Category: Economics

Pharmacy Benefit Managers (PBMs) Create Incentives to Reduce Hiring and Pay of Pharmacists

(p. A1) If any group of workers might have expected their pay to rise last year, it would arguably have been pharmacists. With many drugstores dispensing coronavirus tests and vaccines while filling hundreds of prescriptions each day, working as a pharmacist became a sleep-deprived, lunch-skipping frenzy — one in which ornery customers did not hesitate to vent their frustrations over the inevitable backups and bottlenecks.

“I was stressed all day long about giving immunizations,” said Amanda Poole, who left her job as a pharmacist at a CVS in Tuscaloosa, Ala., in June. “I’d look at patients and say to them, ‘I’d love to fill your prescriptions today, but there’s no way I can.’”

Yet pay for pharmacists, who typically spend six or seven years after high school working toward their professional degree, fell nearly 5 percent last year after adjusting for inflation. Dr. Poole said her pay, about $65 per hour, did not increase in more than four years — first at an independent pharmacy, then at CVS.

For many Americans, one of the pandemic’s few bright spots has been wage growth, with pay rising rapidly for those near the bottom and those at the top. But a broad swath of workers in between has lagged behind.

. . .

(p. A16) Pharmacies also faced external challenges. To hold down the cost of prescription drugs, insurance companies and employers rely on so-called pharmacy benefit managers to negotiate discounts with drugmakers and pharmacies. Consolidation among benefit managers gave them more leverage over pharmacies to drive prices lower. (CVS merged with a large benefits manager in 2007.)

Big drugstore chains often responded by trying to rein in labor costs, according to William Doucette, a professor of pharmacy practice at the University of Iowa. Several pharmacists who worked at Walgreens and CVS said the formulas their companies used to allocate labor resulted in low levels of staffing that were extremely difficult to increase.

According to documents provided by a former CVS pharmacist, managers are motivated by bonuses to stay within these aggressive targets.

. . .

In most cases, an industry without enough workers to meet customer demand would simply hire more, or at least raise wages to attract them.

Yet, according to the Bureau of Labor Statistics, neither of those things happened last year. The number of pharmacists employed in the United States dropped about 1 percent from 2020 to 2021. On balance, employers did not raise wages — in fact, median pay fell slightly, even without adjusting for inflation.

. . .

Several pharmacists said they were especially concerned that understaffing had put patients at risk, given the potentially deadly consequences of mix-ups. “It was so mentally taxing,” said Dr. Poole, the Tuscaloosa pharmacist. “Every day, I was like: I hope I don’t kill anyone.”

. . .

Asked about safety and staffing, CVS and Walgreens said they had made changes, like automating routine tasks, to help pharmacists focus on the most important aspects of their jobs.

Many pharmacists contacted for this article quit rather than face this persistent dread, often taking lower-paying positions.

Still, none had regrets about the decision to leave. “I was 4,000 pounds lighter the moment I sent my resignation email in,” said Dr. Wommack, who left the company in May 2021 and now works at a small community hospital.

As for the medication she had taken for depression and anxiety while at Walgreens, she said, “Shortly after I stopped working there, I stopped taking those pills.”

For the full story, see:

Noam Scheiber. “Why Working At Pharmacies Lost Its Luster.” The New York Times (Tuesday, September 13, 2022): A1 & A16.

(Note: ellipses added.)

(Note: the online version of the story has the same date as the print version, and has the title “How Pharmacy Work Stopped Being So Great.”)

Office Space Designers Finally Pull Back from Extreme “Open” Space that Forces Collaboration at the Price of Blocking Concentration

(p. 1) First there were individual offices. Then cubicles and open floor plans. Now, there is a “palette of places.”

. . .

. . . the move toward pure open floor plans that packed more workers into less and less space . . . was supposed to drive collaboration, but many experts agree it often went too far, with row upon row of desks and workbench-style seating more likely to generate ennui than efficiency.

. . .

The new model is largely open, but not entirely. Under the revised thinking, breaking down walls to bring people together is good, but so are “team spaces” and standing tables, comfortable couches and movable walls.

