Wednesday, April 20, 2016

The Minimum Wage: A Bad 28 Months, and Getting Worse For Now

In December 2013 I published “Six Points Against a Higher Minimum Wage.”  It became one of my most-read Work’s New Age blog posts, with more than 2,000 views to date, and has generated good discussion and healthy controversy.  

Although I do not subscribe to ideology from either the left or the right, one of my fixed principles is supporting the maximum number of American jobs; since forcing organizations to pay people more than they would otherwise can only damage that, I am an archconservative on this issue, against any increase, let alone the up to 106%, to $15.00 per hour, many have been advocating. 

The six reasons I listed address different flaws in a higher minimum, clear but often lacking in publicity:  the incorrect assumption that most or all positions paying less than that are with very profitable companies; the nationwide job dearth, currently 17.8 million as measured by the American Job Shortage Number (AJSN); the already high demand for these opportunities even at current wage levels; the folly of worsening the deepest gap in American employment, that between the low paid and those not paid at all; that, between those not in poverty now and those for whom even $15 per hour would not get them out of it, there are relatively few cases where that rate would make the difference; and the excessive damage it would do to both workers and their employers in poorer areas.  I also noted that my conservatism on this issue did not extend to unemployment benefits or food stamps, which should be extended and made readily available for all in need of them, respectively.  I have also advocated, perhaps paradoxically, a guaranteed citizen’s income, which would end the erroneous idea that those offering work are responsible for the welfare of those they hire, and, if the minimum wage were repealed, would allow for a flowering of pleasant, interesting, or easy, but now illegally-low-paying, positions.

In the two years and four months since, there has been a great deal of activity here.  News stories about protestors who have latched on to specifically $15 per hour, usually but not always in the fast food industry, seem never to end.  Despite inflation since then at 2% annually, 12 states raised their minimums January 1st, with increases from 25 cents to $1 per hour, with current rates now headed by $10 in California and Massachusetts.  Although the press has generally been in favor of such moves or at least neutral toward them, that has changed recently, with unfavorable but apparently straight news stories from the Los Angeles Times (“California minimum wage hike hits L.A. apparel industry: ‘The exodus has begun,’” Shan Li and Natalie Kitroeff, April 15) and Investor’s Business Daily (“Minimum-Wage Hikes Hit Hiring in California, Arkansas,” Jed Graham, March 15), an expository article in CNS News (“California Minimum Wage Could Cost State Taxpayers Billions,” April 13), and anti-increase opinion pieces in The Week (“Democrats have lost their minds over the minimum wage,” Shikha Dalmia, April 11), and, astonishingly enough, The Huffington Post (“Don’t Kid Yourself on the $15 Minimum Wage,” Stephen Adams, April 12).  On the Democratic presidential campaign side, though, candidate Bernie Sanders has consistently been a staunch advocate of that national $15, and his opponent Hillary Clinton actually took criticism about, and as a result walked partially back on, her view that it should be “only” $12.  (To my knowledge, none of the 17 original Republican candidates advocated any minimum wage increase at all.)

These last articles put forth a few objections beyond my original six.  Adams claimed a higher minimum wage would generate “a moral hazard,” with workers at that rate “conned into thinking they don’t need to build up their human capital to earn a decent living.”  I’m not sure this idea is valid, and don’t have sympathy for his additional assertion that it would damage companies by compelling them to raise pay on higher-compensated employees, since above the mandated minimum that would be caused only by simple market forces.  A better cause for concern, suggested by another Graham article, is that employers, when forced to raise wages against their will, may recoup that by taking other benefits, such as education payments and vacation time, away from them. 

