Friday, September 29, 2017

Guaranteed Income in the Press: Some Understand It, Some Miss the Point, and All Provide Welcome Attention

We’ve had more writing on what I have long considered one of the few possible comprehensive solutions to the jobs crisis, and what thinkers back to at least Thomas Paine have proposed for centuries before that. 

The first piece is from April 25th in Business Insider, “Canada is launching an experiment that will give 4,000 people free money until 2020.”  In the first paragraph, author Chris Weller said “a regular monthly allowance” was “a system known as basic income,” and soon thereafter named the soon-to-begin Ontario Basic Income Pilot as an example of that.  This program would get 4,000 Ontario residents “additional income based on their current salary,” which would be reduced by half of any additional earnings.  Maybe this is a good idea, but it’s not a guaranteed income.  It’s welfare.  It’s akin to some American situations, in which jobless people lose benefits once they find work.  Using that name for this sort of program is destructive to the idea of a true basic income, and will feed into conservatives’ concern that it excessively discourages people from working. 

The same author reported in the same publication on July 5th that “Hawaii just became the first US state to pass a bill supporting basic income.”  Hawaii’s government, though, is not planning to implement it, or even to determine if it would be justified, but to collect preliminary data which could result in another study.  It was not clear if Weller’s view on what guaranteed income is had changed over the intervening two-months-plus, but here he said that the person spearheading the effort, state representative Chris Lee, “had become intrigued by the idea of paying people a salary just for being alive.”   

On August 1 we went back to the definition problem.  “Universal Basic Income Experiment in Finland Not Looking Good,” in CNS News, combined author and Cato Institute economist Daniel Mitchell’s undeveloped and almost reflexive stance against it with Finland’s upcoming effort, which, as it will only consist of giving benefits to out-of-work people, does not match the title.  Perhaps in Finland it would be a bad thing, as Mitchell said, to cut the number of surplus workers, but I doubt it, and that would not be a problem in the United States, where at last count we could easily fill 17.6 million additional jobs.  In any event, Finland’s plan is only a test of generous unemployment benefits, and its success or failure will be irrelevant to the merits of guaranteed income.

After the last piece, I was refreshed to see one which showed better understanding.  In “Top Economists Endorse Universal Basic Income” (Forbes, August 31), contributor Frances Coppola shared proceedings from two economics conferences.  At one in Mainau, two panelists hit the right notes.  Sir Chris Pissarides spoke positively of globalization and automation, while acknowledging their job-reducing effects, and suggested a “universal basic income” as a way “you can trust people to decide for themselves how to spend their money” by letting the market provide social services.  Daniel McFadden “advocated unconditional income transfers.”  Coppola’s conclusion that “universal basic income is a radical policy that requires a radical funding solution” is, also, a point that must be made.

While likewise positive, and mentioning the unconditional nature of such a program executed properly, Ben Schiller’s “A Universal Basic Income Would Do Wonders For The U.S. Economy” (Fast Company, September 13) showed weaknesses around the edges.  Schiller named “a huge jolt” as one of its justification, or at least mitigating factors, citing research showing that a $1,000 monthly stipend for all adults would expand the economy more than 12% over eight years.  That’s not very much, and the article also suffers from references to “benefits not conditional to having a job” and “you don’t have to work… to get a UBI,” when more worrisome is, as above, others’ views that such money should only be distributed to people not working.  I was glad to see, though, a glimpse of why the technical community, which will probably be a necessary constituency in getting one implemented, is increasingly supporting guaranteed income.

Last week we saw an understandably but discouragingly political stance by a major possible 2020 presidential candidate.  In “Joe Biden Is Against a Universal Basic Income – and He’s Right” (The Daily Beast, September 26), the uncredited author heralded the candidate’s September 19th remarks, such as “our children and grandchildren deserve… the skills to get ahead, the chance to earn a paycheck, and a steady job that rewards hard work,” and “a job is… about your dignity… self-respect… your place in your community.”  The writer considered whether “Biden’s comments put him on the wrong side of history,” but soon afterward, unfortunately, disposed of that idea.  It may be a good move for Biden to go after Donald Trump’s base by talking as if he were giving a 1980 small-town stump speech, but we know nothing about he would create anything like 17.6 million new jobs, and the author’s comments that guaranteed income “would just be one more government handout” and would result in “millions of aimless Americans playing video games in their basements” make it clear that he or she, along with Biden, is also out of touch with the issue. 