Privacy is also good, particularly for tasks that require intense concentration, the thinking goes. That doesn’t mean a return to the glory days of private offices, but it does mean workers have more space and more places to seek solitude than in the neo-Dickensian workbench settings. The new designs often include “isolation rooms,” soundproof phone booths, and even lounges where technology is forbidden.

. . .

(p. 4) But in 2010, Microsoft started testing open designs with a quarter of a floor, and then expanded. Since 2014, it has opened 10 renovated buildings without offices, including four this year.

Microsoft, Mr. Ford said, has taken a test-and-learn approach. It learned, for example, that its early designs were too open plan, with 16 to 24 engineers in team-based spaces. Engineers found those spaces noisy and distracting, and concentration suffered. Too much openness can cause workers to “do a turtle,” researchers say, and retrench and communicate less — colleagues who retreat into their headphones all day, for example.

Today, there are more private spaces, and the team areas hold only eight to 12 engineers. “That’s the sweet spot for Microsoft,” Mr. Ford said.

The company thinks it is working. Microsoft’s Azure cloud software business has surged in the last few years, as has the company’s stock price. Mr. Ford said about 20 percent of the workplaces have been redone on Microsoft’s campus in Redmond, Wash., and the surrounding area. Within five years, he said, he expects the renovated share to reach 80 percent.

For the full story, see:

Steve Lohr. “Don’t Get Too Comfortable at That Desk.” The New York Times, SundayBusiness Section (Sunday, October 8, 2017): 1 & 4.

(Note: ellipses added.)

(Note: the online version of the story has the date Oct. 6, 2017, and has the same title as the print version.)

The McCarthy Era, and Right Now: Each a “Very Bad Time” for Free Speech

(p. A13) New Milford, Conn.

Old-fashioned liberalism doesn’t get much respect these days, and Nadine Strossen illustrates the point by pulling out a hat. “I have to show you this gift that somebody gave me, which is such a hoot,” she says, producing a red baseball cap that bears the slogan MAKE J.S. MILL GREAT AGAIN. “Which looks like a MAGA cap,” she adds, as if to help me narrate the scene.

As she dons it, I observe that if she walked around town in her bright-blue home state, angry onlookers would think it was a MAGA hat. “And,” she continues, “I can’t tell you how many educated friends of mine have said, ‘Who is J.S. Mill?’ So we really do have to make him great again.”

Ms. Strossen, 71, has made a career as a legal and scholarly defender of classical liberal ideals, most notably as president of the American Civil Liberties Union from 1991 through 2008. She brings up John Stuart Mill (1806-73), the British philosopher and parliamentarian, by way of citing his view, as she puts it, “that everything should be subject to re-examination,” including “our most cherished ideas.”

. . .

“For many decades now there’s been this asserted dichotomy or tension between equality rights and liberty,” Ms. Strossen says. “I continue to believe that they’re mutually reinforcing, that we can’t have meaningful liberty, in a meaningful sense, unless it’s equally available to everybody. . . . Every single one of us should have an equal right to choose how we express ourselves, how we communicate to somebody else, what we choose to listen to.”

She elaborates in her 2018 book, “Hate: Why We Should Resist It With Free Speech, Not Censorship,” and in our interview when we turn to higher education. Campus authorities frequently justify the suppression of “so-called hate speech”—Ms. Strossen is punctilious about including that dismissive qualifier—with what she calls the “false and dangerous equation between free expression and physical violence.”

“When people hear the term ‘hate speech,’ ” she says, “they usually envision the most heinous examples—a racial epithet; spitting in the face of Dr. Martin Luther King. But in fact, when you see what’s been attacked as so-called hate speech on campus, it’s opposing the idea of defund the police, opposing the idea of open borders.” Any questioning of transgender ideology or identity is cast as “denying the humanity of trans people, or transphobic.” Ms. Strossen hastens to add that “I completely support full and equal rights for trans people,” but she says critics are “raising concerns that I think deserve to be raised and deserve to be discussed.”

Ms. Strossen, herself a professor emerita at New York Law School, likens the situation on campuses to McCarthyism, “a climate of fear that leads to treating certain people with suspicion or, worse, ostracizing those people and those who try to defend them, and punishing them.”

. . .