How are businesses dealing with giving substantial raises to all of their lowest-paid employees, and what do press sources think they need to do?  Articles in The Washington Post (“As minimum wage marches toward $15, small businesses adapt,” Joyce M. Rosenberg, April 13) and Forbes (“How To Cope With New Minimum-Wage Laws,” Bill Fotsch and John Case, April 12) address this matter, and although one is news reporting and one is couched as advice for entrepreneurs, some strategies in them are similar.  They both name raising prices, cross-training more often, and moving to what we might call a Costco employee model, with higher pay, better benefits, and higher expectations leading to, they hope, better performance, lower turnover, and fewer supervisors.  Other ideas mentioned by only one of the stories were passing work onto customers, such as restaurants requiring them to fill their own coffee cups and sit-down places getting them to bus their own tables fast-food style; teaching employees about the financial needs of the businesses to get more focused efforts; moving work to other states or countries; and installing labor-saving equipment.

The ideas in the above paragraph are the ones we are likely to see as the minimum wage marches up toward, and in some places to, $15 per hour.  The future of work at that rate of pay will belong more and more to those now the best.  Per the CNS News piece, jobs will be disproportionately lost by younger, less educated, and less skilled workers – the people whom liberals wanted to become the prime beneficiaries of mandated higher pay.  We will see again the likes of what happened with warehousemen, who, two generations ago, needed little beyond physical strength, ability to read, and common sense, but now must also be not only more efficient workers but skilled computer users.  And there is no denying that positions will go away – in January, 20 states lost net jobs, of which 7 were among the 8 raising their minimums 50 cents per hour or more, including California, up $1, which broke a streak of 54 consecutive seasonally-adjusted monthly gains.  As above, and per an April 15th Forbes article (“Even The Fight For $15 Now Recognizes The Cost Of A $15 Minimum Wage,” Tim Worstall), there rates to be a backlash.  When August 2018 arrives, despite now-scheduled increases continuing, we may know the impetus behind this effort has peaked.  For now, however, we must deal with the combination of higher minimum wages and a permanent jobs crisis the best we can.  

Friday, April 15, 2016

Jobs and the Gig Economy – Or Do I Mean the Sharing Economy? – Part 2

Last week I wrote about a new expression – the “gig economy” and proposed it be used not as a synonym for sharing resources other than labor, but for employment of sorts through a chain of one-off work assignments.  I noted in passing that these propositions have “generally weaker prospects” than those in which labor was secondary to providing the likes of vehicles, housing, and equipment for their customers.  Why is that the case?

First, for employees, working small gigs is classically, in economic terms, an inferior good.  That means it is something that people use less when times get better, such as payday loans, margarine, or the lowest grade of beer.  When transitions between opportunities are included, it is clear that individual ones need to pay well over the minimum wage for even that level to be reached over the course of a week, month, or year, which is often not the case.  That is why Steve Tobak wrote in Fox Business that depending on these engagements for income is “no substitute for a career.” 

Second, the problem of poorly accounted-for expenses, on which Uber almost depends from its drivers, raises its head with individual work assignments.  That takes the form of setup and preparation time which shrinks net hourly receipts, as well as travel and needed-resource-acquisition costs.  Other things being equal, those are higher than for regular employees, due to workers having insufficient time to determine the most efficient solutions and to the variable nature of assignments preventing many economies of scale.    

There are three good things, however, about employment in the gig economy.  These income propositions can provide experience, not only valued by regular-job employers but allowing workers to find out how much they like and can do something, and get paid a bit at the same time.  They allow those who can’t find a regular job to earn money.  And, maybe best of all, they constitute a partial repealing of the minimum wage. 

Now on to the business side.  There is strictly no such thing as an industry requiring occasional employees, but authors of articles on the gig economy have discussed a number of new, and not so new, business ideas along with it.  Some never did well in the past, such as providing delivery of low-priced items – author, entrepreneur, and radio talk show host Bruce Williams said, decades ago, “you can’t deliver three dozen doughnuts” – but are being tried again, usually with similar results.   A great mass of them have potential but have not succeeded yet, mainly because their managements so far lack the experience to know how best to run them – of this grouping, most will fail but some will get there before their venture capital runs out.  One especially good principle is still to cater to the 1%, as money is concentrated to the point where those with large amounts of it will outsource almost anything they don’t want to do in person and may be willing to pay very high hourly rates for goods and services brought to them.  Who knows, the idea of selling extra-fresh milk from Omaha dairy cows, as Steven Hill mentioned in Salon last month, could work, as might an infinite number of other propositions; when the market has time to do its magic, winners will remain. 

