Category: Labor Economics

Ethnic Russians in Ukraine Identify as Ukrainians, Instead of as Russians (They Choose Freedom and Prosperity)

(p. A8) LSTANYTSIA LUHANSKA, Ukraine—The Russian-controlled areas of Ukraine’s Luhansk and Donetsk regions were once the engines of the country’s economy and dominated its politics.

They produced its richest man, billionaire industrialist Rinat Akhmetov, as well as former President Viktor Yanukovych, ousted by the street protests that triggered the Russian invasion in 2014.

Since then, however, the two areas—now nominally independent “people’s republics” inside the larger regions of Luhansk and Donetsk—have turned into impoverished, depopulated enclaves that increasingly rely on Russian subsidies to survive. As much as half the prewar population of 3.8 million has left, for the rest of Ukraine, more prosperous Russia or Europe. Those who remain are disproportionately retirees, members of the security services and people simply too poor to move. Current economic output has shrunk to roughly 30% of the level before the Russian invasion, economists estimate.

As Russian President Vladimir Putin is massing more than 100,000 troops for a possible broader invasion of Ukraine, the developments in Donetsk and Luhansk show what many fear could happen to the rest of the country if he were to carry that out. The dismal record of Russian rule is one reason so many Ukrainian citizens, including Russian-speakers, are ready to take up arms so that their hometowns won’t meet the same fate.

. . .

Isolyatsiya used to be a popular contemporary art space in Donetsk, hosting exhibitions and performances at a Soviet-era insulation materials factory. When Russian-backed militants took it over in 2014, saying the space was needed to store Russian humanitarian aid, they allowed staff to rescue a collection of Soviet-period social-realist paintings but smashed the contemporary art pieces, melting some of the statues and installations for scrap metal.

. . .

Weeks later, Isolyatsiya’s compound turned into a detention facility operated by the Donetsk republic’s ministry of state security. One of the hundreds of prisoners there was Ukrainian novelist and journalist Stanislav Aseev, who was detained in 2017 after local security officials discovered he was contributing under a pen name to Ukrainian news outlets. Mr. Aseev, who says he was repeatedly tortured with electric shock, was freed in December 2019 as part of a prisoner exchange and now lives near Kyiv.

“They’ve managed to rebuild a Soviet system in the occupied territories—and not the Soviet system of the 1960s and 1970s, but a Soviet system of the 1930s and 1940s, with dungeons, with torture chambers, a system where lives are ruined if you dare to write or say something negative about these republics and their authorities,” Mr. Aseev said.

. . .

Unlike in the wars of the former Yugoslavia, where religion and ethnicity created a permanent identity marker, here whether to consider oneself Ukrainian or Russian is a matter of choice and ideology rather than blood.

. . .

At the Slovyansk local museum, a room is dedicated to the 84 days when the town remained under the control of Russian militias in 2014. Exhibits include rocket-propelled grenades, artillery fragments and ballots of the referendum on independence from Ukraine that pro-Russian forces carried out at the time. Some 100 local residents died in Slovyansk, and more than 2,000 buildings were destroyed or damaged in the fighting. A suburb along the main highway still stands in ruins.

“It’s a big stress. Everyone is afraid, God forbid, that it will happen again,” said one of the museum’s curators, Oleksandr Gayevoy, who lived through the fighting in 2014. “People now prefer not to talk too much, because who knows who will come here next.”

Mr. Gayevoy added that one of his brothers, who remained in the Russian-controlled town of Yenakiyevo, former President Yanukovych’s hometown, was an ardent supporter of the Russian-installed regime there but has since changed his views.

“There used to be a lot of enthusiasm for the Donetsk people’s republic in the beginning, everyone chanted DPR, DPR, DPR! Now, there’s just a lot of disappointment,” said Mr. Gayevoy, who last visited the Russian-held areas in 2019. “My brother now tells me that they are ruled by cretins. The economy there has crumbled, the jobs are gone. There’s nothing good over there.”