On campus, she admits that things are worse than they’ve been at least since the McCarthy era—but she still tries to look on the bright side. “I am absolutely convinced that a future generation is going to look back on this time and say this is another very bad time,” she says.

For the full interview, see:

Tunku Varadarajan. “THE WEEKEND INTERVIEW; Make Freedom of Speech Liberal Again.” The Wall Street Journal (Saturday, Aug. 6, 2022): A13.

(Note: ellipses between paragraphs, added; ellipsis internal to paragraph, in original.)

(Note: the online version of the interview has the date August 5, 2022, and has the same title as the print version.)

The Strossen book mentioned in the interview is:

Strossen, Nadine. Hate: Why We Should Resist It with Free Speech, Not Censorship. New York: Oxford University Press, 2020.

A Dog (But Not A.I.) Can Put Together What It Learns in Two Separate Contexts, and Apply It in a Third Context

(p. 6) . . . an engineer named Blake Lemoine . . . worked on artificial intelligence at Google, specifically on software that can generate words on its own — what’s called a large language model. He concluded the technology was sentient; his bosses concluded it wasn’t.

. . .

There is no evidence this technology is sentient or conscious — two words that describe an awareness of the surrounding world.

That goes for even the simplest form you might find in a worm, said Colin Allen, a professor at the University of Pittsburgh who explores cognitive skills in both animals and machines. “The dialogue generated by large language models does not provide evidence of the kind of sentience that even very primitive animals likely possess,” he said.

Alison Gopnik, a professor of psychology who is part of the A.I. research group at the University of California, Berkeley, agreed. “The computational capacities of current A.I. like the large language models,” she said, “don’t make it any more likely that they are sentient than that rocks or other machines are.”

. . .

(p. 7) “A conscious organism — like a person or a dog or other animals — can learn something in one context and learn something else in another context and then put the two things together to do something in a novel context they have never experienced before,” Dr. Allen of the University of Pittsburgh said. “This technology is nowhere close to doing that.”

For the full story, see:

Cade Metz. “A.I. Does Not Have Thoughts, No Matter What You Think.” The New York Times, SundayBusiness Section (Sunday, August 7, 2022): 6-7.

(Note: ellipses added.)

(Note: the online version of the story was updated Aug. 11 [sic.], 2022, and has the title “A.I. Is Not Sentient. Why Do People Say It Is?”)

During December 2022, Kindle Version of McCloskey’s Bourgeois Equality Is Only $2.99

The long, but wonderful, third volume of Deirdre’ McClokey’s Bourgeois trilogy, Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World, is on offer from Amazon during the month of December 2022 in eText Kindle version for only $2.99.

Gig Work Thrives Because Workers Value Flexibility to Pursue Balance or Fulfilment

(p. B1) American workers are experiencing, by many measures, one of the best job markets ever. The unemployment rate has matched a 53-year low. Job listings per available worker are at historic highs. Wages, while not quite keeping up with inflation, are rising at their fastest pace in decades.

So why would people keep doing gig work, a notoriously difficult and insecure way to make a living?

. . .

Picking up shifts offers something that traditional permanent employment still generally doesn’t: the ability to work when and as much as you want, demand permitting, which is often essential to balance life obligations like school or child care.

. . .

(p. B5) “We were seeing this move towards multiple income streams, because that work was picked up as a stopgap and then continued,” Dr. Gervis said.

Take Denae Bettis, a 23-year-old Steady user living in Severn, Md. After dropping out of college, she got a job at UPS, and after a few years rose to become a safety supervisor, usually starting at 4 a.m. During the pandemic, she took on more responsibilities.

“The job got really stressful, and I felt like I had no way out,” Ms. Bettis said. So in June 2020, she started a side gig through Instacart, shopping for people holed up at home. The next month, she quit her job, making it easier for her to pursue her passion: working as a personal makeup artist, which often requires taking early-morning appointments.

Surviving on income from gigs — which for Ms. Bettis now include DoorDash as well as Instacart — isn’t easy. But Ms. Bettis thinks she can save enough money to open her own storefront.

“We just went through a period where millions died, so are you going to spend your time at your job if it doesn’t fulfill you?” Ms. Bettis said, summing up gig work’s appeal. “Everybody loves stability, but if the flexibility isn’t there, I don’t think a lot of people are going to go back.”