Overall, we can expect that individual work assignments will provide money for many people.  Maybe not as much as they would like, but enough to make a real difference in their lives.  That is a superb thing.  It rises to the level of a possible comprehensive solution to the jobs crisis, along with guaranteed income, reduced work hours, assured government employment, and payment for providing online data and content. 

Five ideas, one for each year I have been writing on this subject.  If you can add to this list, please let me hear from you.

Friday, April 8, 2016

Jobs and the Gig Economy – Or Do I Mean the Sharing Economy? – Part 1

A new phrase hit the news earlier this year – the “gig economy.”  Like many neologisms, it is sort of catchy, evoking entertainment bookings and, with it, something of freedom and maybe creativity.  It first registered with me with a March 27th Salon Steven Hill article, “Good riddance, gig economy,” which was followed by a Wall Street Journal one the next day, “The Entire Online Gig Economy Might Be Mostly Uber,” and a Fox Business effort only this past Wednesday, which took a surprising for-them liberal view, “The Gig Economy:  Boon for Companies, Bust for Workers.”  Although the Journal used it as early as February 18th, The New York Times must have missed the beginning of this expression, since they had a similar piece three days before Salon’s, “The Uber Model, It Turns Out, Doesn’t Translate.”     

Unfortunately, this phrase also has a shortcoming typical of those in the early stages – its definition is fuzzy.  All four of these articles seem to conflate what the idea of working gigs would seem to be – people offering their labor for one-off opportunities – with what is still called the sharing economy, or income openings through providing other tangible assets, such as cars, apartments, tools, and so on.  Although owners must contribute labor in the process of sharing their possessions, that is secondary, even for Uber unlicensed-cab drivers, as what customers are paying for is the resource being provided.  On the other hand, someone willing to be paid to pick up and deliver something may not need any resources beyond time and effort.  A second unclear area is the steadiness of the work with one employer (sorry, Uber management, that’s in effect what you are).  Many and maybe most people driving for that company work full-time, meaning they are available to pick up customers continuously or almost so for over 30 hours per week.  That is in effect the same as true cabdrivers waiting for pickups or radio calls, but not the same at all as people with TaskRabbit or Mechanical Turk choosing working opportunities one at a time. 

Accordingly, I propose to use both expressions in better defined ways.  Let “sharing economy” be the correct form when assets other than labor are not only involved but required, and “gig economy” for individual work assignments.  When neither is the case, if for example someone is employed by a company but is only intermittently able to work and make money, call them, as Hill in effect wrote, temporary help workers.  Given that we’re talking about different things here, what can we say about them?  

A fair amount has changed with the sharing economy since I first wrote about it over a year ago.  As I predicted, there has been a real backlash.  There have been protests and new laws in cities from New York to Jakarta, both from competitors and governments, against Uber, informal hotel-room provider Airbnb, and their competitors.   However, Uber, usable now in 400 cities, car service Lyft, and Airbnb have continued to grow elsewhere.

So does the Uber model translate to other ventures?  Strictly speaking, despite the Times article’s title, it does.  Companies delivering restaurant food or parking cars are not part of the Uber model – they are simple labor services.  That their customers usually order and pay online does not make them fundamentally distinct.  Airbnb, though experiencing expected problems with zoning and other community restrictions, is a success, and there is every reason for people to continue to be compensated for lending everything from sanders to canoes as well.

Business propositions, and jobs, in the gig economy have generally weaker prospects, especially at the full-time income level.  However, there are some real hopes, and niches, for these service propositions.  What they are, and what they mean for jobs in America, will be the subject of next week’s post.  

