Friday, December 14, 2018

Autonomous Vehicles: Six Slow Months


I last published on this topic June 28th, wrapping up the previous 12 months, and July 11th, with projections on the shares of vehicles reaching certain technological points in the USA and elsewhere and the number of trucking and cabdriving jobs in relation to today’s.  I have established that forecast as a regular annual feature, but didn’t want to get caught up in the often-daily updates in the field I had seen for the previous year.  So what has happened since then?

One noteworthy thing is the lack of news itself.  Companies have been much quieter about their progress, with the largest stories concerning business instead of technical moves.  The promises have softened, especially, as we will see, those from the formerly loudest participant.

One company reached a real milestone in the summer, as “Lyft’s self-driving vehicles have performed 5,000 passenger rides in Las Vegas” (Cohen Coberly, TechSpot, August 22nd).  Although all were in the limited and almost linear area of the Strip, it’s still an impressive accomplishment, especially with no accidents and a stunning 4.96 out of 5 passenger feedback record with comments calling the trips “amazing” as well as safe. 

On the regulatory front, our federal government showed again that it can be helpful and set guidelines without unreasonable or heavy-handed interference.  In “US Department of Transportation updates autonomous car rules,” from Engadget on October 4th, Natalie Behring showed us changes to voluntary, not mandatory, principles, including allowing automata to legally constitute “drivers” and announcing an intention to drop requirements for devices, such as pedals and steering wheels, such systems don’t need.  That approach has drawn disagreement from the private, consumer-advocating Center of Auto Safety, but is certainly the long-run winner.

I thought we had more insights into the recent slowdown in “Through All the Hype, Self-Driving Cars Remain Elusive” (Norman Mayersohn, The New York Times, November 27th), but this article, after noting the likes of “self-driving vehicles, despite being the subject of breathless media reports and in automakers’ strategies, remain years from being available to private owners” (which we know, as the first wave of them will be put in fleets instead), and quoting a Stanford transportation lecturer as saying that “few start-ups actually understood the commitment required to create a complete vehicle” (but none in the past year have tried), listed companies not only specializing in different technical areas but taking varying business approaches, from concentrating on easy environmental conditions to planning to deal with all of them, from partnering with one automaker to offering products to all, and starting with taxi service, intracompany runs, or other fixed-route shuttles.  Mayersohn revealed ten of these concerns, some familiar from the literature but several not, which showed how much forceful, widely-varied work is still ongoing.

In the December 5th Arizona Republic, Ryan Randazzo told us about his progress-assessing project, “We followed Waymo’s self-driving cars around Arizona for 170 miles:  Here’s what we saw.”  The latter, though clouded by his uncertainty on whether the vehicles, all of which had safety drivers, were actually in driverless mode, included extreme caution while approaching a major accident site, perhaps excessively slow turning in some intersections, sluggish lane changing causing some missed turns, and what seemed like unusually conservative driving in general.  Randazzo’s findings cast a positive light on Waymo, which has already shown itself to be one of the soberest and most measured autonomous-technology providers – it seems appropriate to err on the side of caution, and problems such as not getting into the proper lane in time will clearly be attacked and solved.  Remembering that all know that such vehicles are not at all being touted as finished or even commonly available should remove any concern about this piece’s discoveries.

That company recently crossed another line, as “Ex-Google driverless car firm Waymo begins charging for self-driving car rides in Arizona” (USA Today, also December 5th).  It is not a general offering, but only for “pre-approved passengers in the Chandler, Arizona area.”  Meanwhile, as I alluded to before, “Uber plans smaller, more cautious self-driving car launch” (Heather Somerville, Reuters, again December 5th).  This is the first sentence I’ve seen with both “Uber” and “cautious,” but seems to be what came off their drawing board after their real but grossly overemphasized fatal March accident.  Their tests will resume at speeds under 25 miles per hour in dry daytimes with not one but two “employees” in front seats, with no plans for passengers and “no firm start date.”  That may be so unadventurous as to make Uber uncompetitive.  However, Somerville’s reporting of this announcement was more positive than what Rachel England wrote in Engadget’s December 6th “Uber puts self-driving cars back on the road in scaled-down test,” including the statement that “current employees have anonymously claimed that Uber is taking shortcuts to hit internal milestones.”  If that were to be documented and to have demonstrably bad consequences, it could finish Uber off, not only in the autonomous-vehicle realm but eventually as a business.  It is now more important than ever that we differentiate between what Uber is doing and the progress and safety of others. 

