Category: Labor Economics

Highly Praised Robot Is Replaced by Humans in a Variety of Jobs

(p. A1) TOKYO—Having a robot read scripture to mourners seemed like a cost-effective idea to the people at Nissei Eco Co., a plastics manufacturer with a sideline in the funeral business.

The company hired child-sized robot Pepper, clothed it in the vestments of Buddhist clergy and programmed it to chant several sutras, or Buddhist scriptures, depending on the sect of the deceased.

Alas, the robot, made by SoftBank Group Corp., kept breaking down during practice runs. “What if it refused to operate in the middle of a ceremony?” said funeral-business manager Osamu Funaki. “It would be such a disaster.”

Pepper was fired. The company ended its lease of the robot and sent it back to the manufacturer. After a rash of similar mishaps across Japan, in which Pepper botched its job at (p. A10) a nursing home and gave baseball fans a creepy feeling, some people are saying the humanoid itself will need a funeral soon.

. . .

. . . , a Japanese hotel chain created a robot-operated hotel, with dinosaur-shaped robots handling front-desk duties, only to reverse course after the plan failed to save money and created more work for humans.

Pepper was given a perky demeanor and programmed to grasp human emotions and engage in basic conversation. It starred in some early demonstrations. But like a candidate who puts on a fine performance at his job interview only to drive his bosses crazy later, Pepper lacked the skills it said it had, say some of his managers.

In 2016, a Tokyo-area nursing-home operator called Ittokai introduced three units of Pepper, each at a cost of around $900 a month, to lead singing and exercises for elderly people at the home.

“Users got excited to have it early on because of its novelty,” said Masataka Iida, an executive at the company. “But they lost interest sooner than expected.” Mr. Iida said Pepper’s repertoire of exercise moves was limited and, owing to mechanical errors, it sometimes took unplanned breaks in the middle of its shift. After three years, the company pulled the plug.

. . .

SoftBank also touted Pepper as a companion for the home. The initial batch of 1,000 units sold out in a minute despite the hefty price tag.

Technology journalist Tsutsumu Ishikawa said he “fell in love at first sight” after seeing Mr. Son, the SoftBank chief, present a futuristic picture of living with a chatty Pepper.

After arriving at the Ishikawa home, however, Pepper couldn’t recognize the faces of family members or carry on a proper conversation, said Mr. Ishikawa. The robot, connected to the cloud, is supposed to remember the family even after a breakdown, Mr. Ishikawa says, but when Pepper returned home after the repair of a sensor, Pepper greeted him, “Nice to meet you!”

He shipped the robot back to SoftBank in 2018 after spending at least $9,000 over the three-year life of his subscription services agreement; he wasn’t eligible for any form of refund.

“It was such a waste of money. I still regret it,” he said.

For the full story, see:

Miho Inada. “Humanoid Robot Keeps Getting Fired From Jobs.” The Wall Street Journal (Wednesday, July 14, 2021): A1 & A10.

(Note: ellipses added.)

(Note: the online version of the story has the date July 13, 2021, and has the title “Humanoid Robot Keeps Getting Fired From His Jobs.”)

Serendipitous Water Cooler Collaboration “Is More Fairy Tale Than Reality”

(p. B1) When Yahoo banned working from home in 2013, the reason was one often cited in corporate America: Being in the office is essential for spontaneous collaboration and innovation.

. . .

Yet people who study the issue say there is no evidence that working in person is essential for creativity and collaboration. It may even hurt innovation, they say, because the demand for doing office work at a prescribed time and place is a big reason the American workplace has been inhospitable for many people.

“That’s led to a lot of the outcomes we see in the modern office environment — long hours, burnout, the lack of representation — because that office culture is set up for the advantage of the few, not the many,” said Dan Spaulding, chief people officer at Zillow, the real estate market-(p. B7)place.

“The idea you can only be collaborative face-to-face is a bias,” he said. “And I’d ask, how much creativity and innovation have been driven out of the office because you weren’t in the insider group, you weren’t listened to, you didn’t go to the same places as the people in positions of power were gathering?”

“All of this suggests to me that the idea of random serendipity being productive is more fairy tale than reality,” he said.

. . .

