Category: Labor Economics

As Some Occupations Decline, Others Advance

Occupations that the Bureau of Labor Statistics expects to grow and to decline. Source: WSJ article cited below.

(p. B3) . . . the impact of automation is increasingly spreading to the service sector as well. Government economists expect steep declines in employment for typists, telephone operators and data-entry workers. Even jobs that might once have seemed relatively secure, such as legal secretaries and executive assistants, are expected to decline in coming years.

At the same time, technology is creating new opportunities for statisticians, engineers and software developers — the workers developing the algorithms that are changing the global job market.

For the full story, see:

Ben Casselman. “Experts Foresee a U.S. Work Force Defined by Ever Widening Divides.” The New York Times (Wednesday, Oct. 25, 2017): B3.

(Note: ellipsis added.)

(Note: the online version of the story has the date Oct. 24, 2017, and has the title “A Peek at Future Jobs Shows Growing Economic Divides.”)

New York City Made $855 Million Selling Over-Priced Taxi Medallions to Trusting Immigrants

(p. A1) At a cramped desk on the 22nd floor of a downtown Manhattan office building, Gary Roth spotted a looming disaster.

An urban planner with two master’s degrees, Mr. Roth had a new job in 2010 analyzing taxi policy for the New York City government. But almost immediately, he noticed something disturbing: The price of a taxi medallion — the permit that lets a driver own a cab — had soared to nearly $700,000 from $200,000. In order to buy medallions, drivers were taking out loans they could not afford.

. . .

Medallion prices rose above $1 million before crashing in late 2014, wiping out the futures of thousands of immigrant drivers and creating a crisis that has continued to ravage the industry today. Despite years of warning signs, at least seven government agencies did little to stop the collapse, The New York Times found.

Instead, eager to profit off medallions or blinded by the taxi industry’s political connections, the agencies that were supposed to police the industry helped a small group of bankers and brokers to reshape it into their own moneymaking machine, according to internal records and interviews with more than 50 former government employees.

For more than a decade, the agencies reduced oversight of the taxi trade, exempted it from regulations, subsidized its operations and promoted its practices, records and interviews showed.

Their actions turned one of the (p. A20) best-known symbols of New York — its signature yellow cabs — into a financial trap for thousands of immigrant drivers. More than 950 have filed for bankruptcy, according to a Times analysis of court records, and many more struggle to stay afloat.

“Nobody wanted to upset the industry,” said David Klahr, who from 2007 to 2016 held several management posts at the Taxi and Limousine Commission, the city agency that oversees cabs. “Nobody wanted to kill the golden goose.”

New York City in particular failed the taxi industry, The Times found. Two former mayors, Rudolph W. Giuliani and Michael R. Bloomberg, placed political allies inside the Taxi and Limousine Commission and directed it to sell medallions to help them balance budgets and fund priorities. Mayor Bill de Blasio continued the policies.

Under Mr. Bloomberg and Mr. de Blasio, the city made more than $855 million by selling taxi medallions and collecting taxes on private sales, according to the city. Continue reading “New York City Made $855 Million Selling Over-Priced Taxi Medallions to Trusting Immigrants”

News Reports by A.I. Complement News Reports by Humans; Expanding Coverage of Routine Minor Recurring Events

(p. B1) As the use of artificial intelli-(p. B3)gence has become a part of the industry’s toolbox, journalism executives say it is not a threat to human employees. Rather, the idea is to allow journalists to spend more time on substantive work.

“The work of journalism is creative, it’s about curiosity, it’s about storytelling, it’s about digging and holding governments accountable, it’s critical thinking, it’s judgment — and that is where we want our journalists spending their energy,” said Lisa Gibbs, the director of news partnerships for The A.P.

. . .

In addition to leaning on the software to generate minor league and college game stories, The A.P., like Bloomberg, has used it to beef up its coverage of company earnings reports. Since joining forces with Automated Insights, The A.P. has gone from producing 300 articles on earnings reports per quarter to 3,700.

. . .

The A.P., The Post and Bloomberg have also set up internal alerts to signal anomalous bits of data. Reporters who see the alert can then determine if there is a bigger story to be written by a human being. During the Olympics, for instance, The Post set up alerts on Slack, the workplace messaging system, to inform editors if a result was 10 percent above or below an Olympic world record.