Four conclusions stem from the events above.  First, the limited rollouts and smaller set of immediate future implementations mean that we are behind schedule, maybe six months back of what my July projections anticipated.  Second, the Waymo model of operating in smallish, well-mapped and defined areas which can expand with time may become established as the way driverless technology reaches the general public.  Third, the wide variety of companies and methods is good for the long run, as some will be successful and most will not, but may mean further delays in the next year or so.  But fourth, if people working in this field maintain or reimplement their 2017 levels of intensity, there can be no doubt that driverless vehicles will, indeed, become the norm.

Friday, December 7, 2018

Neutral Jobs Data? No, November’s Was Good – The AJSN, Now Down 200,000 to Latent Demand of 15.5 Million, Shows Why


My first thought as I went through this morning’s Bureau of Labor Statistics Employment Situation Summary was that November was a flatline month.  Nonfarm payroll employment gained 155,000, over the level needed to absorb our population gain but not much.  The break-evens included seasonally adjusted unemployment (3.7%), unadjusted unemployment (3.5%), the labor force participation rate (62.9%), and the employment-population ratio (60.6%), arguably the four most important jobs figures the BLS publishes.  Average hourly nonfarm payroll wages didn’t do anything either, gaining 5 cents per hour, or just about the inflation rate, to $27.35.  The two other major data points were mixed, with the count of people working part-time for economic reasons, or holding on to short-hours positions while thus far unsuccessfully seeking full-time ones, up 200,000 to 4.8 million, and the number officially jobless for 27 weeks or longer off 100,000 to 1.3 million. 

Given all that, especially with the last two statistics not an input to it, I expected the American Job Shortage Number or AJSN, which shows latent demand for American work, to have stayed virtually the same.  However, it lost 200,000, improving as follows:


Half of the drop was from lower official unemployment.  The other half came from one of the numbers of marginal labor-force attachment above.  The count of people saying they wanted to work but had not looked for it during the previous year fell 136,000 from October, which meant their group’s latent demand fell about 109,000.  The other smaller factors almost held, with a 45,000 rise in those temporarily in school or training and a 120,000 gain in “other” offset by 53,000 fewer calling themselves discouraged. 

The AJSN’s year-over-year comparison was also strong.  In November 2017, there were 636,000 more unemployed and almost 1.5 million more counted as non-civilian (in the armed forces), institutionalized, and unaccounted for (off the grid), with changes in the other components small and mixed, resulting in a 660,000 drop.  

You may read from other sources that this jobs report was disappointing.  I don’t see that.  More new positions than our rising population needs, even if they were below some estimates, is, as we will find out with the next recession, nothing to take for granted.  The smaller categories above are straightening themselves out, with people settling into a robust employment market but with more realistic views of whether it could help them personally.  Otherwise, we broke even.  As to why November wasn’t better, the answer may be that we are simply running out of room.  We can always use many more jobs, but barring something on the scale of a national infrastructure project, there is no reason for us to get them.  Given that, this is hardly a shabby place to hang out.  And yes, while it was small, the turtle did indeed take another step forward.

Friday, November 30, 2018

Why Indeed? Some Answers to Kate Julian’s Atlantic Question


Four months ago I started a three-part series on a longstanding social problem only then starting to graze national media’s consciousness.  Titled “For Free Thinkers Only:  America’s Sexual Shortcoming” (see the archive under July and August 2018 at this site), it took an independent view on the main failing of the 1960s sexual revolution, that, as New York Times columnist Ross Douthat had put it, sex has been unevenly distributed, with its bounty failing to reach many Americans.  In the series I responded to Douthat’s ideas, assessed where we actually are sexually as a nation, and proposed eight changes to minimize the shortfall.  The final installment has been viewed over 800 times, so clearly there is much interest in this topic.