“There’s credibility behind the argument that if you put people in spaces where they are likely to collide with one another, they are likely to have a conversation,” said Ethan S. Bernstein, who teaches at Harvard Business School and studies the topic. “But is that conversation likely to be helpful for innovation, creativity, useful at all for what an organization hopes people would talk about? There, there is almost no data whatsoever.”

“All of this suggests to me that the idea of random serendipity being productive is more fairy tale than reality,” he said.

. . .

. . . Professor Bernstein found that contemporary open offices led to 70 percent fewer face-to-face interactions. People didn’t find it helpful to have so many spontaneous conversations, so they wore headphones and avoided one another.

. . .

. . . some creative professionals, like architects and designers, have been surprised at how effective remote work has been during the pandemic, while scientists and academic researchers have long worked on projects with colleagues in other places.

Requiring people to be in the office can drive out innovation, some researchers and executives said, because for many people, in-person office jobs were never a great fit. They include many women, racial minorities and people with caregiving responsibilities or disabilities. Also, people who are shy; who need to live far from the office; who are productive at odd hours; or who were excluded from golf games or happy hours.

For the full commentary, see:

Claire Cain Miller. “THE UPSHOT;Returning to the Office? The Myth of Serendipity.” The New York Times, SundayBusiness Section (Sunday, July 2, 2021): B1 & B7.

(Note: the online version of the commentary was updated July 1, 2021, and has the title “THE UPSHOT; Do Chance Meetings at the Office Boost Innovation? There’s No Evidence of It.”)

The Bernstein research mentioned above is:

Bernstein, Ethan, and Ben Waber. “The Truth About Open Offices.” Harvard Business Review 97, no. 6 (Nov./Dec. 2019): 82-91.

Bezos’s Intuitions Drove Amazon’s Innovations

(p. 12) . . . Alexa, the voice coming out of my Echo, more or less is Jeff Bezos. He came up with the idea of a smart speaker in January 2011, back in the era of Google Plus and the iPod Shuffle. Bezos emailed his top deputies that month and declared, “We should build a $20 device with its brains in the cloud that’s completely controlled by our voice.”

For the next nearly four years, he obsessively micromanaged the project, pushing teams in Atlanta and Gdansk to make speech recognition seamless. He put in place a surreal testing protocol that involved hiring temps to spend days in empty apartments chattering away to silent speakers, and berated executives who told him it would take decades to develop speech recognition. He took home an early Echo prototype and when, in a moment of frustration, he told it to go “shoot yourself in the head,” it sent a wave of panic through the engineers who were listening in. He even came up with the idea for the LED ring on top, Stone writes, and with the name “Alexa” (in homage to the ancient library of Alexandria).

. . .

Amazon in the 2010s was an intensely personal venture, run by one of the wealthiest men in the world according to his own desires and reflecting his own personality.

. . .

Like Alexa, Amazon as a company seems to embody some of Bezos’ best personal qualities (his relentless drive to get you that package on time) and his worst (an “informal cruelty” that defines his company’s culture and requires that his factory workers and executives make personal sacrifices for corporate needs).

At Amazon, nearly every big decision comes down to a meeting with Bezos, at which his deputies hold their breaths, genuinely uncertain of whether he will berate them and tear up their proposals, or double their planned budgets. Some of his fixations, like his determination to create a smart speaker, are visionary.

. . .

It was, Stone writes, “a different style of innovation,” in which employees “worked backwards from Bezos’ intuition and were catering to his sometimes eclectic tastes (literally).”

For the full review, see:

Ben Smith. “Colossus.” The New York Times Book Review (Sunday, June 13, 2021): 12.

(Note: ellipses added.)

(Note: the online version of the review was updated June 17,, 2021, and has the title “To Understand Amazon, We Must Understand Jeff Bezos.”)

The book under review is:

Stone, Brad. Amazon Unbound: Jeff Bezos and the Invention of a Global Empire. New York: Simon & Schuster, 2021.

Subsidies for Black Farmers Fuel Claims of “Reverse Racism” and “All Farmers Matter”

(p. 1) LaGRANGE, Mo. — Shade Lewis had just come in from feeding his cows one sunny spring afternoon when he opened a letter that could change his life: The government was offering to pay off his $200,000 farm loan, part of a new debt relief program created by Democrats to help farmers who have endured generations of racial discrimination.

