Category: Labor Economics

Members of the Elite Exempt Themselves from Rules They Impose on the Hoi Polloi

(p. 12) SAN FRANCISCO — It was an intimate meal in a wood-paneled, private dining room in one of California’s most exclusive restaurants. No one around the table wore masks, not the lobbyists, not even the governor.

Photos that surfaced this week of a dinner at the French Laundry, a temple of haute cuisine in Napa Valley where some prix fixe meals go for $450 per person, have sparked outrage in a state where Democratic leaders have repeatedly admonished residents to be extra vigilant amid the biggest spike in infections since the pandemic began.

. . .

The photos of the gathering, taken by a diner at a nearby table and shared with a local television station, also showed the chief executive for the California Medical Association and the organization’s top lobbyist.

. . .

In a 2019 review of the French Laundry and two other Napa restaurants, the New York Times critic Tejal Rao described being “overwhelmed by the opulence” and feeling as if transported onto a “spaceship for the 1 percent, now orbiting a burning planet.” Mr. Newsom said in October that his children, who attend private school, returned to in-person classes even as most of the state struggles with remote learning.

“Newsom and the first partner eschewed state public health guidelines to dine with friends at a time when the governor has asked families to scale back Thanksgiving plans,” wrote the Sacramento Bee editorial board on Friday. It added, “If the governor can eat out with friends — and if his children can attend their expensive school — why must everyone else sacrifice?”

For the full story, see:

Thomas Fuller. “Officials’ Lavish Meal Out Spurs Outrage Among Californians.” The New York Times, First Section (Sunday, November 22, 2020): 12.

(Note: ellipses added.)

(Note: the online version of the story has the date Nov. 18, 2020, and has the title “For California Governor the Coronavirus Message Is Do as I Say, Not as I Dine.” The online version says that the title of the New York print version was “California Governor Calls” and appeared on Thursday, Nov. 19, 2020. The title of my National print version was “Officials’ Lavish Meal Out Spurs Outrage Among Californians” and appeared on Sunday, November 22, 2020.)

“The Often-Unsung Adaptability of Organic Intelligence”

(p. A13) . . ., as the journalist Jonathan Waldman chronicles in “SAM,” the quest for a bricklaying robot has been bumpier than the work of a mason with vertigo.

. . .

Several themes run through the book. First is the often-unsung adaptability of organic intelligence.

. . .

The minute adjustments a human makes when manipulating objects, especially in messy environments like construction sites, result from billions of years of evolution. We make it look easy, until you give instructions to a robot and watch it fumble around or freeze up when it gets a little dirt on its face. Yann LeCun, Facebook’s chief A.I. scientist, once told me, “I would declare victory if in my professional lifetime we could make machines that are as intelligent as a rat.”

Mr. Peters has laudable motivations. “By creating a bricklaying robot,” Mr. Waldman writes, “he aimed to eliminate lifting and bending and repetitive-motion injuries in humans; to improve the quality of walls; to finish jobs faster and safer and cheaper; and to ease project scheduling and estimation. Basically: to modernize the world’s second oldest and most primitive trade.”

. . .

Within this physically and culturally harsh environment, Construction Robotics had to invent and reinvent their business model on the fly. Should they license their innovations? Sell the robots? Rent them? Provide robots and technicians as a service? Create a full-service masonry shop? Pivot from bricks to cement blocks? Take money from venture capitalists, court Google or a Dubai investment fund? Mr. Peters follows the philosophy of the book “The Lean Startup” and aims for an MVP—minimum viable product—to gain exposure and experience, knowing the risks in the construction industry. Word of a robot that builds crummy walls will travel fast, and demolished reputations are hard to rebuild.

The business finally finds its footing in the epilogue, around 2018. Construction Robotics gets SAM to lay more than 3,000 bricks a day (versus 300 to 1,000 for a human mason), and they create another machine that helps workers lift and place concrete blocks, quickly selling dozens. The company now looks to be solvent, though it’s unclear how much the construction landscape is poised to change.

For the full review, see:

Hutson, Matthew. “BOOKSHELF; Building a Better Bricklayer.” The Wall Street Journal (Tuesday, Jan 14, 2020): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date January 13, 2020, and has the title “BOOKSHELF; ‘SAM’ Review: Building a Better Bricklayer.”)

The book under review is:

Waldman, Jonathan. SAM: One Robot, a Dozen Engineers, and the Race to Revolutionize the Way We Build. New York: Simon & Schuster, 2020.

