Friday, October 22, 2021

Four Months of Highly Understandable Inflation, and Our Best Attitude About It

In June, per “Prices Pop Again, and Fed and White House Seek to Ease Inflation Fears” (Jeanna Smialek and Jim Tankersley, The New York Times, July 13th), “a key measure of inflation spiked,” reaching 5.4 percent, which in the 1960s and early 1970s was a perfectly ordinary rate (in the late 1970s it was much higher), and about what basic savings accounts paid.  Much of this bulge was from used cars, and the rest from supply-chain problems and slower-than-expected employment gains.  I wrote then that it was nothing to worry about – is that still true?

The day after that, Smialek reported, again in the New York Times, that “Fed Chair Powell Sees Months of High Inflation, but Then Moderation.”  Powell has been a sober, consistent voice, exactly what best serves the Federal Reserve, which left interest rates unchanged and very low, and he continued that here.

In August, another 5.4% inflation month, as per Smialek, once more in the Times, “Consumer Prices Keep Climbing as Fed and White House Await a Cool-Down” (August 11th).  Wages went up “as employers scrambled to hire and rehire,” and Chipotle price increases, to name one restaurant chain, precipitated, per its CEO, “very little resistance.”  That was all natural and appropriate, as well summarized by Paul Krugman the next day in the same publication, in “Don’t Let Inflation Anxiety Undermine Our Future.”  Krugman backed the then $3.5 trillion infrastructure plan, including its nonphysical components, but acknowledged that such “would take a long time to materialize,” before he ended with “build we can, and build we must.” 

We got word on the next month’s data in “Inflation rose again in July, the Fed’s preferred measure of prices shows” (Coral Murphy Marcos, The New York Times, August 27th).  The rate actually fell then, to 4.2 percent, with a comment from a chief economist that “the economy is still recalibrating.” 

Panicking resumed with the August information, as “Inflation Warning Signs Flash Red, Posing Challenge for Washington,” published October 1st, again by Smialek in the Times.  The annual rate here of 4.3% hardly seemed to require urgent action, especially given the probable crest of the container-ship logjam and low-end pay reaching and exceeding $15 per hour in most places.  (Note that the free market has almost overwritten any need for that to be the national minimum wage.)  I don’t see why that was either unexpected or disturbing, especially when coupled with “Fed’s Bullard:  U.S. businesses having no problems raising prices” (Reuters, October 4th).  As before that is healthy and normal, as people both eager to spend and knowledgeable about higher costs will take the push.  Still the fear continued, as the “Risk of high inflation dogs central bankers as consumer expectations climb” on October 12th once more by Smialek in the New York Times, but, thankfully, per Federal Reserve vice chair Richard H. Clarida, most in that department “generally view that, so long as the recovery remains on track, a gradual tapering of our asset purchases that concludes around the middle of next year may soon be warranted,” but no more, while per Smialek “interest rates are expected to remain near zero for months or even years.” 

Although it isn’t reasonable to blame any one person or group for our rising prices, Peter Coy, in The New York Times on October 15th, reminded those not sure in “Don’t Blame Workers for Inflation.”  That is easy to do, but, per Coy’s research, wages since 2018 have gone up less than consumer prices, and “economists disagree on how much worker incomes will eventually spill over into the general price level.”  However, Jeanna Smialek, twice more in the same publication, determined that “Rising Rents are Fueling Inflation, Posing Trouble for the Fed” (October 15th) and “A regional Fed analysis suggests Biden’s stimulus is temporarily stoking inflation” (October 18th).  Economic stimuli should do just that, as ideally they should largely be spent instead of saved, and the first, “exacerbated by work stoppages, supply shortages and labor constraints” handcuffing real estate developers, makes sense as well. 

Overall, our current level of inflation should not make us lose sleep.  It has clear origins, all from the Covid-19 root cause.  There remain vast trillions of capital dollars ready to fund business opportunities when they present themselves.  We are almost certainly within a year of far better alignment of work and workers, which we will resolve at a level of high prosperity.  Then we may again see 2% inflation, but if we don’t we will still flourish.  Social Security checks, as widely reported, will grow 5.9% next year.  So for now, depending on your outlook, you can worry about climate change, gray goo, creeping socialism, or another Trump election, but don’t be concerned about prices going up.

Friday, October 15, 2021

The Container Ship Jam-up – What Is Happening, and Two Sets of Solutions

On my copy of the first article on this topic I saw, Cindy Wang and Enda Curran’s “The World Economy’s Supply Chain Problem Keeps Getting Worse” (Bloomberg.com, August 25th), which quoted a Hong Kong CEO as saying “we can’t get containers” and “costs have been driven up tremendously,” I wrote that the root causes were not enough infrastructure, reluctance by businesses to raise prices, and foot-dragging on paying workers more.  That was a start, but much has happened since.  This piece, though, hit the main problems, such as the Chinese government closing “part of the world’s third-busiest container port at Ningbo for two weeks after a single dockworker was found to have the delta variant,” “the cost of sending a container from Asia to Europe is about 10 times higher than in May 2020, while the cost from Shanghai to Los Angeles has grown more than sixfold,” and a prediction from a Taiwan company president that the capacity shortage could last into the middle of next year. 

From there, Costas Paris saw “shipping options dry up as businesses try to rebuild from pandemic” (Fox Business, September 12th).  Here we learned that as “the shipping industry consolidated between 2016 and 2018,” “a handful of big shipping players control the majority of containers via giant vessels, leaving the world with fewer routes, fewer smaller ships and fewer ports.”  A variety of infrastructure shortages, including not “enough manpower, trains, trucks and warehouses” along with too few unloading places, resulting in “forty or more loaded ships… waiting at anchor off the coast of Los Angeles on any given day in recent weeks.”  Among others, Walmart and Home Depot, later joined by Costco and Target, have themselves chartered smaller ships able to dock elsewhere.  Fourteen days later, The Wall Street Journal reported in “Cargo Piles Up as California Ports Jostle Over How to Resolve Delays” (Costas Paris and Jennifer Smith) that the average 40 waiting ships was now “more than 60,” worsened by the “port complex” closing “for hours on most days” and throughout Sunday in contrast with Asian and European 24/7 operations, and, due to insufficient warehouse capacity, becoming cluttered with empty containers. 

On October 10th, Peter S. Goodman documented “’It’s Not Sustainable’:  What America’s Port Crisis Looks Like Up Close” in the New York Times.  He discussed the Savannah port, where the 80,000 containers “stacked in various configurations” there are half again the usual amount, and 700 of them “have been left… by their owners for a month or more.”  There, though, they are improving, with “a $600 million expansion” involving “swapping out one berth for a bigger one to accommodate the largest container ships,” “extending the storage yard across another 80 acres, adding room for 6,000 more containers,” and expanding the “rail yard to 18 tracks from five to allow more trains to pull in, building out an alternative to trucking”

Some relief was announced on Wednesday, as “Biden Announces Measures at Major Ports to Battle Supply Chain Woes” (Ana Swanson et al., The New York Times), as “the Port of Los Angeles will operate around the clock.”  That day saw only 25 container ships there waiting to unload, an improvement, though that still meant they were sitting for an average of “more than 11 days.” 

How, beyond what Savannah and Biden are doing, can we free up the container port snarls?  In “Liz Peek:  Biden’s economy is stalled.  Here’s what he must do now to unfreeze our supply chain” (Fox News, October 12th), the author recommends the president “bring together union bosses, transportation industry CEOs, medical authorities, and other interested parties,” and, maybe most importantly, consumers will need to accept more outages and higher prices.  I endorse those, and add the need for longer port hours all over, higher pay for truck drivers and others in positions without enough employees, ample premium-rate overtime for union longshoremen and others already willing to take it on, a faster track to warehouse building, assessment and possible removal or shrinking of business regulations contributing to the jam, easing up on Covid-19-related outages, and quickly passing an infrastructure bill containing only the most urgently needed assistance.  As companies see the demand and can manufacture what is needed, including ships suitable for smaller ports, the problem will go away with time, but for now, many of our jobs and a good chunk of our prosperity depend on getting past the worst of the current situation.  We can do it – why don’t we?