That may also have influenced Atlantic magazine senior editor Kate Julian, as she wrote an article, now featured on the December 2018 cover and long enough to print out to 38 pages, titled “Why Are Young People Having So Little Sex?”  It named some stunning facts and developments, such as high-schoolers’ intercourse experience dropping from 54% to 40% in the 26 years ending 2017 contrasted with Teen Vogue running a guide to anal sex, and ran off a list of no fewer than 19 possible causes mentioned by “sex researchers, psychologists, economists, sociologists, therapists, sex educators, and young adults.”  She zeroed in on five reasons or combinations of same that could be most responsible.  After making points I had also, such as the lack of sex not being immediately life-threatening, she found no solid single conclusion, and ended with the statement that “sex seems more fraught now” and a gloomy story about a 28-year-old woman – not even a man – losing a good emerging relationship by admitting she was a virgin.  The closest Julian had to an overall message seemed to be that we will get through this, which, itself, is sad, not to mention insufficient.

If we are going to mitigate this trend, we need to assess its grounds.  Which of the ones Julian discovered, researched, and wrote more on are truly responsible?  The 19 she first mentioned are a mixed bag.  “Hookup culture” I consider illusory, as it has served only to facilitate opportunities for those with plenty already, and is not a cause in itself.  “Crushing economic pressures” is only a source of possible reasons, as we will see.  “Surging anxiety rates” are not responsible for more than a few.  “Psychological frailty” is not an original cause, and neither is “widespread antidepressant use.”  The distracting effects of “streaming TV,” “the news cycle,” “smartphones,” and “information overload,” and the possible impediments of “sleep deprivation” and “obesity” would, if there were no other issue, be easily brushed aside.  “Environmental estrogens” are only a nit, and “dropping testosterone” is clearly, per Julian’s first detailed assessment, not the problem.  “Digital porn” and “the vibrator’s golden age” cannot replace sex by themselves.

The remaining 4 of the 19 have more causal merit, and are covered in Julian’s “handful of suspects,” discussion of which took up 27 of its 38 pages.  The first was “Sex for One,” or more frequent masturbation enhanced with better pornography and physical devices.  I see two main things wrong with it as a less-sex cause.  One, masturbation is like an economic inferior good, such as margarine, which becomes more popular when the superior alternative is unavailable or too expensive.  Two, therefore, the causality is reversed; masturbating at a frequency that Julian-cited sex therapists would consider excessive is primarily a result of insufficient intercourse opportunities, not a reason for them.

The second “suspect” was the combination of “Hookup Culture and Helicopter Parents,” which also brings in “careerism” and “option paralysis” from the 19.  While “hookup culture” is old under the skin, “option paralysis” can be a result of having so many choices in immediate view, especially for young women, that they settle on nothing, parallel to a Harvard Business Review finding that retailers would sell more cola or chocolate-chip cookies if they had 5 different kinds instead of 30.  As for the other two, we can’t dispute one of Julian’s sources when he said that “it’s hard to work in sex when the baseball team practices at 6:30, school starts at 8:15, drama club meets at 4:15, the soup kitchen starts serving at 6, and, oh yeah, your screenplay needs completion.”  If high school and college students are denied free time, they will not date.  In a truly informed society, such as, per Julian, where the Netherlands might be headed, parents would schedule romance time for their adult and nearly-adult children.

The third major cause Julian called “The Tinder Mirage.”  The problem here is that dating sites which allow men and women to respond freely to each other’s posts will precipitate vastly more contacts from men, most of whom soon find they can never expect responses from women they have right-swiped, Liked, messaged, or the equivalent.  A model such as what eHarmony used in the past decade, where people of both sexes are paired with a more limited set of others, does not have this problem.  However, the real damage done by such apps is, apparently, cutting the viability of trying to pick up people in person, with one of Julian’s respondents considering it now “borderline creepy.”  That, along with such photo-based tools overemphasizing appearance, is reason enough to label modern romance-seeking methods deficient.

Fourth, we get “Bad Sex (Painfully Bad).”  Pornography is unfairly vilified in many ways, but deserves some blame for distorting how it often shows the act, from emphasis on anal sex, which hurts much or most of the time, entering without lubrication or foreplay, to even choking partners to heighten their orgasms.  The real problem here is not with porn but with communication, with good sources for technique buried among bad ones and the near-complete-failure of school sex education, which could have become as much of a foundation and valid information source as has that for driving, and is of course compounded by so many men’s lack of opportunities that would get them experience.