Friday, April 1, 2016

Another Strong Jobs Month, Yet American Job Shortage Number Shows We Could Quickly Fill 17.8 Million More Positions

The Bureau of Labor Statistics March employment and unemployment data has arrived.  The bad news was that official joblessness ticked up to 5.0%, taking its first worsening since May to return to the level where it sat from October through December.  Although the absolute number of unemployed edged down, there are still 2.2 million officially jobless people who have been out for 27 weeks or longer.  The number working part-time for economic reasons, or hired less than full-time and unsuccessfully seeking that, was up 100,000 to 6.1 million.  Average wages, after dropping 3 cents per hour in February, gained back 8 cents, more than inflation but nothing special considering previous months. 

Otherwise, almost all of the data was positive.  Once again the number of nonfarm payroll positions increased more than population change alone could absorb, this time 215,000.  The two indicators of how common it actually is for Americans to be working, the labor force participation rate and the employment-population ratio, not only did not fall back or even stay the same after February’s unusually large gains but went up again, to reach 63.0% and 59.9% respectively.  Most categories of those marginally attached to the labor force, or neither employed nor officially jobless, lost people, led by a superb 500,000-plus drop in those wanting work but not seeking it for a year or more.

The American Job Shortage Number or AJSN, the measure which shows in one figure how many additional positions could be quickly filled if getting one were as easy as buying groceries, takes shares of 11 different employment statuses, and, this month, fell 356,000, as follows:

Compared with a year before, especially important since the AJSN is not seasonally adjusted, the measure is down 767,000, mostly due to lower unemployment but also because of shrinkage in the two most important secondary numbers, those discouraged and those not looking for a year or more.

Despite the worsening in what is still the most known and publicized employment number, the official seasonally-adjusted jobless share, March was a robust month.  With the labor force participation rate and employment-population ratio a big 0.6% higher than only six months ago, it is clear that many people are indeed going back to work, and, for once, not just slipping into marginal labor-force attachment.  There are still too many Americans without jobs, and a shortage of 17.8 million of them is a lot, but we are clearly moving in the right direction.  The turtle stretched his tendons in March with another good step forward.    

Friday, March 25, 2016

Musings on Artificial Intelligence and Superintelligence, Earth-Generated and Otherwise

I’m going off jobs this week, though this material is strongly if peripherally related.  Here are some thoughts on Nick Bostrom’s Superintelligence:  Paths, Dangers, Strategies, released last year, and the follow-on Raffi Khatchadourian November 23rd New Yorker article, “The Doomsday Invention”:

Point 1:  What we have been calling “artificial intelligence” really isn’t – it’s only algorithmic.  If A happens, do B.  Although capabilities of what can be done automatically have gone up exponentially since the BASIC computer language was developed in the 1960s, almost anything that is electronically generated could still be done, if need be, by using that form of code.  We can’t seriously use that phrase in the present tense until we break that boundary. 

Point 2:  Once we do that, and get, as in the first Terminator movie, “autonomous goal-seeking” from machines, what is to prevent them from the likes of what Arnold Schwarzenegger’s character did, determining that the best way to achieve its preset objective is to kill all the people?  Can we find a way of assuring that all post-algorithmic automata avoid that?  Could terrorists program and release them without that restriction? 

Point 3:  None of what Bostrom writes about is a new fear.  The classic in the field is still Bill Joy’s now 16-year-old article, “Why the Future Doesn’t Need Us.”  It explains how close we may be to letting nanotechnology, robotics, and genetic technology, which unlike nuclear, chemical, and biological threats can be furthered by forces much smaller than governments and large universities, get away from us and possibly even kill off our species.  It’s still available from its original source, Wired magazine, at

Point 4:  We still don’t know about Ray Kurzweil’s Singularity, in which human and electronic intelligence merge and such nuisances as mortality go away, but between the slowing of Moore’s Law and Robert J. Gordon’s lifestyle observations in his new The Rise and Fall of American Growth, it doesn’t look good. 

