Category: Economics

Open Offices Speed Spread of Covid-19

(p. B6) After years of squeezing ever more workers into tighter office spaces, companies are realizing how efficiently the modern workspace can spread diseases like the coronavirus.

Cubicles and private offices have made way for open floors, where a sneeze or cough can circulate uninterrupted.  . . .

Between 2018 and 2019, the average office space per seat in North America declined by 14.3% to 195.6 square feet, according to brokerage firm JLL’s 2020 Occupancy Benchmarking Report.

Many companies also have abolished assigned seating, rotating workers through the office. That means workers in many offices are now more likely to touch surfaces contaminated by others.

. . .

In a study of more than 1,800 Swedish office workers that was published in 2014, a group of researchers from Stockholm University found that open-plan offices lead to more sick leaves. Among the possible explanations is that these offices can be more stressful, and risk of infection may be greater. The study also found that offices without assigned desks lead to more extended sick leaves, but only among men.

For the full story, see:

Konrad Putzier. “Open Offices Spur Virus Worries.” The Wall Street Journal (Wednesday, MARCH 11, 2020): B6.

(Note: ellipses added.)

(Note: the online version of the story has the date MARCH 10, 2020, and has the title “Your Open-Floor Office Could Help Spread Coronavirus.”)

Facebook’s Story, Based on Zuckerberg Interviews

(p. 15) In 2011, Levy, now the editor at large at Wired, wrote an extensive history of Google. To report the book, he secured liberal access to executives at Google and was allowed to soak up company culture by wandering around its corporate campus. He employed much the same strategy for “Facebook.” Zuckerberg granted Levy numerous interviews over a three-year period, and gave him “unprecedented access” to company executives.

The result is a work that recounts the company’s narrative mainly through the lens of its central figures.

. . .

Not for nothing is the book subtitled “The Inside Story.” Levy, who first met Zuckerberg in 2006, takes readers inside his college dorm suite; inside the late-night coding and cavorting at the company’s first home base in Palo Alto; inside meetings with the tech moguls who were the start-up’s first major investors; inside design choices that fueled the social network’s popularity; and inside Zuckerberg’s head.

For the full review, see:

Natasha Singer. “Power Trip.” The New York Times Book Review (Sunday, March 15, 2020): 15.

(Note: ellipsis added.)

(Note: the online version of the review has the date Feb. 25 [sic], 2020, and has the title “‘Facebook: The Inside Story’ Offers a Front-Row Seat on Voracious Ambition.”)

The book discussed in the passages quoted above, is:

Levy, Steven. Facebook: The Inside Story. New York: Blue Rider Press, 2020.

At Nonprofit Hospitals Revenue Rises and Charity Care Falls

(p. 7) On paper, the average value of community benefits for all nonprofits about equals the value of the tax exemption, but there is tremendous variation among individual hospitals, with many falling short. There is also intense disagreement about how those community benefits are calculated and whether they actually serve the community in question.

Charity medical care is what most people think of when it comes to a community benefit, and before 1969 that was the legal requirement for hospitals to qualify for tax-exempt status. In that year, the tax code was changed to allow for a wide range of expenses to qualify as community benefits. Charitable care became optional and it was left up to the hospitals to decide how to pay back that debt. Hospitals could even declare that accepting Medicaid insurance was a community benefit and write off the difference between the Medicaid payment and their own calculations of cost.

An analysis by Politico found that since the full Affordable Care Act coverage expansion, which brought millions more paying customers into the field, revenue in the top seven nonprofit hospitals (as ranked by U.S. News & World Report) increased by 15 percent, while charity care — the most tangible aspect of community benefit — decreased by 35 percent.

. . .

The average chief executive’s package at nonprofit hospitals is worth $3.5 million annually. (According to I.R.S. regulations, “No part of their net earnings is allowed to inure to the benefit of any private shareholder or individual.”) From 2005 to 2015, average chief executive compensation in nonprofit hospitals increased by 93 percent. Over that same period, pediatricians saw a 15 percent salary increase. Nurses got 3 percent.

For the full commentary, see:

Ofri, Danielle. “Nonprofit Hospitals Are Too Profitable.” The New York Times, SundayReview Section (Sunday, February 23, 2020): 7.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Feb. 20, 2020, and has the title “Why Are Nonprofit Hospitals So Highly Profitable.”)

The Politico article mentioned in the passages quoted above, is:

Diamond, Dan. “Health Care; How Hospitals Got Richer Off Obamacare.” Politico (Posted July 17, 2017). Available from https://www.politico.com/interactives/2017/obamacare-non-profit-hospital-taxes/.