Last, surprisingly to me, was “Inhibition.”  Did you know that “by the mid-1990s, most high schools had stopped requiring students to shower after gym class”?  I did not.  An apparent unintended consequence of the end of that innocuous part of daily life is that many Millennials “want their own changing rooms and bathrooms, even in a couple.”  After literally thousands of grade school through college nude locker-room appearances in front of other males, which precipitated a total of zero sexually improper comments or actions, it seems bizarre to me not to accept sometimes being undressed in front of someone with whom I’m having intimate relations.  A real cause indeed – if for no reason more than, as one of my gym teachers used to say, “getting in that (dirty) uniform is enough to take a shower,” can we bring them back?

There are more explanations than Julian named for our lack of physical intimacy.  The inflection point we are at, where people differ on whether women should be protected, have full equal rights, have equality of income outcomes, or some combination of these, is one.  The probably about 3-to-1 ratio of unattached, romantically-interested high school or college males to the same in females is discouraging.  We are in our infancy in working to understand and solve this problem – what otherwise could I conclude from an article named “We’re All in Sales Now,” written by a woman apparently na├»ve that men in the bottom 60% of romantic desirability have been forced to be there since Ford was president, making a November 2018, not 1978, New York Times Sunday Review first page?  Yet there is much more in Julian’s article, which I heartily recommend.  You can find it at https://www.theatlantic.com/magazine/archive/2018/12/the-sex-recession/573949/.  In the meantime, free thinkers should keep the faith, and everyone else should join us.  Too little sex for too many people may not kill us, but its effect on our collective happiness is devastating and unnecessary.  Let’s fix it.

Wednesday, November 21, 2018

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


Two yahoo.com 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.

Friday, September 28, 2018

Four Possible Pieces of Government Action: Are They Worthwhile Now?


While we all know that private companies create the vast bulk of jobs, public policy can influence how many there are.  Over the past year, people have proposed four changes which may, or may not, help us have more of them.  Would they be effective?

Ann Tergesen and Richard Ruben, in the October 21 MarketWatch, told us that “There’s talk of capping 401(k) contributions at $2,400 per year.”  A bad idea.  Saving is good, and we should be using tax policy to promote positive things, not discourage them.  As well, $2,400 is a tiny amount.  An annual limit of, say, $10,000, could be reasonable if members of the House Ways and Means Committee truly wanted to “generate revenue to support broad reductions in individual tax rates,” but not less.

There were times when the headline “US employers desperately need workers.  Let’s help millions of adults stuck on food stamps move into jobs” (Sam Adolphsen, FoxNews.com, January 3rd) would have been appropriate, but now is not, on multiple counts.  First, we are over 16 million jobs short, and if companies were more willing to raise pay and provide training, they would have all the workers they need.  Second, given that, enough jobs aren’t out there for people wanting to be paid market rates to “move into.”  Third, not providing enough to eat for citizens of this agriculturally bountiful country is not the way to “help” them.  True, there are some who would just like to survive with minimum effort, but when surveys consistently show how many would prefer to fully support themselves, they are clearly a small minority.  This is 2018, not 1950.

The August 11th Economist discussed a better proposition, land-value taxes, in “On firmer ground.”  What the unbilled authors called “an enticing prospect to those harmed by high land values today” would be especially effective, as while “typically, taxing a good lowers supply and raises prices,” that could cut back land development but not its physical quantity.  A chart with the article showed remarkably little correlation between house replacement costs and their values, with average dwellings in Pittsburgh and Houston worth little more than their rebuilding amounts, but those in San Francisco and San Jose, while half again the replacement cost, worth, due to their land, three and four times that amount.  The idea of owning land itself is only a societal invention, the authors point out, not allowed in the high seas and not the same as having possession of things people have created or bought from those who did.  Land-value taxes are, indeed, worthy of consideration.

With income an increasingly unrepresentative source of government revenue, we need to consider others.  That is the thesis of “Stuck in the past,” also in the August 11th Economist.  This piece also mentioned “expensive housing, often the result of a shortage of land,” which “has yielded windfall gains to homeowners in big, global cities,” and called for, “to stop companies shifting profits,” governments to “switch their focus from firms to investors,” with corporate taxes only as “a backstop, to ensure that investors who do not pay taxes themselves, such as foreigners and universities, still make some contribution.”  We do need to look at an overall tax-system makeover, and implement others, such as on financial transactions, as existing revenue sources, such as income taxes, shrink.  The World War II of implementing that, though, would make partisan Supreme Court nomination battles look like skirmishes.  Likely?  No.  Impossible?  Not quite.  Necessary, within the next 20 years?  Yes. 

