Friday, May 17, 2019

Sluggish or Catastrophic? Five Months of Autonomous Vehicle Non-Progress - II

Since March, despite the general slowdown in driverless car progress and stories about it, some noteworthy articles have been published.  Several reveal another reason why we are now off 2017 and 2018 projections – a backlash.  One piece here is “self-driving car technology can’t deliver on overblown ride-sharing promises,” by Ashley Nunes in the March 4th USA Today.  Here we see several negative misconceptions too often written.  They include insisting on autonomous perfection when there are 30,000-plus driver-error deaths annually (“unless self-driving tech is proven faultless, ceding control of public safety to algorithms is unlikely”), confusing their current state with that to be required for proliferation (“sensors and software might trim the need for human labor but do not… purge that need entirely”), forgetting that taxi equivalents will not work in rural areas, so therefore will not wipe out personal car ownership (“Robocabs… will be cheaper… a better bargain for consumers than owning a car”), and impatience, ignoring almost unbelievable three-year progress (“a technology that never seems to quite arrive”).  There are real points to be made against autonomous vehicles, but they will be obscured with so much common erroneous thinking.

Next, on to the recent Lyft IPO and their competitor’s still-pending one, with Kate Conger’s April 18th New York Times “Uber’s Self-Driving Cars are Valued at $7.25 Billion by Investors.”  That company division, called the Autonomous Technology Group, is receiving billions of dollars from outside investors and will have its own board, facilitating the possibility of detaching if Uber cannot improve.  That is a good thing for them, as between Uber’s being “deeply unprofitable” and losing $1.8 billion in 2018, their propensity for breaking the law, and their doubtful viability if regulated as much as other taxi companies, it is one of the last companies in which I would want to invest.  Yet their instituting a snail’s-pace timeline, as bad as that looked, may indicate a new attempt at behaving decently.  I think if the rest of Uber went out of business, this piece could be successful both in the market and on Wall Street.

As the next article and the final one show, the amount of driverless backlash varies between age groups.  Andy Meek’s April 20th Salon “Millennials are the demographic most open to self-driving cars, but not by much” started with the revelation that Ford’s chief executive had admitted they “overestimated the arrival” of autonomous vehicles, and that, for that company at least, “their applications will be narrow.”  From there, Meek cited a HarrisX study, apparently given to people in that age group, showing that three-fourths were “very afraid” of them with 90% citing possible technical mishaps, but 70% thought progress had exceeded expectations.  The present-future confusion mentioned above again crept in, but it is noteworthy that even people young enough to be more accepting of driverless cars agree, as a group, that the current state of development is insufficient for widespread propagation. 

Within seconds of printing Dalvin Brown’s April 23rd USA Today “Can Elon Musk’s robotaxi plan help Tesla owners make $30,000 a year?”, I wrote, next to that headline, “NO!!”  Musk must have been using something stronger than what he smoked during a September interview to say that in a year, or “a year and three months,” meaning April or July 2020, there would be “over a million robotaxis on the road,” and the idea of those with Teslas viably adding theirs to the fleet sounds more like 2025.  As optimistic as I have been, between technology delays and acceptance barriers as above I see no chance of either that quickly.  Also, especially with the slowdown, it is losing business strategy to overpromise, especially by market leaders.

Last, we have an organized effort, documented by M. R. O’Connor on April 30th in The New Yorker in “The Fight for the Right to Drive.”  The group, the Human Driving Association, strives not only to continue allowing nonautonomous vehicles, but to require each to have a steering wheel and pedals, to mandate that all cars to be fully human-drivable, and to guarantee those things through a constitutional amendment.  Founder Alex Roy backs its ideology from environmental, freedom, technology-value disagreement, and personal-preference perspectives, with justifications ranging from the worthless (matching future laws with current expertise, as twice above) and the tradeoff-refusing (that “autonomy = freedom,” and cutting the latter would automatically be bad), to the intriguing (people may want to drive themselves for communitarian reasons such as those keeping the Amish using horses) and the na├»ve (to give us “meaningful work and individual agency”).  Roy’s group doesn’t have much to offer for alternatives, mentioning “investing in mass-transit” (has always happened), “build(ing) bike lanes” (only a small niche solution, and a step down in life quality for the vast majority), “adoption of electric cars” (as I recently posted, after 130 years of progress and decades of subsidies they don’t get 1% of sales), and “cell phone jamming devices in cars” (no more passengers using them either, I guess).  These losing ideas, along with assuming that driverless rides being paid for by advertising means that families should not appreciate saving maybe $1,000 per month, along with overall pushing against the tide of history, don’t give us enough to support.  Such a group, though, may help ensure that there are roads, maybe even some current cross-country expressways, that people will even at mid-century be able to drive; after all, riding horses is still legal on most public thoroughfares.

On self-driving progress, then, I’ll go for “sluggish,” along with “impeded.”  I will return to this issue with July autonomous-vehicle projections.  Expect that they will be somewhere between what Elon Musk is claiming and what some of the people quoted above expect to see.

Friday, May 3, 2019

April Jobs Data: A Fine Month, With the American Job Shortage Number (AJSN) Down Almost 900,000 to 15.2 Million, But Ordinary Behind the Front-Line Numbers

In advance of this morning’s Bureau of Labor Statistics Employment Situation Summary, Fox News predicted 185,000 more jobs.  Once again, we blew the projection away.

We added 263,000 net new nonfarm positions, and as a kicker, got a 49-year low in the adjusted employment rate, down 0.2% to 3.6%.  The adjusted version, showing that April might have the most people working year-in and year-out, was even more remarkable, reaching 3.3%.  After that, though, results were mixed.  The number of unemployed fell almost 400,000 to 5.8 million, with those out 27 weeks or longer down 100,000 to 1.2 million, but hourly private nonfarm payroll wages were only barely above inflation, up 7 cents per hour to $27.77.  The two numbers showing how common it is for Americans to be working, the labor force participation rate and the employment-population ratio, did not follow the headline results either, with the first actually down 0.2%, a substantial amount for this metric, to 62.8%, and the second unchanged at 60.6%.  Most disappointing was the count of those working part-time for economic reasons, or holding on to less than full-time positions while thus far unsuccessfully seeking longer-hour ones, which repeated March’s 200,000 worsening and is now at 4.7 million. 

The American Job Shortage Number or AJSN, the statistic showing in one figure how many additional positions could be rapidly filled if all knew that getting work were easy, improved 876,000 over March’s to at least a 10-year low, as follows:

The difference from March was completely due to lower official unemployment, which now makes up only 31.8% of latent demand.  In sum, the other numbers above essentially broke even, with the count of those wanting to work but not looking for it for a year or more showing a 133,000 improvement, but offset by rises in those describing themselves as discouraged, temporarily unavailable, and claiming no job interest at all.  Compared with a year before, the AJSN’s improvement was not as extreme, 563,000 lower and better but 87% from reduced official joblessness. 

