Category: Economic Growth

“Plumbing Industry Is Throwing the Kitchen Sink at Job Candidates”

(p. A1) FORT COLLINS, Colo.–The fast-growing business offers all the perks a pampered Silicon Valley tech worker might expect: An on-site tap flows with craft beer and the kitchen is stocked with locally roasted espresso beans. There is a putting green and a smoker for brisket lunches. Next up: a yoga studio.
Welcome to the gushing job market…for plumbers.
Colorado’s Neuworks Mechanical Inc. employs 75 plumbers but needs 15 to 20 more. To keep them happy, it offers “a lot of Zen,” says business-development manager Jackie Sindelar. That includes a sharing exercise that “brings out your raw emotions and makes you vulnerable,” she says.
Drained from a labor shortage, the plumbing industry is throwing the kitchen sink at job candidates.
Bonfe’s Plumbing, Heating & Air Service Inc. of South St. Paul, Minn., boasts an array of arcade games and a “quiet room”–a plush hangout space with insulated walls painted a calming sky blue. It has a lockable door, a comfy couch, a recliner and a sound machine that babbles with the soothing audio of ocean waves.
. . .
U.S. job openings hit a record 6.6 million in March, with the construction industry–where plumbers are heavily employed–seeing one of the largest jumps.
Building, needed repairs and retirements are fueling demand for plumbers at the same time the U.S. jobless rate in April fell below 4% for the first time since late 2000.
The annual median pay for plumbers, pipefitters and steamfitters was nearly $53,000 a year in 2017, according to federal data, but it isn’t uncommon to see jobs advertised for far higher wages, from $70,000 up to six figures.

For the full story, see:
Levitz, Jennifer. “Plumbing Firms, Drained by Labor Shortage, Tap Perks.” The Wall Street Journal (Thursday, May 24, 2018): A1 & A10.
(Note: ellipsis internal to sentence, in original; ellipsis between paragraphs, added.)
(Note: the online version of the story has the date May 23, 2018, and has the title “Perks for Plumbers: Hawaiian Vacations, Craft Beer and ‘a Lot of Zen’.” The last sentence quoted above appeared in the online, but not in the print, version of the article.)

“Entrepreneurial Capitalism Takes More People Out of Poverty Than Aid”

(p. A15) Some 44% of millennials believe they do more to support social causes than the rest of their family, according to the 2017 Millennial Impact report. If you’re volunteering at shelters or working for most nonprofits, that’s all very nice, but it’s one-off. You’re one of the privileged few who have the education to create lasting change. It may feel good to ladle soup to the hungry, but you’re wasting valuable brain waves that could be spent ushering in a future in which no one is hungry to begin with.
There’s a word that was probably never mentioned by your professors: Scale. No, not the stuff on the bottom of your bong or bathtub. It’s the concept of taking a small idea and finding ways to implement it for thousands, or millions, or even billions. Without scale, ideas are no more than hot air. Stop doing the one-off two-step. It’s time to scale up.
. . .
If you don’t think I’m credible, you too can listen to Bono. As he told Georgetown students a few years ago, “Entrepreneurial capitalism takes more people out of poverty than aid.” Of course it does. Want to change the world? Stop doing one-off volunteering and scale up.

For the full commentary, see:
Andy Kessler. “Advice to New Grads: Scale or Bail.” The Wall Street Journal (Monday, May 21, 2018): A15.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date May 20, 2018.)

Wages Rise as Fast-Food Jobs Go Unfilled

(p. A10) . . . in an industry where cheap labor is an essential component in providing inexpensive food, a shortage of workers is changing the equation upon which fast-food places have long relied. This can be seen in rising wages, in a growth of incentives, and in the sometimes odd situations that business owners find themselves in.
This is why Jeffrey Kaplow, for example, spends a lot of time working behind the counter in his Subway restaurant in Lower Manhattan. It’s not what he pictured himself doing, but he simply doesn’t have enough employees.
Mr. Kaplow has tried everything he can think of to find workers, placing Craigslist ads, asking other franchisees for referrals, seeking to hire people from Subways that have closed.

For the full story, see:
Rachel Abrams and Robert Gebeloff. “A Fast-Food Problem: Where Have All The Teenagers Gone?” The New York Times (Friday, May 4, 2018): B1 & B5.
(Note: ellipsis added.)
(Note: the online version of the story has the date May 3, 2018.)