The best article in this batch, “Let’s not give up on a guaranteed basic income before we’ve tried,” by Chris Hughes, was published on September 21 in The Hill.  Without even needing to show that most proposals and pilot efforts under that and similar names have not been guaranteed basic income,  Hughes made all of the right points – naming and generally refuting Biden’s speech above, proposing $1,000 per month (“for every American,” not only those without jobs) as a possible level, acknowledging that employment opportunities are not yet “disappearing wholesale” and that one who “believes in the dignity of work” need not oppose it, and proposing non-income-tax money sources such as a financial transaction levy.  He clearly understands the major considerations, along with what such a program should and should not be. 

This is not the first time we have heard from Hughes, a Facebook co-founder, and given his current position, co-chair of basic income advocacy group The Economic Security Project, it won’t be the last.  Although I do not support immediate guaranteed income implementation, as an ending I can’t do better than his: “Let’s not give up before we have even tried.”      

Friday, September 22, 2017

Six Updates on Old Jobs Issues

Over the past four months, half a dozen articles on work-related areas I have written about have reached me.  What do they have to say?
One old erroneous but still popular notion was the subject of two of them.  In “How Unskilled Americans Are Creating a ‘Crisis’ for the U.S.” (U.S. News & World Report, June 7th), Andrew Soergel passed along a series of incorrect statements.  There is no “skills gap plaguing the private sector,” only a disconnect between what private employers would like to pay and what their applicants will accept.  We can’t “match those 6.9 million (unemployed Americans to 6 (million job openings),” since many of those allegedly available positions are either bogus or require unreasonable qualifications.  No United States Labor Secretary has any business saying that “education is not focusing on the skills demanded by today’s workforce as well as they could or should,” without mentioning the widespread need for employers to rediscover training.  There are plenty of candidates skilled in “trade professions like welding and mechanical repair,” now that community colleges are teaching those things, but they can’t be had for the likes of $10 per hour.   Robert Samuelson, writing in the June 26th Investor’s Business Daily (“Is the Labor Shortage Here?”), at least questioned mistaken views such as a pending labor shortage in which “the postwar employment model might make a comeback” (not with latent demand for over 17 million jobs), and that a 1% increase in “the labor share of the economy” will mean higher worker demand, as it is “too low” (not when additional copies of ever-increasing proportion of products require virtually no more human involvement). 
The actual future of 3D printing, increasingly labeled “additive manufacturing,” was well assessed by the unbilled Economist authors of “Printing things everywhere” and “The factories of the future,” both in the July 1st issue.  Although we now know that this technology will not be on a par with invention of the automobile, and “will never revolutionize mass production,” it will still be greatly valuable for “producing one-off prototypes, because changes are more easily and cheaply made by tweaking a 3D printer’s software than by resetting lots of tools in a factory.”  It is also on its way to producing replacement body tissue, or “bioprinting,” bringing us ever closer to science fiction author Larry Niven’s “autodoc.” 
With its inferior-good status among ordinary working people, is it true that “the gig economy is a boon for boomer retirees” (Steve Vernon, CBS News, July 3)?  Yes, I think it is.  It facilitates many low-paying but pleasant positions, such as babysitting, providing rides, and dog walking, for those not needing full-time income and therefore more willing to accept its shortcomings.  Expect it to continue being beneficial, with the people over 50 and over 60 to whom Vernon referred including more and more over 70 and 80.
The remaining two articles take us further into the world of science-fiction-meets-reality.  In the first, Maggie Astor’s July 25th New York Times “Microchip Implants for Employees?  One Company Says Yes” told about a Wisconsin technology company allowing its workers to opt into having “a chip the size of a grain of rice injected between their thumb and index finger,” allowing them to effortlessly gain access to company buildings and pay for cafeteria food.  That convenience, and the fun of being in on new technology, have won out for almost two-thirds of Three Square Market’s employees, but others have declined, due to being “a little nervous about implanting something” or perhaps by what a cited business professor pointed out, that “once (the chips) are implanted, it’s very hard to predict or stop a future widening of their usage,” in ways that may not even be shared with workers.  There is, indeed, a gap between one supervisor vaguely suspecting that someone is spending an unusual amount of time in the bathroom, and another receiving periodic reports telling exactly when and for how long.  Therefore, even if nonparticipants have no objection to carrying cell phones with continuous GPS tracking, this idea does not rate to become the American norm.

