Labor Economics – Page 36 – artdiamondblog.com

Small Spanish Firms Less Likely to Hire with Higher Minimum Wage

(p. B1) MADRID — As Spain grapples with a turbulent political crisis, one of Europe’s last Socialist governments may soon fall amid the rise of a new nationalism in the country. But whatever the outcome, Prime Minister Pedro Sánchez is leaving behind a signature legacy: a record increase in the minimum wage.
The 22 percent rise that took effect in January, to 1,050 euros (about $1,200) a month, is the largest in Spain in 40 years. Yet the move has ignited a debate over whether requiring employers to pay more of a living wage is a social watershed, or a risky attempt at economic engineering.
. . .
(p. B4) Over 95 percent of businesses in Spain are small and medium-size firms, many of which operate with thin margins, according to Celia Ferrero, the vice president of the National Federation of Self-Employed Workers.
“You won’t find people disputing that higher wages are needed,” said Ms. Ferrero, whose organization represents many smaller businesses. “The question is whether firms can afford it. Higher wages and social security taxes simply make it more expensive for employers to hire or maintain staffers.”
“It’s not that they don’t want to pay; they literally can’t,” she added.
Lucio Montero, the owner of General Events, which makes booths and backdrops for firms displaying wares at big conventions, employs eight workers on the outskirts of Madrid. He pays each €1,400 a month.
The higher minimum wage and increased social security charges will put upward pressure on his labor bill and already thin margins, he said. It is a cost that he can ill afford.
“I would need to think twice about hiring more people,” said Mr. Montero, walking around his tiny, sawdust-covered factory floor.

For the full story, see:
Liz Alderman. “Spain’s Minimum Wage Has Surged. So Has Debate.” The New York Times (Friday, March 8, 2019): B1 & B4.
(Note: ellipsis added.)
(Note: the online version of the story has the date March 7, 2019, and has the title “Spain’s Minimum Wage Just Jumped. The Debate Is Continuing.”)

Hot Job Market Helps the Least Well-Off

(p. A15) This past weekend [Sat., March 2, 2019], The Wall Street Journal published a series of stories titled “Inside the Hottest Job Market in Half a Century.” As far as I’m concerned, this jobs record is the story of the year. The Journal’s articles transformed a year of economic data into the new daily reality of getting paid to work in America.
“All sorts of people who have previously had trouble landing a job are now finding work,” the Journal reported. “Racial minorities, those with less education and people working in the lowest-paying jobs are getting bigger pay raises and, in many cases, experiencing the lowest unemployment rate ever recorded for their groups. They are joining manufacturing workers, women in their prime working years, Americans with disabilities and those with criminal records, among others, in finding improved job prospects after years of disappointment.”
Example: A 23-year-old woman, Cassandra Eaton, a high-school graduate and single mother who was working for about $8 an hour at a day-care center in Biloxi, Miss., is doing now what previously would have been unimaginable. She’s an apprentice welder making $20 an hour at a shipyard in Pascagoula.
The unemployment rate for high-school dropouts, a status many depressing books and studies show puts one close to the bottom of the barrel for getting ahead in America, is 5%. Their median wages the past year rose 6%.

For the full commentary, see:
Daniel Henninger. “WONDER LAND; Story of the Year; You have to be obtuse to stare at this jobs record and pretend it isn’t happening.” The Wall Street Journal (Thursday, March 7, 2019): A15.
(Note: bracketed date added.)
(Note: the online version of the commentary has the date March 6, 2019.)

Farsighted Engelbart Saw That Computers “Would Aid Humans, Not Replace Them”

(p. A15) On Dec. 9, 1968, Doug Engelbart of the Stanford Research Institute presented what’s now known as “The Mother of All Demos.” Using a homemade modem, a video feed from Menlo Park, and a quirky hand-operated device, Engelbart gave a 90-minute demonstration of hypertext, videoconferencing, teleconferencing and a networked operating system. Oh, and graphical user interface, display editing, multiple windows, shared documents, context-sensitive help and a digital library. Mother of all demos is right. That quirky device later became known as the computer mouse. The audience felt as if it had stepped into Oz, watching the world transform from black-and-white to color. But it was no hallucination.
. . .
The coolest thing about this story is that, starting 20 years ago, Doug Engelbart was my next-door neighbor.
. . .
One of Engelbart’s biggest influences was Vannevar Bush’s 1945 essay, “As We May Think,” which envisioned a “memex” machine–a portmanteau of “memory” and “index”–that would enhance human cognition. While I chased my kids’ errant basketballs in his backyard, Doug would tell me about this sort of “human augmentation,” arguing that computer science was developing in ways that would aid humans, not replace them.

