Friday, October 20, 2017

Driverless Cars – More Progress and Positioning – II

Here’s the next chunk.

When my parents bought a Volvo in 1969, that company had a well-established reputation for safety.  It’s been a long time since I’ve seen them in the news for anything other than being acquired by Ford, but here they are again.  Carol Glines’s July 21st Fox News “Safety first!  Volvo’s intelligent drive and sensing technologies work to mitigate accidents” showed how that company is still there, adding cameras, radar sensors, and systems emitting sound warnings and dashboard red lights when they see objects ahead with crash-causing potential.  These schemes, suitable for meatmobiles as well as autonomous vehicles, will not stop cars but will only warn drivers, which, at this early point in their development, is best.  In the meantime, here in the Catskills I’d be glad to have Volvo’s new capability, mentioned in the article, to detect deer.

Legality of driverless cars on public roads has understandably been a patchwork.  That may change.  As described in “House advances bill to clear road for self-driving cars” (Keith Laing, Detroit News, July 27), this Washington legislative body showed foresight, and excellent restraint, by clearing a bill which would allow both the public use of 100,000 self-driving vehicles and prevention of overriding that with state laws.  Per Laing, “lawmakers on both sides of the aisle said the compromise legislation represented a rare bipartisan consensus,” and while it did not please everyone, the House seems to have seen the wisdom of taking risks to reduce our 35,000 annual highway dead.  Kudos to all involved.

Given creeping consumer concern, it was a nice surprise to see “Study:  Majority Of Drivers Say Next Vehicle Will Be Autonomous” (Denisse Moreno, International Business Times, July 28).  Some of the valuable research Moreno cited showed that women, as well as younger people, were more positive about that technology, but were still concerned about driverless safety, and another study found that 72% had no interest in self-driving public transportation.  She also gave us an early glimpse of perceived brand perceptions, with a slim plurality of 19% of respondents saying Tesla seemed the best, and “nearly half” of respondents unable to name a single company doing driverless manufacturing.  General Motors, Ford, and the others have some public relations work to do. 

Popular Mechanics magazine was embarrassed about predicting, on one of its 1957 covers, an “aerial sedan” for 1967, and now we have heard from them again, in July 29th’s “Who’s Afraid of the Self-Driving Car?”.   Author Johanna Zmud, a Texas A&M Transportation Institute senior research scientist, made good statements and raised good questions, such as “the number of highly automated cars as a share of everything on the road will grow over time, but only relatively slowly,” and “how will they handle changing conditions on unpaved roads, which make up nearly half of the country’s 4 million miles of road?”.  She also said that “any argument that self-driving cars will be an antidote for congestion may be, at best, uninformed and specious” (I’d go for ‘overly speculative’), “what is certain is that we’re experiencing the most pivotal time in transportation history since we started building interstate highways,” and, perfectly articulated, “they’re not quite ready yet – and we’re not either – but it won’t be long.”  A fine, fresh voice.

Electronic hacking is a huge potential driverless issue, but that’s not the only kind.  In the August 4th “Researchers Find a Malicious Way to Meddle with Autonomous Cars” (Car and Driver), Mark Harris described “an attack algorithm” which, ostensibly knowing the internal workings of sign-interpretation software, involved stickers or apparent graffiti put on road signs to fool the systems into construing, say, stop signs as saying Speed Limit 45.  The University of Michigan scholars who developed and tested this destructive technology have done well to pinpoint it as a true possible problem, which, I hope, can be solved through protection of proprietary code and stronger penalties for road sign defacement.