A.I. Lacks Common Sense: “A Broad and Often Unspoken Understanding of How the World Works”

(p. A15) Journalists like to punctuate stories about the risks of artificial intelligence—particularly long-term, humanity-threatening risks—with images of the Terminator. The idea is that unchecked robots will rise up and kill us all.

. . .

Melanie Mitchell, a computer scientist at Portland State University, is in the too-soon-to-worry camp. “My own opinion is that too much attention has been given to the risks from superintelligent AI,” she writes in “Artificial Intelligence,” “and far too little to deep learning’s lack of reliability and transparency and its vulnerability to attacks.”

. . .

Object-recognition software, for instance, can track pedestrians, detect tumors and sort photo libraries. But it doesn’t understand the content the way we do. Its obtuseness becomes sharply apparent in so-called adversarial attacks, in which only minimal changes to an image (or a sound or text file) can fool an AI into misidentifying it. Such attacks even transfer to the real world. A stop sign with a few innocuous stickers becomes a speed-limit sign.

The researchers first elucidating such vulnerabilities in neural networks—machine-learning programs inspired by the brain’s wiring—called them an “intriguing property.” Ms. Mitchell writes, “Calling this an ‘intriguing property’ of neural networks is a little like calling a hole in the hull of a fancy cruise liner a ‘thought-provoking facet’ of the ship.”

Ultimately, these systems lack common sense, a broad and often unspoken understanding of how the world works. Common sense, in turn, might require embodied experience in the world, plus the ability to abstract from it and form analogies. Much of Ms. Mitchell’s academic work concerns helping AI form analogies. It hasn’t progressed far. (No fault of hers.)

For the full review, see:

Matthew Hutson. “BOOKSHELF; Learn Like a Machine.” The Wall Street Journal (Wednesday, November 20, 2019): A15.

(Note: ellipses added.)

(Note: the online version of the review has the date November 19, 2019, and has the title “BOOKSHELF; ‘Human Compatible’ and ‘Artificial Intelligence’ Review: Learn Like a Machine.”)

The book under review is:

Mitchell, Melanie. Artificial Intelligence: A Guide for Thinking Humans. New York: Farrar, Straus, and Giroux, 2019.

U.A.W. Spends $60,000 on Leaders’ Cigar Expenses

(p. B1) On a single day in December 2015, Gary Jones, who resigned last month as president of the United Automobile Workers, spent more than $13,000 of the union’s money at a cigar store in Arizona. His purchases included a dozen $268 boxes of Ashton Double Magnums and a dozen boxes of Ashton Monarchs at $274.50 each. “Hi Gary, Thank you & Happy New Year,” read a handwritten note from the store.

The purchases, documented by a federal complaint filed against a union leader in September, were part of more than $60,000 in cigars and cigar paraphernalia that Mr. Jones and other U.A.W. officials expensed to the union between 2014 and 2018. And the cigar purchases were in turn just a small portion of the roughly $1 million in union money that court filings say U.A.W. officials spent on golf outings, four-figure din-(p. B2)ners and monthslong villa rentals during regular retreats in Palm Springs, Calif., and elsewhere.

The scandal comes on top of an investigation into company and union officials’ improper use of millions of dollars from a joint Fiat Chrysler-U.A.W. training center. Mr. Jones’s predecessor as president, Dennis Williams, is accused of encouraging the use of Fiat Chrysler funds meant for worker education as a way to pay for the extravagant spending in Palm Springs and other places.

For the full story, see:

Noam Scheiber and Neal E. Boudette. “Living the High Life On the Workers’ Dime.” The New York Times (Thursday, December 26, 2019): B1-B2.

(Note: the online version of the story has the same date as the print version, and has the title “Behind a U.A.W. Crisis: Lavish Meals and Luxury Villas.”)

With Race-Based College Admissions “Everyone Is at Each Other’s Throat”

(p. A3) Richard Alvarez, a senior of Mexican heritage, is waiting to hear from the University of Chicago. He said his school has spent years educating students about race, but now that the college crunch has arrived that sensitivity training “has gone out the window.”

“Everyone is at each other’s throat,” he said. “White students have this thing that brown and black students unfairly get into schools over them.”

For the full story, see:

Douglas Belkin. “Identity Box Vexes College Applicants.” The Wall Street Journal (Tuesday, December 24, 2019): A3.

(Note: the online version of the story has the date December 23, 2019, and has the title “The Most Agonizing Question on a College Application: What’s Your Race?”)

