Friday, June 28, 2013

Five Reasons Why We’re Pursuing the Wrong Problems

Ross Douthat nailed it again.  In the Sunday New York Times, his column, titled “The Great Disconnect,” contrasted the stated White House objectives with what the American people have said they want.   

What we have heard from Barack Obama’s administration recently has been in three major areas.  First, gun control, about which a reasonable but still somewhat inflammatory attempt to solidify background checks for purchasers failed.  Second, immigration, where a bill combining better legal standing for foreigners illicitly in the United States with stronger border enforcement today passed the Senate.  Third, increased climate change legislation, which Obama punctuated this week by comparing those who are not sure human activity contributes significantly to global warming with members of the Flat Earth Society.  

Where do the most Americans want legislative changes?  Per a January Pew Research survey, first and second were “strengthening economy” and “improving job situation,” named as a “top priority” by 86% and 79% respectively.  “Dealing with illegal immigration,” “strengthening gun laws,” and “dealing with global warming,” corresponding to the three issues above, received 39%, 37%, and 28%, finishing 17th, 18th, and last out of 21 issues mentioned.          

So what else is wrong with Obama’s current emphases?  Five things:

1). They are politically divisive.  None of these issues could reasonably be called bipartisan.  Some Republicans, headed by Marco Rubio, support immigration reform, but few will call for more climate change laws, and further gun control legislation, due to conservative resistance, should clearly be put on hold.

2). The two surviving efforts are destructive to the jobs crisis.  Encouraging more foreign low-skilled workers in the United States has been a good idea at several times, but 2013 is not among them.  Joblessness for high school dropouts, with whom most of such resident aliens would be competing, went over 27% this spring.  Although employers have had trouble filling many of their jobs with Americans, that would end with higher pay.  As for climate-change-related regulations, except for the regulator positions themselves, they can only cost jobs. 

3). Obama seems to be positioning himself to spend his political capital, already weak outside Democrats, on things less essential to the country.  True, Congress stopped his proposed American Jobs Act last year, but a push for more laws related to climate change alienates too many who might be more willing to work with him otherwise.   More than that, the choice of these issues, which are, as Douthat put it “pillars of Acela Corridor ideology” catering to, as well as liberals, “the Wall Street 1 percent,” has potential to put Obama in an elitist, regionalist light.  That would be sadly unfair for his presidency as a whole, which has previously been considerably more moderate.

4). The timing for all three issues is poor.  As Douthat pointed out: 

The president decided to make gun control legislation a major second-term priority ... with firearm homicides at a 30-year low. Congress is pursuing a sharp increase in low-skilled immigration ... when the foreign-born share of the American population is already headed for historical highs. The administration is drawing up major new carbon regulations ... when actual existing global warming has been well below projections for 15 years and counting.

5). The jobs crisis, and by extension the economy, are simply more important.  Understanding the permanence of the jobs crisis is not a political stand.  People are, indeed, becoming aware of the true nature of this situation, and will be increasingly willing, whatever their political obligations and orientations, to work to improve it.  With more than 20 million Americans who would work if they could easily find it, which affects the 9th-ranked Pew Research issue, “helping poor and needy,” as well, the lack of work is as broad-based a problem as any.      

I understand Obama’s frustration with recent years.  His actions, as opposed to the ideas people have attributed to him, have been consistently moderate, and his foreign policy, to name only one area, has been more conservative than liberal.  He has repeatedly tried to negotiate with members of Congress who seemed to want only to refuse everything.  He has contended with many loudly heard voices purporting to dislike everything, regardless of objective merit, he has done. 

Yet the jobs crisis will not wait for him.  Computer scientists, roboticists, and other technologists are searching, as I write and you read, for ways to get machines to do even more work.  Ever more people in other countries are gaining the education, skills, language knowledge, and workplace attitudes needed to compete for what are still American jobs.  Businesses of all kinds are discovering more and more methods to save time, money, and, in the process, labor.  The jobs crisis will command bipartisan cooperation – if not during this presidency, then in the next one.  If Obama is concerned about his place in history, he must get his policy efforts, successful or not, on the side of it.     

Friday, June 21, 2013

Jaron Lanier’s Version of Work’s New Age – Fresh Ideas on a Permanent Problem

Another book on the jobs crisis was released last month, although the author didn’t call it that.  Computer science luminary Jaron Lanier published Who Owns the Future?, which deals with changes caused by the Internet, not all good. 

Lanier dealt with the automation side of Work’s New Age, the name I use for our era starting in 1973, in ways that build on the thesis of the book of that name I released a year and a half ago.  He outdid my examples of eBay and Twitter being major innovations without General Motors-level job counts, by naming Instagram and its succession of much of 14,000-worker Kodak with 13 employees.  Related to my prediction of more resources coming from communities, he discussed how much work is being done in them without what he called “formal benefits” such as wages and other compensation.  He said that we were losing a tacit agreement that work should be paid, even when easy and enjoyable, and that would mean, in effect, the end of the middle class.  Although it might be well and good for people to get nonmonetary advantages for tasks they perform, that would not be enough – as he put it in an interview in Salon last month, “when I talk to libertarians and socialists, they have this weird belief that everybody’s this abstract robot that won’t ever get sick or have kids or get old.”  And, I might add, eat.   