Going back to the business side, we have “Driverless-Car Outlook Shifts as Intel Takes Over Mobileye” (Neal E. Boudette, The New York Times, August 8).  The chip manufacturer, as Boudette said, has jumped into the middle of the self-driving world by spending $15.3 billion on one of the largest and most successful driverless component makers, which is now producing “cameras, sensors and software that enable cars to detect what is ahead.”  Intel now plans to build 100 self-driving cars and will test them in, among other places, Jerusalem, with its extreme pedestrian chaos; per Mobileye co-founder Amnon Shashua, “if you can successfully drive autonomously in Jerusalem, you can drive almost anywhere in the world.”  Intel is now established as a competitor for Nvidia, which, per Boudette, “offers chips with more raw processing power.”  But we will see.

I end with the combined technical and philosophical big-picture August 11th Salon “Self-driving cars are coming – but are we ready?”.  Johanna Zmud and her co-worker Paul Carlson combined on more clear observations and queries.  On one, “how might our nation’s roads and highways, and the driving done by we humans ourselves, need to change as autonomous vehicles become more ubiquitous?”, I have maintained that the burden must fall on the cars and trucks themselves.  Indeed we “won’t likely find many in a dealer showroom for at least 10 years,” cities will see many more of them before they appear in any numbers on highways and in rural areas, and probably if not certainly “self-driving cars will be ready for the open road long before the open road is ready for them.”  Although we can and should expect that use of driverless vehicles will decimate American and world highway casualties, there will be problems during the long transition period, during which there will be a mixture of meatmobiles and what will, by the end of this century, just be called “cars.”  And, as correct as anything cited here, “we can expect it to be an eventful ride, no matter who’s in the driver’s seat.” 

Three more weeks down.  We’ll get closer to up-to-date next week.    

Friday, October 13, 2017

Driverless Cars – More Progress and Positioning – I

Once again, I could probably write a weekly blog on this topic alone.  It’s worthy of it too, as we will see this week and beyond.  So, let’s start to get caught up.
We start with Fox News’s June 30th “Driverless ‘CargoPods’ are delivering groceries to Londoners in new trial.”  That’s a valid autonomous-vehicle proposition, and will move from the manned trucks now in use to unoccupied ones texting or phoning customers when they’re outside, but how much will they charge?  As name recognition and brand establishment would seem less important for a venture both seriously price-competitive and startable on short notice, it seems wrong for any firm to accept losses for years to position themselves for eventual possible profitability, so online grocer Ocado should be expecting positive cash flow soon.

Less substantive is Brent Snavely’s July 2nd Detroit Free Press report that “Ford exec points to ‘great progress’ in driverless cars.”  That company has done better than moving toward “deploying its first fully self-driving car by 2021” which others have achieved already, such as by assembling a consortium including software maker Argo AI.  Ford’s vice president of research and advanced engineering may have said “we don’t worry too much about where the competitors are,” but we don’t need to take this sort of announcement, clearly for public consumption, seriously.

One area of autonomous vehicles which could go in many ways is the nature of their interiors.  With no need for them to be focused on the needs of drivers, car interiors will be blank canvases.  One of an infinite number of possibilities, described in “Autonomous cars will bring a moveable feast of products and services” (Cyrus Radfar, Yahoo Finance, July 2), is “the mobile mall,” using displays to simulate the interiors of a variety of stores.  Such would coordinate well with the inexorable-seeming trend toward online shopping, post-credit-card point of sale technology, and the preferences of those in the Millennial and Generation Z generations.  For car interiors we can use all the imaginative ideas we can find, and this one is certainly reasonable.  

We’re in the early stages of intercity rivalries in this industry, and one of the most prominent so far is “Michigan’s New Motor City:  Ann Arbor as a Driverless-Car Hub” (Neal E. Boudette, The New York Times, July 9).  To the well-established MCity proving grounds, that college town will soon add autonomous buses, as of early July was up to 1,500 vehicles which “radio their speed and direction to each other and to equipment like traffic lights and crosswalk signals,” and soon expects to make good use of all those personally-carried cellphones by having them broadcast pedestrians’ locations to traffic signals and on to cars.  Elsewhere in that state, additional and much larger proving grounds are being built in Ypsilanti and Flint, where, among other things, consortia can aggressively address the problematic issue of autonomous snow driving.

