Firms That Discriminate Earn Lower Profits

(p. B1) Economists at the University of California, Berkeley, and the University of Chicago this week unveiled a vast discrimination audit of some of the largest U.S. companies. Starting in late 2019, they sent 83,000 fake job applications for entry-level positions at 108 companies — most of them in the top 100 of the Fortune 500 list, and (p. B6) some of their subsidiaries.

. . .

(p. B6) In the study, applicants’ characteristics — like age, sexual orientation, or work and school experience — varied at random. Names, however, were chosen purposefully to ensure applications came in pairs: one with a more distinctive white name — Jake or Molly, say — and the other with a similar background but a more distinctive Black name, like DeShawn or Imani.

. . . : On average, applications from candidates with a “Black name” get fewer callbacks than similar applications bearing a “white name.”

. . .

All told, for every 1,000 applications received, the researchers found, white candidates got about 250 responses, compared with about 230 for Black candidates. But among one-fifth of companies, the average gap grew to 50 callbacks. Even allowing that some patterns of discrimination could be random, rather than the result of racism, they concluded that 23 companies from their selection were “very likely to be engaged in systemic discrimination against Black applicants.”

. . .

“Discriminatory behavior is clustered in particular firms,” the researchers wrote. “The identity of many of these firms can be deduced with high confidence.”

The researchers also identified some overall patterns. For starters, discriminating companies tend to be less profitable, a finding consistent with the proposition by Gary Becker, who first studied discrimination in the workplace in the 1950s, that it is costly for firms to discriminate against productive workers.

For the full story, see:

Eduardo Porter. “Study Shows Which Firms Discriminate.” The New York Times (Friday, July 30, 2021): B1 & B6.

(Note: ellipses added.)

(Note: the online version of the story has the date July 29, 2021, and has the title “Who Discriminates in Hiring? A New Study Can Tell.”)

The economic study summarized in the passages quoted above is:

Kline, Patrick M., Evan K Rose, and Christopher R Walters. “Systemic Discrimination among Large U.S. Employers.” National Bureau of Economic Research Working Paper #29053, Aug. 2021.

“Unemployment Rises Like a Rocket and Falls Like a Feather”

(p. B7) Robert Hall, an economics professor at Stanford University, says the job matching process has progressed in two stages. Last year, millions of people were called back to their jobs from temporary layoffs and the unemployment rate descended quickly from 14.8% to 6.7%. This year, the progress has slowed markedly; the jobless rate fell from 6.3% in January [2021] to 5.9% in June.

Mr. Hall and Marianna Kudlyak at the Federal Reserve Bank of San Francisco studied the past 10 recoveries and concluded that U.S. job recoveries have a common pattern. In normal times, they find, “unemployment rises like a rocket and falls like a feather.”

“The easy stuff has been accomplished,” Mr. Hall said in an interview. The rest of the job recovery, he concluded, is going to take some time.

For the full story, see:

Jon Hilsenrath and Sarah Chaney Cambon. “The Mismatch That Is Hammering Job Prospects.” The Wall Street Journal (Saturday, July 10, 2021): B1 & B6-B7.

(Note: bracketed year added.)

(Note: the online version of the story has the date July 9, 2021, and has the title “Why Aren’t Millions of Unemployed Americans Finding Jobs?”)

Dreams May Be a Byproduct of Brain Repair, Without Deep Meaning

(p. 20) Dr. J. Allan Hobson, a psychiatrist and pioneering sleep researcher who disputed Freud’s view that dreams held hidden psychological meaning, died on July 7 [2021] at his home in East Burke, Vt.

. . .

“He showed that sleep isn’t a nothing state,” Ralph Lydic, who conducted research with Dr. Hobson in the 1980s and is a professor of neuroscience at the University of Tennessee, said in a phone interview.

“He demonstrated that the brain is as active during R.E.M. sleep as it is during wakefulness,” he added, referring to sleep characterized by rapid eye movement. “We know as much about sleep as we do in part because of him.”

