Friday, August 30, 2019

Glaciers, Gondolas, and Slot Machines: Attracting Tourism Jobs Means Making Tough Choices

There may be no area of employment more modern, substantial, and promising than catering to people traveling for pleasure.  For all the beefing about air travel conditions, fares are lower in constant dollars than they have ever been.  Worldwide prosperity, on average, is way up.  A shift from valuing objects to valuing experiences means that more and more people travel.  And the rise of the 1% has opened up a new high tier.

With that said, here are three places where that has not worked out as planned.  The first was featured in Peter S. Goodman and Liz Alderman’s August 25th New York Times “Iceland’s Purple Planes Are Grounded, and With Them, Its Economy.”  The piece, about a remarkably steep fall in that country’s number of visitors from discounter WOW going out of business, drew this immediate reaction from me:  Wait a minute!  Wasn’t it just yesterday that Icelanders were complaining about too much tourism?  Word was that visitors, often ill-mannered (of course), were overtaxing their delicate ecology, taking up too much Reykjavik space, preventing locals from getting hotel rooms when they themselves traveled, and so on.  And now “the sudden shortage of Americans – widely celebrated as a free-spending people – is bemoaned by merchants of Viking-themed tourist tchotkes (sic), by whale watching tour operators and by real estate agencies.”  Oh well.

The problem I have always sensed with Iceland’s tourist industry – and I have been there four times – is its ambivalence.  Some would like to make their country, the size of Kentucky with one-fourth the population of metropolitan Louisville, as close to an environmental preserve as sanely possible.  Others see its ample open spaces as opportunities to add industry and other businesses to help their standard of living.  It has often seemed gratuitously high-end to me, with a lack of bed and breakfasts and other low-priced non-hostel hotel rooms, little fast food, and sit-down restaurant meals seeming to start at about US$28 per person.  Except for the fine Bonus supermarket chain and a competitor or two, prices in stores will surprise you.  To sell more Eric the Red refrigerator magnets they can cut their $10 price in half with business-friendlier public policies… if they decide that’s what they want.

The opposite problem has plagued Venice.  Spearheaded by cruise ship passengers spending far less per capita than other visitors, they have just plain had too many – 36 million international ones alone, or 138 per permanent city resident, in 2017.  With demand for related goods and services distorting the business atmosphere the city runs the real risk of becoming a theme park, with a thousandth glass-animal shop pricing out the likes of a dry cleaner or an insurance agency.  Normally supply and demand would kick in, with hotel rooms and restaurants charging more, but with waterborne visitors not using much of either they have been able to clog the streets cheaply.  Two years ago the city banned large ships from docking, and next year they start a three-euro entrance fee for those not staying there, but those will only solve part of the problem – watch this classic destination for more developments.

The third tourism issue is here in the Catskills.  Locals clearly wanted the Resorts World casino, which, at my visit last year looked modern, busy, and full of people gambling, but it is losing so much money that the major stockholders are resorting to declaring bankruptcy, while staying open, to stiff its lenders and stay, at least for a while, in business.  Why has it done so poorly while seeming so good in principle and in real life?

One problem is that Resorts World, with what was a $129 per night hotel-room minimum, became yet another place failing to realize that one thing making Las Vegas great was its quantity of cheap accommodations, facilitating longer stays translating into more gambling.  Its publicity efforts have always seemed inadequate, without any massive push to bring in New York-area Jews with good childhood Catskills memories, and an apparently failed effort by the Malaysian owner to attract high-rolling Asians.  Prices such as the $16 nachos can also cut back repeat visits.  And, to keep bored patrons interested, like any other large casino it requires massive periodic infrastructure spending, meaning it needs way-high amounts of business just to break even. 

However, I suspect the largest problem is something else.  People came to 1950s and 1960s Las Vegas to gamble.  They would play, play, and play.  Long hours, as close to around the clock as they could stand.  Some thought they had systems assuring wins, but few people did that – it wasn’t called Lost Wages for nothing.  Gambling’s appeal is totally different now.  The GI and Silent generations forming not only the backbone but most of the body of Las Vegas punters have been replaced by Generation X and Millennials, who care for gambling vastly less.  Casinos are all over the country now, and the novelty is no more.  Instead of tacitly encouraging problem gambling, people who cannot handle it see a variety of announcements offering them help, including the option to bar themselves.  Roulette, blackjack, craps, and slot machines, after 70 years still the mainstays, are all old hat now.  It has become the norm for people to both know intellectually and feel emotionally that they cannot win over the long term.  Low-stakes entry points, such as $20 buy-in poker and nickel slots that don’t try to get people to play 20, 50, or 100 coins at a time, have gone away.  The clank of coins into metal trays is a thing of the past.  Despite, or maybe even because of, the proliferation of American and world casinos, gambling itself is in big trouble – the choice here is how casinos can change to accommodate that.