We saw more progress in such business conglomerations in “Waymo and Apple Pick Their Dance Partners for Self-Driving Cars” (The Motley Fool in Fox Business, July 10th.)  We now have Waymo, Google’s driverless vehicle concern, pairing with Avis and Chrysler, and Apple simultaneously announcing its Hertz partnership involving Lexus cars.  It’s well worthwhile for consortia to work with companies knowing about physically managing millions of vehicles, and also benefiting Hertz and Avis is easier entrĂ©e into the future of car rental, which, as the article points out, “will likely become more, not less, relevant in an autonomous world.”  The consortia themselves may include “non-exclusive partnerships,” which, as we will see in this series, are happening already.  These are good positive trends.

It is well worthwhile to keep an eye on how investors, as well as other analysts, see driverless-technology companies.  These same sources published “3 Top Stocks in Self-Driving Cars” on July 12th, a piece, which after suggesting that to some people such vehicles still seem “like a bit of cheesy ‘50s-era science fiction” and citing a well-obsolete Business Insider study suggesting “that there will be 10 million autonomous cars on the roads by 2020” (not that many only three years from now) and overly conservative HIS Automotive forecasts of 600,000 by 2025 (let’s try 10-20 million) and 21 million by 2035 (could be 200 million), then moved on to the merits of Waymo, onboard computer maker NVIDIA, and China’s driverless consortium leader Baidu.  All are potentially great buys, especially for investors with the stomach for risk, as any could also turn out like Stutz or Hupmobile.  

A problem with that huge Asian market is the subject of “China’s Grip on Maps Hinders Self-Driving Car Makers” (Liza Lin and Tim Higgins, The Wall Street Journal, July 13).  China, which we sometimes forget is not a free country, “is limiting the amount of mapping that can be done by foreign companies.”  A bad idea, and one reason why I do not think it will be anywhere near the forefront of self-driving progress.

Moving on to the regulatory side, we found out on July 21st from Kevin Roose in The New York Times that “As Self-Driving Cars Near, Washington Plays Catch-Up.”  Although there is no such thing as “a bill that would speed up the development of self-driving cars,” federal regulatory efforts, thus far mercifully mild, are still small in the proposed Highly Automated Vehicle Testing and Deployment Act of 2017.  That bill may do more to remove obsolete regulations than to create new ones, and, as Roose pointed out, state governments, wanting economic benefits from driverless business activity, have generally been lenient as well.

That’s three weeks’ worth – much more will follow. 


Friday, October 6, 2017

September a Strange Employment Data Month: We Lost Jobs, But Most Numbers Were Better, Including Latent Demand with the AJSN Showing We’re “Only” 16.7 Million Jobs Short

The story going into this morning’s Bureau of Labor Statistics September report was about our two major mainland-affecting hurricanes, Irma and Harvey, and what their consequence would be.  The numbers turned out worse, in some ways, than expected – instead of the consensus prediction of 90,000 net new nonfarm positions, we had a loss of 33,000 – but otherwise, headed by the seasonally adjusted unemployment rate which instead of breaking even as projected improved from 4.4% to 4.2%, they got better.  September seemed to be a good month, with unadjusted joblessness off from 4.5% to 4.1%, average private nonfarm wages up 12 cents per hour to $26.55, the count of those working part-time for economic reasons or keeping shorter-hours positions while unsuccessfully looking for full-time ones down 200,000 to 5.1 million, and the two measures of how common it is for Americans to actually be working, the labor force participation rate and the employment-population ratio, up 0.2% and 0.3% to 63.1% and 60.4% respectively.  The number of long-term jobless, however, did not improve, holding at 1.7 million. 

