Four Corporate Practices That May Surprise You – And Displease You

What have those pesky managers at our largest companies have been up to?

In “Is Your Driving Being Secretly Scored?” (The New York Times, June 9^th), author Kashmir Hill asked “You know you have a credit score.  Did you know that you might also have a driving score?”  That, also called “telematics,” which “reflects the safety of your driving habits – how often you slam on the brakes, speed, look at your phone or drive late at night,” is supplied to insurance companies from car manufacturers, or “from apps that drivers already have on their phones,” which can include Life360, MyRadar, and GasBuddy.  These tools often have their extra capabilities explained in legal-looking fine print, often unspecifically, such as “we may collect third party data and reports.”  Yet auto insurers have long used personal data, so this is nothing totally new.  In most cases, it can be shut down, or you can choose to do as I did – leave it alone knowing that relaying boring driving habits can only reduce your premiums.  Those more privacy-concerned can dig out this article for much more – it printed to 11 pages.

Another thing I hadn’t seen before, with its absence glaringly obvious, was from Erica Lamberg in Fox Business on July 16^th: “Hot career trend ‘hushed hybrid’ has managers choosing the employees who have flex work arrangements.”  Back in the day, and since then as far as I can see, employers did not seem to care about productivity or responsible behavior when deciding whether to allow workers to stay at home, but, despite official policies banning that, here we have, secretly, better employees being given some privileges.  “Hushed hybrid” can be defined as “managers overruling, dismissing or choosing not to enforce a company’s return-to-office policies.”  Although it is high time that firms used individual assessments, formal or not, to decide who can work remotely, the problem is that those not chosen may feel deceived about the true policy.  It would be better if management could do this openly – if there are no unions involved, it seems like they should be able to.

A few years ago we got publicity about different customers being charged different prices, even when all aspects of the transactions involved were identical or nearly so.  It may be expanding with new developments, as “FTC probes AI-powered ‘surveillance pricing’ at Mastercard, JPMorgan Chase, McKinsey and others” (Eric Revell, Fox Business, July 23^rd).  The new method uses “AI and other technology” combined with “personal information… such as their location, demographics, credit history, and browsing or shopping history” “to analyze consumer data to help set price targets for products and services.”  The Federal Trade Commission, along with masses of people buying things, did not like that, and it may be banned.

Workers’ long-time frenemy found the spotlight in “So, Human Resources Is Making You Miserable?” (David Segal, The New York Times, August 3^rd).  HR, which “bugs a lot of employees and managers… seems to have more detractors than ever since the pandemic began,” when it “began to administer rules about remote work and pay transparency, programs to improve diversity, equity and inclusion and everything else that has rattled and changed the workplace in the last four years.”  Those in that department are themselves “aggravated or bummed out,” often because “office behavior post-Covid has become notably less civil,” resulting in them “being called in far more often to referee disputes.”  Employment site LinkedIn found three years ago that “H.R. had the highest turnover rate of any job it tracked.”  With more and more areas causing problems for them, its staff members often call it a “thankless job.” 

Perhaps fuller and consistently honest disclosure of practices, my largest wish for HR during my corporate career, would help their reputation – but that would be neither quick nor easy.  And so it goes with the other three situations.  People are more willing to accept a fair shake when they know the rules, even if they are not as favorable as they would like.  That is the moral of these stories.

It Looked Like a Positive Jobs Report Month, Despite AJSN Showing Latent Demand Up Almost 400,000 – But Was It?

This morning’s Bureau of Labor Statistics Employment Situation Summary was supposed to be favorable, with published estimates I saw of the net new nonfarm payroll positions with increases of 165,000, 165,000 and 170,000.  Its 256,000 well exceeded those, and most of the other statistics followed.  Seasonally adjusted and unadjusted unemployment fell 0.1% and 0.2% to 4.1% and 3.8%.  The number of unemployed was off 200,000 to 6.9 million, with 100,000 fewer of those out for 27 weeks or longer, reaching 1.6 million.  The count of people working part-time for economic reasons, or thus far unsuccessfully seeking full-time work while holding on to lower-hours propositions, dropped another 100,000 to 4.4 million.  The two measures showing how common it is for Americans to be working or officially jobless, the employment-population ratio and the labor force participation rate, gained 0.2% and stayed the same, ending at 60.0% and 62.5%.  The unadjusted count of employed lost 162,000 to 161,294,000.  Average private nonfarm hourly payroll wages reached $35.69, 8 cents, or slightly less than inflation, more than the previous month. 