Lack of “Air-Conditioning Can Be Deadly”

(p. A10) The number of air-conditioners worldwide is predicted to soar from 1.6 billion units today to 5.6 billion units by midcentury, according to a report issued Tuesday by the International Energy Agency.
. . .
While 90 percent of American households have air-conditioning, “When we look in fact at the hot countries in the world, in Africa, Asia, Latin America and the Middle East, where about 2.8 billion people live, only about 8 percent of the population owns an air-conditioner,” said Fatih Birol, executive director of the energy agency.
As incomes in those countries rise, however, more people are installing air-conditioners in their homes. The energy agency predicts much of the growth in air-conditioning will occur in India, China and Indonesia.
Some of the spread is simply being driven by a desire for comfort in parts of the world that have always been hot.
. . .
And when it gets hot, forgoing air-conditioning can be deadly. The heat wave that plagued Chicago in 1995 killed more than 700 people, while the 2003 European heat wave and 2010 Russian heat wave killed tens of thousands each.

For the full story, see:
Kendra Pierre-Louis. “World Tries to Stay Cool, but It Could Warm Earth.” The New York Times (Friday, May 18, 2018): A10.
(Note: ellipses added.)
(Note: the online version of the story has the date May 15, 2018, and has the title “The World Wants Air-Conditioning. That Could Warm the World.”)

Plenty of Good Blue-Collar Jobs

(p. A1) ELKHART, Ind.–The self-proclaimed RV capital of the world gives a glimpse of what the American economy looks like when operating at full tilt.
High-school students around here skip college for factory jobs that offer great pay and benefits. For-hire signs sprout like roadside weeds. And workers are so flush that car dealers can’t keep new pickups on the lot.
At the same time, the strains are showing. Employers can’t hang on to employees, and house prices are zooming. The worker shortage prompted a local Kentucky Fried Chicken restaurant to offer $150 signing bonuses. A McDonald’s failed to open for lunch last fall because managers couldn’t corral enough hands at $8 an hour to serve the lines waiting at the door.
No place in the U.S. has seen a labor-market turnaround like this metropolitan region of 110,000 workers, a mix of blue-collar whites, Mexican immigrants and Amish. “It’s like 1955,” said Michael Hicks, a Ball State University economist. “If you show up and have minimal literacy skills, you can find a job here.”

For the full story, see:
Bob Davis. “Economy’s Future Plays Out in Rust Belt.” The Wall Street Journal (Friday, April 6, 2018): A1 & A9.
(Note: the online version of the story was updated April 13 [sic], 2018, and has the title “The Future of America’s Economy Looks a Lot Like Elkhart, Indiana.”)

Individualistic Cultures Foster Innovation

IndividualismProductivityGraph2018-04-20.pngSource of graph: online version of the WSJ commentary quoted and cited below.

(p. B1) Luther matters to investors not because of the religion he founded, but because of the cultural impact of challenging the Catholic Church’s grip on society. By ushering in what Edmund Phelps, the Nobel-winning director of Columbia University’s Center on Capitalism and Society, calls the “the age of the individual,” Luther laid the groundwork for capitalism.
. . .
(p. B10) Mr. Phelps and collaborators Saifedean Ammous, Raicho Bojilov and Gylfi Zoega show that even in recent years, countries with more individualistic cultures have more innovative economies. They demonstrate a strong link between countries that surveys show to be more individualistic, and total factor productivity, a proxy for innovation that measures growth due to more efficient use of labor and capital. Less individualistic cultures, such as France, Spain and Japan, showed little innovation while the individualistic U.S. led.
As Mr. Bojilov points out, correlation doesn’t prove causation, so they looked at the effects of country of origin on the success of second, third and fourth-generation Americans as entrepreneurs. The effects turn out to be significant but leave room for debate about how important individualistic attitudes are to financial and economic success.

For the full commentary, see:
James Mackintosh. “STREETWISE; What Martin Luther Says About Capitalism.” The Wall Street Journal (Friday, Nov. 3, 2017): B1 & B10.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Nov. 2, 2017, and has the title “STREETWISE; What 500 Years of Protestantism Teaches Us About Capitalism’s Future.” Where there are minor differences in wording in the two versions, the passages quoted above follow the online version.)