It was a windfall for a 29-year-old who has spent the past decade scratching out a living as the only Black farmer in his corner of northeastern Missouri, where signposts quoting Genesis line the soybean fields and traffic signals warn drivers to go slow because it is planting season.

But the $4 billion fund has angered conservative white farmers who say they are being unfairly excluded because of their race. And it has plunged Mr. Lewis and other farmers of color into a new culture war over race, money and power in American farming.

. . .

(p. 19) The plans have drawn thousands of enraged comments on farm forums and are being fought by banks worried about losing interest income. And some rural residents have rallied around a new slogan, cribbed from the conservative response to the Black Lives Matter movement: All Farmers Matter.

. . .

“It’s a bunch of crap,” said Jeffrey Lay, who grows corn and soybeans on 2,000 acres and is president of the county farm bureau. “They talk about they want to get rid of discrimination. But they’re not even thinking about the fact that they’re discriminating against us.”

. . .

. . . rural residents upset with the repayments call them reverse racism.

White conservative farmers and ranchers from Florida, Texas and the Midwest quickly sued to block the program, arguing that the promised money amounts to illegal discrimination. America First Legal, a group run by the former Trump aide Stephen Miller, is backing the Texas lawsuit, whose plaintiff is the state’s agriculture commissioner.

“It’s anti-white,” said Jon Stevens, one of five Midwestern farmers who filed a lawsuit through the Wisconsin Institute for Law and Liberty, a conservative legal group. “Since when does Agriculture get into this kind of race politics?”

. . .

One recent afternoon, a friend, Brad Klauser, who runs his family’s large cattle and grain farm, swung by Mr. Lewis’s barn to catch up. As they talked bills, rising fuel costs and sky-high land prices, the conversation turned to the debt relief that only one of them was eligible to receive.

“Everybody should have the same option,” said Mr. Klauser, who is white, leaning on the flatbed of Mr. Lewis’s pickup. “Do you think you’re disadvantaged?”

“There’s definitely disadvantages,” Mr. Lewis replied, saying that officials scoffed when he first tried to get a federal farm loan. “They didn’t take me serious.”

After Mr. Klauser headed home, Mr. Lewis thought about how the two friends were both trying to reap a profit from the land. “Everyone should have a chance at farming,” he said.

For the full story, see:

Jack Healy. “Windfall for Black Farmers Roils Rural America.” The New York Times, First Section (Sunday, May 23, 2021): 1 & 19.

(Note: ellipses added.)

(Note: the online version of the story was updated May 24, 2021, and has the title “‘You Can Feel the Tension’: A Windfall for Minority Farmers Divides Rural America.” The online “pressreader” version showed the continuation page as p. 21. The continuation page of my “National” print version was p. 19.)

World Population Decline Will Slow Global Warming

(p. 1) All over the world, countries are confronting population stagnation and a fertility bust, a dizzying reversal unmatched in recorded history that will make first-birthday parties a rarer sight than funerals, and empty homes a common eyesore.

Maternity wards are already shutting down in Italy. Ghost cities are appearing in northeastern China. Universities in South Korea can’t find enough students, and in Germany, hundreds of thousands of properties have been razed, with the land turned into parks.

Like an avalanche, the demographic forces — pushing toward more deaths than births — seem to be expanding and accelerating. Though some countries continue to see their populations grow, especially in Africa, fertility rates are falling nearly everywhere else. Demographers now predict that by the latter half of the century or possibly earlier, the global population will enter a sustained decline for the first time.

A planet with fewer people could ease pressure on resources, slow the destructive impact of climate change and reduce household burdens for women.

For the full story, see:

Damien Cave, Emma Bubola and Choe Sang-Hun. “World Is Facing First Long Slide in Its Population.” The New York Times, First Section (Sunday, May 23, 2021): 1 & 17.

(Note: the online version of the story was updated May 24, 2021, and has the title “Long Slide Looms for World Population, With Sweeping Ramifications.”)

Entrepreneur Pan Leaves Communist China After Xi Arrests Human Rights Defender and Friend

(p. B1) China’s economy is on a tear. Factories are humming, and foreign investment is flowing in. Even so, the wealthy and powerful people atop some of the country’s most prominent companies are heading for the exits.