Another long-held suspicion of mine is that “artificial intelligence” is not intelligent at all, and still ultimately only resembles 60-plus year-old algorithmic computer-code-interpreting capability.  Gary Marcus, writing in the July 29th New York Times (“Artificial Intelligence Is Stuck.  Here’s How to Move It Forward.”), seemed to share that view, saying such things as “computers that can educate themselves – a mark of true intelligence – remain a dream” and “such systems can neither comprehend what is going on in complex visual scenes (“Who is chasing whom and why?”) nor follow simple instructions (“Read this story and summarize what it means.”).”  He suggested that machines be trained, somehow, to use “bottom-up knowledge,” or “the kind of raw information we get directly from our senses,” in huge national facilities.  That seems a long way off, and may never happen without a huge conceptual breakthrough – so for now, please remember that computers still cannot, and are still no threat to, think.  But we can – and, more than ever if anything, we must.    

Friday, September 15, 2017

Uber and Lyft Beyond the Management Gaffes – What’s Been Happening, and How Can They Survive?

The two largest American ridesharing companies have garnered attention, and a couple of interesting headlines, these past few months. 

The first, “San Francisco investigating whether Uber, Lyft are public nuisances,” appeared in Fox Business on June 5th.  This odd move was driven by that city’s government’s set of mostly left-leaning objections, including allegedly poor usability by those “with a disability” (does this phrase now only refer to ambulatory incapacities, as “accessible” has come to mean “wheelchair-accessible”?) and a company-dictated driver strategy that supposedly “disfavors” some neighborhoods.  Though their City Attorney also named the problem of being “stuck in traffic behind a double-parked Uber or Lyft,” since that issue could be easily solved by traffic enforcement it was clearly less important to him than the other two, as was his disapproval of drivers coming from surrounding areas and becoming “drowsy.”  Wrong.  Even if you don’t like them, running Uber and Lyft out of cities for poorly disguised ideological reasons is not the way.

The second headline, “Uber Can’t Be Fixed – It’s Time for Regulators to Shut It Down,” graced a June 21st Harvard Business Review piece.  During the company’s horrendous mismanagement streak, author Benjamin Edelman wrote that “the problem at Uber goes beyond a culture created by toxic leadership,” and that the ride-sharer’s “business model is predicated on lawbreaking,” so it “can’t easily pivot toward following the rules.”  Some of what Edelman mentioned was more skirting than flouting, by, for example, avoiding the need for million-dollar taxi medallions by dispatching through apps instead of through phone calls, and some, such as the Greyball authority-dodging effort, were seemingly determined illegal only after they were put into practice, yet the company has built up quite a track record at this sort of thing, in line with music pirating facilitator Napster’s instead of those of other large electronic innovators Amazon and Facebook. 

The conclusion Edelman reached was the same one I put forth years ago, to legally treat Uber and Lyft as the cab companies they are.  That novel-****ing-idea made it into another headline, “Uber Should Be Regulated as Taxi Service, European Legal Adviser Says” (The New York Times, July 4th).  Author Amie Stang reported on a Court of Justice of the European Union nonbinding recommendation requiring that Uber “abide by tough European rules governing taxi services,” and in effect upholding a $500,000 fine levied by French authorities “for running an illegal transportation service.”  Fair is fair.

New York’s lawful taxi companies struck back that same month with true innovation, involving “two competing ride-hail apps” Via and Curb, on a way for people to agree in advance to combining with other passengers on rides (“Share a Cab in New York City?  It’s Now Easier,” Winnie Hu, The New York Times, June 6th), in exchange for lower fares.  They seem to have organized the process well, with limits of two parties and three people and drivers not required to participate.  A fine idea. 

