Category: Labor Economics

STEM Skills Are Quickly Obsolete

(p. B8) In a recent working paper with a Harvard doctoral student, Kadeem Noray, I calculated how much the skills required for different jobs changed over time. Help-wanted ads for jobs like software developer and engineer were more likely to ask for skills that didn’t exist a decade earlier. And the jobs of 10 years ago often required skills that have since become obsolete. Skill turnover was much higher in STEM fields than in other occupations.

We can also see this by looking at changes in college course catalogs. One of the largest and most popular courses in the Stanford computer science department is CS229 — Machine Learning, taught by the artificial intelligence expert and entrepreneur Andrew Ng. This course did not exist in its current form until 2003, when Professor Ng taught it for the first time with 68 students, and very little like it existed anywhere on college campuses 15 years ago. Today, the machine learning courses at Stanford enroll more than a thousand students.

. . .

Liberal arts advocates often argue that education should emphasize the development of the whole person, and that it is much broader than just job training. As an educator myself, I agree wholeheartedly.

But even on narrow vocational grounds, a liberal arts education has enormous value because it builds a set of foundational capacities that will serve students well in a rapidly changing job market.

For the full commentary, see:

David Deming. “Engineers Start Fast, but Poets Can Catch Up.” The New York Times, SundayBusiness Section (Sunday, September 22, 2019): B8.

(Note: ellipsis added.)

(Note: the online version of the commentary was last updated on Oct. [sic] 1, 2019, and has the title “In the Salary Race, Engineers Sprint but English Majors Endure.”)

The working paper referred to above, is:

Deming, David J., and Kadeem L. Noray. “Stem Careers and Technological Change.” National Bureau of Economic Research, Inc, NBER Working Paper # 25065, June 2019.

Entrepreneur Helped Firms Lower Costs of Firing Executives

(p. A6) James Challenger had tried law, advertising and manufacturing of gas heaters before dreaming up in the mid-1960s what he called a wild idea: persuading companies to pay him to help find new jobs for executives and middle managers they were laying off.

His firm, Challenger, Gray & Christmas, offered what came to be known as outplacement services. The initial reaction from companies, he said later, was why should we help people we’re firing?

The aptly named Mr. Challenger, who died Aug. 30 [2019] at age 93, struggled for years to persuade companies it was good business to be nice to people heading involuntarily out the door.

For the full obituary, see:

Hagerty, James R. “Wild Idea Created Outplacement Services.” The Wall Street Journal (Saturday, Sept. 21, 2019): A6.

(Note: bracketed year added.)

(Note: the online version of the obituary has the date Sept. 20, 2019, and has the title “James Challenger Helped Create Market for Outplacement Services.”)

Top 0.1% Have 15% of U.S. Wealth

(p. A1) The income tax is the Swiss Army Knife of the U.S. tax system, an all-purpose policy tool for raising revenue, rewarding and punishing activities and redistributing money between rich and poor.

The system could change fundamentally if Democrats win the White House and Congress. The party’s presidential candidates, legislators and advisers share a conviction that today’s income tax is inadequate for an economy where a growing share of rewards flows to a sliver of households.

For the richest Americans, Democrats want to shift toward taxing their wealth, instead of just their salaries and the income their assets generate.

. . .

In the real world, a wealth tax would emerge from Congress riddled with gaps that the tax-planning industry would exploit, said Jason Oh, a law professor at the University of California, Los Angeles. For example, if private foundations were exempted, the wealthy might shift assets into them.

“We’ve never seen in the history of taxation a pristine tax of any form,” Mr. Oh said. “People who want to pursue a wealth tax for the revenue may be a little disappointed when we see the estimates roll in.”

European countries tried—and largely abandoned—wealth taxes. They struggled because rich people could switch countries and because some assets were exempt. Mr. Zucman said Ms. Warren’s tax would escape the latter problem by hitting every kind of asset, from artwork to stock to privately held businesses to real estate.

While he and fellow economist Emmanuel Saez assume 15% of the tax owed would be avoided, former Treasury Secretary Larry Summers and University of Pennsylvania law professor Natasha Sarin wrote a paper estimating the plan would raise less than half what Mr. Zucman projects, based on how much wealth escapes the estate tax.

A paper by economists Matthew Smith of the Treasury Department, Eric Zwick of the University of Chicago and Owen Zidar of Princeton University contends top-end wealth is overstated. Acccording to their preliminary estimate, the top 0.1% have 15% of national wealth, instead of the 20% estimated by Mr. Zucman. Their findings imply that Ms. Warren’s tax might raise about half of what’s promised.