One of his most influential contributions to dream research came in 1977, when Dr. Hobson and a colleague, Robert McCarley, produced a cellular and mathematical model that they believed showed how dreams occur. Dreams, they said, are not mysterious codes sent by the subconscious but rather the brain’s attempt to attribute meaning to random firings of neurons in the brain.

This view, that dreams are the byproduct of chemical reactions, was a departure from psychological orthodoxy and heresy to Freudians, and it remains in dispute.

But to Dr. Hobson, the content of dreams was not as important as the electrical activity of the brain during the dream state.

. . .

“I’m skeptical about any absolute set of rules, scientific rules, moral rules, behavioral rules,” he said in a 2011 interview with The Boston Globe.

For the full obituary, see:

Katharine Q. Seelye. “J. Allan Hobson, 88, Who Took Sleep Seriously, Dies.” The New York Times, First Section (Sunday, August 1, 2021): 20.

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

(Note: the online version of the obituary has the date July 28, 2021, and has the title “Dr. J. Allan Hobson, Who Studied the Dreaming Brain, Dies at 88.”)

Auerbach Talked to Hikers, Skiers, and Divers to Advance Wilderness Medicine: “He Never Stopped”

(p. B10) Dr. Paul Auerbach, an emergency care physician who pioneered the field of wilderness medicine in the 1980s and then taught ways to heal people injured by the unpredictable, died on June 23 [2021] at his home in Los Altos, Calif.

. . .

Out in the wild, knowing how to treat a venomous snake bite or a gangrenous infection can mean the difference between life and death. In the 1970s, however, the specialized field of health care known as wilderness medicine was still in its infancy. Then Dr. Auerbach showed up.

A medical student at Duke University at the time, he went to work in 1975 with the Indian Health Service on a Native American reservation in Montana, and the experience was revelatory.

“We saw all kinds of cases that I would have never seen at Duke or frankly anywhere else except on the reservation,” Dr. Auerbach said in a recent interview given to Stanford University, where he worked for many years. “Snakebites. Drowning. Lightning strike.”

. . .

“I kept going back to literature to read, but there was no literature,” he said. “If I wanted to read about snake bites, I was all over the place. If I wanted to read about heat illness, I was all over the place. So I thought, ‘Huh, maybe I’ll do a book on wilderness medicine.’”

Dr. Auerbach started researching material for the book in 1978, when he began his medical residency at U.C.L.A., finding the time to do so despite grueling 12-hour hospital shifts. He collected information about how to treat burn wounds, hypothermia, frostbite and lightning injuries. He interviewed hikers, skiers and divers. And he assigned chapters to doctors who were passionate about the outdoors.

The resulting book, “Management of Wilderness and Environmental Emergencies,” which he edited with a colleague, Edward Geehr, was published in 1983 and is widely considered the definitive textbook in the field, with sections like “Protection From Blood-Feeding Arthropods” and “Aerospace Medicine: The Vertical Frontier.” Updated by Dr. Auerbach over 30 years, it is in its seventh edition and now titled “Auerbach’s Wilderness Medicine.”

. . .

Last year, shortly before he received his cancer diagnosis, the coronavirus pandemic began to take hold, and Dr. Auerbach decided to act.

“The minute it all first happened, he started working on disaster response,” his wife said. “Hospitals were running out of PPE. He was calling this person and that person to learn as much as he could. He wanted to find out how to design better masks and better ventilators. He never stopped.”

For the full obituary, see:

Alex Vadukul. “Dr. Paul Auerbach, 70, Who Pioneered Treatment of Wilderness Emergencies.” The New York Times, First Section (Tuesday, July 20, 2021): B10.

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

(Note: the online version of the obituary has the date July 19, 2021, and has the title “Dr. Paul Auerbach, Father of Wilderness Medicine, Dies at 70.”)

The latest edition of Auerbach’s book is:

Auerbach, Paul S., Tracy A. Cushing, and N. Stuart Harris, eds. Auerbach’s Wilderness Medicine. 7th ed. 2 vols. Philadelphia, PA: Elsevier, 2017.