For the full story, see:

Yaroslav Trofimov. “Dismal Life in Russian-Occupied Ukraine.” The Wall Street Journal (Saturday, February 5, 2022): A8.

(Note: ellipses added.)

(Note: the online version of the story has the date February 4, 2022, and has the title “Dismal Russian Record in Occupied Eastern Ukraine Serves as Warning.”)

Amazon Warehouse Jobs Give “Economic Boost” to English Town

(p. B4) DARLINGTON, England—Many retailers in this old market town have long held Amazon.com Inc. partially to blame for the closures of a raft of local shops in recent years.

Then, Amazon opened a warehouse here.

The facility, which opened in early 2020, employs 1,300 full-time staff, making it one of the town’s biggest employers. It hired 500 additional seasonal workers during the end-of-year holidays. Wages start at £10 (equivalent to $13.25) an hour, above the legal minimum, and benefits include private healthcare and an £8,000 education allowance available in installments over four years.

The new jobs have all delivered an economic boost for the Northern England town of 100,000, while sparking a reassessment of the U.S. e-commerce giant. Nicola Reading, a gift-shop owner, still blames Amazon for the demise of the local retail scene but now sees an upside, too.

“It feels like Amazon employs half the population of Darlington now,” she said.

Already America’s second-biggest employer, after Walmart Inc., Amazon has been advancing in Europe and the U.K., investing €78 billion ($89 billion) since 2010 in a continentwide expansion that has significantly accelerated over the past few years. Amazon employs over 55,000 full-time U.K. staff.

. . .

Local officials in Darlington have applauded Amazon’s arrival, which they say has benefited the town, chiefly by creating jobs. Amazon’s presence is also encouraging young university graduates to stay in the town and attracting other companies, said Mark Ladyman, the Darlington Borough Council’s assistant director for economic growth.

For the full story, see:

Trefor Moss. “The Small Town That Amazon Upended, Then Saved.” The Wall Street Journal (Saturday, January 22, 2022): B4.

(Note: ellipsis added.)

(Note: the online version of the story was updated Jan. 21, 2022, and has the same title as the print version.)

IBM Sells Failed Watson Artificial Intelligence Health Unit

(p. B3) International Business Machines Corp. agreed to sell the data and analytics assets from its Watson Health business to investment firm Francisco Partners, the companies said Friday [January 21, 2022].

. . .

The Watson Health business uses artificial intelligence to analyze diagnostic tests and other health data and to manage care.

IBM had big aspirations for its Watson artificial intelligence to help in medical research and improve patient outcomes, but the technology’s impact has fallen short of early hopes. Partners and clients have moved away from projects that were built around Watson technology in recent years, although IBM had spent billions of dollars making acquisitions to bolster the business.

“IBM took a risk of becoming a disrupter in the complex health care industry but was only able to garner limited success,” UBS analyst David Vogt said in a note Friday.

For the full story, see:

Matt Grossman. “IBM Sells Its Watson Health Assets To Investment Firm as It Refocuses.” The Wall Street Journal (Saturday, January 22, 2022): B3.

(Note: ellipsis, and bracketed date, added.)

(Note: the online version of the story was updated Jan. 21, 2022, and has the title “IBM Sells Watson Health Assets to Investment Firm.”)

Most Private-Sector Workers Do Not Value Unions Enough to Want to Pay Dues

(p. A17) The annual BLS report on union membership released last week shows that unions lost nearly a quarter-million members in 2021, with private-sector membership dropping to a historic low of 6.1%. Even in retail and healthcare, which labor organizers targeted over pandemic-related safety concerns, union membership declined in 2021 from 2020.

. . .

. . . thinking well of unions and wanting to pay dues to be represented by one aren’t the same. I recently moderated focus groups of workers 18 to 29 in the Midwest and on the East and West coasts. While most said positive things about unions, only a handful wanted to join one.

. . .