Some reports will call this morning’s employment data spectacular and a massive improvement, but here are some reasons why it is neither.  First, though the number of new positions was once again superb, the cuts in the jobless rates seem to come mostly from fewer people pursuing them, as over 600,000 net moved into the no-interest category.  Second, the 4.7 million counted everywhere as working but unhappily doing that less than full time are now within 700,000 of those officially unemployed.  Third, the marginal attachment categories above have lacked real progress for years.  Fourth, our tepid wage improvements, along with the lower but hardly crashing AJSN, put the lie to statements that we have a worker shortage.  Yes, this April was a favorable employment month, but the turtle’s moderate if significant step forward by no means made him look like a cheetah. 

Friday, April 26, 2019

Sluggish or Catastrophic? Five Months of Autonomous Vehicle Non-Progress - I

Since early December, something has been missing.  The weekly and sometimes even daily updates on technical, legal, and organizational driverless car progress have disappeared.  The hottest information-related issue of 2018 (sorry, smartphones), it has been replaced this year by various insights into other applications of artificial intelligence and scattered updates and opinions.  What, though, has been published? 

The most comprehensive article I have seen on this change actually came out near the beginning of it.  Alexis C. Madrigal’s “7 Arguments Against the Autonomous-Vehicle Utopia” (The Atlantic, December 7th), after calling pertinent progress “oversold,” offered a compendium of its largest real and potential obstructions, which was a genuine mixed bag. 

“Bear Case 1:  They Won’t Work Until Cars Are as Smart as Humans” may be why we are lagging behind my most recent forecast (see, with “the sheer number of “edge cases,” i.e. unusual circumstances, they’d have to handle,” and, quoting “legendary roboticist” Rodney Brooks, “perceptual challenges… that are way beyond those that current developers have solved with deep learning networks, and perhaps a lot more automated reasoning than any AI systems have so far [2017] been expected to demonstrate.”  One by one the edge cases can be solved, but if there are indeed vast numbers of them, that will consume some time.  Overall, if the worst issue with driverless technology now is that it isn’t as proficient at dealing with full-contact driving by now as we had anticipated, we’re looking at delays.

Madrigal’s Bear Case 2, “They Won’t Work, Because They’ll Get Hacked,” is a known problem with fixes completed or in progress, and has shown no signs of being uncontrollable.  Bear Case 3, “They Won’t Work as a Transportation Service,” called not only for Uber and Lyft to lose money indefinitely but for them to tire of that and quit, and made the erroneous assumption that “calibrating and maintaining” onboard equipment would be done by individual owners.  The fourth, “They Won’t Work, Because You Can’t Prove They’re Safe,” depends on how people see the 30,000 annual American deaths caused by human drivers, and Bear Case 5, “They’ll Work, But Not Anytime Soon,” ignored that they are functional now, though it seems likely that roll-outs will not be, say, state by state or even city by city, but a square mile or so at a time.  Bear Case 6, “Self-Driving Cars Will Mostly Mean Computer-Assisted Drivers,” confused preliminary progress with the end product.

The most interesting part of Madrigal’s article was “Bear Case 7:  Self-Driving Cars Will Work, But Make Traffic and Emissions Worse.”  As I see it, electric cars have reached a crossroads.  Despite 130 years of technical progress after their first United States production, being beloved by environmentalists (despite over a quarter of their fuel supply coming from coal), being subsidized by the IRS and other parts of the federal government, being facilitated by sufficiently available charging stations at least regionally, and being the recipient of feverish efforts to correct their prohibitive flaw of short battery life, fully electric vehicles still comprise well below 1% of new cars sold, with hybrids sitting at only 2%.  From there, areas recently discontinuing cash grants for their purchase have seen sales drop 75% or more.  Clearly, those working on driverless technology cannot afford to tether it to all-electric platforms.  That means gasoline and diesel engine exhaust not only from people taking driverless trips, but from the vehicles reaching riders.  As for traffic, autonomous cars could end up replacing transit vehicles, and, by providing transportation for more and more people not currently alone in cars due to age or temporary or permanent infirmity, would put additional ones on the road.  All of that means that driverless technology could be seen by most environmental groups as a problem instead of a solution, which could worsen the industry’s second most severe problem, that of legal barriers. 

Three and a half months after that, we got Kara Swisher’s New York Times “Owning a Car Will Soon Be as Quaint as Owning a Horse,” in which the author predicted that she would die before her next auto purchase – meaning, apparently, that she had no plans to move to the country.  Yet the past two months’ other articles were better – see in three weeks. 

Friday, April 19, 2019

Admissions at Top Colleges: Oboes, Guatemala, and Four Questions

It was quite a news item last month that some of our country’s most selective universities had been taking bribes to admit students with more family money than credentials.  Several schools and several known celebrities were involved, with an unknown, probably massive, number yet unrevealed. 

Yet, other problems have come up over the past year.  The bigotry of affirmative action has been revealed by Harvard, which has apparently considered certain eastern Asian cultures too effective in providing learning environments, valuing education highly, and getting children to excel not only at school but in ACT and SAT performance, and have been limiting their numbers.  On the other end, black students, who since at least the 1970s have had nothing to complain about with their relative chances of top-school admission, have been in some places given bogus high school transcripts to enhance their outcomes even more.  It is clear that applicants’ chances to get into the likes of Yale or even UCLA are not determined solely by academic and test performance.

So what questions should we be asking?

First, what do we need to know about these universities?  Two things.  They are stinking rich – it’s not only Harvard’s $38 billion 2015 endowment, but Yale’s $26 billion, Stanford’s $17 billion, Princeton’s $16 billion, and so on.  They profit immensely from a correlation-causation misunderstanding where their students, most with the very highest intelligence, motivation, knowledge sets, and family support before their first day on campus, tend to excel in post-college careers, which through commensurate donations pushes endowments even higher, makes these institutions even better places to spend those four years, allows them to become even more competitive, and perpetuates the cycle.  Although universities do spend some of their money, mostly they seem to keep it and make it grow, which means they have a strong interest in filling their classes with people who rate to facilitate that.

Second, how do top schools maximize their intake of wealthy students?  Many things, while not indicating high net worth themselves, tend to go along with that, and it is remarkable how many are highly valued in prospective students.  Dartmouth and Williams will take a much higher share of oboe and bassoon players, since those instruments are rarely used outside classical music and thus studied mainly by those in the upper classes, than those excelling at accordion and folk guitar.  Highly selective colleges have millions of high school football and basketball players to choose from, but pick similar numbers from those doing fencing, lacrosse, and crew, many or most of whom are from expensive prep academies.  Admissions officers have long been high on applicants who have done the likes of altruistic, Peace-Corps-like trips to places such as Guatemala, even though such ventures cost too much for many families, and volunteer work, even though those with less money need paying part-time positions instead.  Legacy admissions, of less-qualified children of that school’s graduates, are also inclined to have more money than most, and are real and undisputed.  Overall, not a few individuals who would otherwise complain about income inequality are working, in their university jobs, to cement it into place, with the recent celebrity dishonor being only another way.