For the full story, see:

Jaclyn Peiser. “As A.I. Reporters Arrive, The Other Kind Hangs In.” The New York Times (Tuesday, Feb. 5, 2019): B1 & B3.

(Note: ellipses added.)

(Note: the online version of the story has the date Feb. 4, 2019, and has the title “The Rise of the Robot Reporter.”)

Wages Depend More on “Nonemployment” Than on Narrower “Unemployment”

Source of graph: online version of the WSJ article quoted and cited below.

(p. B5) Many economists were puzzled by the slow pace of pay increases because it looked as if a fundamental relationship had broken down.

Decades ago, economists observed that when unemployment falls, wages tend to rise, as companies are forced to offer higher pay to attract workers. Yet even as the unemployment rate fell from 10 percent in 2009 to less than 5 percent in 2016, wages rose slowly. Even now, with the unemployment rate near multidecade lows, wages are not rising as quickly as standard models suggest they should be.

Economists proposed all sorts of theories to explain the mystery: Globalization and automation meant that Americans were competing against lower-paid workers overseas and against robots at home. The rising power of the biggest corporations, paired with falling rates of unionization, made it harder for workers to negotiate for higher pay. Sluggish productivity growth meant that companies couldn’t raise pay without eating into profits.

The recent uptick in wage growth suggests a simpler explanation: Perhaps the job market wasn’t as good as the unemployment rate made it look.

The government’s official definition of unemployment is relatively narrow. It counts only people actively looking for work, which means it leaves out many students, stay-at-home parents or others who might like jobs if they were available. If employers have been tapping into that broader pool of potential labor, it could help explain why they haven’t been forced to raise wages faster.

It appears as if that is exactly what is happening. In recent months, more than 70 percent of people getting jobs had not been counted as unemployed the previous month. That is well above historical levels, and a sign that the strong labor market is drawing people off the sidelines.

For the full story, see:

Ben Casselman. “Why American Wages Are Finally Rising, a Full Decade After the Great Recession.” The New York Times (Friday, May 3, 2019): B1 & B5.

(Note: the online version of the story has the date May 2, 2019, and has the title “Why Wages Are Finally Rising, 10 Years After the Recession.”)

Where Worker Pool Is Large, Employers Demand College Degrees for More Jobs

(p. B1) The median wage for workers with some college education but no four-year degree is $835 per week, about 10 percent less than it was at the turn of the century, after inflation. Workers with a bachelor’s degree typically make one-third more.

Underneath the grim average, however, the truth is that there are better-paid jobs available to workers without the requisite college credential. The trick is finding them. They are not always in the most obvious places.

Keith Wardrip of the Federal Reserve Bank of Philadelphia and Kyle Fee and Lisa Nelson of the Federal Reserve Bank of Cleveland have put together a map. Its most resounding and confounding recommendation: Stay out of the superstar cities. Their booming tech, health and financial industries may offer great jobs for the college educated. But if you don’t have the degree, they have little for you.

What’s a good job?

Mr. Wardrip, Mr. Fee and Ms. Nelson define a “good job” in simple terms: It has to pay more than the national median wage, $37,690 in 2017, adjusted for the cost of liv-(p. B5)ing in the area. In Springfield, Mo., the cutoff is $33,100. In San Jose, Calif., it is $47,900. To figure out how many of these jobs are open to people without degrees, the researchers scoured nearly 30 million local job ads across 121 metropolitan areas to determine their minimum educational requirements. They called them “opportunity jobs.”

. . .

San Francisco is not for you

The most striking finding is how these jobs are distributed geographically. In Asheville, N.C., more than four in five job openings for computer-user support specialists do not require a bachelor’s degree. In San Francisco, only about a third are open to people without a degree. Fewer than half the nursing jobs in Raleigh, N.C., are open to people who haven’t graduated from a four-year college, compared with 85 percent in Huntsville, Ala. Continue reading “Where Worker Pool Is Large, Employers Demand College Degrees for More Jobs”

Cheaper to Teach Humans than to Upgrade Robots

(p. A1) SASEBO, Japan—Yoshihisa Ishikawa’s one-night stay at a robot-staffed hotel in western Japan wasn’t relaxing.

He was roused every few hours during the night by the doll-shaped assistant in his room asking: “Sorry, I couldn’t catch that. Could you repeat your request?”

By 6 a.m., he realized the problem: His heavy snoring was triggering the robot.