Friday, September 21, 2018

Six Points Against a Higher Minimum Wage: How Do They Stand Up Almost Five Years Later?


On December 13, 2013 I published a post with the first half of the title above.  It has been read over 2,000 times and has drawn various comments.  Much has changed in the economy and the world since then.  How have these arguments held up?

The first point was that “not every low-paying job is with a large and very profitable company,” and in fact most such positions were and are with small, often struggling local concerns with little in common with the likes of McDonald’s and Walmart, and run real risks of being closed out if the business’s owners were forced to pay more.  Two comments implied that we could tie minimum pay to profitability, which sounds unwieldy but would indeed solve the Burger King-vs.-Joe’s-Bar-and-Grill problem here.  Another stated, correctly, that more money in circulation would help such businesses survive – it would, but in the great majority of cases would not approach being enough.

Second was that the country, then 19 million jobs short, was poorly placed to lose more to higher mandated wages.  Per the AJSN, that number is now 16.6 million, but that is not even a 15% reduction and still shows our surplus of people who would work if given the opportunity.  One commenter mentioned the increased money movement above – again positive, but far insufficient – and suggested that we could help that jobs deficiency with government infrastructure programs.  I heartily agree, as I have in the past – we will need to build, repair, and upgrade numerous bridges, roads, dams, airports, cellular towers, and much more sooner or later, and it may as well be sooner. 

My third point was that higher minimum wages would make employers pay more than they need to, that when they do not get the workers they require, or want to improve their quality and tendency to stay, they can and should raise their offers on their own.  That has been borne out by Walmart and other companies establishing internal minimums higher than the government requirement.  One observer said that the additional competition would be good for customers, which it could be, unless there is plenty as it is.  He also mentioned the problem of “a full time paycheque being less than your rent,” which would only apply to a small share of low-paid workers, as well over half are with parents, sharing living spaces, or have additional household income.

Fourth, I called “the largest inequality” the one between those working and unable to find jobs.  That is less true now than in 2013, but millions of those 16,600,000 would tell you that is how they see it.  No, this is not “fake news” – it isn’t real news or news at all, only my viewpoint – and is necessarily subjective anyway.  In business theory, income is known as a “hygiene factor,” which means that its appeal as it increases does not go up as a straight line but almost levels out.  Sure, $4.5 million or whatever per hour is farther from $15 than $15 is from $0, but a remarkable number of Americans would consider themselves halfway to being rich if they, indeed, earned $30,000 per year – and most people earning $1 million a year would see less change in their lives if their income increased 100-fold than if it went to zero.

Fifth was the limited ability of a higher minimum wage to lift people out of poverty.  That would only work for people experiencing that now who would not once their pay increased, even with no gain in the number of hours they are working.  Vastly more would need additional money or are not poor now, the latter most common among the 45% of minimum-wage workers who are under age 30.  “Increased consumerism” from people being paid more will not solve this problem by itself either. 

Last, our country contains vast variation in costs of living, and getting $7.25 per hour is not the same in Hawaii as in southern Texas.  Over the past five years, many states and cities, most with above-average living costs, have responded by raising the lowest pay themselves, a valid solution not inflicting prohibitively high minimums on others.  I add to that that there are huge individual variations in money wants and needs as well, and it would be an unmitigated loss if those able and willing to work for less than the minimum were legally forced to be unemployed instead. 

I finished with suggestions that, instead of penalizing businesses who need workers, we increase food stamps and unemployment compensation.  Our economy is better, and keeping them the same might be adequate now, but with that 16.6 million there is still no excuse for cutting them. 

One other thing has happened since I first posted here.  Guaranteed income, or universal basic income, has received a lot of attention and a few, usually fatally flawed, trials.  If it comes to pass, and I think it will before 2050, there will be no need for a minimum wage.  That would allow more interesting, fulfilling, and fun work opportunities to pay less, while, fittingly, having little effect on the dirtiest ones.  If everyone were assured of financial survival, I think we as a country could agree, after we had a guaranteed income in place, to abolish minimum wages completely.  Then, and only then, would everyone wanting to work be able to do that.  In the meantime, the ideas above are still valid – we need to let people earn. 