Third, how can we get high-end college admissions to be fairer?  Ross Douthat, in his March 17 New York Times column “The Scandals of Meritocracy,” suggested that those discontented with this situation from both the left and the right could be satisfied by a “centrist prescription for reform,” in which “elite schools should emphasize class-based rather than race-based affirmative action," while “phasing out preferences for jocks and legacies.”  Another even more meritocratic way would be to excise sex, race, and ethnicity information entirely, perhaps by electronically removing names and pictures from applications before evaluation.  A third choice would be to admit that the current system strives to neutralize cultural strengths and weaknesses, and admit the top few percent of each group.  Another would be to cut the cord between universities and government, denying them the likes of favorable tax treatment but freeing colleges to admit whoever they see fit. 

That brings us to the final question:  Is pure meritocracy really what we want?  American life is full of competitions, for recognition and career success as well as university admissions and their consequences, incorrectly represented as rewarding only excellence.  Douthat named “three ways that a ruling class can be legitimated – though intergenerational continuity, through representation (of minority groups) and through aptitude.”  He also asked if Harvard’s average SAT score, 1512 out of 1600 for the class of 2022, would be truly better if it went to 1570, and said the “essential premise that intelligence alone merits power is the premise that has given us many present difficulties.” 

My personal bias is toward merit.  I think demographic group membership is far less significant than individual attributes and choices, but, from talk of “reparations” for those many generations removed from slavery to votes for second members of the Clinton and Bush political dynasties, oceans of others clearly disagree.  In our many pretenses that merit is the only meaningful criterion, governing bodies will continue to do what they think they should.  And that is as far as we can go, today, on the issue of unfair university admissions. 

Friday, April 12, 2019

Three on American Social Problems Just Beyond Politics and Employment: Is This Where We Are Now?

Our country is in pain.  There are plenty of perspectives from which we can say that, with the most obvious our political polarization, widespread opioid abuse, and the seeming reduction of civil discourse.  Yet there are more, as three authors have pointed out.

The first is Arthur C. Brooks, president of the conservative think-tank American Enterprise Institute, in the November 23rd New York Times “How Loneliness Is Tearing America Apart.”  He called that an “epidemic,” saying that it is shown by almost half of our country-people claiming that they “sometimes or always feel alone or “left out.””  Last year I wrote a three-part series on one large component, insufficient access to sex, but Brooks wrote on something more encompassing.  In reviewing a new book by Nebraska senator Ben Sasse, Them:  Why We Hate Each Other – and How to Heal, he said that instead of from general civic life “people find a sense of community in the polarized tribes forming on the left and the right,” and named “the changing nature of work,” where jobs provide far less togetherness than in the past.  Brooks’s and Sasse’s recommended solution of finding a small-town-like place with plenty of community is, though, hardly an answer for tens of millions of lifetime city dwellers. 

Second, in the April 7th USA Today, we heard from Warren Farrell, a long-time freethinking author on the rights of and relationships between the sexes.  In “’Boy crisis’ threatens America’s future with economic, health, and suicide risks,” he defined another problem area, “a global crisis… particularly egregious in America.”  He saw it as evident in education (males well behind females in school achievement and falling), mental health (he cited the stunning statistics that, despite much press on the pressures on female adolescents, 15 to 19-year-old men and boys kill themselves at triple the rate of same-aged women and girls, which goes up to 4½ times for those 20 to 24), “shame,” with “boys feeling that their masculinity is toxic” (about time somebody mentioned that!), and “economic health,” with technological changes hitting men’s jobs much harder.  Farrell considered the real problem to stem from boys not having involved fathers, or fathers present at all, which, as an effect as well as a cause, leads us to the hardly-valuable conclusion that prosperity is good, and to me the judgment that much of what he discussed is an ultimate result of not enough jobs and commensurate devaluation of people who would otherwise be stabilized through working. 

Third was a piece which I expected to get much more attention than it did.  David Brooks’s February 18th New York Times “A Nation of Weavers,” revealed the author and columnist’s other activity, working on “Weave:  The Social Fabric Project,” a comprehensive attempt to build and strengthen communities nationwide through the nonpartisan Aspen Institute think tank.  After along with Sasse and Arthur Brooks blaming “social isolation,” reminiscent of George H.W. Bush’s Thousand Points of Light David Brooks lauded those with involvements from teaching boxing to visiting hospital patients and a teenage-activity-provider for saying she did things not for or to people but with them, and said they comprised “a movement that doesn’t know it’s a movement.”  He named the real problem as how to “change the culture” and thereby to “change behavior on a large scale,” and said those who “assault and stereotype a person” have “ripped the social fabric.” 

Can we realistically hope to become “a nation of weavers”?  In decades maybe, but not now, for several reasons.  First, our political alliances are too fixed, and civic improvement efforts in almost all cases do not appeal to the Trumpist tribe, as accepting lying, distrusting community, and assaulting and stereotyping vilifying political opponents are, sadly, planks of their platform.  Second, too many efforts are rejected – I for one could name a half-dozen community-building efforts for which I had both interest and ability to help or even lead, which the beneficiaries simply did not want – and armies of potential “weavers” have since become discouraged.  Third, as David Brooks wrote it, the standards for public benefactors are just too high, if indeed “Weavers are not motivated” “by money, power, and status” – there is plenty of room for people seeking such achievements to help where they live as well.  And fourth, Brooks’s piece is generally too vague, with its overall idea, that we should do something to build our communities, not showing a clear path toward action.  

Yes, this is where we are now.  These are real problems.  All have possible solutions, but none are easy.  They may be helped someday by the iGen, who will understand the limitations of technological connections more than any other cohort, or their children.  In the meantime, if we want to improve our lot as human beings and Americans, it is up to us to change – individually. 

Friday, April 5, 2019

March Jobs Data: American Job Shortage Number Down 400,000 to 16.1 Million in Peaceful, Reassuring Month

Most of us eagerly anticipated February’s data, as it showed the state of the economy better than January’s shutdown-marred edition, so what about March’s? 

Heading the Bureau of Labor Statistics data was a 196,000 net new nonfarm payroll jobs gain, a tad above a published 180,000 estimate and not only more than needed for population growth but in line with the 162,000 January-February average.  Seasonally adjusted unemployment held at 3.8%, with the unadjusted version down mostly seasonally 0.2% from 4.1% to 3.9%.  Adjusted official joblessness sat at 6.2 million, with those out for 27 weeks or longer (1.3 million) and average private nonfarm wages (up 4 cents per hour, or about the same as inflation, to $27.70) also treading water.  However, the two measures of how common it is for Americans to be working, the labor force participation rate and the employment-population ratio, both worsened, the former down 0.2% to 63.0% and the latter off 0.1% to 60.6%.  As well, the count of those working part-time for economic reasons, or holding on to less than full-time jobs they were not yet successfully able to upgrade, grew 200,000 to 4.5 million, losing half of its January and February improvement.

The American Job Shortage Number, the figure showing how many positions could be quickly filled if getting one were easy and routine, got 388,000 better, as follows:

The largest differences were from official unadjusted unemployment, which fell 250,000, and an almost 200,000 drop in those wanting work but not looking for it for the past year.  There was little change elsewhere.

Compared with a year before, the AJSN improved 179,000, with a difference of more than that from unemployment.  Despite March’s reduction, the count of those not looking for a year or more is still up 200,000, but nothing else seems a cause for concern.  We have almost leveled off, but not quite.