The categories of marginal attachment mostly bettered as well.  The number of those wanting work but neither officially unemployed nor looking over the previous year dropped over 300,000 to reach 3.3 million, while that of those claiming to be discouraged and those wishing for employment but momentarily not available for it fell as well.  The counts of those purporting no interest in employment and people wanting work but currently in school or training were exceptions.  Overall, the American Job Shortage Number or AJSN, the monthly measure of latent demand for jobs across 11 different employment categories, fell 940,000 to reach its lowest outcome since April, as follows:

Since the AJSN is not seasonally adjusted, we expected some decrease between relatively jobs-poor August and jobs-rich September, but the drop was more than that.  That was also shown in the difference between last month and a year before, also over 900,000 and almost all due to the almost exactly one million cut in the number of officially unemployed.  Note that according to the BLS, “persons with a job are counted as employed even if they miss work for the entire survey reference week… regardless of whether or not they are paid.”  Although that 7-day-period started the day Irma reached the Florida coast, this BLS rule, unless people knew their jobs were gone with the storm, canceled out most of its September statistical effect. 

It is peculiar indeed that employment data for a month with so few work opportunities added should look so good, not only in spots but otherwise across the board.  Overall, it is now best to judge September’s data as showing potential but not yet solid improvements.  If its gains hold, and October’s new positions reach at least 300,000, we can take credit for an unexpectedly fine month.  If not, we will need to average these two together to see just how well we are doing.  So, although I couldn’t clearly see the turtle through the wind and rain, I think I saw another step forward.  

Friday, September 29, 2017

Guaranteed Income in the Press: Some Understand It, Some Miss the Point, and All Provide Welcome Attention

We’ve had more writing on what I have long considered one of the few possible comprehensive solutions to the jobs crisis, and what thinkers back to at least Thomas Paine have proposed for centuries before that. 

The first piece is from April 25th in Business Insider, “Canada is launching an experiment that will give 4,000 people free money until 2020.”  In the first paragraph, author Chris Weller said “a regular monthly allowance” was “a system known as basic income,” and soon thereafter named the soon-to-begin Ontario Basic Income Pilot as an example of that.  This program would get 4,000 Ontario residents “additional income based on their current salary,” which would be reduced by half of any additional earnings.  Maybe this is a good idea, but it’s not a guaranteed income.  It’s welfare.  It’s akin to some American situations, in which jobless people lose benefits once they find work.  Using that name for this sort of program is destructive to the idea of a true basic income, and will feed into conservatives’ concern that it excessively discourages people from working. 

The same author reported in the same publication on July 5th that “Hawaii just became the first US state to pass a bill supporting basic income.”  Hawaii’s government, though, is not planning to implement it, or even to determine if it would be justified, but to collect preliminary data which could result in another study.  It was not clear if Weller’s view on what guaranteed income is had changed over the intervening two-months-plus, but here he said that the person spearheading the effort, state representative Chris Lee, “had become intrigued by the idea of paying people a salary just for being alive.”   

On August 1 we went back to the definition problem.  “Universal Basic Income Experiment in Finland Not Looking Good,” in CNS News, combined author and Cato Institute economist Daniel Mitchell’s undeveloped and almost reflexive stance against it with Finland’s upcoming effort, which, as it will only consist of giving benefits to out-of-work people, does not match the title.  Perhaps in Finland it would be a bad thing, as Mitchell said, to cut the number of surplus workers, but I doubt it, and that would not be a problem in the United States, where at last count we could easily fill 17.6 million additional jobs.  In any event, Finland’s plan is only a test of generous unemployment benefits, and its success or failure will be irrelevant to the merits of guaranteed income.

After the last piece, I was refreshed to see one which showed better understanding.  In “Top Economists Endorse Universal Basic Income” (Forbes, August 31), contributor Frances Coppola shared proceedings from two economics conferences.  At one in Mainau, two panelists hit the right notes.  Sir Chris Pissarides spoke positively of globalization and automation, while acknowledging their job-reducing effects, and suggested a “universal basic income” as a way “you can trust people to decide for themselves how to spend their money” by letting the market provide social services.  Daniel McFadden “advocated unconditional income transfers.”  Coppola’s conclusion that “universal basic income is a radical policy that requires a radical funding solution” is, also, a point that must be made.