Macron Gives France Hope That “Tomorrow Can Be Better Than Today”

(p. A27) PARIS — When people used to ask me what I missed about America, I would say, “The optimism.” I grew up in the land of hope, then moved to one whose catchphrases are “It’s not possible” and “Hell is other people.” I walked around Paris feeling conspicuously chipper.
But lately I’ve had a kind of emotional whiplash. France is starting to seem like an upbeat, can-do country, while Americans are less sure that everything will be O.K.
. . .
The French haven’t become magically cheerful, but there’s a creeping sense that hope isn’t idiotic, and life can actually improve. As is common with a new president, there was a jump in optimism after Emmanuel Macron was elected last year. But this time, optimism has remained strong, and in January it hit an eight-year high.
It helps that France’s economy is finally growing more and that Mr. Macron has made good on promises ranging from overhauling the labor laws to shrinking class sizes at kindergartens in disadvantaged areas.
. . .
“The France of the optimists has won, and is dragging the other part of France toward its own side,” said Claudia Senik, an economist who heads the Well-Being Observatory, an academic think tank here.
The French are even taking an intellectual interest in this alien idea. There are optimism clubs, conferences and school programs, scholars of positivity and books like “50+1 Good Reasons to Choose Optimism.” In September Mr. Macron was a patron of the Global Positive Forum, a study group of “positive initiatives” in business and government. (“Tomorrow can be better than today,” the forum’s website insists.)

For the full commentary, see:
Druckerman, Pamela. “The New French Optimism.” The New York Times (Friday, March 23, 2018): A27.
(Note: ellipses added.)
(Note: the online version of the commentary has the date March 22, 2018, and has the title “Are the French the New Optimists?”)

Chinese Economy “on the Brink of a Precipitous Downturn?”

(p. A15) Reporters in China often run up against Potemkin projects–gleaming science parks sitting half empty, new districts with eerily few residents, solar-powered cities where most of the panels are disconnected. These wasteful investments, designed to fulfill local-government ambitions to boost construction and drive short-term growth, can be a nuisance when researching stories about innovation or environmental foresight. But what if such projects are not a distraction but the story itself? What if China’s economy is, in fact, on the brink of a precipitous downturn? That is the question Dinny McMahon asks in “China’s Great Wall of Debt.”
Mr. McMahon, a former Beijing-based correspondent for this newspaper, suggests that China has powered ahead for as long as it has not because it is immune to crises but because its government has so far managed to intervene to stave them off. When China’s stock market plunged in 2015, the central government directed fund managers to buy instead of sell and pressured journalists to write only optimistic reports. One reporter who strayed from the official line was trotted out on state television to apologize.
Such intervention has created a false sense of confidence, Mr. McMahon argues, which in turn has led to a bad case of economic bloating.

For the full review, see:
Mara Hvistendahl. “”BOOKSHELF; The Chinese Growth Charade; Ghost cities, shadow banks, white-elephant state projects: The country’s pursuit of growth at all costs may come at a high price.” The Wall Street Journal (Wednesday, March 14, 2018): A15.
(Note: the online version of the review has the date March 13, 2018, and has the title “BOOKSHELF; ‘China’s Great Wall of Debt’ Review: The Chinese Growth Charade; Ghost cities, shadow banks, white-elephant state projects: The country’s pursuit of growth at all costs may come at a high price.”)

The book under review, is:
McMahon, Dinny. China’s Great Wall of Debt: Shadow Banks, Ghost Cities, Massive Loans and the End of the Chinese Miracle. New York: Houghton Mifflin Harcourt, 2018.

Early Industrial Workers’ Living Standards Improved Over Their Lifetimes

(p. C6) Historians have long debated whether the Industrial Revolution was a net benefit to those who labored in the mills. The first generation of workers generally enjoyed higher wages and liberation from the confines of rural life. Yes, there was child labor, but one girl who entered a New England mill at age 11 recalled: “It was paradise here because you got your money, and you did whatever you wanted to with it.” In her book “Liberty’s Dawn” (2013), Emma Griffin studied those early industrial workers longitudinally and found that their living standards improved markedly over a lifetime.
. . .
William Blake’s “dark Satanic Mills” are now brightly lit in China, but are they still infernal? Today, Mr. Freeman reports, Foxconn offers “a library, bookstores, a variety of cafeterias and restaurants, supermarkets, . . . swimming pools, basketball courts, soccer fields, and a stadium, a movie theater, electronic game rooms, cybercafés, a wedding-dress shop, banks, ATMs, two hospitals, a fire station, a post office, and huge LED screens that show announcements and cartoons.” But Chinese worker dormitories impose a positively Victorian regime of moral supervision: no drinking, gambling or visiting the opposite sex. Work rules are draconian. And surveillance cameras are everywhere (though, come to think of it, we have plenty of those in the West).
Ultimately, Mr. Freeman can’t decide whether industrialism represents progress or dystopia, and that ambivalence reflects his clear eyes and fair-mindedness. He often lets workers speak for themselves, and they don’t always agree. Xu Lizhi, one of those Foxconn employees who killed himself, was also a poet: “They’ve trained me to become docile / Don’t know how to shout or rebel / How to complain or denounce / Only how to silently suffer exhaustion.” But another worker from a small Hunan village was amazed by his company dormitory: “I had never lived in a multi-story building, so it felt exciting to climb stairs and be upstairs.” Mr. Freeman reminds us that, benevolent or tyrannical, the factory was an exponential leap in the human experience.

