Tuesday, May 30, 2017

Uber’s Terrible, Horrible, No Good, Very Bad Three Months – With More to Follow?

On March 3rd, USA Today published a Jessica Guynn piece titled “Uber’s terrible, horrible, no good, very bad week.”  It related how the company, already based as I have written on unsustainable success, in seven days or less, (1) was the subject of an “explosive blog post alleging sexual harassment and discrimination,” (2) was publicly accused, also by employees, of having a “toxic culture,” (3) was sued by a major competitor, Waymo, for technology theft, (4) ditched its senior vice president of engineering for being investigated for a previous case of sexual harassment, (5) had its CEO featured in America’s Funniest Home Videos (well, actually only on what a car dashcam picked up) haranguing one of their drivers, (6) became known to the world for using software, Grayball, to identify and avoid legal authorities in places where their service had been banned, and (7) in the wake of all that, lost its vice president of product and growth.

But Uber’s flaming descent didn’t stop there.

The Greyball story was described in a 6-page New York Times article (How Uber Deceives the Authorities Worldwide”) released that same day, in which author Mike Isaac documented the electronic effort to which Uber went to unmask the enforcement agents, which included such Big Brother techniques as combing social media profiles for those calling themselves police officers and checking personal credit cards for connections with police credit unions, and wrote that using such software might even be a federal crime.  Five days later a company representative said they had made a change, “expressly prohibiting (Grayball’s) use to target action by local regulators,” but added that it would “take some time.”

After that, the hits just kept on coming.  (8) Uber’s competitor Lyft announced the week after the bad-week story that it would move into 100 new markets later this year.  (9) Another New York Times piece, this one on March 18th (“As Uber Woos More Drivers, Taxis Hit Back,” Winnie Hu) showed how Uber drivers are making more money per hour driving Yellow Cabs instead.  (10) Eight days after a progress report on Uber’s self-driving cars was leaked, showing that their test fleet of 43 put in over 20,000 miles in a mid-March week but required manual driver intervention more often on average than every mile, the program was suspended for two days when one driverless vehicle was in an Arizona accident – not their car’s fault, but which resulted in the vehicle flipping on its side.

The carnage seemed to stop in April, but earlier this month, (11) Uber’s primary competitors Lyft and Waymo officially joined forces, per Isaac in the New York Times again on May 14th, “to work together to bring autonomous vehicle technology into the mainstream through pilot projects and product development efforts.”

In combination with the ten previous disasters, that joint venture, if it works, could finish Uber off.  In the May 7th Wall Street Journal, Christopher Mims (“How Self-Driving Cars Could End Uber”) showed how such technology could not only fail to help that firm but could eliminate it entirely, if it is not on the right side of “transportation-as-a-service” offerings likely to come from Ford Motor Company within the next five years, and which would remove Uber’s advantage of not needing to own vehicles themselves.      

One set of people, though, still profit reasonably from Uber.  That is the customers.  They will not be able to keep doing business with that company, though, if it is forced out through its original and continuing problems – or if it has many more streaks like this March.  Although driverless technology speeds on, Uber’s business model will not.  Without cleaned up management along with a major consortium partner, the question is only how many feet of water in which the company will drown.

Wednesday, May 17, 2017

A Year of the Gig Economy

A year and a month ago I posted twice about something existing on a small scale for as long as anyone could remember, but had only recently been given a name and drawn a flurry of discussion.  The “gig economy,” or the offering and working of individual and often very short tasks or sets of tasks, seemed to be gaining a new credibility.  I commented that although taking such small-scale employment was clearly an economic inferior good, it offered both experience and the chance to earn money without being held off by minimum wage laws.  Since then, it has continued without as much attention – but what has been said about it when it has reached print?

On June 4th, Jonathon M. Trugman expressed his displeasure about this phenomenon in New York Post (“This new ‘gig’ economy isn’t helping anyone”).  He didn’t really support the title in the article, which stated that “temporary gig work is better than no work at all,” but did tell us, sadly, that the net new number of American temporary positions added from 2005 to 2015, 9.4 million, exceeded that time’s overall jobs increase, 9.1 million.  That movement away from permanent positions is the real trend, and is disturbing enough, but hardly means that other opportunities are worthless.

A more balanced view turned up in CNN Money (“Millions in gig economy can’t find better jobs or pay,” October 27), which acknowledged both the advantages and disadvantages I named above.  The statistics here, apparently invoked to be negative, almost served the other side better; although “nearly 30% of gig workers who work part-time would prefer a full-time job,” that number could be much higher, and it is redundant to say that three-quarters of “these part-timers” have low incomes. 