Friday, October 8, 2021

September’s Employment Data: A Pitiful Number of New Jobs Conflicts with Strong Apparent and Real Progress Elsewhere, as Latent Demand, Per the AJSN, Dives 1,200,000 to 17.7 Million

Another Bureau of Labor Statistics Employment Situation Summary, another fall in unemployment, another disappointing count of net new nonfarm payroll positions.  That came in at 194,000, this time just over one third of a published prediction, which was 500,000.  Doesn’t look that bad, but…

Wait a minute!

Well before the survey weeks, the federal $300 unemployment add-on ended.  We have been seeing, especially from conservatives but also moderates, how vast numbers of Americans would rush back to the workforce when they lost that extra money. 

No.

I went so far as to predict a banner jobs-adding month, strong also from higher wages, more vaccinations, and more consistent safety for the prudent.  I was so high on those factors that I considered any gain below 1.5 million to indicate little effect from the add-on’s sunset, and predicted about a million. 

Not close.  We now have no reason whatever to think that this supplement kept people away from workplaces.

So what numbers turned up?  Seasonally adjusted unemployment fell a healthy 0.4% to 4.8%, with the unadjusted version, helped by many people as usual returning to work with the new school year, down 0.7% to 4.6%.  The total number of jobless decreased 700,000 to 7.7 million, with those out 27 weeks or longer dropping 500,000 to 2.7 million and those on temporary layoff 200,000 lower to 1.1 million.  The count of people working part-time for economic reasons, or holding on to one or more of those opportunities while unsuccessfully seeking a full-time one, though, held at 4.5 million.  The two indicators of how common it is for Americans to be working or one step away, the labor force participation rate and the employment-population ratio, were mixed, with the former off 0.1% to 61.6% and the latter up 0.2% to 58.7%.  Average hourly private nonfarm payroll earnings, reflecting larger labor demand and higher pay, were up 12 cents, actually less than inflation, before any adjustment, and now sit at $30.85.

The American Job Shortage Number or AJSN, the metric showing how many more positions could be quickly filled if all knew getting one would be as easy as getting a pizza, showed latent demand fell 1.2 million, as follows:


 


Almost 1.1 million of the AJSN’s drop was from lower official unemployment.  The count of those not looking for work for the past year contributed more than the remainder, and almost everything else got higher.  Most noteworthy was the 650,000 gain in those claiming no interest in working, and that, along with others, show that the unemployment drop came not only from those with that status but from those leaving the labor force.  With the AJSN taking big steps toward its prepandemic levels, it is now 5.3 million less than a year ago, with the marginal statuses much lower.  The share of the AJSN from those officially jobless was 37.5%, down 3.3% and meaning that of those not now working who would actually take new, fillable jobs, five-eighths would not be what we consider unemployed.

On the Covid-19 side, the bad effects, yet becoming less common since, were still getting higher at survey time.  Per the New York Times, from August 16th to September 16th the seven-day average of new cases rose 6% to 150,376, that of deaths soared 180% to 1,969, and that of hospitalizations increased 18% to 97,413.  The same number of vaccinations administered was almost unchanged, reflecting fewer people without them and willing to have them offset by those changing their mind on higher infection numbers, gaining 1% to 773,763.  With the low number of new jobs, though, it is clear that few people were unduly endangering themselves for paychecks.

What can we make of this mess?  Clearly, most of those wanting to work took their time getting it.  Those who toyed with finding employment and weren’t successful continued to return to the shelf – and the number of those saying they wouldn’t welcome jobs, which we know is partially contingent on opportunities, again pushing all-time highs is no sign of rising prosperity. 

Overall, September was neither as bad as the puny 194,000 nor as good as the unemployment-rate drops.  We are slowly improving, with the possibility of further, much larger gains over the next few months fully alive.  This time, however, the turtle managed only a baby step forward.

Friday, October 1, 2021

Reduced Work Hours: Four Sets of Insights, But One Big Question

In these times of unfilled jobs and higher pay, we’re getting a flurry of articles suggesting we cut back from five days a week, 40 hours a week, or both. 

The oldest I saw was a reissue of “The Research Is Clear:  Long Hours Backfire for People and for Companies,” first published August 19, 2015 in the Harvard Business Review.  Six years on, except for the lack of pandemic references it looks current as ever, with the likes of “managers want employees to put in long days, respond to their emails at all hours, and willingly donate their off-hours – nights, weekends, vacation – without complaining” and “we log too many hours because of a mix of inner drivers, like ambition, machismo, greed, anxiety, guilt, enjoyment, pride, the pull of short-term rewards, a desire to prove we’re important, or an overdeveloped sense of duty.”  The piece cited studies allegedly showing that “overwork and the resulting stress can lead to all sorts of health problems, including impaired sleep, depression, heavy drinking, diabetes, impaired memory, and heart disease,” with the usual correlation and causation problems, the difference between “a week or two of 60 hours to resolve a true crisis” and “chronic overwork,” and the doubtful or even negative value of more than 40 or 50.  Apparently, neither workers nor managers in many companies agree or even know about much of this, but it does set a starting point.

The first of the newer commentaries came out July 20th online and July 25th in print, by Bryce Covert in the New York Times, titled in the latter “Less Work, More Life.”  It recapped the studies above, but added mention of people, as the Bureau of Labor Statistics puts it, working part-time for economic reasons (“About one-tenth of American workers were working part time but trying to get more hours”), a statement that people in this country spend “7 to 19 percent more time on the job than our European peers,” that “employers steal… overtime hours spent in front of a computer,” and that longer time constitutes “a class divide in overwork” as “the demand to spend 60 hours at an office is one that depletes the lives of professional, higher-paid workers,” the last one refreshing as almost all printed complaints about job requirements have focused on the lowest-paying positions.  I add the effects of Parkinson’s Law, furthered by employees’ perceptions that they can always work into the evening or weekend if need be, and a related problem of people feeling more need to keep in touch because that is easy. 

Next, in Robin Madell’s September 21st Yahoo News “How Does a 4-Day Workweek Work,” we learned about a trend, probably driven by prospective employees demanding more personal time, which is varies between companies putting it into practice.  As well as differences in whether the third day off is fixed or at workers’ discretion, four-day pioneers Kickstarter, Monograph, and Nectafy split on the largest question, whether such a schedule means 32 hours or still 40.

Finally, we had “the Future of Work Should Mean Working Less,” by Jonathan Malesic on September 23rd in the New York Times.  I don’t share the author’s view that “work sits at the heart of Americans’ vision of human flourishing,” that “it’s how we earn dignity,” “how we prove our moral character,” or, much more, that “it’s where we seek meaning and purpose, which many of us interpret in spiritual terms” – those norms peaked in the 1950s, and modern-day employees are increasingly likely to get their emotional needs met from other ventures and relationships which they use their jobs to support, and have never stopped covering their spiritual life with religion.  As well and unfortunately, the “should” in the title exemplifies what else Malesic had to say, that we “ought to expect a bit less of people whose jobs grind them down” (and which are those?), that considering jobs away from the center of self-worth “justifies a living wage” (just exactly what is that?), and, worst, that “this new vision” (new?) “should inspire us to implement universal basic income and a higher minimum wage, shorter shifts for many workers and a shorter workweek for all at full pay,” something that could have been written by a fourth-grader in that paper’s For Kids section. 

More problematic than naivete, though, is the query looming over all of these stories:  If people are expected to work more, what does it mean to reduce stated hours from 40 to 32?  Before we decrease official time on the job, we need to address that.  It is silly to take pride in a cut to 32 hours if that only shrinks people’s labor from, say, 60 hours to 50.  The 40-hour standard workweek, fictional or not, has been described as the norm since the 1930s – bringing actual time below that is in fact two steps away.  Let us take them one at a time. 

Friday, September 24, 2021

Problems of the Pandemic, Beyond the Statistics

It’s bad enough that the United States has had, per the New York Times, 42.6 million coronavirus cases and 680,000 deaths.  How we have handled Covid-19 has precipitated real concerns, which have contributed to those totals and, if unresolved, will also damage how we do in the future.