Obviously, tourism will continue to grow – but in what ways?  We will see.  Not all the jobs it generates will remain.  We wish it the best, but it may have many more hard times ahead.

Friday, August 23, 2019

Work Meritocracy: American Cradle-To-Retirement Competition

Yes, the United States has a culture.  For those of us living here it may seem transparent, but there are ways in which we part company with even our most comparable countries.  One of them is our love of competitions, which are not only central to our educational and vocational experiences but pop up in group recreational activities.  There is something about needing to know who is the best that gets our interest.

While we may bewilder Canadians, western Europeans, Australians, and northeast Asians by competing at choral singing, ranch chores (rodeo), and even ballroom dancing, we are taking that to a further extreme by inventing entire lives based around it – and those choosing that regimen are the worse off.  That is the thesis of Daniel Markovits’s “How Life Became an Endless, Terrible Competition,” in the just-released September issue of Atlantic. 

Markovits, a Yale law professor whose article is planned to be released in book form, exaggerated – most Americans know little firsthand about the things of which he wrote.  But for those regretting not being in what has been called the 1%, he offered a look at the underside of how they got and stayed there.  And it’s not pleasant.

Have you wondered about the lives of those with the half-million-dollar-and up salaries in “finance, management, law, and medicine”?  Per Markovits, they now split off in preschool, when they prepare to “apply to 10 kindergartens, running a gantlet of essays, appraisals, and interviews,” which is repeated with “elite middle and high schools” that “commonly require three to five hours of homework a night,” all focusing not on “experiments and play” but instead on “the accumulation of the training and skills, or human capital, needed to be admitted to an elite college and, eventually, to secure an elite job.”  From there, these one-percenters “work with unprecedented intensity,” for example, if they are large-firm lawyers, producing 2,400 annual billable hours (calling for 70-hour weeks), or, if bankers, putting in 20-hour day-and-night combinations.  Those ultimately successful, per sociologist Arlie Russell Hochschild, survive a “final elimination” by being “still able to maintain a good mental set, and keep their family life together.”  And eventually if they want they can retire, after which they will probably spend much time, money, hope, and effort helping their descendants do as they did.

Although this program, which despite Markovits’s use of the word, is not truly meritocratic – per my post earlier this year with oboes and Guatemala in the title, the type of merit is also critical – it causes problems.  It endangers three areas most would call key to a generally successful life:  happiness, sex, and longevity.  It may provide its practitioners with net worths unknown without entrepreneurism or large inheritances, but with, until the work ends, little opportunity to be enjoyed.  Per the author, it forces even very young people to stick to their preordained plans at the expense of exploration and self-discovery, in the process “exploiting” themselves and “impoverishing” their “inner lives.” 

Of such choices for themselves and their children, it is easy to see the appeal, especially for Americans, who, even those of lower family education and incomes, have long heard about “making something” of themselves, and, if particularly smart or capable, of getting to “the top.”  Winning such long, massive competitions can provide powerful self-esteem and eliminate any fear of having failed or underachieved.  Being without any real possibility of financial failure has its advantages.  However, I suspect the truly smart people, with vision of wider scope, know that excelling in this way is not the best they can do.  There is more to life than that, and those in the tracks described here are missing it, completely and permanently. 

Evaluating our success is open to great debate.  Even if we agree on who was better than whom and by how much, one simple truth still applies:  those winning rat races are still rats. 

Friday, August 16, 2019

What You Need to Know About Career-Related Instruction

The August Northeast Pennsylvania Business Journal had a 16-page section headlined its “2019 Adult Education Guide.”  It presented articles provided by a variety of learning-program providers explaining what courses they had and what they could do for those taking them.  They ranged from The Wright Center for Graduate Medical Education (I didn’t know there even was such a thing), master’s degrees at East Stroudsburg University, “straight-to-career training certificates” from Northampton Community College, a cybersecurity program, and Johnson College’s diesel truck technology credential.  Here are 11 observations on this career-related area.