For the full story, see:

Richard Rubin. “Democrats’ Tax Idea: Target Wealth, Not Just Income.” The Wall Street Journal (Wednesday, Aug. 28, 2019): A1 & A8.

(Note: ellipsis added.)

(Note: the online version of the story has the date Aug. 27, 2019, and has the title “Democrats’ Emerging Tax Idea: Look Beyond Income, Target Wealth.”)

The paper co-authored by Smith, and mentioned above, is:

Smith, Matthew, Owen Zidar, and Eric Zwick. “Top Wealth in the United States: New Estimates and Implications for Taxing the Rich.” Working Paper, July 19, 2019.

Lyft Driver Fears California Law Will Destroy Her Work Flexibility

(p. B4) California lawmakers have hailed the law signed by Gov. Gavin Newsom this week that could require drivers of ride-hailing companies to be labeled as employees rather than independent contractors, saying the measure could raise wages and provide new workplace benefits.

But the drivers are divided about how it will affect them.

For Rachel Hudson, a 43-year-old driver for Lyft Inc. who struggles with arthritis and an anxiety disorder, the bill’s passage is unwelcome. Ms. Hudson has driven for Lyft for about five years and fears employment status could mean having to work in scheduled shifts that would wipe out the flexibility she needs.

“Sometimes, I need a two- to three-hour break. I can’t always be relied upon to be at work at specific times,” Ms. Hudson said. Driving for Lyft “is the only way I can afford a car. It makes a huge impact on my life.”

Ms. Hudson, who lives alone in Stockton, Calif., said that besides federal disability benefits, the earnings from Lyft are her only income.

For the full story, see:

Sebastian Herrera. “Uber, Lyft Drivers Torn Over Law Meant to Protect Them.” The Wall Street Journal (Monday, Sept. 23, 2019): B4.

(Note: the online version of the story has the date Sept. 21, 2019, and has the title “Uber, Lyft Drivers Torn as California Law Could Reclassify Them.”)

Strong Job Market Allows Lower-Income Workers to Change Jobs

(p. A3) The share of lower-income Americans leaving their jobs for new ones leapt earlier this year, pointing to rising confidence in the U.S. labor market among workers who were left behind earlier in the expansion.

A New York Fed survey released Monday showed the share of lower-income heads of household, defined as earning a household income of $60,000 a year or less, who moved to new jobs in April, May, June or July was 12%, up from 8% in the same period a year earlier and the highest rate for records dating back to 2014.

Meanwhile, job changes among higher-income workers have been declining since early 2018.

The lower-income workers had more opportunities: About 4% of lower-income Americans received three job offers in the four months ended in July, up from 1.4% over the same period in 2018, according to the data in the New York Fed Survey of Consumer Expectations.

For the full story, see:

Sarah Chaney. “Lower-Income Americans Are Job Hopping.” The Wall Street Journal (Tuesday, Sept. 24, 2019): A3.

(Note: the online version of the story has the date Sept. 23, 2019, and has the title “Lower-Income Americans Are Increasingly Job Hopping.”)

Newsboys “Were American Icons–Symbols of Unflagging Industry”

(p. A17) Thomas Edison was one. So were Harry Houdini, Herbert Hoover, W.C. Fields, Walt Disney, Benjamin Franklin, Jackie Robinson, Walter Winchell, Thomas Wolfe, Jack London, Knute Rockne, Harry Truman, John Wayne, Warren Buffett and many more familiar names. Besides being illustrious Americans, these men shared a calling—growing up, they were newsboys, delivering newspapers to subscribers or, more colorfully, hawking them on the streets for a couple of pennies, real money in those days.

In their time, newsboys (girls were rare) were American icons—symbols of unflagging industry and tattered, barefoot, shivering objects of pity. They had their own argot and better news judgment than many editors, because they had to size up the appeal of every edition to determine how many copies to buy from the publisher.

For the full review, see:

Edward Kosner. “BOOKSHELF; Street-Corner Capitalists.” The Wall Street Journal (Monday, Oct. 7, 2019): A17.

(Note: the online version of the review has the date Oct. 6, 2019, and has the title “BOOKSHELF; ‘Crying the News’ Review: Street-Corner Capitalists.”)

The book under review is:

DiGirolamo, Vincent. Crying the News: A History of America’s Newsboys. New York: Oxford University Press, 2019.

Amazon Has 30,000 Open Permanent Jobs, and Half “Are Tech Oriented”

(p. A1) SEATTLE — Engineers in the Bay Area. Advertising managers in Chicago. Freight specialists in Arizona. The job listings keep piling up at Amazon, a company that is growing in many directions amid one of the tightest labor markets in memory.