For the full commentary, see:
Andy Kessler. “Life as We Know It Turns 50; The 1968 ‘Mother of All Demos’ showed the world a vision for modern computing.” The Wall Street Journal (Monrday, Dec. 3, 2018): A15.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Dec. 2, 2018.)

Hybrid Jobs Are Less Likely to Become Obsolete

(p. R14) Jobs that tap both technical and creative thinking include mobile-app developers and bioinformaticians, and represent some of the fastest-growing and highest-paying occupations, according to a new report from Burning Glass Technologies, a labor-market analytics firm in Boston.
The company analyzed millions of job postings to better understand the skills employers are seeking. What they discovered was that many employers want workers with experience in such new capabilities as big-data gathering and analytics, or design using digital technology. Such roles often require not only familiarity with advanced computer programs but also creative minds to make use of all the data.
. . .
People who fail to update their skills will qualify for fewer jobs. In 2013, Burning Glass found, one in 20 ads for design, media and writing jobs requested analysis skills. In 2018, one in 13 postings did. In 2013, one in 500 ads for marketing and public-relations pros asked for data-visualization skills. By 2018, the ratio had increased to one in 59.
People in hybrid jobs are also less likely to become professionally obsolete. Highly hybridized jobs have only 12% risk of being automated, compared with a 42% risk for jobs overall, says Burning Glass.

For the full story, see:
Lauren Weber. “The ‘Hybrid’ Skills That Tomorrow’s Jobs Will Require.” The Wall Street Journal (Tuesday, Jan. 22, 2019): R14.
(Note: ellipsis added.)
(Note: the online and print versions have the same dates and titles.)

The Burning Glass Technologies report mentioned in the passages above, is:

Sigelman, Matthew, Scott Bittle, Will Markow, and Benjamin Francis. “The Hybrid Job Economy: How New Skills Are Rewriting the DNA of the Job Market.” Boston, MA: Burning Glass Technologies, Jan. 2019.

Firms Find Humans More Flexible Than Robots

(p. B2) JACKSON CENTER, OHIO–Airstream’s factory here is racing to fill a backlog of orders for its retro, high-end travel trailers that spans well into next year. The company is hiring, adding dealers and spending $50 million to build a bigger plant.
I counted eight workers climbing through an Airstream to bolt a hulking aluminum shell to a steel chassis, and snake fluid lines and wires through walls. To finish the shiny, silver capsule off, workers will need to install 3,000 rivets by hand.
There’s not a robot in sight. They may speed production, but the machines require a substantial investment that risks being wasted if the economy slumps
. . .
“We see in U.S. manufacturing a race between technology and human capital,” Stanford University economist Nicholas Bloom said. While some companies like electric-car maker Tesla Inc. are racing to automate almost every process on the factory floor, he said many executives are reluctant to sink investments in equipment that “will be hard to reverse.”
. . .
Robotics spending is forecast to equal $90 billion in 2018, according to researcher International Data Corp., with a hefty chunk of that investment aimed at industrial or manufacturing uses. That is a considerable increase compared to prior years, but it is only a sliver of the nearly $3 trillion committed to capital investment.
John Van Reenen, a Massachusetts Institute of Technology economics professor and Mr. Bloom’s research partner, said executives in many industries –including health care and retailing–aren’t sold on the technical revolution. “There is a big debate on whether robots are really delivering on the productivity benefits they might promise.”
At an event to commemorate the revamp of a factory west of Detroit last month, Ford Motor Co.’s president of global operations, Joe Hinrichs, said a lot of industrial automation happened several decades ago. Now companies are trying to “optimize how they use people” rather than install more machines.
Ford spent nearly $1 billion converting the factory to go from making small cars to producing pickup trucks. Much of that went toward new tooling for stamping out body parts, but relatively little went toward adding automation, Mr. Hinrichs said. Artificial intelligence is now integrated into the final inspection lines to boost quality. But skilled workers are needed to interact with the AI tools.
Mr. Bloom said incremental efforts like this are helping boost worker productivity, even if at a lower rate than was experienced during the decadelong boom that started in the mid-1990s. He said economists may need to get comfortable with 1% annual productivity gains, particularly because it takes a lot of investment just to maintain that modest rate.