Workers with Criminal Records Pay for Their Second Chance with Greater Loyalty and Harder Work

(p. B1) CINCINNATI—While some companies try to attract and keep employees with yoga classes and lavish cafeterias, Nehemiah Manufacturing Co.’s perks include a social-service team and an attorney.

When two consumer-product veterans started Nehemiah a decade ago, their idea was to create more opportunities in a struggling part of Cincinnati. Increasingly, that meant hiring people who had a particularly hard time finding jobs: those with criminal backgrounds.

Now, workers with criminal records make up around 80% of the company’s about 180 employees—and Nehemiah has learned that offering a job to people trying to turn their lives around is just half the battle.

“We are investing in our employees in order to retain them,” said Richard Palmer, president of Nehemiah, whose brands include Boogie Wipes, Saline Soothers and other consumer products. “It’s no different than tech companies bringing in lunch and a foosball table.”

In one of the tightest labor markets in decades, more employers are willing to give ex-convicts a chance, trying to marry business needs and good intentions. Even large American companies are rethinking whether their responsibilities extend beyond their shareholders. JPMorgan Chase & Co. Chief Executive James Dimon said in October [1999] that the bank would step up efforts to recruit people with criminal backgrounds.

Hiring people with a criminal past can pay big dividends for companies, such as closer community ties and a loyal workforce. But keeping them on the job can be a struggle.

. . .

(p. B6) Since its first days, Nehemiah has become more deliberate about identifying candidates who are likely to be good, reliable employees and has developed a more formal system for providing them with support.

Today, Nehemiah’s annual turnover stands at roughly 15%, well below the 38.5% average for consumer-products companies, as reported by Mercer’s 2019 U.S. Turnover Survey. Nehemiah says it had operating income of $5.7 million on sales of $59.4 million in 2018.

. . .

“We found that the population we were hiring who had criminal backgrounds were our most loyal people,” said Mr. Palmer. “When we were looking for people to work overtime, come in on Saturday or go that extra mile, it was the second-chance population that was saying, ‘I’m in.’”

. . .

At Nehemiah, having a criminal past carries less of a stigma because so many workers have been incarcerated.

. . .

. . ., Nehemiah’s approach . . . means it can spot potential other employers might overlook. When Rayshun Holt came to Nehemiah roughly two years ago, Ms. Merida said he immediately stood out as someone the company wanted.

Mr. Holt, 40, spent two decades in prison after fatally shooting a friend when he was 15 during what he describes as a scuffle over a gun. While in prison, Mr. Holt reconnected to his faith, started taking classes and began coaching other prisoners on how to turn their lives around.

Released in 2016 with $96 in his pocket, he said, “I was filled with hope and overwhelmed by fear.” His first job was in a fast-food restaurant specializing in chicken fingers. “I was the oldest person there and the most enthusiastic. It was the first time in my life I was earning an honest check,” he said.

But he struggled to find steady work with decent pay. Nehemiah hired him as a second-shift supervisor at $19 an hour.

Ms. Merida said she was impressed by Mr. Holt’s passion, humility and sincerity when he told his life story, how he knew the streets but had already taken steps to turn his life around. “I knew this was a born leader who could really have a profound impact on our employees,” said Ms. Merida. “He could show them that no matter how bad it is, your life isn’t over.”

Mr. Holt now works as the company’s commercialization coordinator, responsible for taking new products and product improvements from concept to market.

For the full story, see:

Ruth Simon. “The Company of Second Chances.” The Wall Street Journal (Saturday, January 25, 2020): B1 & B6.

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

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

Why Did McPizza Fail?

Why do some products succeed and others fail? The answers may hold lessons for which future projects should be pursued and, if pursued, how to pursue them. Successes are sometimes researched; failures much less often. The passages quoted below are from an unusually deep dive into the story of McDonalds’s failed McPizza.

(p. 1) Maybe you are too young to remember. Perhaps you forgot. Or there’s a chance you’ve blocked it. But the home of the Big Mac began selling pizza in the mid-1980s, hoping to grab market share from national pie chains. McDonald’s gave up a few years later. Nobody seemed to lament the passing of McPizza, and nobody was urging its return. Which, to Mr. Thompson in the fall of 2016, made the topic all the more appealing.

. . .

(p. 8) One trick to keeping this enterprise alive and entertaining is Mr. Thompson’s refusal to accept answers to the show’s titular question, which he had learned by Episode 5. McPizza failed for reasons that should have seemed evident before it was rolled out: It’s way, way off brand, and it didn’t bake fast enough to keep pace with the rest of the menu.

. . .