While likewise positive, and mentioning the unconditional nature of such a program executed properly, Ben Schiller’s “A Universal Basic Income Would Do Wonders For The U.S. Economy” (Fast Company, September 13) showed weaknesses around the edges.  Schiller named “a huge jolt” as one of its justification, or at least mitigating factors, citing research showing that a $1,000 monthly stipend for all adults would expand the economy more than 12% over eight years.  That’s not very much, and the article also suffers from references to “benefits not conditional to having a job” and “you don’t have to work… to get a UBI,” when more worrisome is, as above, others’ views that such money should only be distributed to people not working.  I was glad to see, though, a glimpse of why the technical community, which will probably be a necessary constituency in getting one implemented, is increasingly supporting guaranteed income.

Last week we saw an understandably but discouragingly political stance by a major possible 2020 presidential candidate.  In “Joe Biden Is Against a Universal Basic Income – and He’s Right” (The Daily Beast, September 26), the uncredited author heralded the candidate’s September 19th remarks, such as “our children and grandchildren deserve… the skills to get ahead, the chance to earn a paycheck, and a steady job that rewards hard work,” and “a job is… about your dignity… self-respect… your place in your community.”  The writer considered whether “Biden’s comments put him on the wrong side of history,” but soon afterward, unfortunately, disposed of that idea.  It may be a good move for Biden to go after Donald Trump’s base by talking as if he were giving a 1980 small-town stump speech, but we know nothing about he would create anything like 17.6 million new jobs, and the author’s comments that guaranteed income “would just be one more government handout” and would result in “millions of aimless Americans playing video games in their basements” make it clear that he or she, along with Biden, is also out of touch with the issue. 

The best article in this batch, “Let’s not give up on a guaranteed basic income before we’ve tried,” by Chris Hughes, was published on September 21 in The Hill.  Without even needing to show that most proposals and pilot efforts under that and similar names have not been guaranteed basic income,  Hughes made all of the right points – naming and generally refuting Biden’s speech above, proposing $1,000 per month (“for every American,” not only those without jobs) as a possible level, acknowledging that employment opportunities are not yet “disappearing wholesale” and that one who “believes in the dignity of work” need not oppose it, and proposing non-income-tax money sources such as a financial transaction levy.  He clearly understands the major considerations, along with what such a program should and should not be. 

This is not the first time we have heard from Hughes, a Facebook co-founder, and given his current position, co-chair of basic income advocacy group The Economic Security Project, it won’t be the last.  Although I do not support immediate guaranteed income implementation, as an ending I can’t do better than his: “Let’s not give up before we have even tried.”      

