why is it so controversial, and what should and shouldn’t we do about it?

Its main weakness is that once proper expense accounting is applied, sharing economy engagements, compared with conventional employment, simply don’t pay very much.  Last month, Joann Weiner wrote in The Washington Post that while Uber claimed taxi-like drivers averaged over $74,000 per year in San Francisco, making it one of the most lucrative sharing-economy propositions, the real net number was more like $40,000, with no paid vacation or other benefits, and mandatory health insurance and matching Social Security contributions pushing that even lower.  (The Internal Revenue Service, not known for its generosity, allows 57.5 cents per business mile – if a driver averages 120 miles per day, as I did for Yellow Cab in the 1970s, he or she would have annual car expenses alone of over $18,000.)  If they drive, as true taxi drivers often do, 55 hours per week, $40,000 net, even if that high, pays even a lower cash rate than an $11.00 per hour job with time-and-a-half overtime.  

Second, the income achieved by Uber, similar Lyft, and room-renting facilitator Airbnb service providers is inflated by a temporary lack of regulation.  It is almost certain that major cities will develop legal limitations either banning or charging high license fees for what they are selling.  It is unthinkable that with New York City taxi medallions, or permits, costing over a million dollars that amateur cabdrivers will be allowed to proliferate, or even operate, forever.  Once zoning laws, and legally sound complaints by neighbors, catch up with the extent of Airbnb rentals, the time when anyone can run a de facto hotel or even a bed and breakfast in residential-zoned neighborhoods will be over.  Good money for now, but not by decade’s end at the latest. 

Third, once such regulation catches up, the bulk of other sharing-economy opportunities will be what established businesses don’t want to pursue for lack of profitability.  In Salon last month, Robert Reich said a more proper name for it would be the “share-the-scraps economy.”  Whatever you think of Reich, that phrase, sadly, fits too well. 

Fourth, while being paid for personal resources provides useful money, being able to sell them means you already have them.  If you have an apartment in Manhattan, you can do well renting it out, but most people don’t.  Not everyone meets the driving-record, car-condition, and other standards Uber and Lyft require.  If you don’t have the right kind of aptitude, you will not do well at doing tasks requiring it.  That does not mean these propositions are invalid, but it does mean that many are effectively available to only a minority.

Overall, once the laws and their enforcement get in place, once more participation and therefore competition brings prices lower, once the drivers and house hosts have commercial insurance, and so on, there won’t be enough left of the sharing economy to constitute a broad-based alternative to even minimum-wage employment.  What will remain will be the selling of possessions and other finite resources, ventures with appeal dependent on incomplete expense accounting, and, as the best of the lot, small business propositions, requiring as for more established ones the right kind of attitude, drive, stamina, wide-range skills, and often willingness to put in hours unheard of when working for others – a set of attributes few people have. 

How can we best deal with the sharing economy, as it is and will be?  There is no need for special regulation, as existing laws will do just fine.  With vastly differing personal completion times, efforts to establish a minimum wage of sorts for less remunerative and more unusual tasks would be misguided, not to mention bureaucratically difficult or impossible, and anyway more opportunities for people to earn money should not be discouraged.  Yet we are best off resisting being enamored of the sharing economy, as it is hardly a jobs-crisis solution.  We need more for what we face in America.