That describes this morning’s data well, February’s disappointing 20,000 jobs gain reversed itself, and unemployment did not increase.  I don’t like the cuts in the labor ratios, but they have fluctuated enough so we can’t call them a trend or even a worry.  Nothing dramatic on the American employment front is now happening.  April’s data may disagree, but for today, the good times continue.  The turtle, once more, took a tiny step forward. 

Friday, March 29, 2019

A New Job Training Bill: How Can It Be Better?

What is the purpose of vocational education?  How can we achieve it?   

Kevin Carey, in the March 1st New York Times “A Well-Meaning Job Training Bill That May Hurt More Than Help,” opined that it should be doing more than simply helping people get started in new careers.  He criticized “The Jobs Act,” a rather grandiose name for an otherwise good bill sponsored by one U.S. Senator from each major party and cosponsored by 12 more “bipartisan” ones, “including three Democrats who are running for president,” concluding it would, per the article’s title, “hurt the students it is designed to help.”  He didn’t like the bill’s shortening minimum Pell-grant tuition-coverage eligibility for programs only eight weeks long, as “study after study finds that too many” of them don’t succeed in “better jobs and wages,” but did not mention how many people completing such courses are hired into their new fields.  He went off on the “dynamics” of how certificate programs, often provided by “for-profit” institutions (an expression he seems to use as a pejorative), “shortchange women,” because most cosmetology certificate holders are female, and have “limitations… stratified by race,” as more blacks than those in other groups end their education with one, and hastily concluded that, for these two masses of people especially, “the bill leaves students at the mercy of a higher education market that routinely fails them.”  He cited the irrelevant statistic that “only about one in four students whose credential is a short-term certificate go on to earn an associate’s or bachelor’s degree within six years,” not seeing that those succeeding in fields they have chosen usually either conclude their higher education or wait years before continuing it.  As a substitute for more vocational certificate graduates, Carey advocated “career advising and job search assistance,” as they “have been shown to help,” as if they, somehow, avoided the flaws of “short training programs of wildly uneven quality.” 

Instead of scuttling a not only positive but rare and commendably bipartisan effort, how could it be improved?  The answer is to require accreditations for certificate programs.  It may take a while for bodies issuing them to develop their standards, and for schools to meet them, but that would be healthy, as program quality at reputable institutions would be certain to quickly improve.  As well as coursework rigor, accrediting boards should also require that certain percentages of graduates – overall, not diced into sex and race groups – be hired in the certificates’ fields.  When programs meet these standards, the Pell grants, described by Carey as “about $3,000” for 8-week ones could start.  This – not dividing Americans by demographic factors, vilifying organizations trying to earn money, or snobbishly pitying people for choosing careers they know do not pay well – is the solution we want.

Friday, March 22, 2019

Artificial Intelligence: Governance, Taxation, Ethics, Ground Rules, and Its Largest Question

Over the past few months the subject of human-replacing technology articles has shifted.  From constant progress reports, autonomous vehicle news is down to a trickle, but artificial intelligence (AI) issues are still drawing reporting.  Here are four such stories, all from The New York Times.

The first, “How Do You Govern Machines That Can Learn?  Policymakers Are Trying to Figure That Out,” by Steve Lohr on January 20th, wasn’t specific.  It reminded us, though, that “today’s machine-learning systems are so complex, digesting so much data, that explaining how they make decisions may be impossible” (italics Lohr’s).  I still believe that AI is only algorithmic, but it is now developing its own computational procedures often already too large to explain.  As to whether we need confidence in systems with methods more accurate than ours, “an M.I.T. computer scientist and breast cancer survivor” said that “you have to use” machine-generated algorithms predicting that disease if they are objectively best.  Yet, as we know from recent driverless-car attitudes, not all will consent to that.  Lohr also discussed two situations which he and everyone else seems to conflate:  poorer AI recognition of female and nonwhite faces, which is a technical issue requiring more work, and how to use controversial but correct data.

Next was Eduardo Porter’s February 24th opinion-section “Don’t Fight the Robots.  Tax Them.”  Important issues he touched on were “how do you even define a robot to tax it?,” that before applying levies on such things we should first withdraw accelerated depreciation and other tax subsidies, and that reduced numbers of workers pay less income tax.  His suggestions included robot-owning businesses forfeiting taxes formerly paid by laid-off workers (good, as it assigns cost to the cost-causer), and a per-robot tax (OK, if we agree on what robots are).  I think we would do better to charge income tax on a sliding scale with companies with more full-time equivalent jobs paying less, which, given Porter’s idea of taxing “the ratio of a company’s profit to its employee compensation,” he almost proposed himself.

The last two were written by Cade Metz and published March 1st.  The content of “Is Ethical A.I. Even Possible?” didn’t support that headline, but focused on two concerns, of facial recognition shortcomings as above and the growing unwillingness of AI researchers to contribute to autonomous weapons systems.  As Metz mentioned, the AI Now Institute, per its website “an interdisciplinary research center dedicated to understanding the social implications of artificial intelligence,” has been formed at New York University.  AI can certainly be ethical, but we will not all agree on what is right to do with it and what is not.

Finally, Metz’s “Seeking Ground Rules for A.I.” proposed ten overarching principles in the field.  They were transparency (in design, intention, and use of the technology), disclosure (to users), privacy (allowing users to refuse to have their data collected), diversity (of the development teams, presumably in race and sex), bias (in input data), trust (self-regulation), accountability (“a common set of standards”), collective governance, regulation, and complementarity (to limit AI as something for people to use instead of something to replace them).  A good start, and may, or may not, go a long way without major changes. 

Beyond all of these, we have a query to which AI will force an answer.  It is not a pleasant one, but we must think about it.  As Lohr almost stated, blacks, whites, men, women, gays, and straights, to name the most common but hardly all identity groups, do not have identical behavioral compositions.  As the systems determine differences between sexes and races, they will use them to identify criminal suspects, recommend hiring or not hiring, accept or refuse mortgage and other loan requests, determine optimal housing, and make or contribute to an almost infinite set of other large life-affecting decisions.  When algorithms are assembled using contextless data, it is inevitable that many will incorporate these factors.  Even if these six categories and more like them were expressly blocked from consideration, proxies such as geographical location would bring them right back in.  So here is the question:  What do we do when the truth is racist, sexist, homophobic, or heterophobic?  The answer we develop will mean more for the future of AI than any further technical progress. 

Friday, March 15, 2019

Males and Females in School and In the Office – Who’s Beating Whom?

A fascinating New York Times article came out February 7th.  Written by clinical psychologist Lisa Damour, “Why Girls Beat Boys at School and Lose to Them at the Office” contrasted men’s “95 percent of the top positions in the largest public companies” with females’ tendency to “study harder and get better grades.”  Damour cited research results citing women’s lack of confidence and suggesting that boys were much more likely to get that from their school experiences, even if they were less likely to show the competence of girls who “don’t stop until they’ve polished each assignment to a high shine and rewritten their notes with color-coded precision.”  She suggested that “parents and teachers can stop praising inefficient overwork,” such as students with top grades doing clearly unneeded extra credit assignments.  The best line was from an unnamed “colleague” of Damour’s saying that, if 90 was enough for an A, “the difference between a 91 and a 99 is a life.”