Remote Workers Are 13% More Efficient Than Office-Based Workers

(p. B4) Fans of remote work often cite studies showing that people who work from home are more productive, like a 2014 study led by the Stanford professor Nicholas Bloom. The study examined remote workers at a Chinese travel agency and found that they were 13 percent more efficient than their office-based peers.

For the full commentary, see:

Kevin Roose. “THE SHIFT; Work From Home? Think Again.” The New York Times (Thursday, March 12, 2020): B1 & B4.

(Note: the online version of the commentary has the date March 10, 2020, and has the title “THE SHIFT; Sorry, but Working From Home Is Overrated.”)

The paper mentioned in the passages quoted above, is:

Bloom, Nicholas, James Liang, John Roberts, and Zhichun Jenny Ying. “Does Working from Home Work? Evidence from a Chinese Experiment.” The Quarterly Journal of Economics 130, no. 1 (Feb. 2014): 165-218.

Meaning and Pride Come “From Being Part of a Shared Enterprise”

(p. 6) . . . over the past three decades, deaths of despair among whites without a college degree–especially those under age 50–have soared.

. . .

Case and Deaton — a married couple who are both economists at Princeton — try to explain the causes in a new book, “Deaths of Despair and the Future of Capitalism.” Their basic answer is that working-class life in the United States is more difficult than it is in any other high-income country.

. . .

Many of the problems afflicting the working class span racial groups, and Case and Deaton emphasize that these problems aren’t merely financial. Life for many middle- and low-income Americans can lack structure, status and meaning. People don’t always know what days or hours they will be working the following week. They often don’t officially work for the company where they spend their days, which robs them of the pride that comes from being part of a shared enterprise.

“Many people used to associate the meaning of their life with what their corporation or institution was doing,” says Deaton, a Nobel laureate in economics. Miners and factory workers identified themselves as such. Warehouse workers, especially those whose paycheck is signed by a staffing company, rarely feel the same connection.

The result of these trends has been a “coming apart,” as Case and Deaton put it, of day-to-day life for whites without a college degree versus those with a college degree.

For the full commentary, see:

David Leonhardt and Stuart A. Thompson. “Dying of ‘Despair’ in America.” The New York Times, SundayReview Section (Sunday, MARCH 8, 2020): 6.

(Note: ellipses added.)

(Note: the online version of the commentary has the date MARCH 6, 2020, and has the title “How Working-Class Life Is Killing Americans, in Charts.”)

The book by Case and Deaton, discussed in the passages quoted above, is:

Case, Anne, and Angus Deaton. Deaths of Despair and the Future of Capitalism. Princeton, N.J.: Princeton University Press, 2020.

“Good Stress” Causes “a Burst of Energy That Focuses the Mind”

(p. A27) It was a staple of medical thinking dating to the 1910s that stress was the body’s alarm system, switching on only when terrible things happened, often leaving a person with an either-or choice: fight or flight.

The neuroscientist Bruce S. McEwen trailblazed a new way of thinking about stress. Beginning in the 1960s, he redefined it as the body’s way of constantly monitoring daily challenges and adapting to them.

Dr. McEwen, who died on Jan. 2 [2020] at 81, described three forms of stress: good stress — a response to an immediate challenge with a burst of energy that focuses the mind; transient stress — a response to daily frustrations that resolve quickly; and chronic stress — a response to a toxic, unrelenting barrage of challenges that eventually breaks down the body.

For the full obituary, see:

Randi Hutter Epstein. “Bruce McEwen, Who Discovered That Stress Can Alter the Brain, Dies at 81.” The New York Times (Tuesday, February 11, 2020): A27.

(Note: bracketed year added.)

(Note: the online version of the obituary has the date Feb. 10, 2020, and has the title “Bruce McEwen, 81, Is Dead; Found Stress Can Alter the Brain.”)

“Entrepreneur Sent Our Words Across an Ocean”

Cyrus Field is described as a “project entrepreneur” in my Openness to Creative Destruction book. In the op-ed linked-to below, I celebrate his achievement.

My book, mentioned above, is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.

In Past Decade Bean-to-Bar Chocolate Makers Grow from Five to 250

(p. D1) According to the Fine Chocolate Industry Association, sales of premium chocolates grew 19 percent in 2018, compared with 0.6 percent for mainstream chocolate like the classic Hershey bar. Over the past decade, the number of small American bean-to-bar chocolate producers — the kind with cacao percentages and places of origin printed on those hyper-chic labels — has jumped from about five to more than 250.

. . .