What’s interesting about “Rigging the gig economy:  A proposed bill would lure freelance workers to sign away their employee rights for cash” (Salon, November 29th), is that it sought to make one politically liberal point, failed, and in the process unintentionally put forth cases for two others.  It related a proposed legislative bill that would either mandate, or allow participation in, a scheme where companies would subsidize gig workers’ health care at an amount equal to 2.5% of their income, in exchange for them agreeing to “accept their classification as nonemployees.”  That’s not a large bonus, but it is significant, and, if they are legally not on their companies’ payrolls, it costs them nothing.  The two true improvements it supported were strict, well-enforced worker-favoring laws on what constitutes a contractor as opposed to an employee, and national health insurance unconnected to income sources.

It was months later before anything more on this subject crossed my desk, and it was on the April 10th New York Times editorial page.  “The Gig Economy’s False Promise” properly debunked what the editorial board called “the promises Silicon Valley makes about the gig economy,” namely the illusions of entrepreneurism and independence, and the idea that “use of the independent contractor model is in fact better for workers.”  The problem here is that as an inferior good, gig jobs, taken mostly when permanent ones are unobtainable, do not hurt those who have them.  As shabby and misleading as these positions can be, the permanent jobs crisis, not those offering them, deserves the blame. 

Most recent was “Is the gig economy working” (New Yorker, May 15).  This long, long form piece (it printed out to 24 pages) used a combination of stories, statistics, and interviews to assess where this form of work might be going.  Its angle, as its subtitle put it, “many liberals have embraced the sharing economy.  But can they survive it?”, surprised me, as I had thought of the gig economy as having mostly conservative appeal, since it facilitates free-market transactions while requiring workers to defend their own interests without regulatory protection.  Author Nathan Heller, though, said some called it “the power to control one’s working life,” with gigs offering a chance for employment to “return, grassroots style, to the people.”  He interviewed some who earned money through TaskRabbit and Lyft, who were actually only choosing the ancient, big-city combination of side work financing primary efforts in creative projects that may or may not sell, and contrasted the reality of such jobs with Uber and Airbnb promotional material.  After much more thought, analysis, and conflation of pure gig opportunities with sharing-economy ones, he came around to the independent-contracting and health-coverage issues above, and concluded with a worker, with whom he started the story, finishing a group of handyman tasks and saying “the gig economy is such a lonely economy.” 

Through these different viewpoints, the real significance of gig work is clear.  First, it is not as good as regular employment.  Second, it is necessary for its participants to be aware of their true after-expenses earnings.  Third, however, to call it harmful or somehow immoral is to make the same mistake as condemning foreign sweatshops or a lower minimum wage, as if laborers under those circumstances would be better off without the best opportunities they can find.  That is “let them eat cake,” a philosophy for which, in any labor market, let alone during a permanent jobs crisis, we can have no use.        

Friday, May 12, 2017

Two Old and One New: Stagnant Living Standards, Underpaidness, and Another Generation

Last month, three articles appeared on worthwhile job-related topics.  Two were on subjects we’ve seen before, and the third was one of the first on something sure to be discussed for at least the next half-century.

Robert J. Samuelson’s “Are living standards truly stagnant?” (The Washington Post, April 11) addressed and partially debunked a “widespread belief” that broad-based American prosperity is not improving.  Although mean inflation-adjusted pay is where it was 42 years ago, Samuelson cited a Dartmouth College study giving authority to something I have repeatedly commented on over the years, that many of our lifestyle improvements don’t show up that way.  One area mentioned here is electronics, specifically cable TV, cellphones, and Internet access.  The research also found that the poorest quarter of households averaged 1.4 cars in 2015, up from 0.75 in 1970, that mean living spaces for those in the bottom half had increased from 1,200 square feet to 1,300 from 1993 to 2007, and that outdoor plumbing, which 12% of the bottom 25% had in 1970, was almost nonexistent two years ago.  These are meaningful things, and serve as a reminder that money, which may become rarer as the jobs crisis worsens, is not the only measure of how well off as a country we are.

In Alternet on April 24th, Paul Buchheit’s “A future of shrinking jobs:  Most workers today are underpaid, and it gets worse” turned out to be better than its title, which could have been written any time since 1973.  That is because it provided the shocking statistic that 94% of positions created since 2007 were “temporary or contract-based.”  Although hardly all of those were low-paying, and that high a share must mostly mean that employee-employer relations are changing, it is consistent with that in general, and answers the question of why fewer people are relocating for work. 