In “The Extremely Weird Politics of Covid, in the September 21st New York Times, columnist Ross Douthat documented how, just before the pandemic caused restrictions, The London Review of Books, a “highbrow left-of-center publication,” said good things about civil disobedience during the 1600s Florence plague, agreeing with people defying “quarantines, lockdowns, and what we now call social distancing,” whereas such resistance is now almost exclusively advocated by conservatives.  Also, last year, “the right briefly favored restrictions when they seemed likely to fall mainly on foreigners and the left briefly suspended its zeal for restrictions when the transgressors were left-wing protestors.”  All of this shows that neither side has been consistently principled, meaning that neither has always made American health their top priority.

On the issue of strangely missing information, two related articles also appeared in the Times.  The first, Zeynep Tufekci’s August 29th “Show Me the Data!” posed the following: “Who should get vaccine booster shots and when?  Can vaccinated people with a breakthrough infection transmit the virus as easily as unvaccinated people?  How many people with breakthrough infections die or get seriously ill, broken down by age and underlying health conditions?,” along with “the Food and Drug Administration has asked that vaccine trials for children aged 5 to 11 be expanded, but why weren’t they bigger to begin with?”.  F.D.A. and Center for Disease Control, where are you?  Why is there no information, still, on the last three of these issues?

The second piece, “The Hard Covid-19 Questions We’re Not Asking” on August 30th by Joseph G. Allen and Helen Jenkins, had more, specifically “Does everyone need to wear a mask?  Are unvaccinated children safe in schools?... What happens if vaccines for children younger than 12 are approved at the end of the year but only 35 percent of this age group get vaccinated” as is now the case for 12 to 15-year-olds, “who have had access to vaccines for months”?  If we reach March with similar children’s inoculation rates, “does that mean masks should come off then anyway?”  These authors also asked a higher-level question, phrased as “What is the purpose of Covid-19 precautions now?”  That is important, now that goals, for example, of “Kids need to be in school, period,” “getting to zero infections and staying at that level before dropping restrictions,” and to “make this virus like a seasonal flu,” now conflict with each other.

On the explanatory side, another article, again in the New York Times, clarified “Why Covid Vaccines for Kids Are Taking So Long” (Daniel Carpenter, September 20th).  The author, who also wrote a book about this agency, blamed the F.D.A., which is now asking for “up to six months of child vaccine trial safety days, rather than two, and larger sample sizes.”  He saw a difference, not acted on well enough by the F.D.A., between the coronavirus and diseases for which “there are generally adequate existing treatments or more time than Covid-19 allows,” justifying a slower approval pace and more conservatism.  He did relate that Pfizer, for children aged 5 to 11, “will apply for emergency authorization by the end of the month.” 

Taking all this, we have “Six Rules That Will Define Our Second Pandemic Winter,” by Katherine J. Wu, Ed Yong, and Sarah Zhang, an updated version released in The Atlantic on September 21st.  These precepts are “the role of vaccines has changed (again)” from preventing all infections to stopping only the most severe ones, “the proportion of vaccinated people matters, but who they are and how they cluster also matters” as Americans without the shots are more likely to do the latter than those in other countries and older victims tend to require more ICU beds, “the people at greatest risk from the virus will keep changing” with the faster-spreading Delta variant putting more children in danger, “as vaccination increases, a higher proportion of cases will appear in vaccinated people – and that’s what should happen” which makes sense since as absolute numbers of a population decrease their percentages will also, “rare events are common at scale” reminding us that for example 40,000 breakthrough infections among 40 million inoculated people is still only one per thousand, and “there is no single “worst” version of the coronavirus” as different variants may prove to be most effective against the unvaccinated and vaccinated.

Even after all of the insights above, the best single thing we can do has not changed.  Get the shots. 


Friday, September 17, 2021

In These Tumultuous Times, What Are Employees and Employers Trying?

Especially if you have been reading this blog, you know what on this subject is happening.  Positions, ever more plentiful, are staying open, and numerous companies continue resisting raising pay to get the personnel they need.  Possible workers, between child-care problems, holding out for more money, benefitting from high unemployment payments, and having changes of heart about what they want to do, are staying jobless.  Covid-19 has become a pandemic of the unvaccinated, with so many of them getting sick that infection, hospitalization, and death rates threaten the highest points America reached in total, before shots were widely available.  Our president is trying to get the vaccine into more people, and working to increase overall safety, by requiring it for many jobs. 

Some responses, such as complaining and giving in, are expected.  Yet a handful are more noteworthy.  Which countermeasures have reached the press lately?

First, employers are paying or just plain requiring employees to take their off-work days.  Per “The limits of vacation” (Jenny Gross, The New York Times, August 14th), firms as prominent as LinkedIn and Intuit “have introduced weeklong companywide shutdowns so employees can fully disconnect,” and another, PwC, “is offering workers $250 each time they take 40 consecutive hours off.”  None of this time is additional to what people have already been guaranteed, but, at PwC at least, they are then being asked to lay off their office email accounts.  That is more important than forcing employees to step away for lengths of time that may not be convenient for them.  As Gross pointed out, it is better still to ask workers what would help them, which could result in less along the lines of “installing a volleyball court on the rooftop of an office” (to get people to spend more after-hours time there) or “providing free food during the day” (to facilitate more lunchtime work), when what people really wanted “was receiving fewer emails from bosses during evenings and weekends.”

Second, businesses now have a real and unusual opportunity to experiment with different ways of togetherness.  That was the thesis of Priya Parker’s August 20th New York Times “How Should We Meet?  And Who Decides?”; ideas she mentioned, without much judgment, included assessing a group’s needs before every meeting, implementing new knowledge of what is best done remotely, and shortening the workweek with a commensurate reduction in tasks.  More than anything else, Parker conveyed the value of management trying different things. 

Third, “New surveys show how pandemic workplace policies are shifting” (Sarah Kessler, The New York Times, September 1st).  Such changes include, with percentages of organizations including those now practicing them, requiring vaccinations (52%), tracking worker inoculation status (78%), considering passing along some health-insurance financial impacts to workers (17%), and cutting travel costs even after the pandemic is minimized or ended (84%).  Planned or not, these changes may not be implemented, let alone lasting. 

Fourth, some companies are saying “We’ll Give You a Week Off.  Please Don’t Quit” (Tiffany Hsu and Lauren Hirsch, The New York Times, September 6th).  What’s missing here is whether or not these breaks, often companywide, are bonus holiday time, in place of individually scheduled vacations, or unpaid furloughs.  These efforts, in various significant but not household-word firms, are designed to cut burnout, but sadly often help only temporarily, as employees often return to piles of emails and the same cultural situation.  Worthy experimentation, but no panacea.

Fifth, more are saying goodbye even from good jobs, as noted and investigated in “Why Are So Many Knowledge Workers Quitting?,” by Cal Newport in the August 16th New Yorker.  One cause may be money saved through fewer pandemic spending opportunities.  Another related reason, Newport mentioned, was that “this particular class of workers were thrown into their own Zoom-equipped versions of Walden Pond” as “diversion and entertainment were stripped down to basic forms,” cutting their need for money.  I won’t hold my breath waiting for dumping well-paying positions in favor of financial leanness to become widespread, but it’s hardly out of the question.

Finally, sixth, the fun one, especially to this long-time remote-work hawk: “Some white-collar workers are secretly balancing 2 full-time jobs and earning up to $600,000, a report says.  They drop in and out of multiple meetings to avoid getting caught” (Grace Dean, Business Insider, August 17th).  Isn’t that a fitting response to poorly controlled telecommuting?  This, by the way, is legal, only something that “could breach employment contracts and get people fired.”  Dean’s perhaps unintentionally humorous accounts of tactics include a teacher-technician who dealt with one boss’s request for a video call while running a class for the other by asking his students to take a break and then firing up his second computer, attending simultaneous meetings online and by voice, and traveling, not for training as represented, but to work part-time jobs.  As long as all employees are treated as fervently productive and scrupulously proper, we will get this sort of ingenuity, and it may prove to be remarkably difficult to identify.  Ha ha – who says news about workplace trends can’t be hilarious?

Friday, September 10, 2021

A Summer of Changes in Hiring, With More to Come

With Covid-19 as the root cause, over the past couple of months there has been at least a decade’s worth of developments in how employers and employees get together.