What may be the only way out for Uber and Lyft, and a better attitude from a certain city on a bay, made the September 12th Yahoo News, in “Lyft to begin testing self-driving cars in San Francisco.”  The experiment will offer free rides, if passengers agree, in generally autonomous but human-monitor-equipped taxis, through “an area that’s already been mapped out in very high detail.”  That effort may seem not to break new ground, but it doesn’t need to, as the more companies can practice driverless ridesharing the more it will be improved and accepted, and the sooner it will arrive as a normal practice. 

Overall, the prospects of Uber and Lyft continuing to do business as they have look bleak.  As I predicted last year, the regulators are circling.  Accordingly, ten years from now they may be long gone, or they may be in the thick of automated, and fully legal, taxis – the choice is up to them.  

Friday, September 8, 2017

In Four More Months on Minimum Wage Increases, We Have Reached a Ceiling

The past year has made quite a difference in the lowest hourly amount American workers can legally be paid.  Before it, we were hearing about “the fight for $15,” with implications from those left of center that such a struggle was not only noble but just.  Now those calls have died down, and that quest doesn’t look worthy, even to many liberals.  What has happened to shift the tide?

In “The Minimum Wage Eats Restaurants” (The Wall Street Journal, May 9), marked as “Commentary,” Michael Saltsman presented data that 60 San Francisco-area eateries closed between September and January, and cited one owner as saying “there’s only so much you can charge for tamales.”  Saltsman cited a Harvard and Mathematica study connecting a $1 increase in the minimum wage with a 14% rise in the chance of a “3.5-star” restaurant folding, and concluded that better pay and benefits “don’t mean much if you can’t find a job.”  In contrast, though, The New York Times editorial board, in “Remember the promise of good jobs?” on June 13th, while correctly in my view disapproving of the Fed raising interest rates, the presidential administration seeking to reduce top-bracket taxes, and the blocking of badly-needed for-inflation adjustments of mandatory overtime pay thresholds, tripped on issues of average pay not tracking productivity gains (why should it?), higher minimum wages when over 17 million Americans want to work and can’t find it, and a vain hope for “Republican leaders’ changing their ways.”

For 16 days in late June and early July, we had what might be called “dueling studies” on the outcome of Seattle’s minimum wage increases.  Fox Business, in “Study:  Seattle minimum wage hasn’t cut jobs” (June 20), started the ball rolling, naming a University of California at Berkeley research effort finding that, without, though, a look at how many additional jobs went uncreated, and citing a University of Washington effort determining that “the law appeared to have slightly reduced the employment rate of low-wage workers even as it boosted pay.” The New York Times also covered both in Noam Scheiber’s June 26th “How a Rising Minimum Wage Affects Jobs in Seattle,” concluding that its labor market was unusually strong and that total earnings by workers in low-paying jobs actually decreased, as did The Seattle Times, in Jon Talton’s nicely titled June 27th “Seattle’s minimum wage:  The plot thickens,” which noted that neither piece of research had yet been peer reviewed, but did not mention that automated solutions, which can be stated and sold in terms of the cost of labor being replaced, can forestall additional positions.  Three days later Holman W. Jenkins Jr. weighed in in The Wall Street Journal, opining that “Seattle Aims at McDonald’s, Hits Workers.”  Although he lost any claim to objectivity by not even mentioning the Berkeley study, he made good points, such as that President Obama’s statement “that a full-time job should be able to support a family,” when implemented through higher minimums, “was a way of saying that jobs that won’t support a family shouldn’t exist,” and that many countries allow “teenagers, trainees,” and “probationary hires” to be paid less.  Politically centrist USA Today, in July 5th’s “In ‘Fight for $15,’ Seattle loses,” concluded the same, matching Yahoo Finance’s Rick Newman in June 26th’s “A $15 minimum wage appears to be too high.”  The last straw, though, may have come from generally liberal Washington Post columnist Catherine Rampell, in “Feel-good ideas that need a hardhearted examination,” who concluded that a mandatory $15 minimum “would risk pricing a lot of people out of work,” such as in Mississippi, where half of workers were now paid below $14.22. 

