Category: Labor Economics

The Social Security Administration Is Badly Administered

(p. B1) Few government agencies touch the lives of more Americans than the Social Security Administration — the agency pays $1.4 trillion in benefits to more than 71 million people every year.

But Social Security has been grappling with a customer service mess that threatens to grow worse before it gets better. The problems include long wait times on the agency’s toll-free phone line, a large backlog in disability applications and a growing problem with overpayments to low-income beneficiaries.

. . .

Training new workers typically takes more than a year because Social Security rules are so complex.

. . .

The waiting time on S.S.A.’s phone line, which is crucial for people with questions about benefits or those applying for benefits, averages 36 minutes. Average wait times have fluctuated over the past decade, but in 2013 the average wait time was 10 minutes. The agency recently began using a modernized toll-free phone system, but noted that more trained employees will be needed to reduce wait times.

There is a backlog of more than one million people waiting an average of seven months for initial decisions on disability benefit applications — a process that has been slowed by staffing issues at the agency and in state governments, which receive S.S.A. funding to determine applicants’ eligibility at the local level.

The agency also is under fire over overpayments of benefits that have led the agency to claw back billions of dollars, with some people receiving notices that they owe tens of thousands to the S.S.A.

. . .

Earlier this year [2023], the Social Security Administration placed last in a ranking of the best places to work in the federal government — . . . .

For the full commentary, see:

Mark Miller. “Social Security’s Customer Service Struggle.” The New York Times, SundayBusiness Section (Sunday, December 3, 2023): 7.

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

(Note: the online version of the commentary has the date Dec. 2, 2023, and has the title “When You Call Social Security, Expect to Wait Even Longer.” In a couple of places where the online version is slightly longer than the print version, the passages quoted above follow the online version.)

Lower-Middle-Class Chinese Risk the Darién Gap to Seek Opportunity and Freedom in the U.S.

(p. B1) Mr. Gao said he felt he had no choice but to leave China.

“I think we will only be safe by coming to the U.S.,” he said, adding that he believed that Xi Jinping, China’s leader, could lead the country to famine and (p. B4) possibly war. “It’s a rare opportunity to protect me and my family,” he said.

A growing number of Chinese have entered the United States this year through the Darién Gap, exceeded only by Venezuelans, Ecuadoreans and Haitians, according to Panamanian immigration authorities.

. . .

Their flight is a referendum on the rule of Mr. Xi, now in his third five-year term. Boasting that “the East is rising while the West is declining,” he said in 2021 that China’s governance model had proved superior to Western democratic systems and that the center of gravity of the world economy was shifting “from West to East.”

Every immigrant I interviewed this year who passed through the Darién Gap — a journey known as zouxian, or walking the line, in Chinese — came from a lower middle-class background. They said that they feared falling into poverty if the Chinese economy worsened, and that they could no longer see a future for themselves or their children in their home country.

In Mr. Xi’s China, anyone could become a target of the state. You could get in trouble for being a Christian, Muslim, Uyghur, Tibetan or Mongolian. Or a worker who petitions for back pay, a homeowner who protests the delayed completion of an unfinished apartment, a student who uses a virtual private network for access to Instagram or a Communist Party cadre who is found with a copy of a banned book.

. . .

Another migrant I spoke with who crossed the Darién Gap, Mr. Zhong, who wanted to use only his family name for fear of retribution, has a background similar to Mr. Gao’s.

. . .

The trouble for Mr. Zhong, now in his early 30s, started last December [2022] when police officers stopped his car for a routine alcohol test and saw a copy of a Bible on the passenger seat. They told Mr. Zhong that he believed in an evil religion and tossed the Bible on the ground and stomped on it. The officers then took his phone and installed an app on it that turned out to have software that would track his movements.

On Christmas Day, four police officers broke into a home where Mr. Zhong and three fellow Christians were holding a prayer service. They were taken to the police station, beaten and interrogated.

Like Mr. Gao, Mr. Zhong came across social media posts about the Darién Gap. He borrowed about $10,000 and left home on Feb. 22 [2023].

. . .

Mr. Zhong soon moved to a town of 30,000 people in Alabama. He had grown up near Chengdu, a city of 20 (p. B5) million. Now he felt truly alone. He works at a Chinese restaurant 11 hours a day, he said, and is unwilling to take a day off. He has learned to cook General Tso’s chicken and other Chinese American dishes. The pay is much better than in China, and he can send more money home. Every Sunday, he joins an online religious service, hosted by a church in Brooklyn’s Sunset Park, another community with a large population of Chinese immigrants.