What I did and saw in school, though now 40 to 55 years ago, was right in line with this piece.  In my classes there were usually phalanxes of peers, almost all girls, who always seemed to be prepared, poised, and academically outstanding.  I was not.  I was one, per Damour, who did “just enough to keep the adults off their backs.”  My parents considered me an underworking underachiever who did not do enough for my future, and applied a great deal of pressure on me to do more and do better.  At times my sister, once found in the middle of the night making an unrequired large chart for a class in which she had a solid A average “just because she wanted it,” fit the girl’s grind stereotype – my mother, after opining that I had the opposite problem, said my sister, who after getting a top mark on a school project would have no interest in discussing its subject, would do well to enjoy present days more. 

What long-term effects did my school attitude ultimately have?  I don’t know how to evaluate the downside, with family financial problems also perhaps precluding a four-year Ivy League stay, but there has been one great advantage.  My most common reason for being apathetic about schoolwork was that I wanted to learn other things.  Since graduating from a good state university in 1979 at age 22 I have continued that, with both advanced degrees, a 6,000-book library, and a vast and unique set of knowledge-enhancing and teaching experiences.  I have converted many personal weaknesses, such as my atrocious grade-school organization ability, into strengths.  While my sister claimed a “very efficient mind,” mine is anything but, and I have taken enormous pleasure from that.  I have no answer for whether, for example, thirty years as a top physician would have been better for me. 

If I were advising students and teachers on how to help the former to get the most from their work efforts, some things would be clear.  Both grinds and slackers need to focus more on tactics, which Damour touched on but could have pursued further, and drop the incorrect assumption that more labor is always good.  All should encourage gaining information from tangents off school subjects, and from totally unrelated things, as well.  All students, especially in high school and college, should at least seriously consider participating in activities to which they will not later have access.  The 91%-and-99% insight above, along with the old line about what people call someone graduating last in their medical school class (the answer is “Doctor”), should be on the wall in every school if not every classroom. 

As for work settings, it is almost paradoxical that so many men and women change places.  While most people making financial sacrifices to preserve life balance are women, it is chiefly men who in pursuit of more money and success seem to lose perspective and forfeit everything else.  It would be hard for bosses to honestly stop loving workaholics, but could they more often value and reward the crucial but too often sadly undervalued virtues of preparation, planning, being on time, following instructions, making commitments, responding to messages, being generally and consistently reliable and dependable, and in general doing what the grind girls above have taught themselves to excel at?  Most cubicle workers and others with open-ended responsibilities could use more emphasis on tactics, especially in knowing what they do not need to do.  That, along with remembering that school grades by themselves have only small effects on workplace success, should keep everyone’s head screwed on more securely. 

So who is winning, the intense or the casual?  Neither.  Both are losing, as long as they fail to pay attention to their lives around them, to how such lives may later be, and to making the most of their work and study time.  As with other social problems, those of overwork and underwork are best solved by having, sharing, and using accurate information.  There need not be winners and losers in classrooms or on jobs, only people making personal choices suited best to them.  That is what we need.

Friday, March 8, 2019

February’s Employment Data: Little Change Compared with December, But AJSN Now 16.5 Million on Higher Latent Demand

This morning’s Bureau of Labor Statistics Employment Situation Summary was special.  Not that there was anything noteworthy about the numbers – they were duller than usual – but now that the government has been staying entirely open, they show us clearer than last month’s fractured issue what has been happening this year.

First was the quite low 20,000 net new nonfarm payroll positions, which wasn’t so bad when averaged with January’s 304,000, or 162,000 per month, not great but still more than needed for our population increase.  Seasonally adjusted unemployment fell 0.2% to 3.8%, but with January’s 0.1% gain we have no trend.  Likewise for average hourly nonfarm payroll earnings, which stalled at plus only 2 cents per hour last time but rose 11 cents last month to $27.66 for a hair-over-inflation average 6.5 cents per hour.  The count of those officially jobless and out for 27 weeks or longer again held at 1.3 million, with the total unemployed number, down 300,000 to 6.2 million, more than erasing January’s 200,000 gain for an average drop of 50,000.  The two best measures of how common it is for Americans to be working, the employment-population ratio and the labor force participation rate, held even, the same result for the first and a hold of January’s 0.1% improvement for the second.

The American Job Shortage Number or AJSN, the metric which shows how many more positions could be easily filled if all knew they were truly easy to get, dropped 600,000 from January for an average 335,000 rise over the past two months, as follows:

Compared with December, most of the gain came from higher official unemployment, with other significant contributions from increases in those not searching for work in the previous year, those in the miscellaneous non-civilian et al. category, and people claiming discouragement.  Compared with a year ago the AJSN has improved by 300,000, with a 419,400 drop in latent demand from those officially unemployed partially offset by a 155,000 hike from those wanting to work but not looking for it for a year or longer.  Perhaps tellingly given improving economic times, 325,000 fewer people are in the miscellaneous group than a year ago, cutting hidden demand there by a tenth of that.

How can we sum up all of this?  It was a decent two months, with small surprises in the part-time-for-economic-reasons (good) and number of new positions (bad).  We are showing signs of leveling off, with year-over-year AJSN improvement wafting down, but we remain in the best economy since 2008.  And we’re still, slowly, getting better.  Accordingly, while it wasn’t large even for his species, the turtle, once again, took a step forward.

Friday, March 1, 2019

Just Like Employees, Not All Articles on Jobs Are Successful

This past week offered me, on the surface, several opportunities to write a post from one published piece.  It didn’t work out that way.  Why not?

Most with potential were in the February 24th New York Times Magazine, subtitled “The Future of Work Issue,” and were even more irritating to me than its font with lines connecting “s” and “t” and other letter pairs.  The first, Charles Duhigg’s “Wealthy, Successful and Miserable,” chronicled how many Harvard M.B.A. graduates were just that, in high-pressure, long-hours positions providing little in deep meaning, sense of purpose, self-direction, and so on.  None of this is anything new, and people have long chosen to leave such positions after getting financially set for life but long before retirement age.  It’s a choice they made, and decades later when they’re teaching kindergarten or some such, plenty will be happy to have taken that enviably remunerative path. 

After a piece impossible to argue with on basic labor rights for household workers, we have Emily Bazelon’s “A Seat at the Head of the Table,” complaining about not enough women in top corporate roles, which has had staggering progress in my lifetime alone but as long as more women than men choose slower career paths will go on to some extent forever.  Then on to Gideon Lewis-Kraus’s “The Rise of the WeWork Class,” worthwhile only if you haven’t seen the January 27th front-page business section’s piece I wrote about three weeks ago documenting the rising business fad of super-workaholism and spineless companies using office space provider WeWork as culture-instilling attack dogs.  The feature on people doing the same jobs for 50 years or more was interesting, if again not a fresh idea, followed by Matthew Desmond’s hackneyed “Dollars on the Margins” which trumpeted the advantages of a $15 per hour minimum wage apparently for everyone, with consideration to neither its downside nor its inability to assure financial solvency, let alone prosperity.  There is a sufficient set of fascinating things to say about where employment is going, but it wasn’t represented here. 