The “historic” worker strife that has drawn media attention is more fiction than fact. Don’t take my word for it: The socialist magazine Jacobin reviewed the new BLS data on work stoppages and concluded that 2021 “was a quiet year, even by recent standards.”

For the full commentary, see:

Michael Saltsman. “Big Labor’s Resurgence That Wasn’t.” The Wall Street Journal (Monday, January 24, 2022): A17.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Jan. 23, 2022, and has the same title as the print version.)

30 Million Workers May Have the Skills, but Not the Degrees, to Move to Jobs That Pay 70 Percent More

(p. B1) Over the last two decades, workers without four-year college degrees have lost ground in the occupations that used to be ladders to middle-class lives for them and their families.

While the trend has been well known, putting a number on the lost steppingstone jobs has been elusive. A new study, published on Friday, estimates that such workers have been displaced from 7.4 million jobs since 2000.

The research points to the persistent challenge for the nearly two-thirds of American workers who do not have a four-year college degree, even as some employers have dropped the requirement in recent years.

“These workers have been displaced from millions of the precise jobs that offer them upward mobility,” said Papia Debroy, head of research for Opportunity@Work, the nonprofit that published the study. “It represents a stunning loss for workers and their families.”

. . .

(p. B2) A previous study by Opportunity@Work, with academic researchers, dissected skills in different occupations and found that up to 30 million workers had the skills to realistically move to new jobs that paid on average 70 percent more than their current ones.

Some major companies have started to adjust their hiring requirements. Rework America Business Network, an initiative of the Markle Foundation, has pledged to adopt skills-based hiring for many jobs. Companies in the group include Aon, Boeing, McKinsey, Microsoft and Walmart.

. . .

“The country as a whole will benefit from not stranding human capital,” said Erica Groshen, an economist at Cornell University and a former head of the Bureau of Labor Statistics.

For the full story, see:

Steve Lohr. “Requirement For Degrees Curbs Hiring.” The New York Times (Monday, January 17, 2022): B1-B2.

(Note: ellipses added.)

(Note: the online version of the story has the date Jan. 14, 2022, and has the title “Millions Have Lost a Step Into the Middle Class, Researchers Say.”)

Side Gigs Can Lift Mood Enough to Improve Performance in Main Job

(p. R4) Contrary to the popular wisdom, moonlighting doesn’t leave people worn out and unproductive from 9 to 5. Instead, side gigs can make people feel more empowered—and thereby more productive at the office.

Dr. Sessions and his colleagues—whose results were recently published in the Academy of Management Journal—posted ads on large social-media networking groups, asking people to take a series of surveys about the nature of their supplementary work.  . . .

The study showed that supplementary work frequently enables side hustlers to feel empowered by taking ownership of self-directed work—which was especially true for those who were motivated beyond making money, says Dr. Sessions.

. . .

Side hustlers self-reported that they were preoccupied with their after-hours gigs the next morning, due to being deeply engaged in that work.

. . .

But that wasn’t the whole story: The moonlighters’ colleagues rated their co-workers’ performance significantly higher on those same days.

So, the uplift in mood had a statistically stronger positive effect on employee performance than the negative effect of being distracted—even if the moonlighters didn’t see things that way.

For the full story, see:

Heidi Mitchell. “When Two Jobs Can Be Better Than One.” The Wall Street Journal (Thursday, Nov. 4, 2021): R4.

(Note: ellipses added.)

(Note: the online version of the story has the date November 1, 2021 , and has the title “How a Side Hustle Can Boost Performance at Your Regular Job.”)

The comprehensive review by Prof. Stephan mentioned above is:

Stephan, Ute. “Entrepreneurs’ Mental Health and Well-Being: A Review and Research Agenda.” Academy of Management Perspectives 32, no. 3 (Aug. 2018): 290-322.

The recent study co-authored by Dr. Sessions mentioned above is:

Sessions, Hudson, Jennifer D. Nahrgang, Manuel J. Vaulont, Raseana Williams, and Amy L. Bartels. “Do the Hustle! Empowerment from Side-Hustles and Its Effects on Full-Time Work Performance.” Academy of Management Journal 64, no. 1 (Feb. 2021): 235-64.