Point 5:  Bostrom, according to the article, plans to be a corpsicle, in other words will have his body frozen after death for future revival.  Per science fiction author Larry Niven, we have real doubts about whether such semi-dead beings will even be welcome decades or centuries from now – they may be seen as selfish liabilities who had their lives already and whose bodies may be harvested for other purposes.  With our fear of dying thoroughly justified, I can’t blame him, but hoping to come back to life in that way may have the same disadvantages of religion… and be more expensive.

Point 6:  We have got about nowhere on knowing the source of consciousness.  Accordingly, we can never assume that machines of any kind, even if they talk and act a good game, have anything behind that.  The same goes for people after being teleported.  As we know from the Turing Test (the ability of computers to convincingly imitate people), it is possible, even easy these days, for things to act human with all the consciousness of an off-and-on air conditioner.

According to Bostrom, space probes travelling at 1% of the speed of light, or 1,860 miles per second, could canvass the entire Milky Way from a spot inside it within 20 million years.  Given that the galaxy contains, per Khatchadourian, ten billion “Earth-like planets,” and per Bostrom they have precipitated “a sum total of zero alien civilizations that developed technologically to the point where they become manifest to us earthly observers (italics his),” why have we not been visited or even contacted by life forms originating elsewhere?

Point 7:  As Bostrom suggested, they may just plain not exist, having been stopped from spacefaringness by any of many “Great Filters,” such as not experiencing the life-starting spark we still don’t understand, not progressing beyond single-celled organisms, or succumbing to asteroid strikes or stellar disturbances.

Point 8:  It is possible that intelligent life, in effect, carries the seeds of its own destruction, that certain types of technology sure to be developed at some point will cause all life on a planet to become extinct?  Could we ever know?  Bostrom philosophized on this, as have others in the past few decades.

Point 9:  Sentient creatures elsewhere could consistently be more like whales than humans, with little or no use of tools and, though intelligent, bound to a water or other environment hard to leave. 

Point 10:  Between these limitations and the restriction of the speed of light, we simply won’t be contacted all that often.  It could be tens of thousands of years, or more, between aliens’ appearances in our space. 

Point 11:  We have no reason to assume that extremely advanced creatures from elsewhere would even be visible to us.  Even if they chose to arrive in person, instead of watching us through the equivalent of super-powerful telescopes (and if they were half of the galaxy away, they would now be watching what we were doing in 48,000 BC), they could be cloaking themselves by staying out of our light range.  We have no idea what beings could do after thousands of years of post-Industrial Revolution progress, let alone millions, so we can’t rule anything out. 

That last sentence applies to artificial intelligence and superintelligence as well.  Don’t say I didn’t warn you. 

Friday, March 18, 2016

This Year’s Book – How Can We Get More Big Changes? – Part 2

Last week’s post was about Robert J. Gordon’s large, comprehensive, and stunning Rise and Fall of American Growth, which made the case that our country is economically and technologically leveling off, with almost all of the truly fundamental life improvements we have seen since 1870 already in place 45 years ago. 

There is no doubt that Gordon is correct.  If you look at one of the most important books by Herman Kahn, likely the leading futurist of all time, 1967’s The Year 2000 co-authored by Anthony J. Wiener, you will find, among many others, two related lists.  Most of the items in the first, “One Hundred Technical Innovations Very Likely in the Last Third of the Twentieth Century,” have come to pass at least partially, but almost none of the 25 in the second, “Some Less Likely but Important Possibilities,” described by the authors as “even money bets, give or take a factor of five,” have happened, even with 16 additional years.  The only two which have seen real achievement are “effective chemical or biological treatment for most mental illnesses” (not most, but some), and “practical laboratory conception and nurturing of animal (human?) foetuses” (not full-term development, but in vitro fertilization anyway).  There is no doubt that these most sober, thoughtful, and eminent prognosticators of almost 50 years ago, while having no concept of the Internet, would be shockingly disappointed at 2016 technology, and dumbfounded that, as Gordon points out, current apartments would be so functionally similar to typical 1940s living quarters.