Turns out, robots aren’t the best at hospitality. After opening in a blaze of publicity in 2015, Japan’s Henn na, or “Strange,” Hotel, recognized by the Guinness Book of World Records as the world’s first robot hotel, is now laying off its low-performing droids.

So far, the hotel has culled over half of its 243 robots, many because they created work rather than reduced it.

. . .

(p. A8) The hotel launched with around 80 robots. The initial positive reaction encouraged it to add many more for guests’ entertainment, such as a team of human and dog robot dancers in the lobby.

That’s when problems started to pile up, said the hotel’s general manager, Takeyoshi Oe.

Toshifumi Nakamura, a former hotel guest, recalled that about half the puppy-size lobby dancers appeared to be broken or in need of charging when he visited in mid-2016. Mr. Oe said the hotel increased overtime for the human staff to cope with the additional workload.

. . .

Mr. Ishikawa, the heavy snorer, said he wasn’t sure how to turn Churi off.

“She got a bad reputation,” said Hideo Sawada, president of the travel company that owns the hotel. Churi was among the robots removed.

. . .

Mr. Oe said the hotel has considered upgrading some robots but has to weigh the potentially high costs of frequent replacements. Churi was in service for four years, plenty of time for the technology to become outdated.

“Many people get a new phone every couple of years, so four years seems really old,” said Mr. Oe.

. . .

Mr. Sawada said he hasn’t given up on the idea of a hotel without human staff, but Strange Hotel has taught him that there are currently many jobs suited only for humans. “When you actually use robots you realize there are places where they aren’t needed—or just annoy people,” he said.

For the full story, see:

Alastair Gale and Takashi Mochizuki. “The World’s First Robot Hotel Is Looking for a Few Good Humans.” The Wall Street Journal (Tuesday, January 15, 2019): A1 & A8.

(Note: ellipses added.)

(Note: the online version of the story has the date Jan. 14, 2019, and has the title “Robot Hotel Loses Love for Robots.”)

More Job Quits Lead to Better Matches and Higher Productivity

(p. A1) Kimberly Enoch had a stable job working from home managing grants for a Little Rock, Ark., nonprofit, but she was bored and thought she could do better.

So she quit.

Within three months, she landed a job as a grant writer at Southern Bancorp Community Partners, snagging a 14% raise, a faster pace at work and an easy seven-minute commute.

“I knew I could do more,” Ms. Enoch said.

She is part of a bigger trend. Workers are choosing to leave their jobs at the fastest rate since the internet boom 17 years ago and getting rewarded for it with bigger paychecks and/or more satisfying work.

Labor Department data show that 3.4 million Americans quit their jobs in April [2018], near a 2001 peak and twice the 1.7 million who were laid off from jobs in April.

Job-hopping is happening across industries including retail, food service and construction, a sign of broad-based labor-market dynamism.

Workers have been made more confident by a strong economy and historically low unemployment, at 3.8% in May, the lowest since 2000. Ms. Enoch started getting interview opportunities the same day she began sending out applications online.

The trend could stoke broader wage growth and improve worker productivity, which have been sluggish in the past decade.

. . .

(p. A2) The recent uptick in quitting goes against a long-running decline in worker mobility. In recent decades, as the population aged and business startups became relatively more rare, employees tended to stick at their jobs longer, said Steven Davis, an economist at the University of Chicago who studies labor-market churn. He and co-author John Haltiwanger presented the findings of diminished economic dynamism to central bankers at the Federal Reserve’s annual Jackson Hole, Wyo., symposium in August 2014.

The problem was exacerbated by the 2007-2009 recession. Fretful workers stayed in roles that weren’t good matches for them, also hurting national productivity. Now that they are looking for better matches, productivity could improve.

For the full story, see:

Harrison, David and Eric Morath. “Economy Spurs Job Hopping.” The Wall Street Journal (Thursday, July 5, 2018): A1-A2.

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

(Note: the online version of the story has the date July 4, 2018, and has the title “In This Economy, Quitters Are Winning.”)

Productivity Rises at Fastest Rate in Almost 10 Years

(p. A2) WASHINGTON—U.S. workers’ efficiency improved during the past year at the best pace in nearly a decade, laying groundwork for stronger wage growth and continued economic expansion.

The productivity of nonfarm workers, measured as the output of goods and services for each hour on the job, increased at a 3.6% seasonally adjusted annual rate in the first quarter from the prior three months, the Labor Department said Thursday [May 2, 2019]. From a year earlier, productivity rose 2.4%. That was the best gain year-over-year since the third quarter of 2010, when the economy was just emerging from a deep recession.