Even more disturbing, Lanier talked about the end of democracy, caused by people not being able to participate in the market and “outspend the top.”  Channeling Work’s New Age Principle #13, he said that “markets can only function if there are customers,” and said that “winner-take-all capitalism” could not survive.   

I could go on comparing Lanier’s ideas and mine – although I do not know if he ever saw Work’s New Age, they are intertwined when not essentially identical – but one of his notions, mentioned by me but developed more by him, is worthy of special attention and concern.  For decades now, we have had more and more people paid not by salary but for each assignment.  In California, they called that the “movie model,” whereas, with my background, I knew it as the “project model.”  It seemed to make good sense for everyone – the professionals would earn more per day of concentrated work, and could then move on to other efforts with other organizations, as their skills would still be in high demand.  They would be free to choose which ones they wanted, and to take time off for training, education, or personal reasons.  There would be no annual limit of three vacation weeks.  Independent contractors, working anywhere from a day to several years, have become more general examples of this trend.  Such entrepreneurs, and in effect that is what they are, could use social networks to ensure maximum efficiency in finding gigs, which is also the right way of thinking about such short-term engagements.    

The point Lanier made is that such a system, even in fields with high demand for work, frequently does not succeed.  He gave an example from the world of hip-hop music, which has been using such a scheme for a long time, and said that only about 50 performers in the country are actually “making a great living” that way, or have solidly middle-class annual, not daily, incomes.  He estimated, even with good demand, easy marketing connectivity, and people with ever-increasing technical skills, that number for all areas of music in the United States to be in a “low number of hundreds.”  By comparison, as of 2010 there were still 176,000 people employed by others as musicians and singers.  When you add the pressures of being in effect in business for yourself, and the need to, as Lanier put it, “sing for your supper for every meal,” we have a problem. 

So it is with other creative fields.  Most independent authors earn little or nothing.  The millions of blogs like this one rarely provide a solid income, and often provide none at all.  Last month, the Chicago Sun-Times laid off its entire photography staff.  Lanier called those with such creative occupations “the canary in the digital coal mine,” as other professions would soon be in the same situation.  Even those who have great success among huge numbers in their fields aren’t doing nearly as well as comparable people working for others, as per Lanier’s example of a towering YouTube star, one Jenna Marbles who has had a billion views of her videos teaching young women about makeup and the like, and earns about $250,000, much the same as most, not just a few, of America’s 691,000 physicians and surgeons.      

When labor doesn’t get paid as it used to, what permanent solutions are there?  In Work’s New Age I advocated a guaranteed income, not enough for the lifestyles to which most of us have been accustomed, but, along with universal health care, enough to ensure a reasonable survival.  Since then I have also come out in favor of shortened work hours.  Lanier recommended micropayments for people making now-free creative content.    

That could help, but would that be enough?  We will need to address that issue sooner than some may think.  The possible end to federal money-creating programs may force the issue, as if we get a recession even those who think the jobs crisis is temporary will soon remember these below-10%-unemployment days as good times.  We don’t know the right way out of it, but we need to start talking.        

Friday, June 14, 2013

Internships in the Spotlight – Are they Abusive or Not?

Just over one year ago I wrote a post about internships, which were starting to get controversial.  I made the point that they were fine even at below minimum-wage levels, if and only if they consistently led to normally paid positions in that field.  In many areas, experience is king, and an internship can be a legitimate, accepted way of getting that.  Yet when chances of getting a regular job afterwards are small, they become exploitative.  That issue was discussed and debated that week in The New York Times’s Sunday Dialogue section. 

This past week there has been a flurry of articles about internships.  Thomas Friedman, also in the Times, referred in his Sunday column to what started it, a New Yorker cartoon of a graduation speaker saying it was “an intern-eat-intern world out there.”  Friedman’s column was not on those positions as such, but advocated them, though mentioning the view that unpaid ones might be only afforded by “rich kids.”  (That is reminiscent of Olympics history, of all things.  In case you were wondering why they traditionally claimed to want only “amateur” athletes, that had nothing to do with the purity of competition unsullied by money – it was to exclude people in the working classes who could not pursue their sports full-time without being paid.) 

Matthew Yglesias, writing in Slate on Wednesday, addressed this “rich kids” problem and concluded, that although unpaid jobs were unfair in that way, the alternative, of not only uncompensated but “negative-salary training” at graduate school, was worse.

Then came coverage of the Fox Searchlight Pictures case, reported on by Katie McDonough in Salon.  That company had been hiring “production interns” whose work responsibilities “consisted primarily of basic chores like taking out the trash and picking up lunch orders for paid staff,” and thus were gaining little understanding of the movie-studio business.   A Manhattan judge ruled on Tuesday  that the positions should have been paid, and not only found Fox Searchlight in violation of minimum wage laws, but granted class status to other interns there, something denied in the previous similar case. 

