Sean Andrews's List: labor, tech, value, econ

• Several factors, including outsourcing, help explain the state of the labor market, but fast-advancing, IT-driven automation might be playing the biggest role.
• More evidence that technology has reduced the number of good jobs can be found in a working paper by David Autor, an economist at MIT, and David Dorn, an economist at the Center for Monetary and Financial Studies in Madrid. They too point to the crucial years of 2000–2005. Job growth happened mainly at the ends of the spectrum: in lower-paying positions, in areas such as personal care, cleaning services, and security, and in higher-end professional positions for technicians, managers, and the like. For laborers, administrative assistants, production workers, and sales representatives, the job market didn't grow as fast—or even shrank. Subsequent research showed that things got worse after 2007. During the recession, nearly all the nation's job losses were in those middle categories—the positions easiest to replace, fully or in part, by technology.
• Brynjolfsson says the trends are "troubling." And they are global; some of the jobs that IT threatens, for example, are at electronics factories in China and transcription services in India. "This is not about replacing all work, but rather about tectonic shifts that have left millions much worse off and others much better off," he says. While he doesn't believe the problem is permanent, that's of little solace to the millions out of work now, and they may not be paid at their old rates even when they do find new jobs. "Over the longer term, they will develop new skills, or entrepreneurs will figure out ways of making use of their skills, or wages will drop, or all three of those things will happen," he says. "But in the short run, your old set of skills that created a lot of value are not useful anymore."
• This means there's a risk, unless the economy generates new high-quality jobs, that the people in the middle will face the prospect of menial jobs—whose wages will actually decline as more people compete for them. "Theory says the labor market will 'clear.' There are always things for people to do," Autor says. "But it doesn't say at what price." And even as it gets crowded and potentially even less rewarding at the bottom, employees at the top are getting paid more, thanks to the multiplier effects of technology. Some 60 percent of the income growth in the United States between 2002 and 2007 went to the top 1 percent of Americans—the bulk of whom are executives whose companies are getting richer by using IT to become more efficient, Brynjolfsson and McAfee point out.
• he problem, he says, is that not enough people are sufficiently educated or technologically savvy to exploit such rapid advances and develop as-yet-unimagined entrepreneurial niches. He and McAfee conclude their book by arguing that the same technologies now making industry far more productive should be applied to updating and improving the educational system. (In one promising example they cite, 58,000 people went online to take an artificial-intelligence class offered by Stanford University.)
• Peter Diamond says that one of the most important things the government can do for employment is to take care of basics, like infrastructure and education. "As long as we have so many idle resources, this is the time when it's advantageous—and socially less expensive—to engage in public investment," he says. Eventually, he believes, the economy will adapt and things will work out, once again. "Jobs have been changing and moving around—within the country, out of the country—for a very long time," he says. "There will be other kinds of jobs that still require people.
• Not necessarily. In the past there were wars, opening up new areas of the globe to trade, financial crashes and depressions that actually wiped out creditors and massive government intervention. To pretend that all that was just "trade finding its own level" is an exercise in historical fantasy.
• his article gets tantalizingly close to the a dilemma I've identified with the following thought experiment. Imagine all goods and services really can be made by two guys and a lot of machines (including the making of the machines). No jobs for anyone else. Problem is, how would we pass out those goods and services to everyone else.
  
  We think of jobs, i.e. labor, i.e. work by people, as a factor of production that is duly compensated out of the returns generated. Of course.
  
  What we miss, however, is the distributive function of jobs. Income from jobs represent tickets which can be exchanged for shares of the goods and services. Jobs are how we pass out the tickets.
  
  Lots of societies have 'made-up' non-producing jobs that fill precisely this function... think civil service functionaries. In some cases, we just pass out the tickets, i.e. welfare. If we do away with the need for people in the production of goods and services, we're stuck. No way to parcel out the tickets. It would take a whole different paradigm, which we have no way to get to.

6 more annotations...

