Friday, May 31, 2019

Around the Horn with Five Jobs-Related Articles

Six weeks, five New York Times pieces on employment.  What did they say?

The headline of the April 21st “Why ‘Find Your Passion’ Is Such Terrible Advice” didn’t match what Stephanie Lee wrote, which was that “we’re pretty bad at most things when we first try them.”  I don’t agree with the theory she cited that “our interests are relatively fixed and unchanging” – my life has been a roaring counterexample – or that passions will be extinguished without immediate success.  People with excessive expectations are generally those unenthusiastic anyway, and it is a perfectly valid choice to choose or accept a dull or unfulfilling work career for its value in supporting passionate activities elsewhere.

Ernie Tedeschi wrote a good summary of a positive trend in April 24th’s “Americans Are Seeing Highest Minimum Wage in History (Without Federal Help).”  The largest problem with the likes of a national $15 level is that in many parts of the country people can do well on less, but that does not mean that those in Manhattan or Hawaii cannot decide on a higher base rate there.  Per Tedeschi, 29 states and Washington, D.C, along with a “surge” in smaller governments, now mandate more than the national $7.25, and 89% of Americans paid the lowest legal amount are getting more.  While I do not support minimum wages, as market conditions require that workers are paid what they will accept, Seattle lawmakers are far more justified in accommodating constituents in their own expensive city than imposing destructive hikes on small Texas towns.

“Behind the Numbers:  How the Jobs Report Comes Together,” by Patricia Cohen on May 3rd, is a good reader on what goes into those usually first-Friday figures.  Not everyone sees that only one hour of weekly payroll effort makes someone “employed,” knows that in order to be “unemployed” one must look for work within the previous four weeks “regardless of any government benefits received,” recognizes that the “labor force” comprises only those working and those unemployed as here, and understands the significance of the employment-population ratio and the labor force participation rate.  Cohen mentions the two monthly data collection efforts feeding these numbers, the “Household Survey” and the “Establishment Survey” targeted to individuals and businesses respectively, and touches on seasonal adjustment which is used because times of the year differ. 

May 27th’s “It’s 2059, and the Rich Kids Are Still Winning” is the first of a set of scenarios provided by “science fiction authors, futurists, philosophers and scientists” presented in opinion article form.  Here an eminent figure in the first category, Ted Chiang, considered the limitations of DNA enhancement, that unless we have a pure meritocracy (exceedingly unlikely in 40 years) “genetic interventions” such as improving intelligence will not, as long as social and class factors are critically important, get us equality between those of different races, income, or anything else.  That is a real point, and while such technology may push us further to the real nature of human beings, it will not level outcomes across all groups, and intelligence for scientists, as with great height for NBA centers, may continue to be necessary for success but not at all sufficient.  Expect to see more from me on this series.

David Brooks, on the same date, followed up his tempting but irritating “weavers” column with “The Welfare State Is Broken.  Here’s How to Fix It.”  An improvement from advocating that people surrender their whole lives to American social-network efforts or conjure up opportunities to “make a difference” in one of the most rejecting fields there is, this time Brooks puts the onus on social service organizations to work together and focus on the related problems of individual families.  I take issue with his characterization of poverty as longer lasting now than in the past – when I was growing up, poor meant you might not have nearly enough food for years on end – but his documented idea of “life teams,” handling everything from immediate financial and employment crises to teaching more constructive choices, is a good one, along with giving isolated people, especially older ones, the chance to join groups which are “part social club, part concierge service and part self-help cooperative.” 

Next week, I will review the latest unemployment figures.  They will show a large piece of what is happening with our economy, but, per the above, not all.

Friday, May 24, 2019

Is it Time to Break Up Facebook?