The third piece, by Christine Comaford on April 22nd in Forbes, is “What Generation Z Wants From The Workplace – Are You Ready?”  As I get older, it strikes me how easy it is to mentally run the younger generations together, as if they were one solid group.  I saw that blind spot into the 1980s, when otherwise astute observers missed the difference between the establishment-questioning 1960s and the superficially self-centered 1970s, which I knew, from growing up in them, were totally different times.  We run the risk of doing that again.  Those who haven’t really comprehended the difference between Generation X, which followed the Baby Boomers, and the Millennials after them, are now confronted with another cohort. 

There is disagreement on the exact or even approximate birth years defining each, but using the U.S. Census Bureau definition the last Millennials were born in 2000.  That means that the oldest members of “Generation Z,” a name which may not stick, are now 16 and reaching the workforce.  They are no more Millennials as Boomers such as myself fit with the preceding Silent Generation. 
So how do those in Generation Z differ from those just older?  Comaford referred to a conversation between two researchers, one from that cohort, on the Society for Human Resource Management website, “Move Over, Millennials; Generation Z Is Here” (David Stillman and Jonah Stillman, April 11).  Among its many fascinating points are:  those from Z were largely raised by “tough-love, skeptical Gen Xers” instead of “self-esteem-building, optimistic Boomers,” making them more pragmatic and independent; they want more to “showcase (their) own individual talents” instead of collaborate; they are more competitive and entrepreneurial; they are “true digital natives,” but still prefer to talk face to face; they want to be independent, and “35% would rather share socks than an office space”; they feel lucky to have good jobs, with 76% saying they are willing to start at the bottom and work their way up and 61% willing to put in a decade or more with one employer; and, in one word, they can be described as “realistic.” 

As this generation has barely if at all reached even nominal adulthood, and, depending again on varying definitions, may still be being born, it is too early to know conclusively what it will be like.  However, Comaford, Stillman pere, and Stillman fils have given us a fine start.  Even if we only take away that generations are different and that those in Generation Z are not the same as Millennials, that will help us understand them.  Let us strive to do that, as, before we know it, there will be yet another group to deal with. 

Friday, May 5, 2017

Latent Demand for Jobs, Most from Those Not Officially Unemployed, Lowest Since Great Recession as AJSN Drops to 16.6 Million

Once again, the American employment situation exceeded its expected improvement.

Estimates called for a gain of 189,000 net new nonfarm positions, with the adjusted jobless rate worsening from 4.5% to 4.6%.  We got 211,000, and a bettering to 4.4%.  Other key numbers, while mixed, were generally also positive, with the count of those officially unemployed for 27 weeks or longer down 100,000 to 1.6 million, and the number of people working part-time for economic reasons, or wanting full-time engagement while holding on to something with fewer hours, plunging 281,000, rounding to 300,000, to 5.3 million.  The two measures showing best how common it is for Americans to have jobs, the employment-population ratio and the labor force participation rate, were split, with the former up a significant 0.1% to 60.2% and the latter down the same amount to 62.9%.  Average wages were adjusted 2 cents per hour downward for March, but even with that are up another nickel, more than inflation once again, to $26.19.  Best of all was the unadjusted employment rate falling 0.3% to a clearly prosperous 4.1%.

The measures of marginal attachment, though, did not improve.  The count of people wanting work but not looking for it over the past year, those also desiring employment but temporarily unavailable, and those with a similar view but out for ill health or disability all rose.  Those claiming no interest whatever in a job continued its steadyish rise upwards, up over 200,000 to 89,210,000.  Overall, the American Job Shortage Number, which shows in one figure how many more positions could be quickly filled if getting one were as easy as getting a pizza, was down over 600,000, as follows:

Compared with a year before, the AJSN has dropped over 700,000 from 17.3 million, completely from lower official joblessness. 

Even though times are clearly improving, we have one cause for concern.  The statuses outside official unemployment are almost all collecting more people.  A year ago, although there were 858,000 more technically jobless, there were fewer in the family responsibilities, in school or training, ill health or disability, other, and did not search for the previous year categories.  There are now 400,000 more Americans saying they do not want to work than in April 2016, some of whom would change that view if the right position came along, and the non-civilian, institutionalized, and off-the-grid total is almost 900,000 higher.  All told, if this many opportunities were created and filled, more than 64% would go to those not officially jobless.  There are still plenty of potential workers on the sidelines, and most are not getting unemployment checks.  They should not be ignored, and constitute a real social change about which organizations seeking employees should be aware.  In the meantime, the turtle, who would be surprised if he looked behind him to see how much ground he has covered over the past two years, took another clear step forward.