Wednesday, November 21, 2018

Hyperloop: A Successful 21st Century Transportation Mode, Or Not?

Two stories appeared this year about a potentially revolutionary travel method that could shake up American employment.  Their titles were sort of out of order, with “Hyperloop is edging closer to reality” by Daniel Cooper coming out on March 8th, and Will Nicol’s “What is the Hyperloop?  Here’s everything you need to know” released October 6th. 

Hyperloop, proposed by Tesla and SpaceX leader Elon Musk and being tested and developed by Hyperloop Transportation Technologies (HTT), is in effect a pneumatic tube designed to carry people and cargo.  It involves “a low pressure environment, surrounding the [passenger and freight-carrying] pod with a cushion of air that permits the pod to move safely at such high speeds, like a puck gliding over an air hockey table.”  Magnetic accelerators, fascinatingly using the rare-earth metal neodymium, provide impetus, and solar panels deliver power.  Travel speeds could exceed 700 miles per hour, and, on half-mile test tracks, have already reached 240.  Progress has been real if preliminary, with HTT already obtaining tens of millions of dollars and making a prototype passenger pod, Quintero One, available in October.  The company has established partnerships with Aecom, a business “involved in many high profile engineering projects,” and Oerlikon, “a leader in vacuum technology since the dawn of the 20th century.” 

As is clear to all, despite a claim by HTT chairman Bibop Gresta that a Hyperloop run from Los Angeles to San Francisco “will be fully optimized and ready for passengers in 2019,” the system may never materialize.  Yet it could.  What points are for and against it?

On the good side, with lower costs and easier implementation, Hyperloop may have bullet trains completely covered.  Its speeds are potentially much higher, and Musk’s $6 billion estimate for making the California run above operational is dwarfed by the $68 billion expected for only the first phase of that state’s under-construction high-speed rail network.  It has real potential to take less time, considering that dealing with airports, than flying for up to 1,000 miles.  It could eventually be built deeper into the earth, cutting distances to places on other parts of the planet and making the “core-tubes,” a fanciful 30th-century invention written about 50 years ago, a reality.

There are also several real problems.  As with other large infrastructure projects, Hyperloop construction will probably run way over budget, making its final LA-SF cost closer to that $68 billion than Musk would like to admit.  As with railroads Its structure is inflexible, and does not lend itself to other uses as vehicles and airplanes offer with theirs.  I am skeptical that solar panels can provide most or all the system’s power needs, as HTT executives have implied.  That company may have unnecessarily hurt perceptions of its seriousness by naming its pod construction material “vibranium,” an already-used name as familiar to many Marvel comic book readers as “kryptonite” was to DC fans.  The Quintero One photos also, fair or not, left me thinking their capacity was small.

Overall, can we predict whether Hyperloop will be by 2050 a common transportation choice, or only another Buck Rogers idea from the past?  It seems clear that it would work, but that is not the issue.  Why did commercial supersonic air travel fail?  Why did pneumatic technology, commonly used for mail in mid-century, go nowhere for decades after that?  Why are rail connections from airports to city centers so rare in the United States?  Until we can easily answer transportation-system questions like these, we will have no idea whether this, one more of Elon Musk’s visionary ideas, will turn out like CD’s to bullet-train’s cassettes, or the other way around.  In the meantime, let’s take Hyperloop, and the jobs it could create and eliminate, seriously but cautiously.

Friday, November 16, 2018

Minimum Wages: Where Are We Now, and How Can We Reach Agreement?

Over the past few years, the federal $7.25 lowest hourly pay level has stayed the same, but many cities and states have installed higher ones.

A good look at what happened this year was Paul Ausick’s “4.5 Million US Workers Get Wage Increases on January 1,” in Yahoo Finance on December 23rd.  Given how many areas hiked their minimum pay rates, that doesn’t seem like a lot, but many were set to take effect years from now, and fewer than I had thought are receiving the bottom amount.  Ausick named 18 states, with gains ranging from Alaska’s 4 cents per hour to Maine’s $1.00, with their new levels from Missouri’s $7.85 to Washington’s $11.50.  These seem to correlate only slightly with living costs, as Alaska’s $9.84 and Hawaii’s $10.10 are less than Arizona’s and the latter only matches Rhode Island’s, and don’t seem to reflect conservative or liberal majorities either.