The American Job Shortage Number, the metric showing how many more positions could be quickly filled if all knew that getting one would be little more than an ordinary daily errand, worsened with a 359,000 increase, as follows:

Almost all of the AJSN’s increase is probably illusory, as the Census Bureau greatly increased their view of the American population from November 16^th to December 16^th, the dates of record for the AJSN, and so the non-civilian et al. category above, which takes the difference between those included in our population and in any employment category, rose almost 3.4 million.  Accordingly, the share in the AJSN flew up almost as much as the statistic increased.  Otherwise, the fall in those officially unemployed was essentially offset by a gain in those wanting work but not looking for it during the previous year, and there were no other large changes.

Compared with a year earlier, the AJSN grew just over 200,000, with the largest changes from a lower number of expatriates (subtracting 700,000 from the AJSN), more people officially jobless (adding 490,000), more in armed services or unaccounted for (adding 349,000), and more discouraged (adding 127,000). 

So what’s the real story here?  It was good, but tempered by 683,000 net drop in the labor force, which along with 432,000 more claiming no interest, means that too many, perhaps the same people previously stepping back into the job-search world without finding what they wanted, are departing.  Will that be a problem in 2025?  We will continue tracking it, which we need to know before being enthusiastic about improvements mostly attributable to a smaller labor force.  In the meantime, though, the turtle took a fair-sized step forward.

Artificial Intelligence: The Energy, Computing Power, and Geographical Changes It Will Need, and Why That is Good

One of several large concerns about AI is getting enough resources for it, namely electricity and data center capacity.  Here’s a fast look at seven articles showing it can’t make it on what’s out there now.

“How Amazon goes nuclear” (Dan DeFrancesco, Business Insider, October 25^th) started with “What’s bigger than tech’s ambitious plans for generative AI?  The amount of energy needed to power it.”  It may call for a large, controversial source, as “Amazon has led a $500 million financing round for a company developing modular nuclear reactors.”  Google has started similar endeavors, and “should these data center efforts continue to struggle, companies’ big bets on generative AI could also falter.”

Otherwise, “AI’s leaders puzzle over energy question” (Marissa Newman, Bloomberg Tech Daily, October 30^th).  That puzzling, happening at Dubai’s Future Investment Initiative which was “mostly centered on AI,” included how to deal with a possible 40% next-decade rise in electricity use – not that much more for AI, but overall.  The Saudi Arabian Oil Company’s CEO “made his pitch” on data centers there using natural gas at relatively low cost.  Others saw merit.

Stateside, “Exxon Plans to Sell Electricity to Data Centers” (Rebecca F. Elliott, The New York Times, December 11^th).  That will also be powered by natural gas, generated at a large power plant, possibly completed by late 2029, of undisclosed cost and location, and will be a new line of external business for ExxonMobil.

With these new facilities, it is fair to consider “How A.I. Could Reshape the Economic Geography of America” (Steve Lohr, The New York Times, December 26^th).  Cities “well positioned to use A.I. to become more productive” include “Chattanooga and other once-struggling cities in the Midwest, Mid-Atlantic and South,” such as Dayton, Scranton, Savannah, and Greenville, each of which has “an educated work force, affordable housing and workers who are mostly in occupations and industries less likely to be replaced or disrupted by A.I.”  A variety of other businesses, many connected with trucking and freight, stand to benefit.

What is “The 19^th-Century Technology That Threatens A.I.” (Azeem Azhar, still The New York Times, December 28^th)?  It’s electricity, on which “America has a long way to go.”  In Virginia, “a hotbed for data centers,” those wanting “to connect to the grid” could face a seven-year wait, and “some counties in the state are introducing limits” on them.  Our country, per the author, has “a patchwork of conflicting regulations, outdated structures and misaligned investment incentives” slowing or stopping infrastructure building, along with “a skills gap in labor shortages in construction and engineering, a complex permitting process trapping projects in years of bureaucratic review across multiple agencies,” “high costs of capital,” and “local opposition.”  Overall, per Azhar, “if the United States truly wants to secure its leadership in A.I., it must equally invest in the energy systems that power it.”

In answer to a question arising naturally from the first source above, Bradley Hoppenstein, writing in CNBC, told us “Why tech giants such as Microsoft, Amazon, Google and Meta are betting big on nuclear power” (December 28^th).  It’s because of “the energy demands of their data centers and AI models” that “nuclear power has a lot of benefits,” including having no carbon, its providing “tremendous economic impact,” and “can be always on and run all the time.”  However, we haven’t seen anywhere near as much opposition from anti-nuclear groups as we probably will. 

On the front page of Sunday, December 29^th’s New York Times business section was “Data Centers Are Fueling a New Gold Rush” (Karen Weise).  They named installations being built in less populated areas of Washington state, resulting in “electricians flocking to regions around the country that, at least for now, have power to spare” and “a housing crunch” almost certain to create more jobs.

The electricians in Washington were matter-of-fact about the boom not lasting forever.  When work runs out there, they hope to find it elsewhere, and probably will, even in the same industry.  No matter what happens in the long run with artificial intelligence, it is building economies now.  Don’t expect that to stop this year – or the next.