Productivity tends to be strong in the early days of an economic cycle. Accelerating improvement nearly 10 years after the recession ended raises hopes that a combination of more efficient workers and Americans rejoining the labor force could provide necessary fuel to extend one of the longest expansions in the post-World War II era.

For the full story, see:

Eric Morath. “Productivity Rises at Fastest Pace in Years.” The Wall Street Journal (Friday, May 3, 2019): A2.

(Note: bracketed date added.)

(Note: the online version of the story has the date May 2, 2019, and has the title “U.S. Worker Productivity Advances at Best Rate Since 2010.”)

“Confidence Stops You from Learning”

(p. A15) Mr. Karlgaard, a former publisher of Forbes magazine, has plenty of vivid anecdotes to make his case for late bloomers.

. . .

Bill Walsh, the great coach of the San Francisco 49ers, got his first NFL head coaching job when he was 46 and won his first Super Bowl at 50. He was famously twitchy, self-deprecating and eager to learn, and had this to say about confidence: “In my whole career I’ve been passing men with greater bravado and confidence. Confidence gets you off to a fast start. Confidence gets you that first job and maybe the next two promotions. But confidence stops you from learning. Confidence becomes a caricature after a while. I can’t tell you how many confident blowhards I’ve seen in my coaching career who never got better after the age of forty.”

Late bloomers, Mr. Karlgaard argues, are not just people of great talent who develop later in their lives. They also possess qualities that can only be acquired through time and experience. They tend to be more curious, compassionate, resilient and wise than younger people of equal talent. This may be true, Mr. Karlgaard notes, of older people generally, who are being flushed out of the workforce much too early.

For the full review, see:

Philip Delves Broughton. “THE WEEKEND INTERVIEW; Standing Against Psychiatry’s Crazes.” The Wall Street Journal (Tuesday, April 30, 2019): A15.

(Note: ellipsis added.)

(Note: the online version of the review has the date April 29, 2019, and has the title “BOOKSHELF; ‘Late Bloomers’ Review: Please Don’t Rush Me.”)

The book under review, is:

Karlgaard, Rich. Late Bloomers: The Power of Patience in a World Obsessed with Early Achievement. New York: Currency, 2019.

Robots Allow Walmart to Better Use “Workers for New Tasks”

(p. B4) Walmart plans to use autonomous robots in more stores by next year to scan shelf inventory to be able to detect products that are out of stock and direct workers and shoppers to precise product locations, Mark Ibbotson, head of central operations for Walmart U.S., said in an interview.

Walmart is also adding automatic conveyor belts to backrooms that sort products to speed the process of unloading the roughly nine trucks that arrive at a typical store each week, executives said at a presentation in June. The conveyor belts cut the number of workers needed to unload trucks by half, from around eight to four, they said.

The changes give Walmart more labor dollars to spend on “pickers,” workers who roam the store to compile online orders that are picked up by customers in store parking lots, said Mr. Ibbotson.

“It’s a savings” that allows Walmart to keep labor costs steady, through attrition and better using workers for new tasks, he said.

For the full story, see:

Sarah Nassauer. “Retailers Bring on Robots.” The Wall Street Journal (Monday, July 2, 2018): B4.

(Note: the online version of the story has the date July 1, 2018, and has the title “Target, Walmart Automate More Store Tasks.”)

Finnish Universal Basic Income Did Not Increase Labor Supply

(p. A8) A much-watched experiment in Finland failed to provide evidence that offering people a guaranteed income is the answer to some of the insecurities caused by potentially profound changes in the jobs market.

Early results from a pilot program suggest that providing unemployed people with a minimum income doesn’t encourage them to find work, . . .

. . .

“The Finnish government hoped that UBI would increase labor supply and employment, but it did not,” said Christopher Pissarides, a professor of economics at the London School of Economics and a Nobel Prize winner.

For the full story, see:

Paul Hannon. “Basic Income Experiment Didn’t Boost Employment.” The Wall Street Journal (Saturday, Feb. 9, 2019): A8.

(Note: ellipses added.)

(Note: the online version of the story has the date Feb. 8, 2019, and has the title “Experiment in Finland With Guaranteed Income Creates Less Stress but No Jobs.”)