On Monday [Sept. 9, 2019], Amazon said it had 30,000 open positions in the United States, including full- and part-time jobs at headquarters offices, technology hubs and warehouses.

Although the company has positions to fill across the country, Amazon’s job boards list many more openings in the Seattle area and California and by its new campus near Washington, D.C., than it does anywhere else.

The vacancies, which Amazon said it hoped to fill by early next year, are permanent jobs and do not include seasonal positions for the warehouse workers and drivers that the company typically hires to handle the spike in orders it gets around Christmas. More than half the jobs are tech oriented, and roughly a quarter are for warehouse work, the company said.

For the full story, see:

Karen Weise. “Amazon’s Work Force Has 30,000-Job Hole.” The New York Times (Tuesday, September 10, 2019): B3.

(Note: bracketed date added.)

(Note: the online version of the story has the date September 9, 2019, and has the title “Amazon Has 30,000 Open Jobs. Yes, You Read That Right.”)

California Anti-Gig-Worker Regulations Have “Unintended Victims”

(p. B1) SAN FRANCISCO — After months of bickering over who would be covered by a landmark bill meant to protect workers, California legislators passed legislation on Wednesday [Sept. 11, 2019] that could help hundreds of thousands of independent contractors become employees and earn a minimum wage, overtime pay and other benefits.

. . .

In California, religious groups said they feared that small churches and synagogues would not be able to afford making pastors and rabbis employees. Winemakers and franchise owners said they were worried they could be ensnared by the law, too. Even some of the contractors for the app-based businesses that have been at the center of this debate said the change could hurt them if companies like Uber, Lyft and DoorDash decided to restrict how often they could work or cut them off entirely.

. . .

(p. B4) Small vineyard owners are concerned that they could be forced to directly employ the independent truckers they use to haul their harvests and become responsible for providing insurance and workers’ compensation. Currently, truckers operate as contractors, with their own rigs and insurance, and serve several vineyards, said Michael Miiller, director of government relations at the California Association of Winegrape Growers.

“Our members are growers, not trucking companies,” Mr. Miiller said. “The target of legislators is Uber and Lyft, but the unintended victims are small, independent vineyards on the coast of California.”

Saunda Kitchen owns a Mr. Rooter plumbing business in Sonoma County that has 30 employees, for whom she pays payroll taxes and provides the various mandated benefits. But Ms. Kitchen said she believed that she herself would have to become an employee of Mr. Rooter under the new law, which could cause the parent company to pull out of the state.

“I wouldn’t have access to new technology, training, help with marketing,” said Ms. Kitchen, who planned to talk with Mr. Rooter officials on Thursday [Sept. 12, 2019] about how to proceed.

For the full story, see:

Kate Conger and Noam Scheiber. “Gig-Worker Law Sows Confusion and Defiance.” The New York Times (Thursday, September 12, 2019): B1 & B4.

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

(Note: the online version of the story has the date Sept. 11, 2019, and has the title “California’s Contractor Law Stirs Confusion Beyond the Gig Economy.”)

Princeton Economist Blinder Wrongly Forecast Huge Offshoring of Jobs

(p. A1) A widely covered 2007 study by Alan S. Blinder, a Princeton economist and former Clinton administration official, estimated that a quarter or more of jobs were vulnerable within the next decade. But many companies discovered that labor savings were offset by other factors: time differences, language barriers, legal hurdles and the simple challenge of coordinating work half a world (p. A14) away. In some cases, companies decided they were better off moving jobs to less expensive parts of the United States rather than out of the country.

“Where in retrospect I missed the boat is in thinking that the gigantic gap in labor costs between here and India would push it to India rather than to South Dakota,” Mr. Blinder said in a recent interview. “There were other aspects of the costs to moving the activities that we weren’t thinking about very much back then when people were worrying about offshoring.”

. . .

In a follow-up paper released Friday [Sept. 27, 2019], another economist, Adam Ozimek, revisited Mr. Blinder’s analysis to see what had happened over the past decade. Some job categories that Mr. Blinder identified as vulnerable, like data-entry workers, have seen a decline in United States employment. But the ranks of others, like actuaries, have continued to grow.

Over all, of the 26 occupations that Mr. Blinder identified as “highly offshorable” and for which Mr. Ozimek had data, 15 have added jobs over the past decade and 11 have cut them. Altogether, those occupations have eliminated fewer than 200,000 jobs over 10 years, hardly the millions that many feared. A second tier of jobs — which Mr. Blinder labeled “offshorable” — has actually added more than 1.5 million jobs.