Global Freedom Has Declined for 15 Straight Years

(p. A4) Freedom House, a nonpartisan organization dedicated to promoting freedom and democracy, reports that freedom across the globe has declined for 15 straight years, a trend that accelerated last year. “The long democratic recession is deepening,” Freedom House says.

. . .

Democracy is messy, but in an authoritarian system the problem is the lack of messiness. Cults of personality develop, opposing voices with potentially good ideas are squelched, healthy debates and innovative thoughts are blocked. In a new piece in Foreign Affairs magazine, China expert Jude Blanchette notes this risk for Mr. Xi in China: “Paeans to the greatness of ‘Xi Jinping Thought’ may strike outsiders as merely curious or even comical, but they have a genuinely deleterious effect on the quality of decision-making and information flows within the (Communist) party.”

At least China has done a good job of managing its economy. Elsewhere, authoritarian systems have produced a plundering of national resources, corruption and a general mismanagement of the economy.

For the full commentary, see:

Gerald F. Seib. “Autocrats Show Staying Power, for Now.” The Wall Street Journal (Tuesday, July 13, 2021): A4.

(Note: ellipsis added.)

(Note: the online version of the commentary has the date July 12, 2021, and has the title “Cuba’s Unrest Frames World’s Big Struggle: Dictators vs. Democracies.”)

34,300 Hong Kongers Apply for British Visa to Leave “A City That Is Lacking Freedom”

(p. B1) LONDON — Lin Kwong had a good life in Hong Kong. She taught sports management part time at a college and chaired an amateur drama club. Her young son, Chee Yin, was doted on by his grandparents. She had friends and favorite restaurants. But in February, she made the difficult decision to leave it all behind.

“Nothing is as difficult as staying in a city that is lacking freedom,” she said.

In the year since China imposed a sweeping national security law on its territory of Hong Kong, a former British colony, tens of thousands of people have made plans to leave the city. And like Ms. Kwong, many are headed for Britain, where holders of British National Overseas (B.N.O.) pass-(p. B3)ports have been given a pathway to work and citizenship. In the first quarter of the year, 34,300 people applied for the special visa, according to Britain’s immigration department.

. . .

Ms. Kwong often posts on social media, wanting to show the benefits of life in Britain. At a memorial in London last month on the anniversary of the 1989 Tiananmen Square massacre, she posted a photo of a lit candle. In Hong Kong, the long-running annual vigil had been banned.

At a protest in London on June 12, hundreds of Hong Kongers marched through the city center chanting “Fight for freedom!” and “Stand with Hong Kong!” Organizers wore masks with a Union Jack pattern, and sang “God Save the Queen.”

For the full story, see:

Isabella Kwai and Alexandra Stevenson. “Departing Hong Kong For New Life.” The New York Times, First Section (Monday, July 12, 2021): B1 & B3.

(Note: ellipsis added.)

(Note: the online version of the story was updated July 31, 2021, and has the title “Hong Kong Migrants Seek Fresh Start in U.K. After Crackdown.”)

Anderson Led NCR to Disrupt Its Own Cash Register Technology

I believe that Clayton Christensen (with Raynor) in The Innovator’s Solution, used the NCR transition from mechanical cash registers to electronic cash registers as an example of creative destruction that was NOT an example of his disruptive innovation. Alternatively, should this be considered a rare case where a firm succeeds in disrupting itself, especially rare because it was not implemented by the firm founders? (The usual case of rare self-disruption is HP disrupting its laser printer by developing the ink jet printer.)

(p. A9) The same self-belief that kept Mr. Anderson alive as a POW gave him confidence he could save NCR.

“The most important message I try to get across to our managers all over the world is that we are in trouble but we will overcome it,” he told Business Week, which reported that he had the “stance and mien of a middleweight boxer.”

Founded in 1884, NCR was comfortably entrenched as a dominant supplier of mechanical cash registers and machines used in accounting and banking. It underestimated the speed at which microelectronics and computers would wipe out its legacy product line. By the early 1970s, NCR was losing sales to more nimble rivals.