One indication of a trend topping out is people not only refusing to join it, but rollbacks.  Fox News’s June 29th “Maine restaurant workers successfully lobby to lower the minimum wage” recapped how servers arranged for defeat of new laws endangering their jobs by forcing employers to pay them the same minimums as non-tipped workers.  An even clearer sign of a tide turning is backlash reactions, such as the subject of “Missouri Republicans Lower St. Louis Minimum Wage from $10 to $7.70” (, July 3rd), implementation of a state law barring communities there from setting their own, higher, floors.  That is a questionable step, since one problem with state-level wage mandates is that they do not account for differing living costs, resulting in required pay being too high in some areas, too low (if you advocate meaningful minimum wages) for others, or both, and they prevent local governments from making decisions that should fall to them.  

In the context of the fight for $15 being seemingly on the way out, we probably won’t need to worry about something being assessed in the United Kingdom, a “Minimum wage push for gig economy workers” (Kamal Ahmed,, July 10th).  That is a good thing, since, in addition to removing this bottom rung on the ladder, such would require either determining maximum lengths of time these tasks would take or paying less effective workers more to complete them.  I do like the idea of officially designating them “dependent contractors,” between employees and independent agents, which while not as good as making them the same as company-hired would remove the pretense that they are free to work any way they want.  Yet they cannot viably have guaranteed hourly rates.  That would be bad – and, as I also believe that about higher national minimum wages, the shift in our views is positive.   

Friday, September 1, 2017

August Was a Blah Jobs Month, With AJSN Still 17.6 Million – Is That Good or Bad?

This morning’s Bureau of Labor Statistics employment data has arrived, and everything’s the same as it was.

Reminiscent of those signs saying something like “on this spot in 1897, nothing happened,” we treaded water, ran in place, broke even, didn’t change, went nowhere. 

We did, though, see some small variability between metrics.  There were 156,000 net new nonfarm payroll jobs created, a tad lower than a 180,000 estimate but still about 25,000 more than our population increase soaked up.  The seasonally adjusted unemployment rate ticked up 0.1% to get to 4.4%, but the unadjusted equivalent was down a similar amount to 4.5%, an unusual combination given two generally similar months.  The number of unemployed adjusted to 7.1 million, up 100,000, but the long-term jobless, or those with that official status but without work for 27-plus weeks, fell the same amount to 1.7 million.  The labor force participation rate held at 62.9%, though the other measure best showing how common it is for Americans to have jobs, the employment-population ratio, shed 0.1% to reach 60.1%.  The count of those working part-time for economic reasons, or maintaining short-hours employment while looking for full-time opportunities, had its third straight month of 5.3 million.  After a substantial July increase, average private nonfarm hourly wages rose only 3 cents per hour, less than inflation, and is now at $26.39. 

The American Job Shortage Number or AJSN, which shows how many additional positions could be quickly absorbed if getting one were as easy as getting a pizza, was almost unchanged from July, down 20,000 as follows:


The largest changes to the AJSN came from lower official unemployment, which cut latent demand by 138,600, and more people not technically jobless but wanting work and not searching for it in the previous year, which increased the AJSN by 85,600.  The trend toward demand for jobs coming from those with non-unemployed statuses continued, with a new low of 37.2% of the AJSN from those officially jobless.  Despite generally good economic times, the set of people neither working nor technically unemployed is ready to take over 11 million positions – other than, of course, those being advertised now.

Compared with August 2016, the AJSN is down almost 400,000, with the officially-jobless and discouraged-worker shares, down 638,000 and 115,000, partially offset by 100,000-plus gains in the demand from American expatriates, those not looking for a year or more, and non-civilian, institutionalized, and people off the grid.

Is this stasis a good or bad thing?  We have certainly seen worse situations to camp out in.  Yet we are still short a lot of jobs.  We are still finding improvements in some places, such as the number of positions, and the big domestic news event of the past month, Hurricane Harvey and its massive rainfall, promises to create much employment.  Barring the start of a recession, which could happen any times, better times are coming soon, so I vote for August as “good enough.”  Accordingly, while we may need a microscope to see it, the turtle, did, again, take a step forward.