Friday, September 22, 2017

Six Updates on Old Jobs Issues

Over the past four months, half a dozen articles on work-related areas I have written about have reached me.  What do they have to say?
One old erroneous but still popular notion was the subject of two of them.  In “How Unskilled Americans Are Creating a ‘Crisis’ for the U.S.” (U.S. News & World Report, June 7th), Andrew Soergel passed along a series of incorrect statements.  There is no “skills gap plaguing the private sector,” only a disconnect between what private employers would like to pay and what their applicants will accept.  We can’t “match those 6.9 million (unemployed Americans to 6 (million job openings),” since many of those allegedly available positions are either bogus or require unreasonable qualifications.  No United States Labor Secretary has any business saying that “education is not focusing on the skills demanded by today’s workforce as well as they could or should,” without mentioning the widespread need for employers to rediscover training.  There are plenty of candidates skilled in “trade professions like welding and mechanical repair,” now that community colleges are teaching those things, but they can’t be had for the likes of $10 per hour.   Robert Samuelson, writing in the June 26th Investor’s Business Daily (“Is the Labor Shortage Here?”), at least questioned mistaken views such as a pending labor shortage in which “the postwar employment model might make a comeback” (not with latent demand for over 17 million jobs), and that a 1% increase in “the labor share of the economy” will mean higher worker demand, as it is “too low” (not when additional copies of ever-increasing proportion of products require virtually no more human involvement). 
The actual future of 3D printing, increasingly labeled “additive manufacturing,” was well assessed by the unbilled Economist authors of “Printing things everywhere” and “The factories of the future,” both in the July 1st issue.  Although we now know that this technology will not be on a par with invention of the automobile, and “will never revolutionize mass production,” it will still be greatly valuable for “producing one-off prototypes, because changes are more easily and cheaply made by tweaking a 3D printer’s software than by resetting lots of tools in a factory.”  It is also on its way to producing replacement body tissue, or “bioprinting,” bringing us ever closer to science fiction author Larry Niven’s “autodoc.” 
With its inferior-good status among ordinary working people, is it true that “the gig economy is a boon for boomer retirees” (Steve Vernon, CBS News, July 3)?  Yes, I think it is.  It facilitates many low-paying but pleasant positions, such as babysitting, providing rides, and dog walking, for those not needing full-time income and therefore more willing to accept its shortcomings.  Expect it to continue being beneficial, with the people over 50 and over 60 to whom Vernon referred including more and more over 70 and 80.
The remaining two articles take us further into the world of science-fiction-meets-reality.  In the first, Maggie Astor’s July 25th New York Times “Microchip Implants for Employees?  One Company Says Yes” told about a Wisconsin technology company allowing its workers to opt into having “a chip the size of a grain of rice injected between their thumb and index finger,” allowing them to effortlessly gain access to company buildings and pay for cafeteria food.  That convenience, and the fun of being in on new technology, have won out for almost two-thirds of Three Square Market’s employees, but others have declined, due to being “a little nervous about implanting something” or perhaps by what a cited business professor pointed out, that “once (the chips) are implanted, it’s very hard to predict or stop a future widening of their usage,” in ways that may not even be shared with workers.  There is, indeed, a gap between one supervisor vaguely suspecting that someone is spending an unusual amount of time in the bathroom, and another receiving periodic reports telling exactly when and for how long.  Therefore, even if nonparticipants have no objection to carrying cell phones with continuous GPS tracking, this idea does not rate to become the American norm.

Another long-held suspicion of mine is that “artificial intelligence” is not intelligent at all, and still ultimately only resembles 60-plus year-old algorithmic computer-code-interpreting capability.  Gary Marcus, writing in the July 29th New York Times (“Artificial Intelligence Is Stuck.  Here’s How to Move It Forward.”), seemed to share that view, saying such things as “computers that can educate themselves – a mark of true intelligence – remain a dream” and “such systems can neither comprehend what is going on in complex visual scenes (“Who is chasing whom and why?”) nor follow simple instructions (“Read this story and summarize what it means.”).”  He suggested that machines be trained, somehow, to use “bottom-up knowledge,” or “the kind of raw information we get directly from our senses,” in huge national facilities.  That seems a long way off, and may never happen without a huge conceptual breakthrough – so for now, please remember that computers still cannot, and are still no threat to, think.  But we can – and, more than ever if anything, we must.    

Friday, September 15, 2017

Uber and Lyft Beyond the Management Gaffes – What’s Been Happening, and How Can They Survive?

The two largest American ridesharing companies have garnered attention, and a couple of interesting headlines, these past few months. 