Friday, September 14, 2018

Seven Articles on Modern Employment, Three Clear Conclusions


What has been the underside of the decades-low official jobless rate and the recent 49-year low in unemployment claims?  A septet of widely varying pieces over the past 21 months tells us.

In “Struggling in NJ – 52 percent of all workers earn less than $20 an hour,” published in New Jersey 101.5 on January 16th, 2017, Dino Flammia introduced us to people he called ALICE, or “Asset Limited, Income Constrained, Employed,” or, to use an older and pithier expression, the working poor.  The real person he described, someone who, despite working full-time, seemingly got a car repossessed, “has begun putting several bills on credit cards,” and is “at risk of losing her home,” is hardly the worst off, and is one of millions. 

Next, we get to “Is freelancing the future of employment?” (The Conversation, August 15th, 2017), which discussed both sides of irregular work, not only the gig-economy Uber drivers and TaskRabbit short-propositioners but professionals working without being on regular payrolls.  For the latter, “freelancing is increasingly a choice that people make to escape the 9-to-5 workday,” and are closer to considering it “liberating, empowering, and even glamorous” than ordinary gig workers.  The share of American “freelancers” saying they made that choice from necessity came down from 47% in 2014 to 37% in 2017 and may be “a key visible indicator of the future of work,” though “full-time, company-based work is still the standard for employment in most Western countries.”  Small labor propositions, as I have described before, are still economically inferior goods, but opportunities for the likes of physicians to opt for less continuous employment are not.

We next saw a view, “Global Economy’s Stubborn Reality:  Plenty of Work, Not Enough Pay” (Peter S. Goodman and Jonathan Soble, The New York Times, October 7th), once again expressing surprise that, despite showy unemployment rates, wages are lagging.  When we are over 16 million jobs short due to latent demand, almost two-thirds of which comes from people not officially jobless, pay will stagnate.  As the article correctly points out, the ever-increasing ability of those in other countries, along with rising use of non-company employees as in the previous piece, are factors.  Weaker unions, though, are not a cause but a result, and there is no reason for same-job pay to increase more than inflation.  That also covers most of the subject matter of “The economy is hot, yet many U.S. workers feel left behind.  A new report sheds some light” (Andrew Van Dam, Washington Post, July 5th) – the rest is the insights that “even when Americans do find another job, their earnings don’t recover,” and “U.S. employment benefits provide less support in the first year of unemployment than those in any other country in the study.” 

On we go to a relatively ignored current work problem, that “Employers will do almost anything to find workers to fill jobs – except pay them more” (Michael Hiltzik, Los Angeles Times, July 10th).  Well, they will do something else – they will cry about a “skills gap,” and, per the article, complain that “labor is being paid first again” as, consequently, “shareholders get leftovers.”  Why business owners seem to think that paying market prices for workers is an undue hardship remains mysterious to me.

Much of the material here was put into a book, Temp, written by Cornell labor historian Louis Hyman and released last month, and reviewed by Jennifer Szalai in the August 22nd New York Times “How the ‘Temp’ Economy Became the New Normal.”  As well, Hyman, through Szalai, stunned us with “94 percent of American jobs created between 2005 and 2015 were for “alternative work,” and blamed “Manpower, the temporary staffing agency, and McKinsey, the management consulting company,” which “acted like a vise, with one supplying the labor and the other supplying the ideology.”

The seventh piece came out this week.  Matthew Desmond’s September 11th New York Times “Americans Want to Believe Jobs Are the Solution to Poverty.  They’re Not” spent most of its printed-out 19 pages telling us something we should know already with a sprawling anecdotal account of a woman trying to support herself and three children on a combination of 20 to 30 hours per week as a $10-$14 per hour home health aide and various off-and-on public assistance programs, contrasted with how “these days, we’re told that the American economy is strong.”  Desmond gave us plenty of erroneous reinforcement, such as the implication that wages should match productivity and that $7.25 per hour is a “poverty wage,” but more reasonably showed how this woman’s life is harder than, in a civilized society, it should be.