Two weeks ago The New York Times printed a guest op-ed piece from pertinent company co-founder Chris Hughes, opining that “It’s Time to Break Up Facebook.”  It was long, printing out to 27 pages, but more or less made only the point that antitrust regulators have been remiss in allowing this firm, unquestionably now along with Amazon, Google, eBay, and Microsoft one of our technology industry’s answers to football’s Monsters of the Midway, to become a monopoly.  Hughes wrote that other Facebook creator and current CEO Mark Zuckerberg, though “still the same person I watched hug his parents as they left our dorm’s common room at the beginning of our sophomore year,” has influence “far beyond that of anyone else in the private sector or in government,” as he “sets the rules for how to distinguish violent and incendiary speech from the merely offensive, and he can choose to shut down a competitor by acquiring, blocking or copying it.”  As was also attributed to Microsoft, which garnered similar antitrust attention twenty years ago, Zuckerberg “used the word “domination” to describe our ambitions, with no hint of irony or humility,” an attitude bearing lush fruit in the form of a $500 billion de facto conglomerate including, in the form of WhatsApp, Messenger, and Instagram along with the marquee brand, four different billion-user-plus American-based social media platforms, with only YouTube in that size range not owned by them.  The Federal Trade Commission, perhaps swayed by the lack of user fees, allowed Facebook’s 2012 purchases of two of these firms which set up this situation, which now seems entrenched, and which Hughes maintained needs to end.  In the meantime, privacy issues, along with data restriction and manipulation facts and allegations, with Zuckerberg’s company draw more and more commentator attention.

So is a Standard Oil-style breakup what we need?  Here are some points to consider.

First, my personal bias is that Facebook has been greatly beneficial to me.  I used to fantasize about friends and acquaintances from different times and areas of my life getting together, and since I started with the site in 2009 I have had that capability, if not as much successful interchange as I had hoped, on my desktop.  My main beef with it is not its use of my data – I don’t mind getting focused advertising, which is as far as it now seems to go – but with, as Hughes said, being subject to “algorithms that select which users’ comments or experiences end up displayed in the News Feeds of friends and family,” when the posts I want to see are simply all of them.  I do not use Facebook for getting news, except for stories from a few business sites I selected.  Therefore, I want it to succeed and continue. 

Second, Facebook, counter to what Hughes wrote, is indeed a natural monopoly.  We do not want to maintain contacts through half a dozen platforms, returning to early last century when businesspeople needed multiple telephones on their desk and “I’m on the Bell” became a brand’s slogan. 

Third, monopolistic damage in this case, since it is not directly financial, requires ideology to identify, which means fundamentally more controversy and less clarity than the usual knowledge that with only one seller prices will rise.

Fourth, antitrust forces certainly have been weak, and need to consider market domination as well as direct cost to consumers when blocking mergers.

Fifth, though nominal startup costs for a new social media system would be low, successful publicity would be difficult.  Despite plenty of online advertising, millions of businesses will end operations this year for lack of sales.

Sixth, American employment would benefit, at least temporarily, if Facebook broke into multiple companies.  None of them, though, are or would be massive employers.

Seventh, our real causes for concern are about privacy.  It’s OK to get ads for Brazilian hotels when I’ve recently checked Sao Paulo airfares, but I don’t relish my health insurance companies seeing, for example, that I liked a page on Brie.  The time to stop these interconnections is now, when they are just getting started, and government action, as clumsy and behind-the-times as it usually seems, appears the least of evils. 

Should we break up Facebook?  Clearly the feds could undo those 2012 acquisitions and stop more.  Yet there is something distasteful about punishing a company that became so large because people wanted what it had to offer.  I think the way is to allow it to be a monopoly, but regulate it, including some loose but real limitations on speech and data usage, sort of like how AT&T was treated in the decades before divestiture.  When telephony became more innovative it was time for that arrangement to end, but before that the stability of phone service, even if long distance calling unfairly subsidized local connections, helped most people greatly.  And if mineable personal data pays for a valuable tool previously unobtainable at any price, that is OK, especially when so many people have little money to spare.  Through the regulatory authority, we could negotiate improvements and changes.  So let us not forget that the number of users on these platforms is in the billions for a reason – let’s not throw out the baby with the bath.

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.