For a summary, see David Autor’s September 5th New York Times “The Labor Shortage Has Empowered Workers.”  This scarcity, if you can even call it that, is not from a lack of people able to take positions – our country’s population growth has slowed, but it is still positive.  We have seen a groundswell of potential applicants wanting more money especially for low-level labor, proximately caused by, in Autor’s view, high unemployment benefits, insufficiently available childcare, and simply that “people’s valuation of their own time has changed.”  For the first time since the early 1950s, “the U.S. doesn’t have a job quantity problem:  instead, it has a job quality problem” (italics his). 

That last sentence explains, as well as anything that short could, “Why America has 8.4 million unemployed when there are 10 million job openings” (Heather Long, Alyssa Fowers, and Andrew Van Dam, The Washington Post, September 4th).  The first answer the authors gave is that “there is a massive reallocation underway in the economy that’s triggering a “Great Reassessment” of work in America” from both sides, as “the pandemic and all of the anxieties, lockdowns and time at home have changed people.”  After learning that the available positions are often in less desirable geographical areas, pay is often below new increased market levels, and many more are in business services and health care than there are unemployed workers with related careers, the disparity makes more sense.

In a USA Today article printed September 5th in the Times Herald-Record, “Labor Dan quiz:  When will the worker shortages end?,” Paul Davidson concluded that this real or imagined phenomenon would run until the end of 2023.  As he did not mention the frequent need for higher pay, or potential policy-loosening moves, it is an open question how much quicker it could be.

Hiring requirements have changed as well.  Per “DealBook:  No vaccine, no job” (Andrew Ross Sorkin, The New York Times, August 28th), “the share of job ads that require new hires to be vaccinated have (sic) nearly doubled in the past month.”  Some companies make exceptions for remote workers, and companies, especially large ones, have been more hesitant to impose that requirement on existing staff.  A more momentous shift has started, also per Davidson from and appearing in the same publications on the same dates, in “No degree?  No experience?  No problem.”  Both requirements are due for frequent elimination, perhaps starting a return to the days when most business positions required no education after high school, and when employers were more willing to leverage the knowledge, as put to me by a career counselor almost forty years ago, that people could be trained for 80% of jobs within three weeks.  From an unexpected direction, we discovered that “an Oregon McDonald’s is so desperate for workers it hung a huge banner outside calling on 14-year-olds to apply” (Mary Meisenzahl, Business Insider, August 31st), a tactic matched by at least one Burger King.  That, though, brings its own restrictions, as, per the New York Department of Labor as a sample, workers aged 14 and 15 are limited to “a maximum 3-hour day and 18-hour week when school is in session,” with 40 weekly hours allowed only when school is closed “for the entire calendar week.” 

Have high unemployment checks held down the numbers of people seeking and accepting work?  We are about to conclusively find out, as, as of Labor Day, “Federal Jobless Aid, a Lifeline to Millions, Reaches an End” (Ben Casselman, The New York Times, September 2nd).  We should see at least part of this change’s effect in the next set of employment numbers, to be released October 8th and reflecting mid-September survey outcomes. 

What changes have been happening on the job?  Barring a preemption from urgent news, I will look at those next week. 

Friday, September 3, 2021

August Jobs Report: Almost Everything Got Smaller, and the AJSN Showed Latent Demand Off 1.2 Million to 18.8 Million

This time, nearly all the numbers in the Bureau of Labor Statistics Employment Situation Summary decreased.  Starting with net new nonfarm payroll positions, which at 235,000 hit neither one-third of the consensus 750,000 projection nor one-fourth of July’s 943,000 rise, that polarity was also matched for better by seasonally adjusted unemployment (down 0.2% to 5.2%), unadjusted unemployment (down 0.4% to 5.3%), the total number of officially jobless (down 300,000 to 8.4 million), and those out for 27 weeks or longer (down 200,000 to 3.2 million).  Staying even were the labor force participation rate, at 61.7%, and the count of those working part-time for economic reasons, or holding on to such jobs while thus far unsuccessfully seeking full-time ones, still 4.5 million.  Increasers were the number on temporary layoff, up 100,000 to 1.3 million, the employment-population ratio, strange since the number working fell, up 0.1% to 58.5%, and average private nonfarm payroll hourly earnings, with an adjustment gaining 19 cents to $30.73.  This time, higher pay seems to have reflected higher wages at the bottom instead of such jobs going away, as employers are, if slowly and grudgingly, raising pay to keep positions filled.

The American Job Shortage Number or AJSN, the measure of how many additional positions could be quickly filled if all knew they would be easy to get, also shrunk, decreasing 1,188,000 as follows:

 


Of its 11 components above, ten decreased.  The only exception was spectacular – the count of those saying they did not want a job soared almost 2.2 million, possibly its largest monthly change ever.  That, which had declined almost 1.7 million over the previous two months, more than rebounded, showing that many people rejoining the labor force from mid-May to mid-July and not finding what they wanted went back on the shelf.  The share of the AJSN from those officially jobless, 40.8%, edged down 0.6%.

On the Covid-19 front, the interval from July 16th to August 16th, in percentage terms, was by far the worst 16th to 16th one so far.  The seven-day daily average of new cases shot up 361% from 30,901 to 142,414, that for hospitalizations jumped 264% from 22,641 to 82,519, and deaths, going from 280 to 704, climbed 151%.  The average daily number of vaccine doses administered rose 47% from 519,678 to 765,555.  A map of the worst places in the country looks much like an 1860s one of Confederate States supporters, with almost all of the highest rates in or near the Southeast.  It is now very much a pandemic of the unvaccinated, with the 38% of Americans with no shots at higher risk than they have ever been.

What can we make of this data?  The statistic that explained the others was the fall in those not wanting to work – that fit with lower counts of both unemployed and marginally employed people, which, with higher latent demand percentages, accounted for the AJSN’s otherwise surprising drop.  It was a sort of consolidation month, with a disappointing number of new positions but others not bad overall and looking more like they did, though with half-again-higher unemployment, before the pandemic.  I can no longer trade heavily on how we have been doing with the coronavirus, as the massive majority of cases are preventable through convenient and long-available vaccinations, so we are left with a moderately progressive outcome.  Accordingly, the turtle took a medium-sized step forward.

Friday, August 27, 2021

Surveillance: We’ll Need to Get Back to It Pretty Soon

Back in February 2021 – that was a long time ago, wasn’t it?  – the largest national issue we faced was the rapidly growing capability of people, companies, institutions, and our governments to track us.  Indeed, that month I wrote a three-part series on electronic surveillance.  Since the pandemic started, this concern has almost disappeared from the press.  What have been the exceptions?

If it were released when we could deal with it more comprehensively, Shoshana Zuboff’s January 29th New York Times “The Coup We Are Not Talking About” would be a good place to start.  The author called for an end to the situation in which “companies can stake a claim to people’s lives as free raw material for the extraction of behavioral data, which they then declare their private property,” as it has been followed by “epistemic inequality, defined as the difference between what I can know and what can be known about me” and “coordinated streams of disinformation,” to result in life where “epistemic dominance is institutionalized, overriding democratic governance with computational governance by private surveillance capital.”  Ultimately, “if we are to defeat the epistemic coup, then democracy must be the protagonist,” through “the democratic rule of law” and recognizing that “new conditions summon new rights” and “unprecedented harms demand unprecedented solutions.”  As with the Covid-19 effort, we will probably need to take more chances with less-than-100%-proven solutions. 

Soon afterwards, the Times also published Cade Metz and Kashmir Hill’s “Here’s a Way to Learn if Facial Recognition Systems Used Your Photos” (January 31st).  Well, sometimes.  Anyone can use the tool Exposing.AI to determine if specific pictures were involved, but only if they “were posted to Flickr, and they need a Flickr username, tag or internet address.”  There are of course billions of photos online, and almost any could, legally or not, be stored for identification.

Now, near the beginning of anti-surveillance legislation, “Massachusetts is one of the first states to create rules around facial recognition in criminal investigations” (The New York Times, March 1st).  There, currently, “police first must get a judge’s permission before running a face recognition search,” and who can do such is limited.  Other cities, though, including Oakland, Portland, San Francisco, and Minneapolis, already “have banned police use of the technology” entirely.