Entrepreneurs Are Happier Because Autonomy and More Meaningful Work Matter More Than Stress and Workload

(p. R1) “If you look at the data, it turns out that entrepreneurs on average earn less money than a typical employed person, work 13 hours more a week and report that it’s a very stressful occupation,” says Boris Nikolaev, assistant professor of entrepreneurship at Baylor University in Waco, Texas. “But despite that, there’s overwhelming evidence in the literature that entrepreneurs report significantly higher levels of job satisfaction.”

. . .

“Entrepreneurs are happier in terms of all indications (p. R4) of life satisfaction and work satisfaction,” says Ute Stephan, professor of entrepreneurship at King’s College London, who conducted a comprehensive review of more than 100 academic studies on entrepreneurship and well-being. “However, they might be more stressed than the rest of us, as well.”

This unusual mix of stress and happiness comes about, she says, because entrepreneurs tend to be deeply invested in their businesses, and their passion is a double-edged sword: It gives them a strong sense of purpose and autonomy, but it can also lead to worry, late nights, overwork and stress.

. . .

The stress and workload have a strong negative effect, as is evident in other studies, but the sense of doing something important and being their own boss is so gratifying that it outweighs all those negatives and leaves them happier overall.

“What they are doing is important to them, it’s part of who they are, it’s part of their identity, and that’s why it has such a positive impact on well-being,” says Prof. Stephan.

. . .

. . . in a recent study, Prof. Stephan discovered that autonomy alone isn’t enough. It’s important, to be sure—but what entrepreneurs need, above all, is meaning. She analyzed survey data from over 22,000 people in 16 European countries, comparing their feelings of happiness with the extent to which their work gives them a sense of meaning and autonomy.

. . .

She found that entrepreneurs experienced higher levels of happiness than wage-earning employees (4.37 vs. 4.28 on a scale of 1 to 6), as well as higher levels of meaning (4.56 vs. 4.25 on a scale of 1 to 5) and autonomy (2.66 vs. 1.95 on a scale of 0 to 3). Using regression analysis, she discovered that meaning was the decisive factor in entrepreneurial happiness.

“What we found is that much more important than decision-making freedom is the sense of doing something profoundly meaningful,” she says. “That really energizes you, and as an entrepreneur you really need that energy to be creative and to do the work that’s important to you.”

But finding meaning in work doesn’t have to be about changing the world. Framing work in terms of performing an important service can help even entrepreneurs in less glamorous industries find meaning and happiness—such as contractors who help people build a dream home, or accountants saving people from disastrous money problems.

For the full story, see:

Andrew Blackman. “Are Entrepreneurs Happier Than Other People?” The Wall Street Journal (Thursday, Nov. 04, 2021): R1 & R4.

(Note: ellipses added.)

(Note: the online version of the story was updated Nov. 3, 2021 , and has the title “Are Entrepreneurs Happier Than Everybody Else?”)

The comprehensive review by Prof. Stephan mentioned above is:

Stephan, Ute. “Entrepreneurs’ Mental Health and Well-Being: A Review and Research Agenda.” Academy of Management Perspectives 32, no. 3 (Aug. 2018): 290-322.

The recent study by Prof. Stephan mentioned above is:

Stephan, Ute, Susana M. Tavares, Helena Carvalho, Joaquim J. S. Ramalho, Susana C. Santos, and Marc van Veldhoven. “Self-Employment and Eudaimonic Well-Being: Energized by Meaning, Enabled by Societal Legitimacy.” Journal of Business Venturing 35, no. 6 (Nov. 2020): DOI: https://doi.org/10.1016/j.jbusvent.2020.106047.

Humans Still Matter in Chess

(p. A14) Magnus Carlsen, of Norway, steamrolled Russia’s Ian Nepomniachtchi 7.5-3.5 in the best-of-14 series, capturing a decisive victory that solidified his legacy as the greatest in the history of the sport. He has been the world champion since 2013—this was his fifth win—and is the highest-rated player of all time.