For the full review, see:
Rose, Jonathan. “The Very Symbol of Modern Times; Workers’ paradise or soul-deadening dystopia? Why society remains of two minds about the factory.” The Wall Street Journal (Saturday, Feb. 24, 2018): C6.
(Note: ellipsis between paragraphs, added; ellipsis within paragraph, in original.)
(Note: the online version of the review has the date Feb. 23, 2018, and has the title “Review: The Very Symbol of Modern Times; Workers’ paradise or soul-deadening dystopia? Why society remains of two minds about the factory.”)

The book under review, is:
Freeman, Joshua B. Behemoth: A History of the Factory and the Making of the Modern World. New York: W. W. Norton & Company, 2018.

The book by Emma Griffin, mentioned above, is:
Griffin, Emma. Liberty’s Dawn: A People’s History of the Industrial Revolution. New Haven, CT: Yale University Press, 2013.

Human Ancestors May Have Had Capacity for Symbolic Thought 600,000 Years Ago

(p. D1) On Thursday [February 22, 2018], a team of researchers offered compelling evidence that Neanderthals bore one of the chief hallmarks of mental sophistication: they could paint cave art. That talent suggests that Neanderthals could think in symbols and may have achieved other milestones not preserved in the fossil record.
“When you have symbols, then you have language,” said João Zilhão, an archaeologist at the University of Barcelona and co-author of the new study.
. . .
(p. D6) But a second study, which Dr. Zilhão and his colleagues published Thursday [February 22, 2018], in the journal Science Advances, hints that Neanderthals might well have been painting long before 64,000 years ago.
The scientists traveled to a cave on the coast of Spain where Dr. Zilhão had earlier discovered shells that had been drilled with holes and painted with ocher.
. . .
He and his colleagues discovered a layer of flowstone sitting atop the rock where they had found the shell jewelry. That flowstone turned out to be about 115,000 years old.
. . .
The colored, pierced shells themselves are probably not much older than that. Up until about 118,000 years ago, the cave was flooded, thanks to higher sea levels.
That finding provides strong evidence that the shells were made by Neanderthals. They were definitely living in Spain 115,000 years ago, while modern humans would not arrive in Europe for another 70,000 years.
The two new studies don’t just indicate that Neanderthals could make cave art and jewelry. They also establish that Neanderthals were making these things long before modern humans — a blow to the idea that they simply copied their cousins.
The earliest known cave paintings made by modern humans are only about 40,000 years old, while Neanderthal cave art is at least 24,000 years older. The oldest known shell jewelry made by modern humans is about 70,000 years old, but Neanderthals were making it 45,000 years before then.
“These results imply that Neanderthals were not apart from these developments,” said Dr. Zilhão. “For all practical purposes, they were modern humans, too.”
The new studies raise another intriguing possibility, said Clive Finlayson, director of the Gibraltar Museum: that the capacity for symbolic thought was already present 600,000 years ago in the ancestors of both Neanderthals and modern humans.
He agreed with Dr. Zilhão that the new study supports the idea that Neanderthals used language. In addition to the evidence of symbolic thought, researchers have also found that the inner ears of Neanderthals were tuned to the frequencies of speech, much like our own.
“We don’t know how they spoke or what they said,” said Dr. Finlayson. “But they had the ability of speech.”
The cave paintings that Dr. Pike and his colleagues have dated are generally abstract. There’s no evidence so far that Neanderthals painted images of lions and other animals, as modern humans did thousands of years later.
But Dr. Pike doesn’t think a lack of animal imagery marks a mental deficiency in Neanderthals. It could simply reflect a cultural preference.’