He told me a joke over the phone: “Why did you go to the United States?” someone asks a Chinese immigrant. “Aren’t you satisfied with your pay, your benefits and your life?” The immigrant responds: “Yes, I’m satisfied. But in the U.S., I will be allowed to say that I’m not satisfied.”

“I can live like a real human being in the U.S.,” he said.

. . .

. . . Mr. Gao got his work permit, bought a car and started delivering packages for an e-commerce company. He makes $2 per package. The more he delivers, the more he makes.

. . .

On one Wednesday in November [2023], Mr. Gao said, he woke at 4 a.m., delivered more than 100 packages and didn’t get home until after 9 p.m.

He took the next day off. When the motorcade of Mr. Xi, who was in San Francisco for a meeting with President Biden, drove by, Mr. Gao joined other protesters on the sidewalk, chanting in Chinese, “Xi Jinping, step down!”

For the full commentary, see:

Li Yuan. “THE NEW NEW WORLD; Why More Chinese Are Risking Danger in Southern Border Crossings to U.S.” The New York Times (Monday, December 4, 2023): B1 & B4-B5.

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

(Note: the online version of the commentary has the date Dec. 3, 2023, and has the same title as the print version.)

“I Do What I Want; You Don’t Like It, Don’t Buy It”

(p. 27) Terry Castro, a New York-based jewelry designer whose knack for blending the fantastical with the elegant propelled him from selling on the sidewalks of New York to adorning celebrities like Rihanna and Steven Tyler, died on July 18 [2022] at his home in Istanbul.

. . .

Mr. Castro, who worked under the single name Castro, considered himself a “creator of dreams.”

. . .

Passionate and at times confrontational, Mr. Castro considered himself a rebel within the industry.

“I do what I want; you don’t like it, don’t buy it,” he said in a 2012 interview with The Black Nouveau, a style blog. Recounting his scattered efforts to “go commercial,” he concluded that the income was not worth the creative price paid.

For the full obituary, see:

Alex Williams. “Terry Castro, 50, Rebel Who Created Exquisite Jewelry.” The New York Times, First Section (Sunday, August 7, 2022): 27.

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

(Note: the online version of the obituary has the date Aug. 4, 2022, and has the title “Terry Castro, a Proud Outsider in the Jewelry World, Dies at 50.”)

Nebraska Interest Cap Regulation Reduced Consumer Payday Loan Options

(p. A1) Nebraska’s payday lenders have all shut down in the two years since voters capped the interest rate they could charge.

The last handful gave up their delayed-deposit services business licenses in December [2021], according to records kept by the Nebraska Department of Banking and Finance.

Just six months earlier, there had been 19 such businesses.

. . .

. . ., Ed D’Alessio, executive director of INFiN, a national trade association representing delayed-deposit businesses, said the closures were predictable, based on the experience of other states that have imposed similar rate caps.

“Nebraska’s 36% rate cap on delayed-deposit loans was never about consumer protection,” he said. “It was about activists’ thinly veiled desire to eliminate a regulated service valued by many.

“But Nebraskans’ need for credit did not go away. Instead, they have been left with fewer options for managing their financial obligations,” D’Alessio said.  . . .

Payday loans, also known as cash advances, check advances or delayed-deposit loans, are a type of short-term, high-cost borrowing that people use to get small amounts of immediate cash.

For the full story, see:

Martha Stoddard. “Payday Lenders Disappear From State After Rate Cap.” Omaha World-Herald (Tuesday, Sept 13, 2022): A1-A2.

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

(Note: the online version of the story was updated Oct. 18, 2023 [sic], and has the title “Payday lenders disappeared from Nebraska after interest rate capped at 36%.”)

P&G CEO Defended Using Harsh Criticism of Workers

Deirdre McCloskey frequently says we should use more “sweet talk.” Edwin Artzt defended using harsh talk. Is there room for both?

(p. A8) Edwin Artzt, who expanded Procter & Gamble Co.’s global reach in the 1980s and then, as chief executive officer in the early 1990s, rattled the company’s managers with cost-cutting drives and harsh criticism of their work, died at the age of 92, the Cincinnati-based company said.

As CEO from 1990 until 1995, Mr. Artzt was known for berating managers and using words including “stupid” and “imbecilic” to describe some of their proposals, as recounted in “Soap Opera: The Inside Story of Procter & Gamble,” a 1993 book by Alecia Swasy, a former Wall Street Journal reporter. He didn’t sugarcoat his desire to eliminate weak brands and underperforming employees.