Early this month, per “The Lesson to Learn From Apple’s Tool to Flag Child Sex Abuse” (Brian X. Chen, The New York Times, August 11th), “Apple introduced a software tool for iPhones to flag cases of child sex abuse” by tracking uploads from “a database of known child pornography” to that company’s iCloud storage utility.  The title is inaccurate, though, as child abuse is not the same as viewing or even moving photos originating from others.  There are easy countermeasures, mainly using “a hybrid approach to storing your data,” but the issue here, whether people not under investigation can be electronically surveilled, is at best ripe for a legal challenge and at worst is clearly against the law.  The slippery slope – what other crimes could people be monitored for, what sources can be flagged, and in what other ways could activity be examined – is obvious, and is once again a subject for clarification, discussion, and, with state boundaries meaningless here, for setting national policy.

At the same time, the coronavirus has resurged, with, despite over half of Americans fully vaccinated, threats to set new all-time highs in hospitalizations and new cases.  The seven-day-average of the latter has surged more than 13-fold since its July 5th low.  Everyone is tired of wearing masks, and few, though some, of those refusing the vaccine have relented.  Even assuming that those who have had the shots continue to be safe, we could easily be looking at another six months of national emphasis and distraction.  Where will electronic surveillance be when Covid-19 largely leaves us alone?  We don’t know, but it, instead of the virus, may then be out of control.  We need help there quicker – will we get it? 

Friday, August 20, 2021

Automation: Little Press Recently, but Still a Real Pending Problem

In my 2012 Work’s New Age, I wrote extensively about the coming of machines and expected them soon to take over tens of millions of jobs.  That hasn’t happened – yet.  There has still been some of that, and continued sporadic public concerns over the past six months.

The first I can offer is “The Robots Are Coming for Phil in Accounting,” by Kevin Roose in the March 6th New York Times.  Most here reads as if it were from around the time of my book above, including mentions of automation taking over positions much higher paying than the industrial production work where it started, that machines get more “disruptive potential” as they “become capable of complex decision-making,” that “A.I. optimists” have long expected the absurd outcome of an equal number of positions to be created after robots eliminate many, and that it is valuable to select careers “harder to automate.”  What’s new is outcomes of studies which “compared the test of job listings with the wording of A.I.-related patents, looking for phrases like “make prediction” and “generate recommendation” that appeared in both,” endangering largely “better-paid, better-educated workers in technical and supervisory roles.”

Next, we have a National Bureau of Economic Research paper “Tasks, Automation, and the Rise in US Wage Inequality,” by Daron Acemoglu and Pascual Restrepo, issued in June.  In the abstract, the authors said “that between 50% and 70% of changes in the US wage structure over the last four decades are accounted for by the relative wage declines of worker groups specialized in routine tasks in industries experiencing rapid automation.”  That should be scary.

Low-level service workers are now enjoying higher demand and pay than they have had maybe ever, but that may turn out to be short-lived, per Ben Casselman’s July 3rd New York Times “Pandemic Wave of Automation May Be Bad News for Workers.”  We have for years seen kiosks and phone apps allowing fast-food customers to order without involving anyone at a counter, and, as the cost of employees jumps, automated solutions get more cost-effective.  As pay levels have shot up suddenly, and software and devices take time to develop, we can expect many more of those to reach management’s input streams within the next year or two.  Whether companies are willing to pay people current market rates or not, they will have ever-better alternative options.

Three days later, also in the Times, “The pandemic has brought more automation, which could have long-term impacts for workers” provided a good summary and set of examples, including “an automated voice” taking Checkers drive-though orders and suggesting additional purchases, supermarket “robots to patrol aisles for spills and check inventory,” a Kroger’s warehouse with “more than 1,000 robots that bag groceries for delivery customers,” and even remote factory troubleshooting, allowing technicians to cover larger geographical territories.  In all, “technological investments that were made in response to the crisis may contribute to a post-pandemic productivity boom, allowing for higher wages and faster growth” – at the expense of jobs bringing in relatively little revenue.

There are reasons why companies do not automate as much as they could, starting with maintaining good public relations.  It could be that no great post-Covid spurt of technology eliminating workers will materialize.  But there is plenty of justification for it, especially when management sees production-level compensation as an unpredictable budget-buster.  Accordingly, permanent automation could, indeed, turn out to be the coronavirus’s most widespread and lasting legacy.  Bet against that at your peril.

Friday, August 13, 2021

Six Months of Artificial Intelligence News: Not Much, But Don’t Ignore It

Before the pandemic struck, I called the use of artificial intelligence, after but related to electronic surveillance, the second most important current American issue.  The problem is not AI itself, but what we will allow it to do, and how we will react when it uncovers information we are not happy learning.  Except for its expected incremental progress, what has reached the press about it recently?

We got a level-setting summary on the February 23rd New York Times from Craig S. Smith, “A.I. Here, There, Everywhere.”  Common now are “conversations” with devices which we order, in sentences reminiscent of those addressed to computer HAL 9000 in the now 54-year-old movie 2001:  A Space Odyssey, to turn on lights, put on the heat, start the oven, and so on.  Handy, but we may come to see today’s capabilities as “crude and cumbersome,” and, as devices learn our regular patterns and report deviations to systems or people which may pass them on when we don’t want them to, “privacy remains an issue.”  AI is now being packaged into humanoid “realistic 2D avatars of people” which can be used for the likes of tutoring, and being used as in effect a fifth or sixth-level computer language by following commands to write software.  Of course, we can expect much more. 

Another AI application, in this case in place for a decade or more, has a growing set of countermeasures, some described in Julie Weed’s March 19th “Résumé -Writing Tips to Help You Get Past the A.I. Gatekeepers” in the New York Times.  Weed recommended “tailoring your résumé, not just the cover letter, to each job you are applying for,” using the same keywords as in the advertisement, and to use “words like “significant,” “strong,” and “mastery.”  The software will evolve over time, as will the applicants’ best responses.

The headline of Cade Metz’s March 15th piece, also in the Times, asked “Who Is Making Sure the A.I. Machines Aren’t Racist?”  Metz asserted that AI “is being built in a way that replicates the biases of the almost entirely male, predominantly white work force making it,” and defends that with examples of systems poor at identifying faces of blacks, a six-year-old AI identification of a black man as a gorilla, and another set of programs being trained with an 80%-white set of faces, approximating the general population.  All of that, if legitimate, has been, can, or will be repaired.

Ted Chiang, in the New Yorker on March 30th, addressed a large underlying AI issue in “Why Computers Won’t Make Themselves Smarter.”  He invoked Ray Kurzweil’s Singularity, or the point, per Wikipedia, “at which technological growth becomes uncontrollable and irreversible, resulting in unforeseeable changes to human civilization,” and questioned if that would ever happen.  He cited an example of a certain roundworm, with a far lower number of brain neurons and other body cells than humans, on which scientists have “mapped every connection” but “still don’t completely understand its behavior.”  While computer compilers have compiled themselves for many decades, improvement stops there, exemplifying the inability, conceptionally as well as so far empirically, for automata, in contrast with people, to learn from others.  These issues are not as clear as Chiang made them seem, but his view is good enough to be either refuted or accepted.

The newest is from Frank Pasquale and Gianclaudio Malgieri, “If You Don’t Trust A.I. Yet, You’re Not Wrong,” in the July 30th New York Times.  The authors, law professors, argued for more artificial intelligence regulation, but stumbled in explaining why.  They seem to have missed the differences between private and public use, that it cannot be banned simply because it does not always make optimal conclusions, that discrimination against individuals with certain characteristics may be justified, that more pressing issues such as Covid-19 have caused it to “not appear to be a high-level Biden administration priority,” and that is useless to talk about “racially biased algorithms” or “pseudoscientific claptrap” if nobody can define those terms.

In a year or so, if the pandemic has faded to pre-2020 levels, we need to address artificial intelligence – if we can afford to wait that long.  Ahead of them on the list of issues needing attention then, though, are two others, which, barring large breaking national developments, will be the subject of my next two posts.