These articles offer three things we can take away.  First, due to a variety of national and worldwide economic factors, many jobs are low-paying.  Second, accordingly, we should not be cutting back the safety net, that, for example, food stamps and unemployment benefits should be consistently and easily available and, if anything, greater than they are now.  Third, though, we cannot require that all positions meet anyone’s “living wage” diktat, which in real life varies immensely from person to person, place to place, and situation to situation.  Personal choices still matter – if you doubt that, look over the Desmond article and tick off the bad ones the protagonist has made and still makes which affect her prosperity.  We are in Work’s New Age – we can no longer expect everything material our parents and even grandparents had – but we still need to govern ourselves as well as we can. 

Friday, September 7, 2018

Another Strong Jobs Month – AJSN Down 200,000 with Latent Demand for 16.6 Million More Available Positions


In this morning’s Bureau of Labor Statistics monthly Employment Situation Summary, one thing surprised me.  I had just commented that the projected number of net new nonfarm positions was usually too high, so wondered if, at 163,000, the official report would show we failed to cover our population increase. 

We did, though, easily.  The result was 201,000, about a third more than we need to sustain our growing number of adult residents.  The writeup was positive in other ways as well.  The count of those officially jobless was off 100,000 to 6.2 million, those out 27 weeks or longer fell the same amount to 1.3 million, and the total of people working part-time for economic reasons, or holding on to short hours while thus far unsuccessfully seeking full-time ones, dropped another 200,000 even after the previous month’s 100,000 loss, to 4.4 million.  Average private nonfarm payroll wages again increased more than inflation, up 10 cents per hour to $27.16. 

The headline adjusted unemployment rate did not improve, though, staying at 3.9%.  The unadjusted figure was the same, off 0.2% from July and showing August is a neutral seasonal month.  The two disappointing results were in the two figures indicating best how common it is for Americans to be working, the labor force participation rate and the employment-population ratio, each down 0.2% to reach 62.7% and 60.3% respectively.

The American Job Shortage Number or AJSN, which gives in one number how many additional, not-currently-available positions could be filled if all knew that getting one were as easy as getting a pizza, improved 217,000, as follows:



Outside the 324,000 improvement from those officially unemployed, 70,000 from those discouraged, and 33,000 from those pleading family responsibilities, though, the components got larger.  Most noteworthy was the 2 million gain in those claiming no interest in working, a huge jump for one month, adding 100,000 to the AJSN.  Other significant worseners were the number of people in school or training and those also wanting to work but not looking for it for the past year.  The changing outcomes in these three categories show that fewer people not technically counted as jobless tested the waters in August than in July, adding up to a real labor force shrinkage.

Compared with a year before, though, the AJSN is looking great.  The August 2017 figure was 17.6 million, over one million higher, mostly due to the difference in official unemployment.  The only significant gainer since then was those not wanting a job, with cuts in those in the armed forces, institutions, and off the grid and those not looking for the previous year helping the AJSN by about 100,000 apiece.  About 34.5% of the AJSN now comes from those unemployed, down from last month’s 36.1% and continuing a general long-term trend of more and more positions being filled by others.

So how good a month was it?  Although I’m concerned about the fallen participation percentages, and the corresponding increase in people staying on the shelf, it was positive.  There is nothing small about, month after month, our employment gains exceeding the needs of our additional population, or about the key and unheralded figures of long-term jobless and working part-time for economic reasons seeming to fall almost every month.  It is, relatively speaking, a fine economic time, and we’re still improving.  Accordingly, once again, the turtle took a small but clear step forward.  

Friday, August 31, 2018

Resorts World Catskills – A Casino in Trouble? – II


Last week I posted on reports that Sullivan County, New York’s Resorts World Catskills (RWC), though an unqualified success at bringing jobs to its area, was falling way short of financial projections, and was also getting subpar TripAdvisor reviews.  How did it look?  What concerns deserve management attention?  Overall, are these problems as bad as they seem? 

I visited it a week ago Saturday night.  The sign on New York Route 17, an expressway through its area, was clear, but once taking the proper exit not so much.  After one more sign pointing me to a right turn leading into a roundabout, I had to guess the correct way out.  I did, and a stoplight at Resorts World Drive, along with an arrow pointing me left, said I was on the right way.  After two miles through the countryside, isolating RWC from the rest of the county, I was there. 

Thousands of well-lit parking spaces surrounded the impressive and obviously new 18-story hotel and below casino.  I easily walked through and got in. 