Mr. Artzt, who died on April 6, was sometimes called “The Prince of Darkness.” Some colleagues said the nickname reflected a hot temper. He said it came from his habit of working late.

“I certainly don’t want to have a short trigger with people and not give them a chance,” he told The Wall Street Journal in 1991. “But sure I’ve cleared out deadwood. Probably some of it was still breathing when it was cleared out.”

Two years later, he said: “Terrifying people is not my intention…People come to me years later and say, ‘Remember that meeting 10 years ago? You laid it on me, but I sure remember that lesson.’”

For the full obituary, see:

James R. Hagerty. “P&G CEO’s Harsh Talk Rattled a Bureaucracy.” The Wall Street Journal (Saturday, April 15, 2023): A10.

(Note: the online version of the obituary was updated April 12, 2023, and has the title “Edwin L. Artzt, P&G CEO Known for His Tough Talk, Dies at 92.”)

The book on Proctor & Gamble mentioned above is:

Swasy, Alecia. Soap Opera: The Inside Story of Proctor & Gamble. New York: Crown Publishing, 1993.

Taxpayer-Financed Transfer Payments Reduced Childhood Poverty 59% in 30 Years from 1993 to 2023

(p. A1) WASHINGTON — For a generation or more, America’s high levels of child poverty set it apart from other rich nations, leaving millions of young people lacking support as basic as food and shelter amid mounting evidence that early hardship leaves children poorer, sicker and less educated as adults.

But with little public notice and accelerating speed, America’s children have become much less poor.

A comprehensive new analysis shows that child poverty has fallen 59 percent since 1993, with need receding on nearly every front. Child poverty has fallen in every state, and it has fallen by about the same degree among children who are white, Black, Hispanic and Asian, living with one parent or two, and in native or immigrant households. Deep poverty, a form of especially severe deprivation, has fallen nearly as much.

In 1993, nearly 28 percent of children were poor, meaning their households lacked the income the government deemed necessary to meet basic needs. By 2019, before temporary pandemic aid drove it even lower, child poverty had fallen to about 11 percent.

More than eight million children remained in poverty, and despite shared progress, Black and Latino children are about three times as likely as white children to be poor. With the poverty line low (about $29,000 for a family of four in a place with typical living costs), many families who escape poverty in the statistical sense still experience hardship.

Still, the sharp retreat of child poverty represents major progress and has drawn surprisingly little notice, even among policy experts.

For the full story, see:

Jason DeParle and Maddie McGarvey. “A Quiet, Dramatic Blow to Childhood Poverty.” The New York Times (Monday, September 12, 2022): A1 & A16-A17.

(Note: the online version of the story has the date Sept. 11, 2022, and has the title “Expanded Safety Net Drives Sharp Drop in Child Poverty.”)

The Most Powerful A.I. Systems Still Do Not Understand, Have No Common Sense, and Cannot Explain Their Decisions

(p. B1) David Ferrucci, who led the team that built IBM’s famed Watson computer, was elated when it beat the best-ever human “Jeopardy!” players in 2011, in a televised triumph for artificial intelligence.

But Dr. Ferrucci understood Watson’s limitations. The system could mine oceans of text, identify word patterns and predict likely answers at lightning speed. Yet the technology had no semblance of understanding, no human-style common sense, no path of reasoning to explain why it reached a decision.

Eleven years later, despite enormous advances, the most powerful A.I. systems still have those limitations.

. . .

(p. B7) The big, so-called deep learning programs have conquered tasks like image and speech recognition, and new versions can even pen speeches, write computer programs and have conversations.

They are also deeply flawed. They can generate biased or toxic screeds against women, minorities and others. Or occasionally stumble on questions that any child could answer. (“Which is heavier, a toaster or a pencil? A pencil is heavier.”)

“The depth of the pattern matching is exceptional, but that’s what it is,” said Kristian Hammond, an A.I. researcher at Northwestern University. “It’s not reasoning.”

Elemental Cognition is trying to address that gap.

. . .

Eventually, Dr. Ferrucci and his team made progress with the technology. In the past few years, they have presented some of their hybrid techniques at conferences and they now have demonstration projects and a couple of initial customers.

. . .

The Elemental Cognition technology is largely an automated system. But that system must be trained. For example, the rules and options for a global airline ticket are spelled out in many pages of documents, which are scanned.

Dr. Ferrucci and his team use machine learning algorithms to convert them into suggested statements in a form a computer can interpret. Those statements can be facts, concepts, rules or relationships: Qantas is an airline, for example. When a person says “go to” a city, that means add a flight to that city. If a traveler adds four more destinations, that adds a certain amount to the cost of the ticket.