What even his rivals marvel at is how Carlsen, 31, has weaponized the computer revolution against them. He does it not by overpowering opponents with calculation, but by harnessing that digital knowledge to turn games into more human battles.

“Magnus is proud of saying that he’s probably the top player who works the least with the computer and is the least influenced by the computer,” said Carlsen’s coach, Peter Heine Nielsen. “He wants to trust his own evaluation, his human touch and to keep that.”

. . .

. . . here’s the twist: the most lethal use of computer-based analysis isn’t to find something that only the machine can see. It’s figuring out what it sees and dismisses that might still be useful. The dream of any computer-savvy chess player is to discover a string of moves that an engine doesn’t necessarily favor, yet taps into a line that their opponent hasn’t prepared.

“That’s the Holy Grail,” said grandmaster Cristian Chirila, who assisted world No. 4 Fabiano Caruana when he faced Carlsen for the world championship in 2018. “If you can get there, that’s a huge advantage.”

In any given situation, the engines might recommend any number of moves and suggest that they are all relatively equal. Those are the obvious ones to study. But by playing a more obscure move—perhaps even one that the computers suggest is disadvantageous—Carlsen thrives by throwing his opponents into that unfamiliar territory.

For the full story, see:

Joshua Robinson and Andrew Beaton. “Computers Revolutionized Chess. Magnus Carlsen Wins by Being Human.” The Wall Street Journal (Friday, December 10, 2021): A14.

(Note: ellipses added.)

(Note: the online version of the story was updated Dec. 10, 2021, and has the same title as the print version.)

“In a World Filled With Distraction,” Apolo Ohno Praises “Deep Work”

(p. C12) Cal Newport’s “Deep Work” eloquently describes how to find an advantage in a world filled with distraction.

For the full review, see:

Apolo Ohno. “12 Months of Reading; Apolo Ohno.” The Wall Street Journal (Saturday, Dec. 11, 2021): C12.

(Note: the online version of the review has the date December 10, 2021, and has the title “Who Read What: Business Leaders Share Their Favorite Books of 2021.”)

The book praised by Ohno is:

Newport, Cal. Deep Work: Rules for Focused Success in a Distracted World. New York: Grand Central Publishing, 2016.

Xi’s Micromanaging “Zero Covid” Policy Hurting Chinese Economic Growth

(p. A1) Earlier this year, Xi Jinping issued brief instructions to education officials in Beijing. China’s leader wanted to reform the country’s $100 billion private tutoring industry, which the state worried was helping well-to-do families gain advantages for their offspring and creating anxiety among families that couldn’t afford the help.

Education officials drafted a plan that included new limits on tutoring for children up to the equivalent of ninth grade, said people familiar with the effort.

The plan was too soft, Mr. Xi said, in a one-sentence note to the education ministry, according to the people.

Scrambling to please him, the ministry expanded the limits to include students up to the equivalent of 12th grade. In addition, it required all private education companies to re-register as nonprofits.

The more extreme rules, issued in July [2021], triggered panic selling that erased tens of billions of dollars from the value of education com-(p. A14)panies listed on U.S. and Hong Kong stock exchanges. Officials from the China Securities Regulatory Commission hastily scheduled meetings with foreign investors to calm them down, according to people familiar with the conversations, and promised that Beijing would consider market impact before introducing future policies.

The episode is just one example of Mr. Xi’s evolving management style as the Chinese president consolidates control of the world’s second-largest economy. He is widely considered the most powerful Chinese leader in a generation. He is also a micromanager who intervenes often, unpredictably and sometimes vaguely in policy matters big and small.

. . .

Behind the scenes, many officials question some of Mr. Xi’s decisions.

In late July [2021], a Covid-19 outbreak caused more than 1,200 infections after months of nearly zero reported cases. Some central government officials, eyeing other countries, suggested it might be time for China to stop its strategy of pursuing “zero Covid” and learn to live with the virus, according to a person familiar with the discussions.