For the full story, see:
Zimmer, Carl. “MATTER; The Neanderthal, the Artist.” The New York Times (Tuesday, February 27, 2018): D1 & D6.
(Note: ellipses, and bracketed date, added.)
(Note: the online version of the story has the date FEB. 22, 2018, and has the title “MATTER; Neanderthals, the World’s First Misunderstood Artists.”)

The first article mentioned above and co-authored by Zilhão, is:

Hoffmann, D. L., C. D. Standish, M. García-Diez, P. B. Pettitt, J. A. Milton, J. Zilhão, J. J. Alcolea-González, P. Cantalejo-Duarte, H. Collado, R. de Balbín, M. Lorblanchet, J. Ramos-Muñoz, G. Ch Weniger, and A. W. G. Pike. “U-Th Dating of Carbonate Crusts Reveals Neandertal Origin of Iberian Cave Art.” Science 359, no. 6378 (Feb. 23, 2018): 912-915.

The second article mentioned above and co-authored by Zilhão, is:
Hoffmann, Dirk L., Diego E. Angelucci, Valentín Villaverde, Josefina Zapata, and João Zilhão. “Symbolic Use of Marine Shells and Mineral Pigments by Iberian Neandertals 115,000 Years Ago.” Science Advances 4, no. 2 (Feb. 22, 2018): 1-6.

Upward Mobility from Moving to the Robust Redundant Labor Markets of Open Boomtowns

(p. B3) Chicago in 1850 was a muddy frontier town of barely 30,000 people. Within two decades, it was 10 times that size. Within another two decades, that number had tripled. By 1910, Chicago — hog butcher for the world, headquarters of Montgomery Ward, the nerve center of the nation’s rail network — had more than two million residents.
“You see these numbers, and they just look fake,” said David Schleicher, a law professor at Yale who writes on urban development and land use. Chicago heading into the 20th century was the fastest-growing city America has ever seen. It was a classic metropolitan magnet, attracting anyone in need of a job or a raise.
But while other cities have played this role through history — enabling people who were geographically mobile to become economically mobile, too — migration patterns like the one that fed Chicago have broken down in today’s America. Interstate mobility nationwide has slowed over the last 30 years. But, more specifically and of greater concern, migration has stalled in the very places with the most opportunity.
As Mr. Schleicher puts it, local economic booms no longer create boomtowns in America.
. . .
Some people aren’t moving into wealthy regions because they’re stuck in struggling ones. They have houses they can’t sell or government benefits they don’t want to lose. But the larger problem is that they’re blocked from moving to prosperous places by the shortage and cost of housing there. And that’s a deliberate decision these wealthy regions have made in opposing more housing construction, a prerequisite to make room for more people.
Compare that with most of American history. The country’s economic growth has long “gone hand in hand with enormous reallocation of population,” write the economists Kyle Herkenhoff, Lee Ohanian and Edward Prescott in a recent study of what’s hobbling similar population flows now.
. . .
Were it not for all the restrictions on housing in the most productive places — if workers were able to more freely migrate to them — Mr. Herkenhoff and his co-authors and the economists Enrico Moretti and Chang-Tai Hsieh have estimated that the nation’s G.D.P. would be substantially higher. By their calculations, there are millions of workers missing from the Bay Area and metropolitan New York today.
The population growth that is occurring in these metro areas is fueled almost entirely by immigration, as Ryan Avent points out in “The Gated City,” where he makes a similar argument to Mr. Schleicher. If we consider only domestic moves, about 900,000 more people have moved away from New York than to it since 2010. On net, about 47,000 have left both San Jose and Washington, D.C., while Boston has lost a net 36,000.

For the full commentary, see:
Emily Badger. “Why New York and the Bay Area Are Missing Millions of Workers.” The New York Times (Friday, Dec. 8, 2017): B3.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Dec. 6, 2017, and has the title “What Happened to the American Boomtown?”)

The Herkenhoff et al. paper mentioned above, is:
Herkenhoff, Kyle F., Lee E. Ohanian, and Edward C. Prescott. “Tarnishing the Golden and Empire States: Land-Use Restrictions and the U.S. Economic Slowdown.” Journal of Monetary Economics 93 (Jan. 2018): 89-109.

The Moretti and Hsieh paper mentioned above, is:
Hsieh, Chang-Tai, and Enrico Moretti. “Housing Constraints and Spatial Misallocation.” Working paper, May 18, 2017.

The book by Ryan Avent, mentioned above, is:
Avent, Ryan. The Gated City. Amazon Digital Services LLC, 2011.