In training the round-the-world ticket assistant, an airline expert reviews the computer-generated statements, as a final check. The process eliminates most of the need for hand coding knowledge into a computer, a crippling handicap of the old expert systems.

Dr. Ferrucci concedes that advanced machine learning — the dominant path pursued by the big tech companies and well-funded research centers — may one day overcome its shortcomings. But he is skeptical from an engineering perspective. Those systems, he said, are not made with the goals of transparency and generating rational decisions that can be explained.

“The big question is how do we design the A.I. that we want,” Dr. Ferrucci said. “To do that, I think we need to step out of the machine-learning box.”

For the full story, see:

Steve Lohr. “You Can Lead A.I. to Answers, but Can You Make It Think?” The New York Times (Monday, August 29, 2022): B1 & B7.

(Note: ellipses added.)

(Note: the online version of the story was updated Sept. 8, 2022, and has the title “One Man’s Dream of Fusing A.I. With Common Sense.”)

Communists Renege on “Implicit Bargain” to Give Chinese “Stability and Comfort” in Exchange for Lost Freedom

(p. 1) After violently crushing pro-democracy demonstrations at Tiananmen Square in 1989, Beijing struck an implicit bargain: In exchange for limitations on political freedoms, the (p. 9) people would get stability and comfort.

But now the stability and comfort have dwindled, even as the limitations have grown.

. . .

Atop a hill in Shenzhen’s Lianhuashan Park stands a 20-foot bronze statue of Deng Xiaoping. Mr. Deng, the leader who pioneered China’s embrace of market forces after Mao’s death, watches over the city that is a living reminder of the country’s ability to change direction. Mr. Deng is shown in midstride, to honor his credo that opening should only accelerate.

Chen Chengzhi, 80, a retired government cadre who hikes to that statue every day for exercise, credits Mr. Deng with changing his life. Mr. Chen moved to Shenzhen in the 1980s, soon after Mr. Deng allowed economic experimentation here. The city then had just a few hundred thousand people, but Mr. Chen, who had endured famine and the Cultural Revolution, believed in Mr. Deng’s vision.

“At the end of the day, all good things in China are related to Shenzhen,” Mr. Chen said on one of his daily walks, adding that he cheered when China’s premier, Li Keqiang, visited the statue in August and pledged that China would continue opening to the world.

If it doesn’t do so, Mr. Chen said, “China will hit a dead end.”

But Mr. Li is retiring, even as the Xi Jinping era of rising state control stretches on.

For now, Mr. Chen continues climbing the hill — looking over the city that he helped build, that he believes in still.

For the full story, see:

Vivian Wang. “Covid Crackdowns Shake Chinese People’s Faith in Progress.” The New York Times, First Section (Sunday, December 4, 2022): 1 & 9.

(Note: ellipsis added.)

(Note: the online version of the story also has the date December 4, 2022, and has the title “The Chinese Dream, Denied.” The online version says that the title of the print version was “Beijing’s Bargain With Its People Is Shaken” but my National Edition of the print version had the title “Covid Crackdowns Shake Chinese People’s Faith in Progress.”)

To Force Use of Organic Farming, Government Banned Chemical Fertilizers; A Ban Which “Devastated” Crops and “Destroyed the Farmers”

(p. A6) GALENBINDUNUWEWA, Sri Lanka—For more than half a century, Pahatha Mellange Jayaappu has tilled the field on his modest farm in Sri Lanka’s agricultural heartland, unswayed by recurrent political and economic turmoil.

Now the 71-year-old is just trying to eke out enough of a harvest to feed his family after an abrupt ban on chemical fertilizers last year devastated his crops. He says he has given up on planting for profit.

“We have lived through armed insurrections and bad government policies,” Mr. Jayaappu said. “This is the worst year I’ve ever seen. They have destroyed the farmers.”

Many Sri Lankans aren’t getting enough to eat, and farmers and agricultural experts say the food shortages are set to worsen. The government reversed the ban in November and promised fresh supplies of chemical fertilizers, but farmers said many received only a small amount, and too late for the current growing season.

. . .

The ban on imports of agricultural chemicals took effect in May 2021, and the rice harvest the following March was down 40%, according to government data. Prices soared. Sri Lanka, which had been largely self-sufficient in rice, was forced to use some of its fast-dwindling foreign reserves to import the key staple. Other crops, like tea, an important foreign-exchange earner, have also suffered. In May, the country defaulted on its external debt.

. . .