On then to The Atlantic, and Derek Thompson’s attempt to justify its “Ideas” categorization, “Workism Is Making Americans Miserable.”  A more honest title would have been “Workism Has Long Made Many of Those Americans Who Let Themselves Get Roped Into It Miserable,” but overstatement is its tone throughout.  One of these pieces full of controversial declarations which themselves could be spun into articles of their own (e.g. “everybody worships something,” “the best-educated and highest-earning Americans, who can have whatever they want…,” “the religion of work isn’t just a cultist feature of America’s elite.  It’s also the law”), it maintained a frantic tone about a part of our culture with roots before the Revolution, in its current form since the 1950s, and resurgent in the 1980s.  It laughed at a 1957 prediction that “our identity would be defined by our hobbies, or our family life,” actually written around the time when jobs-as-self-definers peaked, and called “quaint” the idea that some people “preferred careers that gave them time away from the office to focus on their relationships and their hobbies,” a choice now made by maybe one-third of employment-age women and not a few men.  Yet even if Thompson was caught flatfooted by the Protestant work ethic, he acknowledged that average American work-years have shortened, and correctly pointed out that seeking passion in what is only one component of people’s lives is not automatically optimal.
The best I saw was Joe Pinsker’s “The ‘Hidden Mechanisms’ That Help Those Born Rich to Excel in Elite Jobs,” also in the February Atlantic.  It should be clear to all that financial advantages are significant to career outcomes in a variety of ways, and now we have a book documenting that:  Daniel Laurison and Sam Friedman’s The Class Ceiling: Why It Pays to Be Privileged.  If it hasn’t occurred to you that those altruistic trips to Guatemala by 15-year-olds impressing college admissions officers simply perpetuate familial financial strength, or that 20-something professionals who can draw from “the bank of Mom and Dad” are more likely to stick it out and ultimately succeed in the likes of New York City, you should at least read this author-interview article.

Perhaps I shouldn’t be disappointed with these efforts.  They all came out in one week.  There will be more, and whether good, bad, or indifferent I will keep you up with them.

Friday, February 22, 2019

Amazon and Queens: What Happened?

“Amazon on Thursday canceled its plans to build an expansive corporate campus in New York City after facing an unexpectedly fierce backlash from lawmakers, progressive activists and union leaders, who contended that a tech giant did not deserve nearly $3 billion in government incentives.” – The New York Times, February 14

That was the story.  How did it get to that point?

We start with Amazon’s 14-month-long search for a second headquarters, which we were led to believe had the honest objective of building it from the ground up.  In November that company announced that it had not chosen the likes of Baltimore, Little Rock, or Salt Lake City, but gone with perhaps the most obvious location, from which it extracted an agreement for $3,000,000,000 in subsidies and tax savings.  That fetched the remarkable amount of resistance, ostensibly about the money but under the surface as much or more about Amazon’s strength, the strange concern that the 25,000 new or brought-in jobs with average annual compensation said to be $145,000 were not unionized, the bad side of gentrification, and the catchall concern of “income inequality.”  Then Amazon suddenly backed out, saying that “a number of state and local politicians have made it clear that they oppose our presence and will not work with us to build the type of relationships that are required to go forward.”

Many were in favor of the project.  They included both Governor Andrew Cuomo and Mayor Bill de Blasio, most owners of nearby Long Island City, Queens businesses of all sizes, nearby public housing residents hoping the area’s jobs situation would improve, many others around the city and state, and the Times Editorial Board, which, despite having decried the deal in a November 14th piece, called Amazon’s withdrawal an “embarrassment to the city” and “an opportunity lost,” and said that as a result the city could get “a reputation for the smugness of its politicians and their hostility to business.”  De Blasio was particularly loud and colorful in showing his anger at the cancellation, saying that day that “you have to be tough to make it in New York City,” and writing a piece, published two days later also in the Times, including the unchosen solution of “if you don’t like a small but vocal group of New Yorkers questioning your company’s intentions or integrity, prove them wrong,” calling Amazon’s move a “capricious decision to take its ball and go home,” saying that “they didn’t want to be in a city where they had to engage critics at all,” and that “a project that could’ve opened a path to the middle class for thousands of families was scuttled by a few very powerful people sitting in a boardroom in Seattle.”  Amazon has now stated that they will not build this second head office anywhere, but will instead enhance their existing and planned locations.

So, who won and who lost?  The largest winner was Alexandria Ocasio-Cortez, a U.S. representative not even of that district, who spearheaded the opposition and took center stage in what, when combined with the proposed Green New Deal and Senator Bernie Sanders’ presidential bid and quick fundraising, has been a sudden burst of activity from the leftmost part of the Democratic Party.  Local community activists in general and specifically, who now know what they can do, also benefited. 

From there, though, almost everybody lost.  Amazon, who seemed arrogant anyway in choosing New York after its seemingly-necessary-only-to-milk-it search, now also comes off as petulant, spoiled, and oversensitive.  As put by Doug Herendeen, show host for WRTA Radio in Altoona, Pennsylvania, they may now be replacing Walmart as the large company people on the left most love to hate, which is quite an achievement, especially for a firm, per Kevin Roose, with a “bedrock” principle “that being loved by customers is all that matters.”  Cuomo, de Blasio, and New York City, who now all seem like impotent bystanders, also lost heavily. The people of Long Island City, Queens, the city, and New York state, since per de Blasio will not have their employment, infrastructure, or cost of living issues helped by the withdrawal, were defeated as well.        

Where will we go from here?  There will be fewer large subsidy offers for a while, but I doubt they will go away permanently, as the appeal of bringing in good jobs is just too strong.  The Sanders/Ocasio-Cortez Democrat wing will continue getting attention, and will garner more votes in next year’s presidential primaries than we would have thought a month ago.  And Amazon, though reviled now by many more, will keep cruising along – a cherry on the top of this debacle was the news four days later, per Niall McCarthy in Forbes, that “Amazon Paid $0 In Federal Income Taxes Last Year.”  That on $11.2 billion net profit, and the difference between the “statutory” 21% corporate levy rate and the $129 million “tax rebate” they received, actually giving them a negative levy, is $2.48 billion in Amazon’s favor.  Whether they get the last laugh, though, is very much unknown.

Friday, February 15, 2019

Slowbalization – More Causes Than You Might Think, and Clear Employment Effects

Another good drawing festooned a provocative article late last month.  This, on the cover of the January 26th-February 1st Economist, was of a snail with its shell replaced by a view of Earth and the title “Slowbalisation – The future of global commerce.” 

In the unbylined piece, and its summary in the Leaders section, we see that that word, “coined by a Dutch writer,” has been apt for the past few years.  The authors say that we can already talk about “the golden age of globalisation,” which ran for 20 years ending in 2010, and that it “was something to behold,” when shipping and telephone call costs came way down and “business went gangbusters.” 