For the full story, see:

Ben Casselman. “White-Collar Jobs Were Supposed to Go Overseas. They Didn’t.” The New York Times (Monday, September 30, 2019): A1 & A14.

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

(Note: the online version of the story has the same date as the print version, and has the title “The White-Collar Job Apocalypse That Didn’t Happen.”)

The Alan Blinder paper mentioned above, is:

Blinder, Alan. “How Many U.S. Jobs Might Be Offshorable?” Princeton University, Department of Economics, Center for Economic Policy Studies, Working Paper # 142, March 2007.

The “follow-up paper” mentioned above, is:

Ozimek, Adam. “Overboard on Offshore Fears.” 2019. https://www.upwork.com/press/economics/report-overboard-on-offshore-fears/

Start-Up Is Building Largest Greenhouse in U.S., Creating 285 Jobs in Kentucky

(p. B6) MOREHEAD, Ky. — Proximity to big markets is crucial for the fresh produce business.

So when AppHarvest, a two-year-old start-up, was looking for a site for a greenhouse, it picked a 366-acre field in Rowan County just outside Morehead, a university town in eastern Kentucky.

The greenhouse, the largest in the United States, will be just a day’s drive from almost 70 percent of American consumers, including those who love fresh tomatoes.

Next summer, when AppHarvest begins production at its $97 million building, 285 employees will start shipping 45 million pounds of fresh produce annually, primarily tomatoes, to grocery stores from Atlanta to New York, and as far west as Chicago and St. Louis.

For the greenhouse to be cost-effective, size was as important as location. The 60-acre, 2.76-million-square-foot building will be big enough to lower costs on materials, production and distribution.

“I asked the engineers, ‘How big can we possibly be to operate efficiently and effectively?’” said Jonathan Webb, AppHarvest’s 34-year-old founder and chief executive. “We have to compete with produce coming from 2,000 miles away.” Continue reading “Start-Up Is Building Largest Greenhouse in U.S., Creating 285 Jobs in Kentucky”

Some Workers Seek to Unionize Brooklyn Food Co-op

(p. 29) Had you found yourself with nothing to read at any point this summer, the letters section of The Linewaiters’ Gazette, the bi-weekly newsletter of the Park Slope Food Coop, might have sated a certain narrative hunger. Serving a community of 17,000 members, The Gazette is a forum for news, grievance, debate, inquiry and perhaps above all, the expression of principle.

. . .

Given the seriousness with which the co-op takes matters of equity and justice, it surprised many members to learn that an effort on the part of some paid workers to unionize had not been going smoothly. Member owned and operated since its founding in the 1970s, the co-op permits only those who work a certain number of hours per month (behind the cash register, unloading delivery trucks, stocking oranges and so on) to shop there. It also employs about 75 people, all but 11 or so of whom receive an hourly wage.

How was it possible that these workers in an institution so famously aligned with the left were not already unionized? It was like imagining the Catholic Church without baptism. As one stunned member pointed out in his letter to The Gazette, the co-op is “literally on Union Street.”

Money is not what has motivated the movement. Many workers receive upward of $27 an hour, and health-insurance fees are not deducted from that pay. Instead, as Marc Thompson, who has been behind the effort to organize, told me, the problems have had more to do with strained dynamics between workers and supervisors and poor communication generally.

Another big issue is that the co-op is an “at will” shop, meaning that workers can be let go at any time for any reason, without managers having to offer cause. Although it rarely happens, the notion that such a scenario could play out has troubled certain employees. The last time someone was abruptly fired, it was because of theft, Mr. Holtz explained, and that was three years ago.

. . .

In a letter to The Gazette that appeared in May [2019], a group of workers representing the majority who oppose the union said they had “doubts that the traditional union model is the right fit for our very nontraditional workplace.” They were pro-union as a matter of political belief but thought that the co-op had “a rich history” of solving its own problems. Whatever was wrong could be handled within the family, in essence.

For the full story, see:

Ginia Bellafante. “BIG CITY; A Labor Rights Rift? Say It’s Not So, Park Slope Food Coop!” The New York Times, First Section (Sunday, September 22, 2019): 29.

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

(Note: the online version of the story was last updated on Sept. 30 [sic], 2019, and has the title “BIG CITY; They Tried to Unionize the Park Slope Food Coop. Guess What Happened.” Above, I cite the title, section, and page number from my National print edition. Those may have been different in the New York print edition. Where there are differences in wording between the online and print versions, the passages quoted above follow the print version.)