On results, in “The effects of 137 minimum wage hikes, in one chart” (Washington Post, February 5th), Christopher Ingraham, with the help of Arindrajit Dube’s scholarly paper, went for a comprehensive look.  He claimed Dube found that while minimum wage raises do cause jobs below the new levels to go away, they also cause creation of a roughly equal number of positions above that level.  Jacob Vigdor, a co-author of a previous study, suggested that, at the current dollar value, raises to $11 per hour or less had much smaller detrimental effects than those $13 or more would have – not yet relevant, since no state currently mandates more than Washington’s $11.50.  On this issue we can use all the help we can get from the academic community, as many of these findings are still controversial and many more minimum wage boosts are on the way.

If the federal $7.25 rate were to be increased, there are better ways than an overall hike.  “A Smarter Minimum Wage,” by Jonathan Cowan and Jim Kessler (The New York Times, November 18th) presented, indeed, a real improvement.  It would allow federal minimum pay levels to vary from area to area, designed by a method “that recognizes the differences in living cost and labor markets in a way that is both flexible and permanent.” The authors provided implementation specifics, designed to cover situations such as same-apartment-size rents averaging 261% Jacksonville’s level in the Los Angeles area and a dozen eggs costing over four times their Fargo cost in Oakland.  As now, Cowan and Kessler’s proposal allows communities, if they see fit, to establish higher floors than the one assigned to them.  Overall, a powerful idea that attacks what is probably the largest problem with raising the lowest pay rate.
How can we best get together on minimum wages?  We can start with three propositions, on which it is reasonable for mainstream Democrats and Republicans to agree.

First, raising minimum legal pay almost always causes some jobs to go away.  We can be more agreeable on this fact of basic economics if we do not argue on how many positions would be lost, but instead only approve the statement that it will be more than zero.

Second, increasing minimum pay levels will encourage many businesses in many industries to consider technological solutions instead of workers.  That is obvious.  Again, if we can avoid getting hung up on the exact numbers, we can reach an accord.

Third, as, per Cowan and Kessler, “we are one country, but hundreds of different micro-economies,” the best level on which minimum wages should be decided is the lowest.  State governments are better positioned to know what they think is best for their people than the federal one, county governments are better than states, and municipal governments are more suitable still.  Let people in areas differing from what surrounds them decide for themselves.  I have not yet heard of a city neighborhood wanting to set their own minimum wage, but that, which could allow for parts of the Bronx choosing a lower floor than the likes of Midtown Manhattan, could be best of all. 

Maybe this is the way to resolve intractable-seeming political issues.  Find the areas of agreement, then and only then work out the details.  What do you think?

Friday, November 9, 2018

Guaranteed Income and a Guaranteed Job: What’s the Difference?

Four years ago September I posted about the subject of a recent article, a vast social program designed to kill off unemployment forever.  That was not a guaranteed basic income, on which I had written and would write more, but was similar in many ways.  The suggestion was for our federal government to provide work for anyone officially jobless, at a consistent $15 per hour. 

It is easy to compare or even conflate these two ideas.  Both are grand plans defensible despite their monumental costs.  Both are, in a sense, nuclear bombs against the jobs crisis.  Each would massively increase the amount of money in circulation, increasing tax revenue to partially offset their outlays.  Each would be susceptible to claims that the amounts involved were insufficient, especially as they would not be enough to support middle-class lifestyles.  However, their differences are less obvious and more profound.  What are they?

First, while guaranteed income would cut overall demand for employment opportunities, guaranteed jobs would increase it, especially at rates of pay above or equal to the government wage rate.

Second, while universal basic income would have little effect on the incentive workers have to perform well, assured government employment would savage it.  I don’t know just how that would play out, but it seems clear that when people are assured of being paid, many would not care about how effective they would be.

Third, guaranteed income would be relatively cheap to establish and maintain, while a program with tens of millions of jobs would be rife with labor needs, money needs, and complications.  Our government would need to implement solutions to a wide range of situations, such as workers who cannot or will not do their assigned jobs, workers who want to change positions, people physically relocating, advancement and training not pertaining to current assignments, employee management and supervision (how could the millions of people needed there be paid the same as their reports?), and so on. 

Fourth, assured stipends would precipitate a profusion of personal decisions, ranging from increased motivation to work from depression relief to doing nothing but collecting checks and everywhere in between.  Assured employment would create three tiers of employment – positions paying more than, about the same as, and less than the established government wage.  That would make it difficult for companies to obtain low-skilled labor at less than, in this example, $15 per hour, whereas if they made it $16 they could be flooded with applicants, with the likely result, with more time-saving word-of-mouth hiring, a drop in the importance of job-seekers’ merit.

Fifth, while assured government employment would not be cheap, its possible net $400 billion cost would be dwarfed by the $1-2 trillion for a $10,000 annual American citizen’s grant.