The first, “San Francisco investigating whether Uber, Lyft are public nuisances,” appeared in Fox Business on June 5th.  This odd move was driven by that city’s government’s set of mostly left-leaning objections, including allegedly poor usability by those “with a disability” (does this phrase now only refer to ambulatory incapacities, as “accessible” has come to mean “wheelchair-accessible”?) and a company-dictated driver strategy that supposedly “disfavors” some neighborhoods.  Though their City Attorney also named the problem of being “stuck in traffic behind a double-parked Uber or Lyft,” since that issue could be easily solved by traffic enforcement it was clearly less important to him than the other two, as was his disapproval of drivers coming from surrounding areas and becoming “drowsy.”  Wrong.  Even if you don’t like them, running Uber and Lyft out of cities for poorly disguised ideological reasons is not the way.

The second headline, “Uber Can’t Be Fixed – It’s Time for Regulators to Shut It Down,” graced a June 21st Harvard Business Review piece.  During the company’s horrendous mismanagement streak, author Benjamin Edelman wrote that “the problem at Uber goes beyond a culture created by toxic leadership,” and that the ride-sharer’s “business model is predicated on lawbreaking,” so it “can’t easily pivot toward following the rules.”  Some of what Edelman mentioned was more skirting than flouting, by, for example, avoiding the need for million-dollar taxi medallions by dispatching through apps instead of through phone calls, and some, such as the Greyball authority-dodging effort, were seemingly determined illegal only after they were put into practice, yet the company has built up quite a track record at this sort of thing, in line with music pirating facilitator Napster’s instead of those of other large electronic innovators Amazon and Facebook. 

The conclusion Edelman reached was the same one I put forth years ago, to legally treat Uber and Lyft as the cab companies they are.  That novel-****ing-idea made it into another headline, “Uber Should Be Regulated as Taxi Service, European Legal Adviser Says” (The New York Times, July 4th).  Author Amie Stang reported on a Court of Justice of the European Union nonbinding recommendation requiring that Uber “abide by tough European rules governing taxi services,” and in effect upholding a $500,000 fine levied by French authorities “for running an illegal transportation service.”  Fair is fair.

New York’s lawful taxi companies struck back that same month with true innovation, involving “two competing ride-hail apps” Via and Curb, on a way for people to agree in advance to combining with other passengers on rides (“Share a Cab in New York City?  It’s Now Easier,” Winnie Hu, The New York Times, June 6th), in exchange for lower fares.  They seem to have organized the process well, with limits of two parties and three people and drivers not required to participate.  A fine idea. 

What may be the only way out for Uber and Lyft, and a better attitude from a certain city on a bay, made the September 12th Yahoo News, in “Lyft to begin testing self-driving cars in San Francisco.”  The experiment will offer free rides, if passengers agree, in generally autonomous but human-monitor-equipped taxis, through “an area that’s already been mapped out in very high detail.”  That effort may seem not to break new ground, but it doesn’t need to, as the more companies can practice driverless ridesharing the more it will be improved and accepted, and the sooner it will arrive as a normal practice. 

Overall, the prospects of Uber and Lyft continuing to do business as they have look bleak.  As I predicted last year, the regulators are circling.  Accordingly, ten years from now they may be long gone, or they may be in the thick of automated, and fully legal, taxis – the choice is up to them.  

Friday, September 8, 2017

In Four More Months on Minimum Wage Increases, We Have Reached a Ceiling

The past year has made quite a difference in the lowest hourly amount American workers can legally be paid.  Before it, we were hearing about “the fight for $15,” with implications from those left of center that such a struggle was not only noble but just.  Now those calls have died down, and that quest doesn’t look worthy, even to many liberals.  What has happened to shift the tide?

In “The Minimum Wage Eats Restaurants” (The Wall Street Journal, May 9), marked as “Commentary,” Michael Saltsman presented data that 60 San Francisco-area eateries closed between September and January, and cited one owner as saying “there’s only so much you can charge for tamales.”  Saltsman cited a Harvard and Mathematica study connecting a $1 increase in the minimum wage with a 14% rise in the chance of a “3.5-star” restaurant folding, and concluded that better pay and benefits “don’t mean much if you can’t find a job.”  In contrast, though, The New York Times editorial board, in “Remember the promise of good jobs?” on June 13th, while correctly in my view disapproving of the Fed raising interest rates, the presidential administration seeking to reduce top-bracket taxes, and the blocking of badly-needed for-inflation adjustments of mandatory overtime pay thresholds, tripped on issues of average pay not tracking productivity gains (why should it?), higher minimum wages when over 17 million Americans want to work and can’t find it, and a vain hope for “Republican leaders’ changing their ways.”