A factory complex covering 55 acres in Dayton made hundreds of exceedingly complicated machines rapidly becoming obsolete. Mr. Anderson found that NCR was using about 130,000 different parts, including more than 9,000 types and sizes of screws. For 1972, his first year as president, NCR took a $70 million charge, largely to write down the value of parts and inventory and replace outdated production equipment.

Mr. Anderson slashed the payroll and invested in new products, including automated teller machines and computers. Profitability recovered, and NCR reported record revenue of $4.07 billion for 1984, the year he retired as chairman.

For the full obituary, see:

James R. Hagerty. “Former POW Revived National Cash Register.” The Wall Street Journal (Saturday, July 10, 20211): A9.

(Note: the online version of the obituary has the date July 6, 2021, and has the title “Former Prisoner of War Saved NCR From Obsolescence.”)

The Christensen co-authored book mentioned above is:

Christensen, Clayton M., and Michael E. Raynor. The Innovator’s Solution: Creating and Sustaining Successful Growth. Boston, MA: Harvard Business School Press, 2003.

AI Algorithms Use Massive Data to Do “Narrow Tasks”

(p. B2) A funny thing happens among engineers and researchers who build artificial intelligence once they attain a deep level of expertise in their field. Some of them—especially those who understand what actual, biological intelligences are capable of—conclude that there’s nothing “intelligent” about AI at all.

. . .

. . . the muddle that the term AI creates fuels a tech-industry drive to claim that every system involving the least bit of machine learning qualifies as AI, and is therefore potentially revolutionary. Calling these piles of complicated math with narrow and limited utility “intelligent” also contributes to wild claims that our “AI” will soon reach human-level intelligence. These claims can spur big rounds of investment and mislead the public and policy makers who must decide how to prepare national economies for new innovations.

. . .

The tendency for CEOs and researchers alike to say that their system “understands” a given input—whether it’s gigabytes of text, images or audio—or that it can “think” about those inputs, or that it has any intention at all, are examples of what Drew McDermott, a computer scientist at Yale, once called “wishful mnemonics.” That he coined this phrase in 1976 makes it no less applicable to the present day.

“I think AI is somewhat of a misnomer,” says Daron Acemoglu, an economist at Massachusetts Institute of Technology whose research on AI’s economic impacts requires a precise definition of the term. What we now call AI doesn’t fulfill the early dreams of the field’s founders—either to create a system that can reason as a person does, or to create tools that can augment our abilities. “Instead, it uses massive amounts of data to turn very, very narrow tasks into prediction problems,” he says.

When AI researchers say that their algorithms are good at “narrow” tasks, what they mean is that, with enough data, it’s possible to “train” their algorithms to, say, identify a cat. But unlike a human toddler, these algorithms tend not to be very adaptable. For example, if they haven’t seen cats in unusual circumstances—say, swimming—they might not be able to identify them in that context. And training an algorithm to identify cats generally doesn’t also increase its ability to identify any other kind of animal or object. Identifying dogs means more or less starting from scratch.

For the full commentary, see:

Christopher Mims. “AI’s Big Chill.” The Wall Street Journal (Sat., July 31, 2021): B2.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 30, 2021, and has the title “Artificial Intelligence’s Big Chill.” When you click on the title in the search list internal to the WSJ, you get a different title on the page of the article itself: “Why Artificial Intelligence Isn’t Intelligent.”)

120 Million Added People Face Food Scarcity Due to Covid-19

(p. A1) An estimated 270 million people are expected to face potentially life-threatening food shortages this year — compared to 150 million before the pandemic — according to analysis from the World Food Program, the anti-hunger agency of the United Nations. The number of people on the brink of famine, the most severe phase of a hunger crisis, jumped to 41 million people currently from 34 million last year, the analysis showed.

The World Food Program sounded the alarm further last week in a joint report with the U.N.’s Food and Agriculture Organization, warning that “conflict, the economic repercussions of Covid-19 and the climate crisis are expected to drive higher levels of acute food insecurity in 23 hunger hot spots over the next four months,” mostly in Africa but also Central America, Afghanistan and North Korea.