The next day, Blair Hickman and Jeremy B. Merrill, also in Slate, parsed this judicial result in an essay titled “Is this the end of unpaid internships?”  They didn’t really address the title issue, but commented that the standards for internships are now higher, that employers must gain little from interns’ work, and that neither college credit being granted nor the workers profiting nonfinancially otherwise were enough to allow these jobs to be unpaid.   Even an intern getting “primary benefit” from a position is no longer sufficient, if the employer benefits as well.

So where are we with internships now?  With the Fox Searchlight ruling as a precedent, unpaid people will probably only, as David Yamada put it, “pad around after someone all day and go home.”  Any work in which, as the law puts it, gets their employers “immediate advantage,” must be paid.  The ruling will be appealed, so may not stand, but until then it is the case law that can be invoked in any similar dispute.    

Is this ruling good or bad?  Mainly it is good.  Although I am no advocate of squeezing employers, whether by recently often-mentioned means such as raising the minimum wage or making discrimination against long-employed people illegal, having someone provide free coffee-fetching service in the false hope of catching on in the field is unethical or worse.  With huge numbers of people willing to work at intern positions, the abuse potential is there and will be naturally tempting for any organization looking to cut costs. 

On the other side, this judgment may be a step too far.  Neither article on it discussed the job prospects for former Fox Searchlight interns.  That is not only one consideration, it is by far the largest one.  Almost thirty years ago I had what was called “Field Study” with a technical college, which consisted of my going to an information technology office and doing programming and other light, even unrelated, work there.  Not only was it unpaid but it cost me tuition money, and the employer certainly got primary benefit from what I did.  Yet I was happy with the proposition, as I did learn a lot about IT employees and installations, and ended up, with that experience on my résumé, landing a permanent position in the field.  The difference was that the jobs were out there, and someone with my credentials, including this internship of sorts, could get one.  When that is the case, there will be few Fox Searchlight-like complaints.   Consistent ability to lead to a good, permanent job, not how the organization gains, is how internships, indeed better financially for all than extra education, should be legally evaluated.  That is what the appeals court should rule.

Friday, June 7, 2013

May AJSN Up Over 700,000, as 20.8 Million Americans Would Work If It Were Readily Available

The official Bureau of Labor Statistics unemployment rate, 7.6%, increased 0.1% in May.  But what happened behind that number?

The count of United States jobs, seasonally adjusted, rose 175,000, modestly more than needed to cover the national population increase.  Fifty-five thousand fewer workers described themselves as discouraged, and the “other” category, of people not on the job for a variety of reasons, was down 78,000.  The other numbers were unfavorable.

Those officially unemployed increased by 288,000 last month, and the count of those saying they were not now available for work went up 254,000.  The most dramatic rise, though, was the 792,000 jump in people reporting they wanted to work, but did not search during the previous year.  The number saying they did not want a job dropped by 1.671 million, a huge change for one month.    Overall, the American Job Shortage Number (AJSN) came in at just over 20.8 million, up 726,000 from April, as follows:

MAY 2013
Total Latent Demand % Latent Demand Total
Unemployed 11,302,000 90 10,171,800
Discouraged 780,000 90 702,000
Family Responsibilities 232,000 30 69,600
In School or Training 353,000 50 176,500
Ill Health or Disability 115,000 10 11,500
Other 684,000 30 205,200
Did Not Search for Work In  Previous Year 3,988,000 80 3,190,400
Not Available to Work Now 1,040,000 30 312,000
Do Not Want a Job 82,436,000 5 4,121,800
Non-Civilian and Institutionalized, 15+ 5,901,508 10 590,151
American Expatriates 6,320,000 20 1,264,000
TOTAL     20,814,951

Consistent with recent months, while the official unemployment rate has shown slight improvement, the AJSN shows there has been no decrease in the number of people outside the world of work looking in.  Most of the people deciding last month that they did, indeed, wish to work now got nowhere with that.    

In other employment news released this morning, the unadjusted unemployment rate held steady at 7.3%.  The number of those jobless for 27 weeks or more, the labor force participation rate, and those working part-time for economic reasons were all also materially unchanged at 4.4 million, 63.4%, and 7.9 million respectively.  These are not good places to camp out in. 

Overall, the American jobs situation is much the same.  With European unemployment ever higher – the Eurozone jobless rate reached 12.2% in April, a record – maybe that isn’t so bad.  At the same time, though, there has been considerable recent press about the United States economy improving.   The data above call that into question.  If the unemployment rate stays much the same when so many perceive times to be getting better, and the AJSN in fact increases, what will these indicators show when observers agree there is no progress, or prosperity is dropping?  In the meantime, we are not putting Americans back to work, and we are only one medium-sized recession away from Eurozone-level joblessness.