First, as above, there are a lot of programs and they vary widely.  The target area of this 33-year-old publication has fewer than a million people, and is probably roughly nationally representative as to economic strength, diversity of jobs, formal education levels, and so on.  A similar compendium for the New York area could be in the hundreds of pages.

Second, such programs are best when the school and the hirers are connected and the latter can strongly influence the former, by relating honestly what program graduates need to be chosen.  The gap between becoming qualified and actually getting a job can be huge, and responsibility for making it as small as possible ultimately falls on the schools.  Third, the in-field getting-hired rate is the most important statistic such organizations can offer.  Fourth, with those two things said there is nothing wrong with for-profit course providers as such. 

Fifth, those considering further instruction need to analyze the target field, including its current state, its prospects several years out, and its long-term viability.  Choosing a Lasting Career is now six years old, but anyone considering putting a large chunk of their lives and money need to look at the same factors as in that book, namely resistance to robotics, susceptibility to improvements in computing and connectivity, chance for a good living wage, family and outside activities compatibility, local-boundness, typical work conditions, and more. 

Sixth, while certificate programs should zero in on specific competencies, overly specific bachelor’s degree programs can fail when narrowly targeted objectives do not materialize.  Nobody expects coursework in air conditioning repair to provide guidance for a life’s worth of thinking, but conventional four-year experiences should do just that. 

Seventh, community colleges are good choices, as they provide well-focused training at bargain prices. 

Eighth, while employment-focused training is often excellent for individuals, as a matter of public policy it is ineffective for cutting joblessness, as it tends only to change who gets work, rather than the total number of people thus successful.

Ninth, students need to consider where the jobs are in their fields of interest, and know if they will need to relocate.

Tenth, nonspecific career credentials, such as M.B.A. programs, usually have very weak connections with employers, so those considering them should determine first if they will be sufficient, when combined with their existing assets, to get them working in the field they want. 

Eleventh, as I advised people as a business professor, anything called “adult education” requires participants to act that way.  College for 18 to 22-year-olds serves purposes other than learning and credential acquisition, but these programs really don’t.  Students should always or almost always attend classes, do assignments in good faith, and complete all work required.  Such things as all-night agonizing over three to five-page papers need to come to an end.  Adult learners will find that if they focus on their assignments and complete them, that will be good enough if not perfect, and they will then pass their courses and complete their objectives.  That is why they are spending their time, effort, and money to be there.  If people get the most from adult learning programs, they may benefit greatly – accordingly, If such training is at all suitable and clearly leads to jobs, I strongly recommend it. 

Friday, August 9, 2019

Autonomous Vehicles: What’s Causing the Delays, and How They Can Get Off the Dime

Per recent posts, the past year has been rather disheartening for those of us who think we need progress on self-driving cars.  What has been the problem, and how can they get moving again?

The best article describing the state of that field so far came out in the July 17th New York Times.  Neal E. Boudette’s “Despite High Hopes, Self-Driving Cars are ‘Way in the Future’,” started by saying that “a year ago, Detroit and Silicon Valley had visions of putting thousands of self-driving taxis on the road in 2019, ushering in an age of driverless cars,” which hasn’t and won’t happen.  The piece’s sources blamed the lack of progress on being able to deal with “all kinds of crazy things on the road,” and Boudette also named small related news items, recapped the fatal accident, quoted evidence of Elon Musk’s delusional hubris, and then got the article to justify itself by naming the need for “micro maneuvers” such as understanding other drivers are looking for a parking space so should not be followed closely and saying that “the technology is available now to create a car that won’t hit anything,” even if it would “constantly slam on the brakes.” 