For the full commentary, see:
John D. Stoll. “ON BUSINESS; Humans Are Winning the Battle With Robots.” The Wall Street Journal (Saturday, Nov. 3, 2018): B2.
(Note: ellipses added.)
(Note: the online version of the commentary has the date Nov. 1, 2018.)

92-Year-Old American Airline Mechanic

(p. A19) Azriel Blackman, an airline mechanic for American Airlines, is not allowed to climb ladders, drive on the airfield at Kennedy International Airport or even use any tools.
That’s understandable — Mr. Blackman turns 92 next month.
But those constraints have not stopped him from showing up to work at a job he started in an era when trans-Atlantic commercial flights were novel feats.
“He loves coming to work,” said Robert Needham, Mr. Blackman’s boss and the station manager for the airline’s New York maintenance base. “His work ethic is something I’d love every one of my 368 mechanics here to have.”
Five days a week, Mr. Blackman drives himself from his home in Queens Village to the airport long before sunup and well before his 5 a.m. start time. His job as crew chief is to review paperwork detailing what maintenance has been completed and what remains to be done on 17 jetliners that are kept overnight at the airport. Then, wearing a lime-green vest and clutching a paper containing a list of planes and service requests, he starts his walk through a massive hangar, often passing below an enormous mural on the wall featuring his portrait surrounded by four types of aircraft flown by American.
. . .
“Every day the job is different,” Mr. Blackman said. “You’re not doing the same thing repetitively, and that’s good. If in my journey around the hangar I see something I can help on, I do that.”

For the full story, see:
Christine Negroni. “For 75 Years, Helping to Keep Planes Aloft.” The New York Times (Tuesday, June 18, 2017): A19.
(Note: ellipsis added.)
(Note: the online version of the story has the date June 17, 2017, and has the title “For 75 Years, a Mechanic Has Helped Keep Planes Aloft.” The online version identifies the page number of the New York edition as A18. The page number in my copy of the National edition was A19.)

Deirdre McCloskey Offers Advance Praise for Openness to Creative Destruction

Astoundingly rich in ideas and stories, Diamond’s sweet and beautiful book is more: an open-handed guide to what really matters in explaining, and sustaining, the Great Enrichment of 3,000 percent per person 1800 to the present. Diamond assuages the ancient fear of betterment, recently haunting us with spooks of AI and technological unemployment. He shows conclusively that an “innovative dynamism” enriches us all, materially and spiritually. The poor are bettered. The jobs are bettered. Read the book and be bettered, freed from specious and politically poisonous worries about economic change.

Deirdre McCloskey, UIC Distinguished Professor of Economics and of History Emerita. Author of Bourgeois Equality and many other works.

McCloskey’s advance praise is for:
Diamond, Arthur M., Jr. Openness to Creative Destruction: Sustaining Innovative Dynamism. New York: Oxford University Press, forthcoming June 2019.

Government Fiscal Stimulus Does Not Speed Job Growth

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

(p. A17) . . . is there evidence that stimulus was behind America’s recovery–or, for that matter, the recoveries in Germany, Switzerland, Sweden, Britain and Ireland? And is there evidence that the absence of stimulus–a tight rein on public spending known as “fiscal austerity”–is to blame for the lack of a full recovery in Portugal, Italy, France and Spain?
A simple test occurred to me: The stimulus story suggests that, in the years after they hit bottom, the countries that adopted relatively large fiscal deficits–measured by the average increase in public debt from 2011-17 as a percentage of gross domestic product–would have a relatively speedy recovery to show for it. Did they?
As the accompanying chart shows, the evidence does not support the stimulus story. Big deficits did not speed up recoveries. In fact, the relationship is negative, suggesting fiscal profligacy led to contraction and fiscal responsibility would have been better.