Mr. Wickremesinghe was installed by Parliament last month after his predecessor, Gotabaya Rajapaksa, fled the country and resigned in the face of mass protests over fuel shortages and food prices.  . . .

Mr. Rajapaksa billed the ban as a nationwide shift to organic farming, but agricultural experts say that requires a yearslong transition. Opposition lawmakers said cutting off imports of fertilizer, which the government heavily subsidizes for farmers, was a shortsighted attempt to hold on to foreign reserves.

. . .

Farmers complained that the organic fertilizers that came on the market after the ban took effect were poor quality, full of material that wasn’t fully decomposed. And the haste of the ban left insufficient time to make their own compost, or learn how to farm organically.

For the full story, see:

Shan Li and Philip Wen. “Sri Lanka’s Farmers Struggle to Survive.” The Wall Street Journal (Saturday, August 20, 2022): A6.

(Note: ellipses added.)

(Note: the online version of the story was updated Aug. 19, 2022, and has the title “Sri Lanka’s Farmers Struggle to Feed the Country—and Themselves.”)

Productivity Increases from AI May Create New Valuable Tasks and Occupations

(p. A2) For centuries, new waves of automation have been greeted by predictions of widespread job loss and convulsive disruption. For centuries, the predictions have been wrong.

. . .

Predictions of technology’s labor-market impacts are notoriously flawed. Experiments like those involving AI often fail to replicate in the real world. Nearly two decades ago, the advent of international fiber-optic connections led some scholars to estimate a fifth of U.S. jobs, such as radiologist, could be offshored. Nothing even close to that happened. A decade ago, economists began warning that self-driving trucks would deprive millions of high-school graduates of good-paying jobs. Today, there are more truck drivers than ever and employers are begging for more.

Often, the technology isn’t good enough or human tasks are too complicated to be replaced. Regulation and inertia get in the way, so the impact unfolds over many years and can’t be detected amid countless other forces at work.

Joshua Gans, an economist specializing in AI at the University of Toronto, said: “Technological changes turn something that was scarce into something that is abundant,” and in the process, “reveal to us what the real value of that stuff is.” Journalists’ greatest value, he said, will be in asking good questions and judging the quality of the answers, not writing up the results.

Spreadsheets made math-intensive analysis easy and cheap, and as a result, led to the creation of countless new tasks and occupations. Large language models could similarly lead to an explosion in applications requiring the synthesis of large amounts of information into serviceable prose.

For the full commentary, see:

Greg Ip. “CAPITAL ACCOUNT; The Robots Have Finally Come for My Job.” The Wall Street Journal (Thursday, April 6, 2023): A2.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date April 5, 2023, and has the same title as the print version.)

Milton Friedman Made the Case for Freedom to 15 Million Viewers

New York Times reviewer Szalai says that watching Milton Friedman’s “Free to Choose” documentary today is a surreal experience. To the contrary, I say that watching Milton Friedman’s documentary today is an exhilarating experience and watching the the evening news today is a surreal experience. (As a graduate student at the University of Chicago, I was in the audience for a couple of the episodes of Milton Friedman’s “Free to Choose” documentary.)

(p. C1) The documentary series “Free to Choose,” which aired on public television in 1980 and was hosted by the libertarian economist Milton Friedman, makes for surreal watching nowadays. Even if Ronald Reagan would go on to win the presidential election later that year, it was still a time when capitalism’s most enthusiastic supporters evidently felt the need to win the public over to a vision of free markets and minimal government.  . . .

They had an enormous audience: The 15 million viewers who watched the first episode saw an avuncular Friedman (diminutive and smiling), leaning casually against a chair in a Chinatown sweatshop (noisy and crowded), surrounded by women pushing fabric through clattering sewing machines. “They are like my mother,” Friedman said, gesturing at the Asian women in the room. She had worked in a factory too, after immigrating as a 14-year-old from Austria-Hungary in the late 19th century. Friedman explained that these low-wage garment workers weren’t being exploited; they were gaining a foothold in the American land of plenty. The camera then cut to a tray of juicy steaks.

For the full review, see:

Jennifer Szalai. “Sounding an Alarm Over America’s Values.” The New York Times (Saturday, February 18, 2023): C1 & C4.

(Note: ellipsis added.)

(Note: the online version of the review was updated Feb. 17, 2023, and has the title “Is the Marriage Between Democracy and Capitalism on the Rocks?”)

The book based on Milton Friedman’s documentary is:

Friedman, Milton, and Rose D. Friedman. Free to Choose: A Personal Statement. New York: Harcourt Brace Jovanovich, Inc., 1980.