From what I have read and not read, I see five reasons why progress has almost ground to a halt.  First, not only overreaction to that single death, but expected overreaction, as the firms seemed to pull back soon thereafter without receiving much actual pushback.  Second, companies’ testing has, thus far, not emphasized creating algorithms mimicking the thoughts of actual drivers.  Third, as I have read recently about artificial intelligence, massive efforts such as this often go through slow stretches in research intensity, which author and professor Nick Bostrom called a “winter,” or “period of retrenchment” – we clearly have another one here.  Fourth, the legal and regulatory climate, despite the July 31st Yahoo Finance report that “U.S. Congress seeks to jump start (a) stalled self-driving car bill” to allow them more, has been intimidating if not actively discouraging, perhaps to the point where companies have focused excessively on being stopped.  Fifth, there has been insufficient emphasis on implementation – I saw that when working with information technology technicians more comfortable keying on the clean and promising future than on dealing with the grit of making things actually work, and recognize, or at least strongly suspect, it again. 

What, then, are the solutions?  Here are six.  One, researchers need to catalog what Boudette called “corner cases,” where people disobey traffic laws, and concentrate on solving them.  Two, it is time for them to quantify how drivers actually think when faced with these problems.  In Kurt Vonnegut’s Player Piano, those making automated barbers copied the exact movements of people doing that job – let’s do that here.  Three, they should implement Boudette’s “car that won’t hit anything” and see where it could be used – the technology could progress from there.  Four, we need more driverless shuttle buses in limited, well-defined settings, which is about the lowest-hanging fruit actually constructive.  Five, manufacturers and others should push for more freedom and more places to use these vehicles, which may, given the recent Congress event, be easier than they think. 

Sixth, and finally, those on the side of this technology need to do interviews, give presentations, write articles, issue news releases, do radio spots, appear on TV shows, and put in Internet advertising, all emphasizing the potential for slashing the 30,000 annual driver-caused American deaths along with other autonomous-vehicle advantages and showing how close we really would be if we can tolerate a few more accidents.  There were times when it was more acceptable for efforts thought of as American projects to cause tragedies along the way.  Eighteen people have died during space flights and 96 perished during Hoover Dam’s construction, not to mention such numbers as over 400,000 United States soldiers killed in World War II.  It is time for us to consider driverless vehicle implementation necessary for the country, and give it the same status.  Then, as we know about our countrymen and from our history, it will succeed.

Friday, August 2, 2019

July Employment Data Almost All Positive – AJSN Says Latent Demand Unchanged at 16.4 Million Jobs Behind

According to two published new-positions projections, this morning’s Bureau of Labor Statistics data wasn’t supposed to do anything spectacular either way.  It didn’t, but its improvements were remarkably broad-based. 

We added 164,000 net new nonfarm positions, within a few thousand of the predictions.  The seasonally adjusted unemployment rate sat at 3.7% while the unadjusted one went up 0.2%, half or so of that due to typical differences between June and July, to 4.0%.  The adjusted jobless number gained 100,000 to 6.1 million.

From there, though, everything got better.  Those out for 27 weeks or longer lost a surprising one-sixth and is now at 1.2 million.  The count of those working part-time for economic reasons, or keeping short-hours positions while seeking longer ones, lost over 300,000 and is now at 4.0 million, 700,000 less than only three months ago.  The two measures of how common it is for Americans to be working, the labor force participation rate and the employment-population ratio, each gained a significant 0.1% and are now at 63.0% and 60.7% respectively.  Average private nonfarm payroll hourly earnings were up 8 cents, significantly over inflation, to reach $27.98. 

The American Job Shortage Number or AJSN, the measure of how many additional positions could be quickly absorbed if all knew they were available, was almost unchanged, as follows:

Increased latent demand from those officially unemployed, pushing the AJSN up 156,000, was more than offset by drops in almost every category of marginal attachment, most importantly those wanting to work but not looking for it over the past year and those claiming discouragement, down 154,000 and 144,000.  Between higher unemployment and lower inputs elsewhere, the share of the AJSN from official joblessness is now 36.0%, up 1.5% from June.  Compared with a year before the AJSN has improved 400,000, with the largest falls in official unemployment and the two marginal attachment groups just mentioned.

Overall, how good was July?  I am happier with the smaller groupings’ improvements than I am unhappy with higher unemployment.  We need those pools to continue to improve, as they remain underpublicized and are all too capable of harboring people who would rather be on the job.  Gains in the employment-population ratio and the labor force participation rate indicate a stronger than appearing economy, and we got both this time.  The AJSN did not get in on the act, but is still maintaining a good distance from what it was 12 months ago.  No records were set this time, but none were supposed to – the turtle took another step forward.