The latest are Pan Shiyi and Zhang Xin, the husband-and-wife team that runs Soho China, a property developer known for its blobby, futuristic office buildings. In striking a deal this week to sell a controlling stake to the investment giant Blackstone for as much as $3 billion, Mr. Pan and Ms. Zhang are turning over the company as high-profile entrepreneurs come under public and official scrutiny in China like never before.

. . .

(p. B5) “For big tycoons in China, nowadays they need to be careful in general,” said Ling Chen, who studies state-business relations in China at the School of Advanced International Studies at Johns Hopkins University.

. . .

Mr. Pan was . . . one of the first Chinese business leaders to recognize the power of the internet in marketing and public relations. He wrote a popular blog in the 2000s. Then, when the Twitter-like social media platform Weibo came along, he quickly became one of its most influential voices, amassing more than 20 million followers.

. . .

He was never too pointed in expressing his opinions. But he wanted China to learn from its mistakes, such as its cruel treatment of the moneyed and educated classes during the Cultural Revolution.

After Mr. Xi took office as China’s top leader in 2013, the authorities began going after businesspeople and intellectuals with big online followings. The police that year arrested Wang Gongquan, a friend of Mr. Pan’s and supporter of human rights causes, on charges of disrupting public order.

Mr. Pan and Ms. Zhang began selling off property holdings in China and spending more time in the United States.

For the full story, see:

Raymond Zhong. “A Chinese Power Couple Cashes Out.” The New York Times (Friday, June 18, 2021): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story has the date June 17, 2021, and has the title “As China Scrutinizes Its Entrepreneurs, a Power Couple Cashes Out.”)

Risk Averse Family Firms with Large Cash Reserves Can Last 1,000 Years

Is longevity for firms a noble goal? Or do humans usually flourish more in the churn of creative destruction?

(p. B1) KYOTO, Japan — Naomi Hasegawa’s family sells toasted mochi out of a small, cedar-timbered shop next to a rambling old shrine in Kyoto. The family started the business to provide refreshments to weary travelers coming from across Japan to pray for pandemic relief — in the year 1000.

Now, more than a millennium later, a new disease has devastated the economy in the ancient capital, as its once reliable stream of tourists has evaporated. But Ms. Hasegawa is not concerned about her enterprise’s finances.

Like many businesses in Japan, her family’s shop, Ichiwa, takes the long view — albeit longer than most. By putting tradition and stability over profit and growth, Ichiwa has weathered wars, plagues, natural disasters, and the rise and fall of empires. Through it all, its rice flour cakes have remained the same.

Such enterprises may be less dynamic than those in other countries. But their resilience offers lessons for businesses in places like the United States, where the coronavirus has forced tens of thousands into bankruptcy.

“If you look at the economics textbooks, enterprises are supposed to be maximizing profits, scaling up their size, market share and growth rate. But these companies’ operating principles are completely different,” said Kenji Matsuoka, a professor emeritus of business at Ryukoku University in Kyoto.

(p. B5) “Their No. 1 priority is carrying on,” he added. “Each generation is like a runner in a relay race. What’s important is passing the baton.”

Japan is an old-business superpower. The country is home to more than 33,000 with at least 100 years of history — over 40 percent of the world’s total, according to a study by the Tokyo-based Research Institute of Centennial Management. Over 3,100 have been running for at least two centuries. Around 140 have existed for more than 500 years. And at least 19 claim to have been continuously operating since the first millennium.

. . .

The businesses, known as “shinise,” are a source of both pride and fascination.

. . .

Most of these old businesses are, like Ichiwa, small, family-run enterprises that deal in traditional goods and services. But some are among Japan’s most famous companies, including Nintendo, which got its start making playing cards 131 years ago, and the soy sauce brand Kikkoman, which has been around since 1917.

. . .

The Japanese companies that have endured the longest have often been defined by an aversion to risk — shaped in part by past crises — and an accumulation of large cash reserves.

It is a common trait among Japanese enterprises and part of the reason that the country has so far avoided the high bankruptcy rates of the United States during the pandemic. Even when they “make some profits,” said Tomohiro Ota, an analyst at Goldman Sachs, “they do not increase their capital expenditure.”