My first mission was to join the Player’s Club.  That is the well-established way of getting both communications and complimentary food, beverages, lodging, cash back, and prizes for gambling there, and before even engaging a slot machine anyone should join that or the equivalent.  The line at the desk was about 15 people long, but, with four people working, moved quickly.  I wanted to see if their process was as fast as those in Las Vegas casinos, and it was – they put my driver’s license in a reader and, questions on my email and phone number and about two minutes later, I had my card, preprinted with my name and including $10 worth of free slot play. 

To redeem the latter, I wanted a $5 machine.  Not easy to find – they, with $1 machines, were in the “high limit” area, which, with two sets of directions, sent me through the gorgeously new gaming expanse, which I wandered through more after losing my two attempts.  It was fully up to modern standards – the “slots” (in quotes since you can’t play them with coins, only bills) all with video screens, the table games mostly filled with players including some betting hundreds per play, the restaurants with concentrations at $8 to $20 per meal, people everywhere, well-marked restrooms, and good directional signs.  I also went to the poker room.  No longer can the casual once-a-week-with-friends players expect to survive at casino poker – the modern version is no-limit, with the players’ skills often honed by hundreds or thousands of hours of compressed-time online experience, but, judging by the 15 tables in play, there were plenty of those even in this low-population area.  The room, though comfortable, didn’t have much special to offer its players, with comps set at a minimal $1 per hour with no higher promotional times, but attendance didn’t seem lacking.

Though the RWC facility looked vibrant and beautiful, I found a few other causes for concern.  Room rates, for now seemingly $200 per night and up, were sky-high by casino-hotel standards.  They did not have headline-name entertainment, and, overall, the non-gambling options seemed weak.  The 24-hour diner, while a real and necessary asset, charged the likes of $16 for nachos.  These may not stop those from traveling to visit once but will impede critical repeat business. 

There are still many things about RWC’s viability we don’t know.  Beyond what I saw, here are some questions for their management and ownership. 

First, what has happened with the effort to bring in high-rolling Asian customers?  They themselves could put you in the black.  Are you doing all you can there?

Second, are you marketing RWC aggressively to New York City?  There are hundreds of thousands of people, many quite wealthy now, with memories of childhood Catskills trips.  Are you considering offering them the likes of free hotel stays? 

Third, what can you do to step up your entertainment options?  Last decade, that shortage killed a billion-dollar Las Vegas casino with a storied history, the Aladdin.  I live 20 miles away, get all four local newspapers, and see stories and advertising about oodles of small local concerts elsewhere, but nothing about anything you offer. 

Fourth, are dollar slot machines, common as far back as the 1970s, really “high limit” in 2018?  Is it possible that more of them, even with the modern trend toward playing many multiples of the minimum, would help that strange per-machine shortfall?  If not, with your state-of-the-art machines getting such good reviews, just what is the slot-machine-revenue problem?

Fifth, where is your community involvement?  I expected that you would have the likes of buses to canoeing and fishing providers, not to mention partnerships with community institutions such as WJFF Radio, whose management has heard nothing from you.  You can’t go it alone here, especially when so many locals didn’t want your facility built.

Sixth, how much do you project that legalized sports betting, your Monster golf course, and your $33 million entertainment complex will help your business?  Do you seriously expect a big boost from the Kartrite indoor water park, which is well into Pennsylvania and has its own hotel?  Is it possible you need rooms to compete with Las Vegas’s $50-per-night offerings and nearby Monticello’s $60 ones?

Seventh, can you quantify how much our bad winter and early spring weather hurt your bottom line?

Eighth, is there or is there not a gap between the previous six months’ results and what you expected?

Ninth, is it just my perception, or has your communication, in general, been lacking?  With my blog and WJFF program I qualify as a journalist, and doubt I was the only one whose multiple information requests you did not respond to.

And tenth, the big question.  With casinos now in 44 states, we know they are not automatically travel destinations.  With those in the Silent Generation much larger per-capita gamblers than Boomers, and the Millennials lowest of all, is it possible that the model of people going to gamble, to the exclusion of almost everything else, for a week or weekend is becoming obsolete?  If so, how are you going to deal with that?

Overall, I don’t know how successful Resorts World Catskills will be in five or ten years.  I am inclined to be optimistic.  But it’s nothing that will be given to it.  “If you build it, they will come” may work for cornfield baseball diamonds in the movies, but it’s nothing casino resorts can expect in real life.