Gordon wrote a section, the Postscript, with recommendations on how to implement major innovations.  Unfortunately I found that the weakest part of the book.  It read like a catalogue of a general, mostly liberal, public policy agenda, with connections to life-changing inventions almost all ranging from weak (more immigration) to nonexistent (a higher minimum wage, less prison time, a carbon tax).  If we keep the only idea there favorable to large life-changing technological improvements, a lifting of “regressive regulations,” what can we add to it?

The first move is to agree upon and realize the problem.  Per Peter Thiel, 140-character messaging is not as profound as flying cars.  Even if it were, there is evidence that Moore’s Law, the doubling of computing capability every 18 months, along with its commensurate price decreases, is ending at least temporarily, so it will help us even more to look beyond electronics. 

Second, we can combine that with an understanding of why predictions often fail.  As Joel Garreau wrote in 2005’s Radical Evolution, there are five major reasons for that.  They are more complications than originally expected, prohibitive costs, replacement by other new and unexpected technologies, negative experiences or perceptions related to the idea, and conflicts with cultural and other human behavior.  These have prevented, in the United States and elsewhere, a cancer cure, magnetic levitation trains, home mainframe computers, a nationwide identification database, and more extensive public transportation respectively.  Possible innovations should be checked against these standards, both to anticipate and possibly overcome future problems and to identify those with no real chance of becoming widespread reality. 

Third, we can agree, at least to some extent, on which inventions would be fundamental improvements and which would be only incremental.  For example, though I take issue with Gordon’s view that self-driving cars are not fundamentally different – they will have far-reaching effects on everything from alcohol and drug-consuming patterns to much of American manufacturing and on to our philosophical sense of what freedom actually is – we can develop a set of standards to determine who is right and differentiate the likes of electric power from such as the latest iPhone release. 

Fourth, we can then offer incentives for people and companies to create and develop large life-changing improvements with reasonable chances of widespread acceptance.  One way is through taxes, where research and development on such technologies should gather large breaks.  Another is by appealing to the wealthiest individuals and corporations, those accumulating amounts of cash so vast they explain why the money supply is growing much faster than inflation.  Even those with far less than Bill Gates’s $76 billion and Apple’s $178 billion will see the merit, once the above issues are reasonably settled, of offering some large prizes ($1 billion and up?) for widespread implementation of fundamental advances.

Fifth, we need to move space exploration out of the pure-science-at-taxpayer’s-expense stage and into industrialization.  That is the single most important area-specific change we can make.  Space travel, especially when involving humans, has long been not only a symbol for but a source of innovations, and more of it would help us move forward more than might make logical sense.  The National Aeronautics and Space Administration has served us well over its 58 years, but it is time for it to get out of the mission-originating business and become exclusively an advisor and technology resource for SpaceX, Virgin Galactic, and literally thousands of other and future companies.  There are at least three large justifications for this change.  First, government is inherently too large and slow to excel at innovating with leading-edge technology.  Second, as we have learned since the Apollo moon landings, when space exploration becomes only another federal expense that makes it susceptible to budget cuts.  Third, there are so many possibilities for making large profits in space without governmental competition that companies will have great incentive to be involved there, especially if special tax reductions, as in general above, help them along.  One massive area almost certain to be technically viable is the harvesting of solar power in space, which, with the potential to end almost all of our energy needs cheaply, would certainly qualify as fundamental change. 

In the effort to resume large life improvements, there are two traps we must avoid.  First is cutting off or greatly inhibiting outer-space industry for environmental-protection reasons.  Space is incomprehensibly gigantic, and if manufacturing can be done freely there not only is it better in many functional ways but it can be much less damaging than on Earth, even if regulations are strictly limited.  The second is rewarding ideas instead of their implementation.  Ideas are not what we need.  From technical journals to science fiction to just-plain common knowledge, we have long had plenty, and there will be more.  It is time to focus on action.  We can get back on track, if we realize what we need to do and do it.   