Large enterprises in particular keep substantial reserves to ensure that they can continue issuing paychecks and meet their other financial obligations in the event of an economic downturn or a crisis. But even smaller businesses tend to have low debt levels and an average of one to two months of operating expenses on hand, Mr. Ota said.

For the full story, see:

Ben Dooley and Hisako Ueno. “A Family Business Got Its Start In a Pandemic (1,000 Years Ago).” The New York Times (Saturday, December 5, 2020): B1 & B5.

(Note: ellipses added.)

(Note: the online version of the story was updated Jan. 7, 2021, and has the title “This Japanese Shop Is 1,020 Years Old. It Knows a Bit About Surviving Crises.”)

Older Americans Shifting to Entrepreneurship at Faster Pace

(p. B6) In April [2020], Dave Summers lost his job as director of digital media productions at the American Management Association, a casualty of layoffs brought on by the pandemic.

Mr. Summers, 60, swiftly launched his own business as a digital media producer, coach and animator who creates podcasts, webcasts and video blogs.

And in September, he and his wife, who teaches nursery school, moved from Danbury, Conn., to Maryville, Tenn., which they discovered while visiting their son in Nashville. “My new work is all virtual, so I can live anywhere,” he said. “Not only is it a cheaper place to live, we love hiking and the outdoors, and our new town is in the foothills of the Great Smoky Mountains.”

Droves of small businesses have been shuttered by the economic fallout of the coronavirus, but for Mr. Summers, starting a new one was the best option.

“I’m not sitting on a massive nest egg, so I need to work to keep afloat,” he said. “It’s also about being healthy and happy. I can’t just retire because underneath it all I’m creative, and I have to be busy doing stuff and helping people tell their stories.”

While the coronavirus pandemic is causing many older workers who have lost jobs, or who have been offered early retirement severance packages, to decide to leave the work force, others like Mr. Summers are shifting to entrepreneurship.

In fact, older Americans had already been starting new businesses at a fast rate. In 2019, research from the Kauffman Foundation, a nonpartisan group supporting entrepreneurship, found that more than 25 percent of new entrepreneurs were ages 55 to 64, up from about 15 percent in 1996.

Across the age spectrum, there has been a rise in new business start-ups since May [2020], according to the Census Bureau. The surge is likely “powered by newly unemployed individuals opting to start their own businesses, either by choice or out of necessity,” according to the Economic Innovation Group, a bipartisan public policy organization.

. . .

It turns out that the importance of entrepreneurship, or self-employment as a form of work, increases significantly with age, according to a report by Cal J. Halvorsen and Jacquelyn B. James of the Center on Aging & Work at Boston College.

According to the report: “While about one in six workers in their 50s are self-employed, nearly one in three are self-employed in their late 60s and more than 1 in 2 workers over the age of 80 are self-employed.

For the full story, see:

Kerry Hannon. “Older Americans Make a New Start in a Business of Their Own.” The New York Times (Friday, November 27, 2020): B6.

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

(Note: the online version of the story has the date Oct. [sic] 21, 2020, and has the title “Making a New Start in a Business of Their Own.”)

Chinese Local Governments Run Up $6 Trillion in Debt, Partly to Build Giant Statues and a Full-Size Replica of Titanic

(p. B1) To officials in her corner of China, the statue of Yang Asha, a goddess of beauty, serves as a tribute to the rich culture of the local people and, they hope, a big draw for sightseers and their money. To many others in China, she is another white elephant in a country full of expensive monuments, gaudy tourist traps and wasteful vanity projects that draw money away from real problems.

Those critics point to the statue of Guan Yu, a general from antiquity, in the city of Jingzhou, where he also towers higher than the Statue of Liberty and wields an enormous polearm called the Green Dragon Crescent Blade.

They point to the Jingxingu Hotel, a 24-story wooden building with lots of empty balconies and open spaces but few actual rooms — and it has not accepted guests beyond a few tourists who come to gawk.

They point to the construction of a full-size, $150 million replica of the Titanic in a reservoir deep in China’s interior, 1,200 miles from (p. B5) the ocean.

. . .