Early on, Mr. Thompson learned that a McDonald’s in Pomeroy, Ohio, was the last franchise in the country still serving the pizza, and he raised money through Indiegogo to fly there and try it. (He described it as “at least as good as Little Caesars.”)

He wondered how the place kept selling an item that others in the chain didn’t offer. Once again, definitive answers were elusive because the franchise owner would not speak to him.  . . .

Several months after Mr. Thompson’s visit, the Pomeroy McDonald’s stopped selling McPizza. The podcast depicted this as retaliation against the show, a shameless effort to curtail old-fashioned muckraking. This makes sense only in the mind of “Brian Thompson,” whose baseline assumption is that McDonald’s ought to again sell pizza because people love it and because the company is in business to make money. Hence, any rationale for the product’s demise is under suspicion.

To Mr. Thompson’s delight, he keeps unearthing new rationales for the product’s cancellation. At one point, he heard about a McDonald’s in Adak, Alaska, a largely deserted island in the middle of the Bering Sea. For years, Adak was a Cold War outpost for Army and Navy barracks, but it was decommissioned in the early 1990s, and the McDonald’s there was abandoned. Last year, Mr. Thompson raised money online to travel the 3,100 miles there, hoping that the husk of a restaurant would contain his Holy Grail: a McDonald’s pizza oven.

He flew to Anchorage, then took a once-a-week, three-hour flight to Adak. After landing, he went straight to the McDonald’s and was disappointed to see it had been boarded up — there was no way inside. The trip seemed a grand bust. But as Mr. Thompson prepared to leave the island, his Airbnb host suggested he call a guy named Larry, who, it turned out, had once found a pizza oven in a derelict bowling alley. Evidently, it had been hauled out of the defunct McDonald’s. Larry determined it had been manufactured for McDonald’s by Garland Commercial Industries, a company in Freeland, Pa.

To “Brian Thompson,” this was a breakthrough on a par with the formulation of the laws of thermodynamics. He called Garland, and a representative put him in touch with a service tech in Cleveland who had once repaired McDonald’s ovens. Unlike the corporate P.R. department, this guy was chatty.

“They were only in McDonald’s for roughly two to three years because of the difficulty to program them,” the tech said on Episode 143. “I don’t even think there’s program manuals for it.”

And thus, to Mr. Thompson’s delight, three years into the show, he’d added another reason that McDonald’s killed pizza — the ovens were a fiasco.

For the full story, see:

David Segal. “Answering a Fast-Food Question, if You Care.” The New York Times, SundayBusiness Section (Sunday, November 1, 2020): 1 & 8.

(Note: ellipses added.)

(Note: the online version of the story has the date Oct. 28, 2020, and has the title “A Podcast Answers a Fast-Food Question That Nobody Is Asking.”)

“Run With the Herd or Be Crushed by It”

The author of the passages quoted below writes poetry and novels in Havana.

(p. 7) Throughout my life, I’ve seen how powerless parents are in matters regarding their own children. Parents have no say over how their children should be raised, whether they will be conscripted or sent away to school in rural areas, and what dangers could befall them being so far from home and such a young age. They have no say over their children’s manners, religious teachings and political ideologies. There are only two choices: Run with the herd or be crushed by it.

As a teenager in the 1980s, I was taught in a “scientific communism” class that family was the heart of society. But from what I could see, that was no longer the case; organizations with mass followings like the Young Communist League had taken its place.

. . .

I was born and raised in a system that exerts control under the guise of paternalism — a system that caresses you as it beats you, that teaches you but also inhibits you, enlightens you and censures you. We are hostages to a government that behaves like an abusive, old-fashioned and sexist father, from whom we must seek consent and forgiveness.

For the full commentary, see:

Wendy Guerra. “Cuban Women Need a Revolution.” The New York Times, SundayReview Section (Sunday, October 13, 2019): 7.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date Oct. 12, 2019, and has the title “‘Cuban Women Await Their #MeToo Moment.” The first paragraph quoted above is from the online version and differs in several respects from the equivalent paragraph in the print version.)

Robots That Can Grip Donuts Cannot Grip Asparagus

Distinguished MIT labor economist David Autor, who I reference in my book Openness to Creative Destruction: Sustaining Innovative Dynamism, was a co-chair of the MIT Work of the Future Task Force that wrote the report discussed in the article quoted below.

(p. B3) L. Rafael Reif, the president of Massachusetts Institute of Technology, delivered an intellectual call to arms to the university’s faculty in November 2017: Help generate insights into how advancing technology has changed and will change the work force, and what policies would create opportunity for more Americans in the digital economy.