Sixth, while guaranteed income would be straightforward, the jobs program could quickly devolve into make-work, illegitimate favoritism, and tasks with far less than $15 per hour value.  We could easily end up with the likes of, as the Soviets had, people working in barbershops only to sweep up hair, crippling incentive for productivity increases and with what might be deleterious personal effects such as that country’s one-in-seven alcoholism rate.  We would like to think that inconsistent with our national character, but millions working dead-end jobs with no real incentive for high performance could attract the dark clouds that many observers have said have long hung over the Soviet and Russian spirit. 

In the late summer of 2014, while I acknowledged that guaranteed employment was one of only four comprehensive jobs-crisis solutions, with paid Internet contributions and reduced working hours along with universal basic income, I did not think it would work.  That is still my view, but if we decide it is the best way out of an indefinite job shortage, we could get the most of it by making its structure more like the postwar job market.  Government work could be assured, but would need different skill levels, diverse rates of pay, promotions, demotions, and be available to those not officially jobless.  The latest American Job Shortage Number or AJSN shows that those with other employment statuses make up more than two-thirds of latent demand – we cannot deny them these opportunities. 

Given its flaws, it is no surprise that assured government employment has got little press attention since Senator Bernie Sanders proposed it last spring.  However, we still need possible solutions for what will, within years, be clear to all as a permanent jobs crisis.  As you may have noticed above, my count of them is still where it was five summers ago, at four.  We cannot afford to stop there.

Friday, November 2, 2018

Another Fine Employment Month, but the American Job Shortage Number (AJSN) Says Latent Demand Is Up Almost 100,000 to 15.7 Million

Once again, this morning’s Bureau of Labor Statistics Employment Situation Summary not only exceeded expectations but showed our labor market is still improving.  Net nonfarm payroll positions, for which The Wall Street Journal publicized an analyst-projected 188,000 gain, went up 250,000.  The marquee seasonally-adjusted unemployment rate stayed at 3.7%, but the unadjusted one, despite little seasonal difference between September and October, fell from 3.6% to 3.5%.  There are still an adjusted 1.4 million people officially jobless and out for 27 weeks or longer, and 4.6 million working part-time for economic reasons or holding on to shorter-work-hours positions while thus far unsuccessfully seeking full-time ones, but we gained 100,000, to 6.1 million, total unemployed.  The two measures of how common it is for Americans to be working, the labor force participation rate and the employment-population ratio, each rose a substantial 0.2% to reach 62.9% and 60.6% respectively.  Average private nonfarm payroll wages went up a hair over inflation, 5 cents per hour, and are now at $27.30.

The American Job Shortage Number, which tells how many additional positions we could absorb if it was common knowledge that about anyone could quickly get one, gained 76,000, as follows:

Compared with a year ago the AJSN is down 461,000, with 424,000 of that from lower official unemployment.  That share of the AJSN reached another pre-Great Recession percentage low, and is now at 33.1%, meaning that more than two-thirds of gains in employed Americans would come from those with other statuses. 

There’s not much to debate about October’s jobs report – it is very strong.  It especially bolstered the shakiest measures above, the employment-population ratio and the labor force participation rate, and everything else is solid.  The AJSN’s small gain came mostly from those wanting work but discouraged or not having looked for 12 months or more, and is probably an effect of the half-million drop in those claiming no interest.  Despite much recent ink on the chances of a recession, there is no sign of it here.  The turtle took another step forward.  

Friday, October 26, 2018

Robots and Artificial Intelligence: Five Mid-Year Articles, Loads of Insights - II

A fourth article is yet another behind the curve, but in some respects a useful review.  Ben Casselman’s June 25th New York Times “Robots or Job Training:  Manufacturers Grapple With How to Improve Their Economic Fortunes” reminded us how automata would allow employers to avoid both hiring flawed people and paying more (actually, the article said “help ease their labor crunch”), that training potential workers might allow them to be suitable (what a novel idea), and that “rising productivity” could allow higher wages (only sometimes, as companies have competitors benefitting from it as well).  Casselman also quoted a Federal Reserve economist saying that with 3.8% joblessness “eventually you’re going to run out of easy-to-find workers” (not when we can easily fill over 15 million more positions, two-thirds to those not officially unemployed), named the problem with “unskilled laborers” not showing up and not doing their jobs (paying them more to increase demand for their positions is still legal, and some business propositions dependent on low wages won’t succeed anyway), and touched on both the significance of accumulated efficiency in reducing the number of positions and higher labor costs encouraging “ways to economize.”  He said that “raising rates too quickly could be a costly mistake for the Fed” (was Wednesday’s 600-point Dow drop a result of that?), and noted that “The Fed’s most recent projections estimate that the unemployment rate will fall to 3.5 percent next year” (what does that assume about the effects of our escalating trade war?).  All worthy of discussion, if not agreement.