Friday, August 6, 2021

A Banner Jobs Report, But We Still Have a Long Way to Go – AJSN Shows Latent Demand for 20 Million More Positions

There were high expectations for this morning’s Bureau of Labor Statistics Employment Situation Summary, and it exceeded them.  The 943,000 net new nonfarm positions were about 100,000 more than the consensus projection.  Unemployment, up last month from people rejoining the labor force but not getting jobs, fell 0.5% and 0.4% seasonally adjusted and unadjusted, and reached, respectively, 5.4% and 5.7%. 

The other key numbers also showed robust improvement.  The total number of unemployed dropped 800,000 to 8.7 million.  The total on temporary layoff shed a third to reach 1.2 million.  The count of people with long-term joblessness, or 27 weeks or longer, lost 600,000 to 3.4 million.  Those working part-time for economic reasons, or keeping that type of employment while thus-far unsuccessfully seeking full-time work, were only 100,000 less numerous to get to 4.5 million, but held last time’s 700,000 improvement.  Average private nonfarm payroll earnings, including an adjustment to June’s data, were up 14 cents, more than inflation, and are now at $30.54.  The two best measures of how many Americans are working or one step away, the labor force participation rate and the employment-population ratio, gained 0.1% and 0.4% to 61.7% and 58.4%. 

The American Job Shortage Number or AJSN, the gauge of how many new positions could be absorbed if all knew that getting one would be quick and easy, improved 700,000, as follows:


Six-sevenths of the AJSN’s loss was from lower official unemployment, with most of the rest from fewer discouraged workers.  One change is lower population growth, which has so far cut the break-even for additional monthly jobs from approximately 130,000, where it was for most recent years, to about 60,000.  The share of the AJSN from unemployment fell 1.5% to 41.4%.

The state of the Covid-19 pandemic, over the same time assessed by the employment numbers of June 16th to July 16th, generally worsened.  Per the New York Times, the seven-day average of new daily cases jumped 143% to 30,901, and hospitalizations rose 20% to 22,641.  The same measure of deaths, though, decreased 16% to 280.  Daily vaccinations, reflecting a dwindling customer set most of all, declined 55% to reach 519,678.  Since the shots are available on a walk-in basis all over the country, there can be no reasonable thought that the good numbers above were at the expense of a worsened coronavirus response.

A fine jobs report month indeed, but we need to stay aware of our entire situation.  We still have 4.9 million fewer jobs than before the pandemic.  The AJSN is 4.2 million higher than it was in February 2020, and is greater than it was two issues ago. 

In late May and early June, many people newly sought but did not find work.  Over the month since, lots of them did, without needing to compete with as many re-arrivals.  Still, we’re nowhere near back, and weekly state unemployment claims, hovering around 400,000, continue to reinforce that.  The turtle took another big step forward, but where we were a year and a half ago and long before remains far in front of him.

Friday, July 30, 2021

The Pandemic and the Economy: Where We Are and Why We Got Here

It’s been an eventful Covid-19 week.

To clear up two spreading misconceptions, per Apoorva Mandavilli’s “As Infections Rise, C.D.C. Urges Some Vaccinated Americans to Wear Masks Again (The New York Times, July 27th), the Centers for Disease Control and Prevention “said on Tuesday that people vaccinated against the coronavirus should resume wearing masks in public indoor spaces in parts of the country where the virus is surging.”  That organization neither ordered Americans to comply nor suggested that for the entire country.  It released the following map, and said that those fully vaccinated in the counties colored blue or yellow need not resume wearing masks:


The orange and red counties were those with 50 new recent weekly cases per 100,000 in population.  Businesses are still free to name their own masking policies, but in the safer counties this pronouncement should not encourage them to reinstate such requirements.

“Will the Delta Variant Wreck the Recovery?”  That was the title of a July 28th New York Times piece, in which author Neil Irwin attempted to judge that.  First, though, according to “Flush with COVID stimulus money and boosted by reopenings, the U.S. economy grew sharply in the spring but slower than projected” (Paul Davidson, USA Today, July 29th), our gross domestic product gained 6.5%, annually and seasonally adjusted, in the second calendar quarter.  That did not match 8.5% forecasts, but is still strongly positive, given that, per Davidson, we still have “supply chain bottlenecks” and “shortages of materials and workers.” 

Irwin, though, missed the point.  He said that this more contagious coronavirus version could have the effect of “throwing sand in the gears,” even though business is continuing, feared damage if “schools were to return to remote learning” when the C.D.C. recently announced that they would not need to, and “that the pandemic policy story… is starting to repeat itself,” when it does not even approach that.  We have enough problems dealing with reasonable fears to add others.

However, we do have a sort of time bomb now set and ready to go off, as described in “The Delta variant is jeopardizing the economic recovery, but Congress isn’t budging as 20 million workers are set to lose unemployment aid” (Juliana Caplan and Joseph Zeballos-Roig, Yahoo News, July 27th).  That many “are poised to lose all jobless aid on Labor Day,” and the current 8 or 9 million advertised positions aren’t enough.  Expect much more on this issue over the next week or two, including continuation proposals.

The special pandemic problems of an unusual place make up “How to Reopen a Festival City When a Virus Lurks:  Very Anxiously” (Katy Rockdahl, The New York Times, July 25th).  New Orleans, with an economy heavily dependent on close-quarters face-to-face activities, has an above-average vaccination rate, but also vast numbers of visitors of unknown status.  Ultimately, concerns there are only a more intense version of those elsewhere, in response to which getting the shots is even more important.

Consistent with conversations I have had with other fully inoculated people, I agree with David Frum that “Vaccinated America Has Had Enough” (The Atlantic, July).  Indeed, “this pandemic could be almost over by now,” and “the reasons it’s still going are pretty clear,” namely “vaccine resistance among conservative, evangelical, and rural Americans.”  I don’t fault the last set as much as the other two, since people living in the country are often isolated and get into contact with a small and limited set of others, resulting in tiny numbers of new Covid-19 cases – for verification of that, see the concentration of blue-colored counties in the Great Plains – but the other two have been a national embarrassment.  They remind me of the church sign I saw which ended by saying that if you want to meet Jesus now, text while driving, and have made a mockery of calls to “make America great again.”  See the Northeast region above, and imagine the entire country like that – that’s what imprudent people have blocked.

I end with a pungent and remarkably humorous July 26th article by Ryan Cooper, “Is the American economy about to fall back into the pandemic pit?,” in The Week.  That magazine usually reviews news and commentary from elsewhere, but went beyond that here.  As you have seen I don’t think our economy will do any such thing, but I enjoyed reading “as infrastructure negotiations drag on interminably, depressing liberal base voters about the dysfunctional U.S. political system,” “you should never underestimate the irresponsibility of the conservative propaganda apparatus” as shown by “months and months of deranged anti-vaccine propaganda,” “for decades the hegemonic view among American political elites has been that the government needs to force people to work,” and, my favorite, “seemingly all it took for the entire political establishment of both parties to abandon (the $300 federal unemployment supplement) was a handful of restaurant owners whining on television that they couldn’t find enough workers at the wages they were offering.”  Whether you agree or disagree – and I did both while reading Cooper’s piece – I hope you too want to see more from this man.

Friday, July 23, 2021

Covid-19 As It Is: Four Facts, and Five Clear Conclusions

We have reached yet another new pandemic stage.  Wednesday’s 7-day average of new American cases, according to The New York Times, was 41,310, more than any day before June 30th or between May 19th and July 20th.  Deaths, with daily average 249, are doing much better, and hospitalizations, with 25,917 on most recent data date July 20th, are somewhere in the middle.  Vaccinations have leveled at 530,000 per day, less than one-sixth of the April 13th 3.384 million peak but still remarkably high given how many people, 49% fully vaccinated and 7% more having had one shot and needing another (60% and 9% of adults), have already completed that. 

There have been numerous recent articles about our current situation, many misleading and poorly summarized.  Where actually are we?

First, the pandemic is now a problem of the unvaccinated.  Per the Center for Disease Control, at of July 6th only 5,186 out of 156 million fully vaccinated Americans have contracted Covid-19.  While more who have had the shots have been transmitting the disease to others, their chance of getting it themselves is tiny.

Second, even the more contagious Delta variant is no real danger to the vaccinated, even those who have had the Johnson & Johnson one-shot formula.  We may well establish a need for booster doses, but we haven’t yet, and if so they will probably be more akin to tetanus and polio vaccines than anything urgent. 