For 16 days in late June and early July, we had what might be called “dueling studies” on the outcome of Seattle’s minimum wage increases.  Fox Business, in “Study:  Seattle minimum wage hasn’t cut jobs” (June 20), started the ball rolling, naming a University of California at Berkeley research effort finding that, without, though, a look at how many additional jobs went uncreated, and citing a University of Washington effort determining that “the law appeared to have slightly reduced the employment rate of low-wage workers even as it boosted pay.” The New York Times also covered both in Noam Scheiber’s June 26th “How a Rising Minimum Wage Affects Jobs in Seattle,” concluding that its labor market was unusually strong and that total earnings by workers in low-paying jobs actually decreased, as did The Seattle Times, in Jon Talton’s nicely titled June 27th “Seattle’s minimum wage:  The plot thickens,” which noted that neither piece of research had yet been peer reviewed, but did not mention that automated solutions, which can be stated and sold in terms of the cost of labor being replaced, can forestall additional positions.  Three days later Holman W. Jenkins Jr. weighed in in The Wall Street Journal, opining that “Seattle Aims at McDonald’s, Hits Workers.”  Although he lost any claim to objectivity by not even mentioning the Berkeley study, he made good points, such as that President Obama’s statement “that a full-time job should be able to support a family,” when implemented through higher minimums, “was a way of saying that jobs that won’t support a family shouldn’t exist,” and that many countries allow “teenagers, trainees,” and “probationary hires” to be paid less.  Politically centrist USA Today, in July 5th’s “In ‘Fight for $15,’ Seattle loses,” concluded the same, matching Yahoo Finance’s Rick Newman in June 26th’s “A $15 minimum wage appears to be too high.”  The last straw, though, may have come from generally liberal Washington Post columnist Catherine Rampell, in “Feel-good ideas that need a hardhearted examination,” who concluded that a mandatory $15 minimum “would risk pricing a lot of people out of work,” such as in Mississippi, where half of workers were now paid below $14.22. 

One indication of a trend topping out is people not only refusing to join it, but rollbacks.  Fox News’s June 29th “Maine restaurant workers successfully lobby to lower the minimum wage” recapped how servers arranged for defeat of new laws endangering their jobs by forcing employers to pay them the same minimums as non-tipped workers.  An even clearer sign of a tide turning is backlash reactions, such as the subject of “Missouri Republicans Lower St. Louis Minimum Wage from $10 to $7.70” (, July 3rd), implementation of a state law barring communities there from setting their own, higher, floors.  That is a questionable step, since one problem with state-level wage mandates is that they do not account for differing living costs, resulting in required pay being too high in some areas, too low (if you advocate meaningful minimum wages) for others, or both, and they prevent local governments from making decisions that should fall to them.  

In the context of the fight for $15 being seemingly on the way out, we probably won’t need to worry about something being assessed in the United Kingdom, a “Minimum wage push for gig economy workers” (Kamal Ahmed,, July 10th).  That is a good thing, since, in addition to removing this bottom rung on the ladder, such would require either determining maximum lengths of time these tasks would take or paying less effective workers more to complete them.  I do like the idea of officially designating them “dependent contractors,” between employees and independent agents, which while not as good as making them the same as company-hired would remove the pretense that they are free to work any way they want.  Yet they cannot viably have guaranteed hourly rates.  That would be bad – and, as I also believe that about higher national minimum wages, the shift in our views is positive.