The situation is particularly bleak in Africa, where new infections have surged. In recent months, aid organizations have raised alarms about Ethiopia — where the number of people affected by famine is higher than anywhere in the world — and (p. A5) southern Madagascar, where hundreds of thousands are nearing famine after an extraordinarily severe drought.

. . .

In South Africa, typically one of the most food-secure nations on the continent, hunger has rippled across the country.

. . .

An estimated three million South Africans lost their jobs and pushed the unemployment rate to 32.6 percent — a record high since the government began collecting quarterly data in 2008.

. . .

In Duncan Village, the sprawling township in Eastern Cape Province, the economic lifelines for tens of thousands of families have been destroyed.

Before the pandemic, the orange-and-teal sea of corrugated metal shacks and concrete houses buzzed every morning as workers boarded minibuses bound for the heart of nearby East London. An industrial hub for car assembly plants, textiles and processed food, the city offered stable jobs and steady incomes.

“We always had enough — we had plenty,” said Anelisa Langeni, 32, sitting at the kitchen table of the two-bedroom home she shared with her father and twin sister in Duncan Village.

For nearly 40 years, her father worked as a machine operator at the Mercedes-Benz plant. By the time he retired, he had saved enough to build two more single family homes on their plot — rental units he hoped would provide some financial stability for his children.

The pandemic upended those plans. Within weeks of the first lockdown, the tenants lost their jobs and could no longer pay rent. When Ms. Langeni was laid off from her waitressing job at a seafood restaurant and her sister lost her job at a popular pizza joint, they leaned on their father’s $120 monthly pension.

Then in July, he collapsed with a cough and fever and died of suspected Covid-19 en route to the hospital.

“I couldn’t breathe when they told me,” Ms. Langeni said. “My father and everything we had, everything, gone.”

For the full story, see:

Christina Goldbaum and Joao Silva. “No Job, No Food: Virus Deepens Global Hunger.” The New York Times (Friday, August 6, 2021): A1 & A5.

(Note: ellipses added.)

(Note: the online version of the story was updated Aug. 6, 2021, and has the title “No Work, No Food: Pandemic Deepens Global Hunger.”)

The Walt Disney Company Cheats Scarlett Johansson

Walt Disney is one of my heroes. The current Walt Disney Company is not.

(p. B1) The fight between actress Scarlett Johansson and Walt Disney Co. over her contract for the movie “Black Widow” has a new participant: the powerful Creative Artists Agency, which represents Ms. Johansson and many of Hollywood’s biggest stars.

On Thursday, Ms. Johansson filed a lawsuit against Disney alleging her contract was breached when the company decided to put “Black Widow” on its Disney+ streaming service at the same time it was released in movie theaters.

. . .

“They have shamelessly and falsely accused Ms. Johansson of being insensitive to the global Covid pandemic,” CAA Co-Chairman Bryan Lourd said in a statement.

Mr. Lourd blasted Disney for releasing details of Ms. Johansson’s salary and for attempting to tie (p. B2) her lawsuit to the pandemic. Disney “included her salary in their press statement in an attempt to weaponize her success as an artist and businesswoman, as if that were something she should be ashamed of,” he added.

Mr. Lourd said Disney’s response to Ms. Johansson is an attack on her character that is “beneath the company that many of us in the creative community have worked with successfully for decades.”

. . .

“They have very deliberately moved the revenue stream and profits to the Disney+ side of the company, leaving artistic and financial partners out of their new equation. That’s it, pure and simple,” Mr. Lourd said.

For the full story, see:

Joe Flint. “Johansson’s Agent Rips Disney Over Film Flap.” The Wall Street Journal (Sat., July 31, 2021): B1-B2.

(Note: ellipses added.)

(Note: the online version of the story has the date July 30, 2021, and has the title “Scarlett Johansson’s Agent Rips Disney Over ‘Black Widow’ Dispute.”)