The final piece of the five is a view from Andy Clark, “a professor of logic and metaphysics,” that “We Are Merging With Robots.  That’s a Good Thing.”  This further New York Times article suggested that automata’s amalgamation with artificial intelligence may add the third area of human capability.  He named ten things “true today,” some among them that “sex and companionship robots are already here,” that “the human genome itself is now an object of control and intervention” (we are just getting started, with gigantic ethical issues along with massive opportunities just around the corner), and that “neuro-enhancement, the improvement by drugs, practices, or implants of normal mental functioning, is possible and may soon become the norm” (did that start with Prozac, 32 years ago?).  He may have been carried away in saying that “sharing and group solidarity are now easier than ever before,” when that is woefully untrue with in-person interaction, but noted that “the boundaries between body and machine, between mind and world, between standard, augmented and virtual realities, and between human and post-human” are becoming less clear.  More properly, though, they are being redefined, as such borders were breached over 700 years ago with the first pair of eyeglasses.  Clark continued by writing that what he called these machine “subintelligences” were “not yet intelligences like our own,” correct unless we consider a toaster smart for being able to brown bread, and called the “two most important… questions” how we should “negotiate” all of these possibilities” (of course), “and what costs are we willing to tolerate along the way?” something now being negotiated with driverless vehicles.  He also rose the issue of inequality, certain to happen if these improvements require personal resources, and concluded that “what is up for grabs is what we humans are, and will become.”

Instead of my own conclusions beyond the parenthetical statements above, I will defer to a sixth piece of writing, dated August 11th and once more in the New York Times, from Sherry Turkle, for decades a clear and freethinking voice on the subjects of the program she teaches at M.I.T., “science, technology, and society.”  The title, “There Will Never Be an Age of Artificial Intimacy,” says most of it.  No matter how effective robots or computer applications seem to be, their lack of emotions will invariably “lead to an empathic dead end.”  There is all the difference between these things and living beings, even those of terrestrial or other species with which we cannot verbally communicate, which can feel.  In that sense artificial intelligence is a misnomer, and we can see no work in progress with a chance to change that.  More than anything else about robots and artificial intelligence, that is what we need to understand. 

Friday, October 19, 2018

Robots and Artificial Intelligence: Five Mid-Year Articles, Loads of Insights - I

Five pieces published a few months ago helped us.  Not by giving views we could all agree with, but by adding to our necessary national dialogue and refreshing us on what’s been happening in this field.  Here’s what they had to say on this two-in-one area.

In “Moguls and Killer Robots,” which took up most of page 1 of the June 10th New York Times business section and two-thirds of another one, Cade Metz set out to tell us what happened between business information technology titans Mark Zuckerberg and Elon Musk, and ended up providing information bearing repetition.  That included Musk’s statements that artificial intelligence was “potentially more dangerous than nukes,” and that “we are headed toward either superintelligence or civilization ending,” of which Zuckerberg, perhaps due to his experience being in a less physically hazardous area, Facebook, than Musk’s space tourism at least partially disagreed.  We also saw what can happen when business decisions, in this case “a $9 million A.I. contract (Google) had signed with the Pentagon,” conflict with the views of employees, who threatened a “rebellion,” and the statement apparently not obvious to some from an Oxford research director that “you can now talk about the risks of A.I. without seeming like you are lost in science fiction,” echoed by concerns from a Cornell computer science professor that “the kind of systems we are creating are very powerful… and we cannot understand their impact.”  Metz indirectly touched on the difference between narrow AI, focused and benign, and general AI, which need not be either, and reminded us how they can depart from the usual human ways of solving problems, when such a facility was directed to maximize scores in a boat racing computer game and did that “while spinning in circles, colliding with stone walls and ramming other boats.”  The founder of Google’s Deep Mind, the effort creating the board-game Go program which beat a major champion, Demis Hassabis, summarized our needs well by saying “we need to use the downtime, when things are calm, to prepare for when things get serious in the decades to come.”  We can disagree that all is tranquil now on the AI-danger front, but not that it will at least threaten to get worse later. 