That issue, he wrote, is the “defining challenge of our time.”

Three years later, the task force assembled to address it is publishing its wide-ranging conclusions. The 92-page report, “The Work of the Future: Building Better Jobs in an Age of Intelligent Machines,” was released on Tuesday [November 17, 2020].

. . .

Technology has always replaced some jobs, created new ones and changed others. The question is whether things will be different this time as robots and artificial intelligence quickly take over for humans on factory floors and in offices.

The M.I.T. researchers concluded that the change would be more evolutionary than revolutionary. In fact, they wrote, “we anticipate that in the next two decades, industrialized countries will have more job openings than workers to fill them.”

That judgment is informed by field research in several industries and sectors including insurance, health care, driverless vehicles, logistics and warehouses, advanced manufacturing, and small and medium-size manufacturers.

. . .

Despite advances, robots simply don’t have the flexibility and dexterity of human workers. Today’s robots learn from data and repetition. They can be remarkably adept at a certain task, but only that one. The report cited a fine-tuned gripping robot that could pluck a glazed doughnut and carefully place it in a box, with its shiny glaze undisturbed.

“But that gripper only works on doughnuts,” the report said. “It can’t pick up a clump of asparagus or a car tire.”

The cost and operational expertise required will also slow the widespread adoption of robots.

For the full story, see:

Steve Lohr. “Don’t Fear the Robots, Says Jobs Study Group.” The New York Times (Wednesday, November 18, 2020): B3.

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

(Note: the online version of the story has the date Nov. 17, 2020, and has the title “Don’t Fear the Robots, and Other Lessons From a Study of the Digital Economy.”)

The MIT report discussed above is:

MIT Work of the Future Task Force. “The Work of the Future: Building Better Jobs in an Age of Intelligent Machines.” Cambridge, MA: Massachusetts Institute of Technology, 2020.

My book mentioned above is:

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

Least-Well-Off Were Gaining Before Pandemic

(p. A3) U.S. families’ income and wealth rose in the years heading into the coronavirus pandemic, with those in lower-income and lower-wealth categories reaping relatively large gains, the Federal Reserve said in a report on household finances.

. . .

The distribution of wealth between low- and high-income households narrowed slightly in the latest survey period, Fed economists said, a shift from the 2010-to-2016 period when incomes largely stagnated for all but the most well-off after the 2007-2009 recession.

Families in the lowest two income groups recorded large percentage increases in median net worth, suggesting the decadelong expansion benefited a wide swath of society. Net worth rose 37% to $9,800 for the lowest earners, and increased 40% to $44,000 for the second-lowest group. The median net worth of the highest and second-highest groups declined 8% and 9%, respectively.

For the full story, see:

Harriet Torry. “Household Wealth Rose Before Crisis.” The Wall Street Journal (Tuesday, September 29, 2020): A3.

(Note: ellipsis added.)

(Note: the online version of the story was updated Sep. 28, 2020, and has the title “Household Wealth Rose in Years Before Pandemic, Fed Says.”)

“Before the White People Left”

(p. A1) CHICAGO — The old guard of this city’s Roseland neighborhood, a community on the South Side famous for molding a young Barack Obama and infamous for its current blight, has never forgotten the fruit trees.

Back in the 1970s, before the full exodus of white residents, the erosion of local businesses, the crack epidemic of the 1980s and the disinvestment that followed, it was the trees that signaled the societal elevation of Black families — separating those who moved here from the urban high rises they fled. An apple tree greeted Antoine Dobine’s family in 1973, he said. The tree meant a yard. A yard meant a home. And a home meant a slice of the American dream, long deferred for Black Americans.

“Pear trees, peaches, apples, it was beautiful,” Mr. Dobine recalled. “Before the white people left.”

. . .

The fruit trees have been replaced with overgrown lots. Residents say gangs use the abandoned areas to stockpile weapons, which children sometimes find.

For the full story, see:

Astead W. Herndon. “Black Area Embraces Protests But Still Has No Grocery Store.” The New York Times (Wednesday, August 12, 2020): A1 & A21.

(Note: ellipsis added. The online version say that the New York print version had the title “In a Black Chicago Community, Doubt Defies Hope for Change.” My National print version had the title “Black Area Embraces Protests But Still Has No Grocery Store.”)

(Note: the online version of the story was updated Aug. 28 [sic], 2020, and has the title “‘A Smoking Gun’: Infectious Coronavirus Retrieved From Hospital Air.”)