Friday, March 11, 2016

This Year’s Book: Are the Big Changes Over? – Part 1

More than four-fifths of 2016 still remains, but we already have a strong candidate for the book of the year.   Northwestern professor Robert J. Gordon, cited by Bloomberg Markets as one of its most influential 2013 thinkers, has issued a massive but remarkably welcoming-looking hardback on a topic affecting almost everything in public or private business policy.  Titled “The Rise and Fall of American Growth:  The U.S. Standard of Living Since the Civil War,” it develops the thesis that, from a variety of standpoints, we have not continued the improvements to our lives which were greatest in the 100 years ending 1970, and cannot expect to.  It is a three-pound counterweight to the Moore’s Law-fueled projections of rapidly improving computing capabilities driving enormous lifestyle improvements, in which Gordon maintained that the changes we have seen since 1969 have almost all been incremental instead of fundamental, and have not approached the value of “electric lighting, indoor plumbing, home appliances, motor vehicles, air travel, air conditioning, and television,” all of which were in place over 50 years ago. 

For something not mentioned much in print (though I did pass along David Bodanis’s observation that the home lives in the movie E.T. seemed hardly changed 25 years later, and expressed doubt that computer speeds doubling every 18 months meant similar improvements elsewhere, in 2013’s Choosing a Lasting Career), Gordon’s theory has real merit.   What more can we say about it?

First, the end of fundamental innovations is not from lack of possibilities.  On only one area of those, not covered by Gordon, consider the following quotation, from R. Buckminster Fuller’s 1970 I Seem to Be a Verb:  “By 1988, says a federal report, the biggest businesses in the U.S. will be:  (1) The manufacture and service of cars, and (2) the manufacture, insertion, and service of artificial hearts.”  We were on that pace through the early 1980s, until the most advanced such device, the Jarvik-7, proved inadequate, and successors fared little better.  Since then, the leader in artificial hearts has become the American company SynCardia, which in 2013 said proudly that its devices had been installed, as temporary pre-transplant stopgaps, in 161 patients.  As for those transplants, only 2,332 took place in the United States in 2011, which would be a fundamental gain if it were closer to the 610,000 annual American heart disease deaths.  Our general lack of fundamental progress is summarized well in another quotation, passed along by Gordon from author Peter Thiel:  “We wanted flying cars, instead we got 140 characters.”      

Second, as I have observed publicly for five years, new technology never employs more than a tiny fraction of what the likes of cars, modern houses, and air travel did and continue to do.  As of 2010, Twitter, used by tens of millions of Americans, employed a total of 300 people, half the number working in single AT&T buildings I worked in decades ago.

Third, although Gordon emphasizes slower gains (not a drop) in per-worker productivity, one explanation I did not see in the book.  A high proportion of jobs added since the Great Recession have been low-level – at one point, fully one-third of them were with temporary help agencies – and have inherently small productivity.  Cleaning and retail counter positions are necessary, but are never going to contribute the dollar values once added by now obsolete manufacturing or even office jobs, not to mention their management. 

Fourth, I have three quarrels with what Gordon called “headwinds,” or factors preventing larger economic growth.  Education levels flattening out, which they are doing in this country, is not a problem, as, consistent with what Gordon himself wrote, most of the truly life-altering improvements going into widespread service between 1870 and 1970 were invented early in that time, when the high school graduation rate was less than 5%.  Baby boomers leaving the workforce as they reach retirement age is not a demographic obstacle, it is a permanent jobs crisis effect, since, as my 2006 doctoral research showed, even before the Great Recession the massive majority wanted to work into their 70s and beyond.  And inequality is not a cause of issues with technology or anything else, it is an effect, a natural result of higher and higher scalability in which products are reproduced almost without cost and so must benefit ever more limited sets of people; in contrast, cars provided money for millions, as they required not only designers and investors but factories full of people to be paid to actually make them.

Fifth, is it possible that, with the amount of business innovation always in progress, that we are in nothing more than a 50-year lull?  That, which I have not assessed in detail, is a real potential explanation for what this author has wrought. 

If what Robert J. Gordon is saying is true, how can we best deal with it?  Be here next week.