The reasons it is not now the same go well beyond the current White House occupant, or even similar pseudo-populists in the likes of Poland and Hungary.  Per the authors, goods-moving rates have stopped falling, services are often impossible to transport, more parts are being made nearer their consumers, and “multinational firms have found that global sprawl burns money and that local rivals often eat them alive.”  “Cross-border bank loans” have plummeted from 60% of 2006 GDP that year to 36% recently, and “gross capital flows have fallen from a peak of 7% in early 2007 to 1.5%,” both largely caused by more cautious lending attitudes from the Great Recession.  Other metrics down from 2007 include trade in goods and services as percentage of GDP, intermediate imports as the same, the percentage of profits “multinational,” and the share of S&P 500 companies’ sales from other countries.  Even services that can be done remotely are not crossing borders as much as I, anyway, had expected, with information technology positions still often turning up near the top of lists of most promising American careers.  Accordingly, instead of, as it may have seemed, the Trump administration working to bring vigorous intercountry trade to a screeching halt, its tariff actions, instead, have had a “fragile backdrop.”

The real problems with slowbalization go beyond damaging people benefitting from cheaper and better products.  They include, per the authors, cutting emerging countries’ selling opportunities, impeding solving international problems such as immigration and tax avoidance, and helping China to “win regional hegemony faster.”  Although globalization has been one of the three largest factors of the permanent jobs crisis, even if it were to disappear completely automation and efficiency would stop manufacturing and easily optimizable service jobs from returning to anything like their 1950s ubiquity. 

Here are a few pertinent observations, some old but all valid.  The frequency and amount of international trade has not moved only in one direction even for the past several decades, let alone over centuries.  Tariffs are stupid, and cut prosperity in unmeasured ways much more than any job creation or often-in-vain-anyway job preservation adds to it.  As we saw with the auto industry in the 1980s and 1990s, overseas competition is one of the best drivers for American companies to improve their products.  Although its evidence is now in latent demand instead of official unemployment, our country has excess capacity in workers.  These four realities apply no matter what the world trade situation.

How can we expect American jobs to be affected by slowbalization?  The current unhurried downward trend for service providers will not accelerate but will continue.  They will be temporarily shored up in areas protected by tariffs.  They will improve for people connected with Canadian or Mexican trade, and worsen for those working for companies exporting elsewhere.  As shifts in trade laws generally involve treaties and negotiations, change will not be quick, so even if there is an overall reversal of anti-globalization attitudes, it will take years to see its results.  Yet, as with the weather, if you don’t like the current situation, wait – it will change. 

Friday, February 8, 2019

Intense Fostering of Workaholism: The Latest Ugly, Depressing Business Fad

The top two-thirds of the front page of the January 27th New York Times business section showed a bold picture.  Drawn in red, yellow, and black Soviet-mural style, it had three present-day, youngish adults, holding a portfolio, a smartphone, and a computer tablet, at attention and indicating support for something, with, below them, a commuter train and platform and in large letters “TGIM!” (Thank God It’s Monday).  The headline of the Erin Griffith article said “Drudge Report,” and the next largest type asked “How did millennial workaholism become an aspirational lifestyle?”

Before I get into this piece, I’ll tell you what it got me thinking about.  I worked for 14 years, 1988 to 2002, in AT&T information-technology-related cubicle jobs.  I was outstanding at such fringe attributes as organizing and managing my time and work, focusing my efforts, and accomplishing a great deal, to the point where I wrote and was paid to give a presentation on those things titled “Ten Free Hours a Week.”  The one thing I did not do, though, was work extra hours.  While my management occasionally postured about a general need for the likes of me to do that, they never required it, and I was never admonished either formally or informally for not staying longer.  The mini-analysis I did showed that, even if such behavior meant more pay and a slightly higher chance of promotion, it would have an expectation of only a few dollars per hour.

However, many of my peers took a different approach.  Some were in the office – working from home was then only emerging there – sixty or seventy hours per week, the overage unpaid of course, and made sure that everyone knew that.  Productivity and performance, in that environment where constructive criticism was rare and supervisors seemed to ignore differences between employees, varied absurdly – in fact, I once told my boss that I was doing from two to ten times as much work as any of my five similar-job coworkers.  People took divergent views on what tasks they should be doing, a critically important judgment area in a setting with little outside control.  I cannot determine how much my or their approaches hurt or helped them, but never saw any correlation between hours worked and promotions received.

Time worked, though, varies with companies.  I was there not long after Ross Perot’s Electronic Data Systems became infamous for people being expected to work extra-long hours.  And while some set expectations for that during hiring, it was and is informal pressure that drives that. 

That brings me back to the article, which showed how forcefully some of today’s cubicle workers are being persuaded to put in more time.  According to what Griffith wrote, the main perpetrators are not only specific CEOs or proprietors, such as multiple-business owner Gary Vaynerchuk, but a commercial workspace provider.  Apparently, if your office is in a WeWork facility, you are treated to throw pillows, neon signs, and even cucumbers in water coolers bearing messages such as “hustle harder,” and “don’t stop when you’re tired.”  The piece is lacking in any indication of how many people live this way, but WeWork’s count of 400,000 tenants, and its $47 billion market valuation, mean that it’s more than a few.

So what are the problems with that?  At the top of the list is what I thought of over and over while reading the article:  the philosophy is self-serving.  One37pm, Tesla, and Quora, three companies Griffith cited, would prefer to hire fewer people by getting dozens of unpaid hours from those they get, representing massive savings.  Another is confusion between the founders’ efforts, which are entrepreneurial, and the employees’, which are not.  Working for a fast-moving new company does not make you an entrepreneur – if you want that, you can start one of your own.  Business owners put in huge amounts of time, which they accept since they have a chance of earning not something like $140,000 per year plus benefits but multiples of that, or, if at a smaller scale, making a living from doing something they fully control.  (We cannot validly compare these expectations to those given new lawyers motivated by the business-ownership rewards of firm partnership.)  If they, per a former Yahoo CEO, “are strategic” about sleep, bathing, and even trips to the bathroom, that is toward knowing that they, not their management or business owners, will fully benefit from everything they achieve.  The language Griffith relates is full of such independent-firm references, most insidiously Tesla co-founder and CEO Elon Musk exhorting his non-business-owning employees that “nobody ever changed the world on 40 hours a week.”  Extra benefits such as bringing in lunch food and providing ping-pong tables, while of value, are transparent efforts to maximize work time.  Hiring a mercenary third party, whether WeWork or another, to push long hours is ultimately cowardly.  And even the slogan is wrong – if you are working seven days a week, what is significant about Monday?

As long as there are businesses, there will be crazes.  In 1970’s Up the Organization, Robert Townsend torpedoed “synergy” by calling it “a business fad like hula hoops, which holds that two plus two makes five.”  After an appropriate if ineloquent barnyard epithet, he said that “two plus two usually makes three, and you know it.”  To name more, in the 1980s we had adoration of anything Japanese, before we found out that that country’s success was illusory and unsustainable; in the 1990s, unrestricted telecommuting got us less work, when employees who could not succeed in environments designed for getting things done went home to their handpicked distractions.  And here we have another. 

If this “hustling” propagates, what will happen?  People will burn out, and what would have been company-beneficial 20-year careers won’t make it to five.  Businesses will lose lawsuits, when juries determine that heart attacks, strokes, and other excessive-stress results were their fault.  People will write reams of articles and stacks of books, devastating cubicle-job employers in general as well as the specific companies involved.  We may even see France-style legal restrictions on what workers can be required to do outside of normal business hours.  And even production will be a disappointment, as the studies, showing that hourly work accomplished after 45 or 50 per week first drops off then crashes, are verified.  The trend, if this is one, is as detrimental as any business fad I have ever seen – let’s hope for all of our sake that it does, indeed, go the way of hula hoops.