Third, there is another Covid-19 version, named Beta, which is rare here.  Per Emily Anthes in July 19th’s New York Times “The Beta Variant: What Scientists Know,” it has been around since last year, yet has only one of every thousand American infections.  At one point it accounted for 95% of South African virus samples, but has failed to have anywhere near Delta’s growth or the original strain’s total cases.

Fourth, the worst American infection rates are all in red states.  The highest are now in southwestern Texas, the Jacksonville area, and all over the three columnar states Missouri, Arkansas, and Louisiana.  That coincides with low vaccination levels, which in turn correlate strongly with percentages of Republican voters.

Starting with the above, what should we be doing and not doing?

First, there is a case for requiring fully vaccinated people to wear masks, but it is weak.  It prevents requiring others to trust, and it cuts down transmission of the virus by those who have had the shots.  Otherwise, all points are in favor of continuing to end that as a requirement. 

Second, businesses are completely entitled to set rules.  Whether for employees, customers, or walk-ins, they can decide what to require, including mask wearing and documentation of vaccination status.  There is nothing immoral or overly invasive about asking for the latter.

Third, we can debate the issue of paying unvaccinated people to get that done, but we need to do that quickly.  I think that, beyond incentives worth about $50 apiece or less, that is inappropriate, as it establishes doubt about the medicine’s value and rewards the wrong people, but it still may be worth it, as more of them are getting sick and dying every day.

Fourth, we cannot justify mandating that people get the vaccine, but can restrict public access to locations and resources on that basis.  It is past time for our governments to clearly state these two things.

Fifth, getting vaccinated is a choice, but an obvious one.  At least it is from my standpoint.  However, the past five or six years have taught us how powerful tribal identities can be even here, and how they can, in George Orwell’s words, convince many pursuing them to “reject the evidence of (their) eyes and ears.”  If those seeking to belong are willing to die for that, it is their business, but it gives the appearance of dragging the rest of us down.  That is sad, but, along with the first four points, it is reality, and we need to, like it or not, accept it.

Friday, July 16, 2021

Americans Going Back to Work: Seven Points to Understand

Is it true that great masses of people are refusing to take jobs, when they worked before the pandemic started?  I’ll give that partial credit, as millions still fit that category, but what do we need to know about what is really taking place?

First, people collecting unemployment benefits are once more consistently required to show evidence that they are looking for work and not turning down opportunities.  With more open positions, that is a tougher requirement than once.  Some states are only now reinstating that, but with ready vaccine eligibility and availability it has been fully justified for months.

Second, while on May 19th we could have read about “21 states now canceling federal unemployment benefits” (Denitsa Tsekova in Yahoo! Money), none northeast of West Virginia, that is less relevant now for the reason above, which is just as well since the problem that was intended to solve would have been better fixed through mandatory job searches.

Third, it is good for all of us that the Federal Reserve chair is wary of acting, that even when “The Economic Gauges Are Going Nuts, Jerome Powell Is Taking a Longer View” (Neil Irwin, The New York Times, June 17th).  Per the author, Powell believes that “the labor market can run hotter for longer than a lot of economists once assumed, with widely beneficial results,” “there are many powerful structural forces that will keep inflation in check,” and “the Fed should move cautiously in raising interest rates, rather than risk choking off a full economic recovery too soon.”  He also “does not see the labor shortages of 2021 as evidence of lasting scars to the potential of American workers, but rather as a reflection of the difficulty of reopening large sectors of the economy and reallocating labor after a pandemic.”  Despite the Labor Department’s subsequent finding that “the Consumer Price Index jumped by 5.4 percent in the year through June” (“Prices Pop Again, and Fed and White House Seek to Ease Inflation Fears,” Jeanna Smialek and Jim Tankersley, The New York Times, July 13th), which rates to be temporary, that still holds true.

Fourth, new unemployment claims, while less than one-sixth of a year ago, are still sitting at more than 50% over their pre-coronavirus levels, at 364,000 the last week of June and 373,000 the first of July.  That means a high number of positions are still being discontinued.  We also still have 5.8 million fewer people employed than in February 2020, which means we have a long way to go to reach where we were, let alone where we would be if the growth rate of jobs had continued its 2019-20 pace.

Fifth, we’re in a transitional time, between what working practices and compensation were like in February 2020 and how they will emerge from the pandemic.  Despite many confident predictions, we have no idea what share of people will be working remotely in a year, how many will end up changing careers, and, accordingly, what will happen to housing prices and commuter-dependent businesses. 

Sixth, companies hiring for low-end positions are trying everything – sign-on bonuses, tuition assistance, improved health care and other benefits – instead of hiking pay adequately, and as a result, “A record number of U.S. small businesses are raising wages, NFIB says, but skilled workers still hard to find” (Jeffry Bartash, MarketWatch, July 13th).  Give them another month of missing robust sales and many will see the light, whereupon they may be amazed at how many people are suddenly willing to work for them.

Seventh, ultimately what we need to do is heed the headline of a Neil Irwin March 5th New York Times article, “For the Economy, the Present Doesn’t Matter.  It’s All About the Near Future.”  Current economic results, beyond being in some kind of a recovery, are chaotic and should not be taken as meaningful trends.  For those, we’ll just have to wait and see.

Friday, July 9, 2021

A Shortage of Workers? Our Situation Assessed, Followed by the Winning Strategy

Why are more advertised positions going unfilled?

First, that “more” is accurate.  Per “U.S. job openings, quits hit record highs in April” (Lucia Mutikani, Reuters, June 8th), on April 30th there were 9.3 million of them, at least a 20-year high.  Yet the American Job Shortage Number (AJSN), based on data collected two or three weeks later, showed latent demand for 19.9 million additional positions, almost 4 million more than its 2019-2020 pre-pandemic low.  Clearly something is happening, but what is it?

We have seen two cases of dueling headlines here.  Combatants on the first, on the effect of higher jobless compensation, included  “Job searches haven’t jumped in states canceling unemployment benefits early” (Denitsa Tsekova, Yahoo Money, June 22nd) and “U.S. jobless claims dropping faster in states ending federal benefit” (Howard Schneider, Reuters, June 24th), followed by a left-of-center synthesis attempt by Patricia Cohen in the June 27th New York Times, “Where Jobless Benefits Were Cut, Jobs Are Still Hard to Fill.”  All three pieces use largely different sets of seemingly legitimate data, so it is hard to argue with any of them, but the most insight came from a photo included with Cohen’s article.  It was captioned as a restaurant in St. Louis, with two signs reading “Now Hiring!  Experienced Servers and Bartenders!”  With such positions needing only a week or two of training and practice for adequate initial performance, it was interesting to see one unmentioned solution next to several hundred words bemoaning a problem. 

The second controversial area was exemplified by Jeffrey Bartash’s July 6th MarketWatch “The red-hot U.S. economy cools off, ISM finds, because of major shortages and not enough workers.”  The author here cited an Institute for Supply Management pronouncement that not only are too few people taking jobs for “restaurants and retailers,” but such firms cannot “get all the supplies they need.”  However, four days before in HuffPost, Arthur Delaney had a piece titled “Despite ‘Worker Shortage,’ Businesses Keep Finding Workers,” in which he maintained that June’s 850,000 net new nonfarm payroll growth was exceedingly high, logistically, to process for one month.  He also cited a source saying that restaurant hourly pay was 11.2% higher than a year ago.

Other weak apparent-worker-shortage explanations came from two other sources.  Quentin Fottrell’s May 25th MarketWatch “’Contagious unemployment’ is one theory why companies have difficulty hiring workers,” which on closer scrutiny was only the old practice of disregarding or factoring down the credentials of applicants long jobless, with responsibility properly shifted by author and Wharton professor Peter Cappelli to companies’ hiring practices.  Many especially on the left would be glad to see that “There isn’t a worker shortage in the U.S. – there’s been a worker awakening” (Hope King, Axios, June 16th), but while I agree with the first headline clause, it’s too soon to assume that the second, though possibly in progress, is at hand already.  Christopher Rugaber got warmer with “Fewer working-age people could slow the economy” (Times Herald-Record, July 5th), pointing out that people from the late 1950s, when more American babies were born than in any other time in history, are now turning 65 and causing historic, though, small, drops in the 16-64 age cohort.  Still, the AJSN tells us that latent demand for employment is deeper and wider than the 0.1% reduction Rugaber named.