Mr. Xi was furious, said people familiar with the issue. In a note to underlings, he asked if officials were becoming “lax and numbed” in fighting the virus, according to these people and to state media reports. “Zero Covid” would remain the policy.

Local officials intensified their efforts. In late October [2021], they locked more than 30,000 visitors into Shanghai Disneyland and forced them to undergo Covid-19 tests after one customer tested positive. Authorities temporarily shut one of China’s biggest container ports after a single case, hurting global supply chains.

China’s economic growth slowed to 4.9% in the third quarter from the previous quarter’s 7.9% rate. Economists have said China’s zero-tolerance pandemic measures, including lockdowns of residential compounds and cancellations of public events, are likely to have a significant impact on China’s growth if they don’t succeed in snuffing out the virus soon.

Some local government officials have warned against “excessive pandemic prevention” measures, according to speeches quoted on websites. Yet officials keep pressing, fearful they might be punished if a Covid-19 case emerged in their area.

. . .

Mr. Xi later “personally planned, personally proposed, personally deployed and promoted” the development of Xiongan, a new “eco-city,” out of farmland about 60 miles from Beijing, according to state media, and urged state firms to move there. Despite billions of dollars of investment, it hasn’t matched the quick success of Deng-era special economic zones such as Shenzhen.

To comply with the new regulatory regime for after-school tutoring this year, education companies have laid off tens of thousands of employees, including teachers. Given the impact on the industry, officials have been enforcing the rules on tutoring for children only up to the equivalent of ninth grade—as originally proposed.

. . .

“Some only act when the party’s central leadership has instructed them to do so,” Mr. Xi said in a speech to the party’s top disciplinary officials last January, made public only recently. He complained that many officials aren’t competent to deal with complicated issues, and that if he didn’t issue so many instructions, little would get done.

“I issue instructions as a last line of defense,” he said.

For the full story, see:

Josh Chin. “Xi Jinping’s Style: Micromanagement.” The Wall Street Journal (Thursday, Dec. 16, 2021): A1 & A14.

(Note: ellipses, and bracketed years, added.)

(Note: the online version of the story has the December 15, 2021, and has the title “Xi Jinping’s Leadership Style: Micromanagement That Leaves Underlings Scrambling.”)

Chinese Social Media Attacks Walmart as Some Firms Reduce Investment in China

(p. A1) Walmart Inc., the world’s largest retailer, became the latest Western company to face scrutiny over its handling of business involving Xinjiang, following the passage of a U.S. law that virtually bans all imports from the northwestern Chinese region over forced-labor and human-rights concerns.

The Bentonville, Ark.-based retailer attracted anger on Chinese social media beginning last week after internet users shared comments that purported to show that Walmart had stopped stocking products from Xinjiang in its China-based Walmart and Sam’s Club stores.

. . .

Last week, U.S. semiconductor giant Intel Corp. issued an apology to Chinese consumers, partners and the public following an outcry on Chinese (p. A9) social media against the Santa Clara, Calif.-based company, which had published on its website a letter to suppliers asking them to avoid sourcing from Xinjiang.

. . .

Chinese social media campaigns are often not as organic as their overseas peers, as authorities and technology firms curate and censor domestic online content.

. . .

The American Chamber of Commerce in Shanghai said in September that 30% of retail and consumer companies polled in its most recent business survey cited public backlash and consumer boycotts as a top concern, the highest among the major industries covered by the business lobby. More than one-tenth of the companies said they had reduced planned investments in China because of concerns about consumer boycotts.

For the full story, see:

Liza Lin. “Walmart Draws Anger In China Over Xinjiang.” The Wall Street Journal (Tuesday, December 28, 2021): A1 & A9.

(Note: ellipses added.)

(Note: the online version of the story has the date December 27, 2021, and has the title “Walmart Sparks Public Outcry in China Over Products From Xinjiang.”)