Friday, February 1, 2019

The January Jobs Report: After Sorting Through the Disclaimers, It Looks Good, But the AJSN Says Latent Demand for Work Was Up 1.3 Million

Before we consider the data, we need to look at the caveats the Bureau of Labor Statistics put on this morning’s Employment Situation Summary.  They were “workers who indicated that they were not working during the entire survey reference week and expected to be recalled to their jobs should be classified as unemployed on temporary layoff… However, there also was an increase in the number of federal workers who were classified as employed but absent from work.  BLS analysis of the underlying data indicates that this group included federal workers affected by the shutdown… Such a misclassification is an example of nonsampling error and can occur when respondents misunderstood questions… If the federal workers who were recorded as employed but absent from work had been classified as unemployed on temporary layoff, the overall unemployment rate would have been slightly higher than reported.”

Whew.  I think all that means that the data, understandably and almost perforce, did not accurately reflect the government shutdown.  So, what did it apparently tell us?

First, it showed a second straight huge gain in nonfarm payroll positions, 304,000.  Second, the official seasonally-adjusted unemployment rate rose 0.1% to 4.0%.  Third, unadjusted joblessness, up 0.7% to 4.4%, showed not only the large seasonal difference between December and January, but the greater optimism of those not working that they might be able to do that, and other factors beyond those two.  The measures of how common it is for Americans to be working or strongly trying to work, the labor force participation rate and the employment-population ratio, each increased 0.1%, to 63.2% and 60.7% respectively.  Private nonfarm payroll wages went up only 3 cents per hour, less than inflation but closer to that than last month’s jump, to reach $27.56.  The count of people unemployed for 27 weeks or longer sat at 1.3 million.  One change we can disregard for now is the 400,000 burst in those working part-time for economic reasons, or looking to increase their less-than-full-time labor hours, to 5.1 million, an unknown but doubtless substantial share of which almost certainly reflected idled full-time government workers with side ventures.

The American Job Shortage Number or AJSN, the measure which shows how many more positions could be filled if all knew that getting one were as easy as getting a pizza, returned to within 45,000 of its January 2018 level, or up 1.27 million from December’s, as follows:

The largest changes to latent demand since last month were one million more from those technically jobless, followed by a 171,000 hike from people wanting work but not looking for it for 12 months or longer.  Compared with a year before, nothing changed much, with the largest worsening from those in the just-mentioned category, and small but meaningful improvements in those unemployed, those not wanting a job, and those in the military, in institutions, or off the grid. 

How can we evaluate January’s data?  The picture, though fuzzier than usual, is still there.  The 304,000-job gain, which blew away published estimates of 172,000 and 165,000, should have little to do with the government shutdown.  The supporting numbers are generally consistent with good times, with more people, if not yet getting jobs, changing their statuses to ones closer to that.  Otherwise, we will need to look at February’s data – if, of course, the government is fully open at BLS survey time.  In the meantime, through the fog, I saw the turtle take another step forward.     

Friday, January 25, 2019

How and Why Does the World Need to Rethink Retirement?

A piece came out in the December 4th New York Times with a title intriguing to me.  Unfortunately, Katie Robertson’s “Why the World Needs to Rethink Retirement,” after presenting a list of things it would be nice for retirees to have, became only a compendium of the current Social Security and Medicare equivalents in nine other countries – useful, but hardly suggesting revolution.  So how can we do that?

Until around 1860, Americans worked as long as they could, so there was no such thing as routine retirement.  The first such law was passed in 1861, allowing most naval officers to stop working at age 62.  Thirteen years later, a railroad, the Canadian Great Trunk, implemented the first North American private business retirement system.  In the 1880s, German chancellor Otto Von Bismarck created a state retirement program which was the first major plan to use the age of 65, which, as life expectancy there was then 45, had a rather different significance.

According to one source the proportion of American men 65 years and older working dropped steadily from 68.3% in 1890 to 41.8% in 1940, though another claimed observers disagree on how much, if at all, the rate of labor-force participation in older men declined between 1875 and 1935.  The same proportion for women followed no clear pattern, fluctuating between 6.1% and 8.3% from 1890 to 1940.  The largest single American retirement plan started in 1920 for 500,000 civil service workers.  Later in that decade, retirement became commonly viewed as a tool to reduce unemployment, and in 1935, implementation of the Social Security Act served to start the current era of aging.

Employment rates for older men dropped for the next several decades, but all who retired did not stay that way, as about 25% of those retiring from 1969 to 1973 had worked again for at least some time by 1979.  Around that time there was a backlash, with older people wanting to work equating their situation with those of blacks and women, wanting freedom with a lack of discrimination.  Serious concerns about retirement in general also characterized those years, with some thinking it was inefficient and economically destructive.  During the economic expansion of the 1980s and 1990s, more attention became paid to older employees in both commercial and academic sources.

Over the past few years, per Robertson’s article, the two main directions of national retirement programs have been toward closing gaps in coverage and increasing eligibility ages.  In most places, employer-provided pensions have become much rarer, though self-funding options, now in Canada, Australia, and The Netherlands as well as here, are appearing in more places.

While officials more uniformly recognize that some type of national retirement plan is necessary, they also are loath to allow all of the extra time from increased life expectancy to go toward sponsored idleness.  But retirement has still gathered a lot of that – while, despite a recent American dip, lifespans are near all-time highs almost everywhere, typical retirement and pension-onset ages are sometimes slightly higher than 65 but frequently lower.  The examples Robertson cited were 56 for men and 53 for women in Brazil, as low as 60 but going up to 62 for France, 60 for women and 65 for men in Great Britain, as low as 60 in Canada, 65 years and 6 months in Australia, 65 years and 7 months in Germany, 66 in The Netherlands, and still 65 in Japan.  With longevity at age 65 now eighteen years in the United States and higher elsewhere, since Bismarck’s time retirement lengths have jumped; as of 2010 the chancellor, to get the same relation between retirement and death times, would have to set the work-stopping age at 98. 

So where should we go from here?  Clearly, much older people should be fed and covered for health expenses, and, with the physical significance of being 65 today hardly the same as a century ago, postponing benefits is at least justifiable.  The difference between the mid-20th-century situation and now, though, is that there is less demand for employees.  As above, a major reason for implementing Social Security in the 1930s was to cut back the number of workers, and if we were to start Medicare and other payments at, say, age 70, that would be the equivalent of increasing it – so let’s keep retirement age increases modest.  As well, the baby boom generation, perhaps more than any other, has blurred the line between main career and retirement years by not only working later but working off and on – that trend should continue with later cohorts.  Health care expenses have reached the point where it is somewhere between aggressive gambling and outright recklessness for most people middle-aged or older to not have insurance coverage, and Obamacare or whatever program replaces it seem likely to continue for all.  Accordingly, retirement is losing its meaning – and that is how the world, ready or not, will need to rethink it.