For the full story, see:

Lydia DePillis. “Why Gig Work Is Thriving.” The New York Times (Tuesday, August 16, 2022): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story was updated Aug. 17, 2022, and has the title “If the Job Market Is So Good, Why Is Gig Work Thriving?.”)

Initially Socialist Israeli Kibbutzim Gradually Embraced Entrepreneurial Capitalism

(p. C4) Today, in a break with . . . [its] communal past, Ms. Barnea’s kibbutz is farming for profit, and its main cash crop is medical marijuana. She recently retired from managing the greenhouse that grows the drug.

The shift at Kibbutz Beit HaEmek is just the latest sign of how much Israel’s kibbutzim are changing, as both Israel and the kibbutz movement move away from their socialist roots to become more entrepreneurial and profit-driven.

“We have to survive,” said Ms. Barnea, now 64, walking around the greenhouse as the smell of marijuana wafted past.

. . .

Facing a bleak financial future, young people abandoned the kibbutzim in the 1990s. Meanwhile, Israel’s vibrant technology sector took off, providing an additional pull away from the communes.

To reverse the exodus, Israel’s kibbutzim dismantled much of their socialist model. In 1995, Kibbutz Merom HaGolan became the first to go through a so-called privatization process, paying members salaries on a scale.

Today, most kibbutzim have undergone some form of privatization. Many members now earn salaries outside the kibbutz but pay taxes for the community’s upkeep. New members can take out mortgages with banks and buy land on the kibbutz for their homes.

. . .

Only about 40 kibbutzim still share resources and give equal allowances as envisioned in the original model. Most of these communities had created successful businesses that helped them maintain the communal way of living.

One such community is Kibbutz Sdot Yam, on Israel’s central coast between Tel Aviv and Haifa. In the 1980s, the kibbutz opened a factory that constructed quartz surfaces for tables and floors. Despite that venture’s success, the kibbutz is now considering whether to allow members—most of whom work outside the community—to earn their own salaries, rather than sharing them with the commune, said Doron Stansill, a 47-year-old member.

For the full essay, see:

Rory Jones. “The Kibbutz in a Capitalist Israel.” The Wall Street Journal (Saturday, Oct. 14, 2017 ): C4.

(Note: ellipses added.)

(Note: the online version of the essay has the date Oct. 13, 2017 , and has the title “The Kibbutz Movement Adapts to a Capitalist Israel.”)

Entrepreneurs Find New Uses for Bacon Grease and Waste Crabs

(p. A1) OCEAN CITY, Md.—Kristie Williams sells Bumble Soap at her health-food store in this beach town. Its unusual main ingredient, she said, is hard to detect—unless you’re a dog.

“I can’t smell the bacon in the soap,” she said. “My dogs can. Whenever I bring one home, they go crazy.”

The yucky-sounding soap bars are being cooked up less than 4 miles away from Ocean City Organics at Sunrise Diner, . . . (p. A10) Owner Sam Delauter said he branched into soap making when the price of a case of bacon jumped to $90, from $45 last year.

Thinking he could squeeze a few dollars out of his bacon grease in a time of high inflation, he dusted off his great-grandmother’s soap recipe from the Great Depression. He sells the bars for $5.99.

. . .

Searching for new sources of revenue and greener ways to deal with waste, business owners have started coming up with some funky new products. Vodka distilled from dairy-making waste. Compost made from crabs. Reactions from consumers range from enthusiastic to aghast.

For the full story, see:

Harriet Torry. “Inflation’s Byproducts: Bacon Soap or Dairy Vodka, Anyone?” The Wall Street Journal (Wednesday, July 27, 2022): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the date July 26, 2022, and has the title “Inflation’s Funky Byproducts: Bacon Soap or Dairy Vodka, Anyone?”)

Resilient Entrepreneurs Quickly Rebuilt Chicago After “Great Fire” of 1871

(p. C8) Along with the San Francisco earthquake of 1906, the Great Chicago Fire of 1871 stands as one of America’s foundational urban legends, a story of death and rebirth, a monument to the resiliency of the nation’s character.

. . .