(p. D4) The cacao beans (also called cocoa beans) are the seeds that grow inside the pod, surrounded by fleshy, juicy fruit that tastes a little like a mango crossed with a pear that was carrying a lychee. After harvesting, the beans are fermented for up to a week to develop their flavors, and dried.

To make chocolate, the dried beans are roasted, then cracked to separate the outer husks from the inner nibs, which have a nutty, earthy flavor and crunchy texture — and are excellent added to baked goods. The nibs are about half cocoa solids and half cocoa butter.

Chocolate makers grind the nibs into what’s called chocolate liquor, or chocolate paste. This liquor is ground again, along with sugar and other ingredients that might include milk powder to make milk chocolate, lecithin to smooth the texture, or vanilla for flavor.

. . .

The new wave of craft chocolate began with Scharffen Berger, founded in 1996 by Mr. Scharffenberger, a winemaker, and Robert Steinberg, who had studied at the famous chocolate shop Bernachon, in Lyon, France.

“When we started, there were only nine companies grinding their own cacao in the United States and they were all huge, except for Guittard,” Mr. Scharffenberger said, referring to the Guittard Chocolate Company, also in the San Francisco area. “We were the first new chocolate maker on the scene in 150 years.”

When Gary Guittard, the company’s fourth-generation owner, sampled some of Scharffen Berger’s chocolate, it spurred him to revamp his own production, in some cases going back to the way his great-grandfather made chocolate when he started the company in 1868.

“Scharffen Berger was the disrupter,” Mr. Guittard said. “Trying their chocolate was just terrible for me. It opened my eyes to a world of flavors that had been present in our chocolates 50 years ago, but that were lost. We had to change everything to get them back.”

Scharffen Berger was sold in 2005 to the Hershey Company, which moved the operation to Illinois. But other small bean-to-bar makers quickly followed Scharffen Berger’s lead. There are now more than 250 in the United States. And even though Brooklyn, contrary to popular belief, didn’t invent the bean-to-bar craze, it has several producers, including Kahkow, Cacao Prieto, Jacques Torres, Raaka and Fine & Raw.

. . .

A bean-to-bar maker makes chocolate from cacao beans. A chocolatier buys premade chocolate, then melts it and combines it with other ingredients to make confections like truffles or pralines. And this isn’t at all a bad thing: The best chocolatiers buy superb bean-to-bar chocolate as a starting point. (Many professional chocolatiers buy from Valrhona.) It’s just that making chocolate and making chocolate confections are two different skill sets.

For the full story, see:

Melissa Clark. “From Bean To Bar And Beyond.” The New York Times (Wednesday, February 12, 2020): D1 & D4-D5.

(Note: ellipses added.)

(Note: the online version of the story was updated Feb. 13, 2020, and has the title “Everything You Don’t Know About Chocolate.”)

Is Jeff Bezos Still a “Project Entrepreneur”?

In my Openness to Creative Destruction: Sustaining Innovative Dynamism, I suggest that different innovative entrepreneurs have different motives. Some mainly want money for its own sake, some mainly want fame, some mainly want to win the competition. Then there are those who mainly want to bring their project into the world. These are the project entrepreneurs, who often sacrifice for their project, forgoing conspicuous consumption in order to “make a ding in the universe.” (The phrase is due to Steve Jobs.) In my book I give Walt Disney as one example, and Jeff Bezos as another. Was I wrong? Or has Bezos changed? Or is there some other way to account for what looks like Bezos’s conspicuous consumption, as described below?

(p. B4) The national housing market has cooled, but in Los Angeles the ultrarich are still shattering price records. An heiress to the Formula One racing empire sold her home for $119.75 million last July. In December, Lachlan Murdoch paid $150 million for a home in Bel Air.

The latest buyer at the top: Jeff Bezos, the Amazon chief and world’s richest person.

Setting a new high for a home sold in California, Mr. Bezos is paying $165 million for a Beverly Hills estate owned by David Geffen, the media mogul and co-founder of DreamWorks, according to two people familiar with the purchase.

That wasn’t all. In a separate transaction, Bezos Expeditions, which oversees The Washington Post and Mr. Bezos’ charitable foundation, is buying 120 undeveloped acres in Beverly Hills for $90 million, the two people said.

For the full story, see:

Candace Jackson. “Bezos Is Setting Record By Paying $165 Million To Buy Geffen’s Estate.” The New York Times (Saturday, February 15, 2020): B4.

(Note: the online version of the story has the date Feb. 14, 2020, and has the title “Jeff Bezos Buying $165 Million Estate, a California Record.”)

My book is:

Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, 2019.