For the full commentary, see:
Phelps, Edmund. “The Fantasy of Fiscal Stimulus; It turns out Keynesian policies are correlated with slower, not faster, economic growth.” The Wall Street Journal (Tuesday, Oct. 30, 2018): A17.
(Note: ellipsis added.)
(Note: the online version of the commentary has the date Oct. 29, 2018.)

“The Market Doesn’t Care If You’re Indigenous or Not”

(p. A8) MELBOURNE, Australia — It was a disempowering experience at a large corporate organization that prompted Morgan Coleman to become an entrepreneur.
Initially, he was proud to work there. But soon, as one of the few Indigenous employees, he felt patronized and unwelcome by some, and worried that his manager resented him because of his Torres Strait Islander background.
Now, as part of a growing number of Indigenous Australians finding success in the entrepreneurial world even as the rate of non-Indigenous business ownership has fallen, he feels his future rides solely on his merit.
“Whether I succeed or not, it’s entirely up to me,” Mr. Coleman, 28, said in a recent interview at the Melbourne offices of Vets on Call, the app he left his corporate job to start. “The market doesn’t care if you’re Indigenous or not.”

For the full story, see:

Kenneth Chang. “For Indigenous Australians, Defining a Destiny Through Entrepreneurship.” The New York Times (Monday, Feb. 4, 2019): A8.

(Note: the online version of the story has the date Jan. 30 [sic], 2019, and has the title “”It’s Entirely Up to Me’: Indigenous Australians Find Empowerment in Start-Ups.”)

Top Fourth of Humanities Grads Earn Far More Than Bottom Fourth of Engineering Grads

(p. A3) Graduates of liberal arts areas like philosophy, foreign languages, ethnic and gender studies, history and English all have a better-than-even chance of landing a job that fits their education level.
They may not pay well, with teaching and social services popular destinations, but graduates can expect to fare better in terms of landing credential-appropriate roles than transportation, culinary services, agriculture and public administration majors.
. . .
The report’s findings are bolstered by research from Georgetown University’s Center on Education and the Workforce, which has found that job prospects and earnings vary widely by college major, with some counterintuitive results. For example, the bottom quartile of architecture and engineering majors earn far less than the top quartile of humanities and social science majors.

For the full story, see:
Melissa Korn. “Many Grads Underemployed After College.” The Wall Street Journal (Saturday, Oct. 27, 2018): A3.
(Note: ellipsis added.)
(Note: the online version of the story has the date Oct. 26, 2018, and has the title “Some 43% of College Grads Are Underemployed in First Job.”)

Civil-Rights Leaders Argue That Green Policies Saddle the Poor “with Higher Living Costs”

(p. A19) French President Emmanuel Macron stirred popular rage by trying to raise the gasoline tax by about 25 cents a gallon. He argued that higher taxes would reduce fuel use and hence emissions of CO2, helping France meet the lower emissions goals to which it is pledged as a signatory to the United Nations’ Paris Agreement to fight climate change.
Mr. Macron has learned the hard way that voters don’t see climate change as a threat demanding personal sacrifices. The rebellion is global. Green measures that caused energy prices to soar damaged Chancellor Angela Merkel in Germany’s 2017 election. Green energy plans were repudiated by voters in Australia and helped cause a political upheaval in the Canadian province of Ontario.
Voters in Washington state and Arizona rejected November ballot measures aimed at reducing CO2 emissions. The Journal’s William McGurn reported last week that 200 prominent civil-rights leaders have filed suit against the California Air Resources Board. Green policies, they argue, are saddling the poor with higher living costs.

For the full commentary, see:
George Melloan. “The Yellow Jackets Are Right About Green Policies; They have distinguished company in questioning the science behind climate-change dogma.” The Wall Street Journal (Monday, Dec. 17, 2018): A19.
(Note: the online version of the commentary has the date Dec. 16, 2018.)