Photographs taken immediately after the fire show the utter devastation facing residents: a flattened, rubble-strewn landscape, with only the jagged husks of buildings jutting into the smoky air. But “Chicago’s Great Fire” goes beyond the disaster and its cause to recount the remarkable way the city sprang back. An energizing sense of optimism and opportunity, along with a heavy dose of boosterism, had fueled the city’s explosive growth, and those elements quickly went to work. “Almost immediately,” Mr. Smith writes, “many Chicagoans paradoxically came to see the heroic destruction of their city as an unexpectedly positive event, a stage in its irresistible upward development rather than a dispiriting setback.”

“CHEER UP,” exhorted the headline on an editorial in the Chicago Tribune’s first postfire edition, three days after the inferno started. Even while tens of thousands of residents remained homeless, an emissary assured Eastern financiers that the city warranted a new round of investment. Local entrepreneurs built crude shacks in the rubble to sell necessities. Debris not used for rebuilding was dumped on the edge of Lake Michigan, thus enlarging the size of the downtown.

For the full review, see:

Richard Babcock. “A Cow, a Lantern, a City in Flames.” The Wall Street Journal (Saturday, Oct. 17, 2020): C8.

(Note: ellipsis added.)

(Note: the online version of the review has the date October 16, 2020, and has the title “‘Chicago’s Great Fire’ Review: Rising From the Ashes.”)

The book under review is:

Smith, Carl. Chicago’s Great Fire: The Destruction and Resurrection of an Iconic American City. New York: Atlantic Monthly Press, 2020.

If Apple and Google Ban Twitter from Their Phone App Stores, Musk Will Start Making Phones

Elon Musk said he would make his own smartphone if Google and Apple were to ban Twitter from their app stores.

Musk said in a tweet responding to conservative podcaster Liz Wheeler that he hopes the situation does not come to that but that he will make that decision if necessary.

“I certainly hope it does not come to that, but, yes, if there is no other choice, I will make an alternative phone,” he said.

Wheeler first proposed the idea, saying that half of the country would “happily ditch the biased, snooping iPhone and Android.”

“The man builds rockets to Mars, a silly little smartphone should be easy, right?” she tweeted.

For the full story, see:

JARED GANS. “Elon Musk says he would make his own smartphone if app stores ban Twitter.” THE HILL (Saturday, Nov. 26, 2022). URL: https://thehill.com/policy/technology/3750849-elon-musk-says-he-would-make-his-own-smart-phone-if-app-stores-ban-twitter/.

Fewer Jobs Require College Degree Than Prepandemic

(p. A3) The tight labor market is prompting more employers to eliminate one of the biggest requirements for many higher-paying jobs: the need for a college degree.

Companies such as Alphabet Inc.’s Google, Delta Air Lines Inc. and International Business Machines Corp. have reduced educational requirements for certain positions and shifted hiring to focus more on skills and experience. Maryland this year cut college-degree requirements for many state jobs—leading to a surge in hiring—and incoming Pennsylvania Gov. Josh Shapiro campaigned on a similar initiative.

U.S. job postings requiring at least a bachelor’s degree were 41% in November [2022], down from 46% at the start of 2019 ahead of the Covid-19 pandemic, according to an analysis by the Burning Glass Institute, a think tank that studies the future of work. Degree requirements dropped even more early in the pandemic. They have grown since then but remain below prepandemic levels.

. . .

Lucy Mathis won a scholarship to attend a women in computer science conference. There, she learned about an IT internship at Google and eventually dropped out of her computer science undergraduate program to work at the company full time. The 28-year-old now makes a six-figure sum as a systems specialist.

“I found out I had a knack for IT,” she said. “I’m not good at academics. It’s not for me.”

More than 100,000 people in the U.S. have completed Google’s online college-alternative program that offers training in fast-growing fields such as digital marketing and project management, the company said. It and 150 other companies are now using the program to hire entry-level workers.

For the full story, see:

Austen Hufford. “Employers Rethink Need for a Degree.” The Wall Street Journal (Monday, Nov. 28, 2022): A3.

(Note: ellipsis added.)

(Note: the online version of the story has the date Nov. 26, 2022, and has the title “Employers Rethink Need for College Degrees.” I am grateful to Zhigang Feng for calling my attention to the article quoted above.)