“If the Robots Come for Our Jobs, What Should the Government Do?”  Neil Irwin posed this question in article form in the June 12th New York Times.  He acknowledged that “lots of smart technologists and futurists are convinced that we are on the cusp of a world in which artificial intelligence, robotics and other technologies will make a large portion of today’s jobs obsolete,” and considered a guaranteed income, along with “overhauling intellectual property law so that the companies that develop valuable patents and trademarks don’t have such a lengthy monopoly on their innovations” (will Mickey Mouse be in the 2100 public domain?) and “work-sharing programs” by in effect removing 20% of each of 500 positions instead of fully laying off 100 people (worthwhile).  He quoted someone saying it was “increasingly crucial that people continually upgrade their skills to keep up with changing technology” (a clear strategy for individuals, but a cop-out for helping employment in general), and advocating “making job benefits like health insurance and retirement funds more “portable”” (a direction in which we have already been moving).  Now, if we only had similar sets of proposals to deal with globalization and efficiency…

I published many of the points made by Mary Flanagan in “The Rise of the “Automacene”:  How Robots Will Define the Next Epoch in Human History” (Salon, June 16) between book covers five and six years ago, but they are also worth reiterating.  Flanagan cited research-driven estimates that automation, timeframe unspecified, has 98% and 99% chances of spelling the end of positions as loan officers and tax preparers respectively, but less than 1% to do the same for nursing assistants and mental health social workers.  To prepare for a changing “future of work” and “a future in which unprecedented unemployment is the norm,” the author recommends “an educated populace” (see my comment above) and “ability to interconnect disparate ideas” (my personal experience from a lifetime of having this skill, and everything I’ve read about actual workplace trends, say that employers still almost never care about that).  There’s much more to our “need to decouple our jobs from the meaning and identity we expect them to provide us,” on which I wrote an entire chapter and which has been dropping since the 1950s, but there’s no arguing with Flanagan’s conclusion that “we’ll only be able to navigate the upcoming tumultuous changes in society by embracing deep conversations on what it means to be human in the era of machines,” even though precious few Americans want to have such things.

Two more to follow, for next week along with conclusions.

Friday, October 5, 2018

September Employment Report: Latent Demand for Jobs, Per the American Job Shortage Number (AJSN), Dropped, As Did Unemployment – We’re Now Only (?) 15.6 Million Jobs Short

This morning’s was another one-of-a-kind Bureau of Labor Statistics Employment Situation Summary.

I didn’t see a projected number for net new nonfarm payroll positions, and it didn’t matter much, as they took a breather, up 134,000 or essentially the same as our growing population absorbed.  Other results, though, were surprising.  The marquee adjusted unemployment rate found another 0.2% to decline for 3.7%, and is its smallest since December 1969.  The adjusted rate, now lower as September is an above-average working month, fell 0.3% to 3.6%.  We are now at an adjusted total of 6.0 million jobless, down 200,000, and average private nonfarm payroll wages again exceeded inflation with an 8 cent per hour gain to $27.24.  While the labor force participation rate stayed at 62.7%, the other indicator of how common it is for Americans to be on the job, the employment-population ratio, improved 0.1% to 60.4%.

There was a downside, though.  Although unemployment was off, those officially jobless for 12 months or longer now count 1.4 million, up 100,000.  The set of those working part-time for economic reasons, or holding on to shorter-hour opportunities while looking thus far unsuccessfully for full-time ones, gained back the 200,000 it lost in August and is again at 4.6 million. 

The American Job Shortage Number or AJSN, the measure of how many additional positions could be filled if everyone knew they were truly easy to get, plunged 943,000, maybe half of that seasonal (the AJSN is not adjusted), as follows:

The large drop was from the one-two punch of latent demand from those officially unemployed, down 544,000, and that from the greatly reduced count of those wanting work but not looking for it for 12 months or longer, off 445,000.  Changes in the other components were relatively small, with the largest other loss from those discouraged and the highest gain, once again, from people claiming no interest in working.  The share of latent demand coming from the unemployed is now 33.2%, which is, along with the AJSN itself, another post-Great-Recession low. 

Once again, the metric is down over one million from a year ago.  In September 2017 there were 800,000 fewer unemployed and 364,000 fewer wanting work but not searching for at least a year.  Other six-digit year-over-year AJSN changes came from those non-civilian, institutionalized, or off the grid, 1.2 million higher then, and the 2.1 million gain in people saying they do not want a job. 

What to make of this month?  I think it’s OK that net new jobs only matched national growth this time – that has been very strong for years, and cannot be expected to always exceed population gain.  It is healthy that fewer who want jobs aren’t looking, though that number has been oscillating more than improving.  I am concerned about two things.  Two groups which seem to slip through the cracks of prosperity analyses, the long-term unemployed and those working part-time for economic reasons, are within another month like this one of being disturbingly large given the floor-low jobless rates.  And second, the steady growth of those on the shelf, or saying they do not want to work, means that we are in long-term danger of employment being less usual.  Overall, though, the good things dominated – the turtle took another step in the right direction.