So what is the solution?  Bartash may not have seen it this way, but why have restaurant wages, in times of too few employees chasing potentially surging sales, increased just over 10%?  Why not 20%, 30%, or more?  If employers fear that paying what they need to get the workers they require must be permanent, they can frame their money offerings as temporary.  If they think raising prices will boot away customers forever, they should recheck that assumption – most have heard about inflation, along with scarcer low-paid labor, for months now, and they, who are often flush from not spending as much for over a year, want that restaurant meal or what’s been missing on Walmart shelves.  If managers have always hired only workers with experience, the personalities they prefer, or current employment, not to mention illegal attributes, they are paying a steep price in lost business for what are now luxuries.  We know much less than we think we do about what working life will be like after, say, the first of the year, but we can’t wait to find out.  Money’s a wasting – companies as well as people wanting jobs need to get it while they can.

Friday, July 2, 2021

They’re Coming Back: 850,000 More Jobs, but 1.4 Million More in Labor Force Means 800,000 Rise in Latent Demand Per AJSN, to 20.75 Million

The number of advertised jobs keeps rising to new highs, but the seekers are there too, and they’re not all connecting.

That’s one of the findings from this morning’s Bureau of Labor Statistics Employment Situation Summary.  That report started with the marquee result of 850,000 net new nonfarm payroll positions, which beat out 675,000 and 700,000 published projections.  The adjusted employment rate fell 0.2% from 6.1% to 5.9%, and people working part-time for economic reasons, or holding onto that sort of job while seeking and not finding a full-time one, dropped 700,000, or over one-eighth, to 4.6 million.

Otherwise the numbers were weak or neutral.  Unadjusted joblessness, reflecting a normal drop in the count of people working from mid-May to mid-June, rose 0.6% from 5.5% to 6.1%.  The adjusted number of unemployed people was up 200,000 to 9.5 million.  There were also 200,000 more out for 27 weeks or longer, or 4.0 million.  Results unchanged were the number of those on temporary layoff (1.8 million), the labor force participation rate (61.6%), the employment-population ratio (58.0%), and, in effect, average private nonfarm payroll hourly earnings (up 7 cents to $30.40). 

The real changes were among inputs to the American Job Shortage Number or AJSN, the metric showing how many more positions could be filled if everyone knew that getting one would be as easy as running an errand.  That gained 827,000, to reach the following:


The total number of unemployed, unadjusted as is the entire AJSN, which jumped up over 1 million, was responsible for more than the measure’s entire gain.  Other factors, though, changed by unusual amounts.  The count of those out of the labor force fell from 100,603,000 to 99,172,000, a large difference for one month.  The number claiming no interest in working, here, was off just over 1.2 million.  The catchall “Other” category, also above, fell 16%.  As a result, even though we added jobs, so many people returned that we needed more positions than before.

Otherwise on the AJSN front, its share from those officially unemployed rose from 39.9% to 42.9%.  Compared with a year before, which was deeper into the Covid-19 crisis than now, the metric is 8.4 million lower, with all but one million of that from higher joblessness.

How did we do on the pandemic front?  From May 16th to June 16th, the 7-day average of daily cases dove 61% from 33,040 to 12,729, the same count of deaths dropped 45% from 611 to 333, hospitalizations were down 44% from 33,693 to 18,803, and vaccine doses given, figured the same way, shrank 38% from 1,886,917 to 1,165,916.  The last statistic is a result of the other three, on which we continued to make outstanding progress.    

How can we best assess all of this?  We are still gaining filled jobs, but not huge quantities of them.  As always, people change their mind about whether they want to work depending on how they see their prospects, and many, this time, decided they had improved.  However, our 9.3 million advertised positions were lacking, as the count of those unemployed rose more than the net number of opportunities filled.  The coronavirus results say we were not sending people back to work too soon.  Overall, good but not great – the turtle has taken larger steps forward, but he did make another substantial one.

Friday, June 25, 2021

Pay and Minimum Wage: Sometimes it Evolves, Sometimes it Shouldn’t

Cash compensation is the most common and basic reason for working.  It has recently changed in some ways and may do that more soon.  What have we seen and considered over the past several months, and how good or bad is it or would it be?

First, per an undated chart from Yahoo Finance, we now have 30 states plus the District of Columbia with minimum wages more than the national $7.25 per hour.  Given that each decided to mandate a level above that of the whole nation, that is favorable.  It is better still when cities or counties set higher or lower rates, such as in Oregon where, as of July 1st, Portland will have $14 lowest hourly pay with the rest of the state at $12.75.  When the cost of living varies so much across the country, with southern Texas’s $7.25 buying much more locally than Hawaii’s $10.10, it is clear to leave that national floor where it is and let smaller areas choose for themselves.

Another good thing, since it is a result of the free market reacting to the pandemic and its effects, is that “Some workers finally have the upper hand in the job market” (Denitsa Tsekova, Yahoo Money, May 13th).  While there is no reason for the number of positions to approximate the number of people wanting to work, there is also none for jobs, at all places and times, to be scarcer than people willing to fill them.  Here we have workers refusing opportunities that are unsafe, unsuitable, or just pay too little, making employers do more than post an ad and get bombarded with applicants.  The situation will shift back, especially as unemployment compensation resumes requiring people look for work, but will fluctuate, and that is fine.  A similar message came from Neil Irwin’s June 5th New York Times “Workers Are Gaining Leverage Over Employers Right Before Our Eyes,” in which the author noted that “companies are becoming more willing to pay a little more, to train workers, to take chances on people without traditional qualifications, and to show greater flexibility in where and how people work.”  As the perceived labor shortage continues, employers will also need to dig deeper in identifying candidates, to think “more expansively about who is qualified for a job in the first place,” and to disregard certification requirements, such as those for teachers, originally implemented to shrink the number of candidates.  If there are not enough applicants for entry-level business positions, that could mean a return to not requiring bachelor’s degrees, or possibly even any college at all – that worked well before the 1970s and could succeed again.  All of these emerging and possible changes are, and would be, healthy.

We had a different view than the usual from Rick Newman in the May 24th Yahoo Finance.  It was titled “Jobs are back – but pay isn’t,” but could have said job listings instead. I documented the growing gap between hiring and advertisements nine years ago in Work’s New Age, and it is still with us.  Newman cited “a recent study by Bank of America” which determined “that the average pay of open jobs is lower than before the pandemic in 12 of 15 sectors” and “flat” in another.  For better or worse, employers will get workers only at fair market pay, and as always, if they don’t, that means, broadly but accurately, that they need to boost it.  The reason that “Wage Growth Is Holding Up in Aftermath of the Economic Crash” (Ben Casselman and Jeanna Smialek, The New York Times, June 3rd), per Newman, is that the raises are going mostly to existing jobs. 

Wrong ways to go are amply included in Kevin J. Delaney’s March 20th New York Times “What Is Work Worth?”  Forcing an end to situations in which “low-wage workers at companies including Amazon, McDonald’s and Walmart rely on public assistance such as food stamps to make ends meet” (usually a result of low hours as well as low pay, and better than if they had no job at all) and “women and people of color generally earn less than their peers” (illegal and the source of serious penalties if caused by discrimination), would be naïve and anti-market.  Any line manager will tell you that if you “set pay for positions, not people,” employees will improve far less than if they can get merit raises, and few observers of any kind would think workplaces would be more dynamic if they returned to pay based on seniority.  The same is true for the author’s invoking the old saw that workers need “a wage that can support their families,” which may be nonexistent or contain other earners, is impossible to define, and cannot be implemented without stopping those willing to earn less and being able to live on it.

Over the 150 to 200 years since the Industrial Revolution’s United States widespread beginning, workers’ pay has varied.  It will continue to do so, even after this minor if real pattern break we are experiencing now has completed.  The choice we face is how to control it.  If we choose well, we individually as well as collectively will prosper.  If we do not, we will not.  It is up to us.