Singling out the $38 million Jingxingu Hotel and the $224 million Guan Yu project, which also included an elaborate base and surrounding park, the Ministry of Housing and Urban-Rural Development ordered on Sept. 29 [2020] that communities may not “blindly build large-scale sculptures that are divorced from reality and the masses.”

Chinese government officials have long prized big projects. China now has four-fifths of the world’s 100 tallest bridges, more miles of ultramodern expressways than the American interstate highway system and a bullet-train network long enough to span the continental United States seven times. Those projects have employed millions of people and helped fuel the country’s breakneck growth.

But local officials borrowed heavily to fund those projects. Estimates put the amount of local debt as high as $6 trillion, raising fears of financial bombs lurking in the ledgers of far corners of the country.

Beijing has doubled down on further investment spending this year in an initially successful bid to shake off an economic hangover from the outbreak of coronavirus in China last winter.

Yet with each passing year, as projects are built in ever-more-remote places, the economic kick from each project becomes less and less. China is on track this year to add debt equal to four months’ economic output while its economy grows by an amount equal to less than two weeks’ output.

Local government borrowing “is still out of control,” said Gary Liu, an independent economist in Shanghai.

For the full story, see:

Keith Bradsher. “As China Battles Poverty, Colossal Projects Draw Ire.” The New York Times (Fri., Nov. 27, 2020): B1 & B5.

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

(Note: the online version of the story has the date Nov. 26, 2020, and has the title “A Soaring Monument to Beauty in China Is Stirring Passions. Mostly Anger.”)

Those Lacking Degrees Are Cheaper, More Loyal, and Often Equally Able

(p. B5) Millions of jobs requiring a four-year college degree can be done without that level of education, some corporate leaders say.

To address inequalities in business and society, some executives suggest that companies shake up their approach to hiring and consider unconventional candidates. Black Americans in particular are often left unprepared by the U.S. education system, and companies could help by hiring workers without a degree and giving them training, Kenneth Frazier, CEO of Merck & Co., said Tuesday at The Wall Street Journal’s CEO Council Summit.

“It’s really important for us to recognize that because people haven’t had an opportunity early in their lives, it doesn’t mean that they can’t make a real contribution to your company,” Mr. Frazier said.

. . .

“We get many people who are cheaper, they’re just as good, they’re very loyal because this gives them an opportunity,” he said. “For those of us who are insiders now by virtue of our success and our positions in companies, we need to extend ourselves and reach out, and bring in people who may not be the people that we’re comfortable with, and may not be the first person that we think of.”

For the full story, see:

Chip Cutter. “Some CEOs Suggest Hiring More People Without Degrees.” The Wall Street Journal (Thursday, May 6, 2021): B5.

(Note: ellipsis added.)

(Note: the online version of the story has the date May 5, 2021, and has the title “Some CEOs Suggest Dropping Degree Requirements in Hiring.”)

Some Oil and Gas Landmen Seamlessly Transition to Being Wind and Solar Landmen

(p. A1) Carter Collum used to spend mornings shoulder to shoulder with competitors in the record rooms of East Texas courthouses, hunting for the owners of underground natural-gas deposits. At night, he made house calls, offering payments and royalties for permission to drill.

Mr. Collum worked as a landman, tracking the owners of oil and gas trapped in rock layers thousands of feet beneath the earth’s surface and getting their signatures, a job about as old as the American petroleum industry.

. . .

These days, the jobs are going dry. Landmen, after riding the highs of the boom, face weakened demand for fossil fuels and investor indifference to shale companies after years of poor returns. Instead of oil and gas (p. A10) fields, some landmen are securing wind and solar fields, spots where the sun shines brightest and the wind blows hardest.

The difference is shale wells eventually empty and, in good times, that keeps landmen on the prowl for new land and new contracts. Wind and solar energy never run out, limiting demand for new leases as well as landmen.

For the full story, see:

Rebecca Elliott. “Oil-and-Gas Landmen Now Hunt for Wind and Sun.” The Wall Street Journal (Monday, April 19, 2021): A1 & A10.

(Note: ellipsis added.)

(Note: the online version of the story has the date April 18, 2021, and has the title “Landmen Who Once Staked Claims for Oil and Gas Now Hunt Wind and Sun.”)