• we want to create the conditions where charity isn’t necessary.  The point of egalitarianism isn’t to compensate the losers but to create the conditions for their freedom.
• that policies required in the name of fairness can undermine self-respect, and therefore we have to accept that the egalitarian ethos can have conflicting elements which need to be accommodated in some way.

• The central proposal is for a basic income grant of $10,000 per year for every citizen aged 21 and above.

    

    

  There are two catches. The first is that everyone must spend $3000 of that grant on a basic health care package, which insurance companies will be forced to offer to everyone at that price with no exclusions for pre-existing conditions, age, etc (the sum $3000 is negotiable for Murray—what is not negotiable is that there should be a residual grant of $7000, so that if the insurance costs more the grant would be more). The second is that all other government welfare programs (including TANF, Social Security, Medicare, etc, and all corporate welfare but not spending on genuine R&D or compulsory public schooling) would be abolished to pay for the grant.
• Inequality of wealth grounded in unequal abilities is different. For most of us the luck of the draw cuts several ways—one person is not handsome, but is smart; another is not as smart but is industrious; still another is not as industrious, but is charming. This kind of inequality is enriching….But some portion of the population gets the short end of the stick on several dimensions. As the number of dimensions grows, so does the punishment for being unlucky.

• luck egalitarianism. The unconditional basic income grant is a non-stigmatizing and non-paternalistic (if imprecise) way of recognizing and repairing this unfair inequality.

    
• left-wing academics who have developed and defended the unconditional basic income grant over the past 20 years or so—I’d be especially miffed if I were, say, Philippe Van Parijs. I’d be even more miffed that no-one commenting on the book seems to know that the idea has been around for years. This is a case of the left having the ideas, and the right adopting and selling them.
• I doubt that Murray is unaware of the ancestry of his proposal, and have a suspicion that he suppressed it precisely because he wanted to speak truth to power—in other words he is addressing the right, not the left (certainly the book reads that way) and does not want to prejudice them against him (in fact, he claims Friedman’s negative income tax as the main ancestor of his proposal, and makes perfectly sensible public choice type objections to it, enhancing the sense that this is addressed to the right rather than the left).
• Liberal commentators who reject Murray’s proposal out of hand should ask themselves if they would have the same reaction if it had been made by a group of respected left-wing academics—and then read Real Freedom For All, The Civic Minimum, or The Stakeholder Society (Ackerman and Alstott’s proposal is structurally different from the others, but it’s not clear how different it would be in practice. For a great book comparing basic income grants with capital of stakeholder grants see Redesigning Distribution; if none of the other books assure you that the left has thought all this stuff through, this one will).
• Next, I think anyone reading the book will have the same experience as me; objections arise in your head, and although Murray addresses almost every one of them, calmly and sensibly, you can’t help feeling that there is a fair amount of conjecture, and it is easy to counter-conjecture. This is one of several reasons that liberal commentators have rejected it out of hand (other reasons perhaps including in some cases complete lack of intellectual seriousness)
• One final substantive comment; Murray is very attentive to the paternalism and perverse incentives built into benefit policy but says almost nothing about the same when it is built into tax policy. The mortgage interest deduction is the most striking feature. Its main effect is probably to raise house prices, thus benefiting first occupants, but its aim is to encourage home ownership. Why? If there are good reasons to own homes people will do it; if not they won’t.
• given the ambitiousness of his own reform proposal he should just argue for lowering taxes across the board, and abolishing the complex system of deductions.

• The title of this post asks “right or left”? Perhaps that’s not a fair question or even, for many of our readers, an important one. In evaluating a reform it’s often worth asking whether, discounting transition costs, you think the world of the reform (once stably and securely implemented) would be better than the status quo. As someone on the left, I ask four basic questions of a proposed reform:

    

8 more annotations...

• Cowen cites Paul Krugman’s comment about government-provided healthcare, that “what would terrify the right . . . is the likelihood that genuine socialized medicine would actually win that competition” with private insurance. Cowen responds that “What would terrify the left . . . is the likelihood that genuine privatized cash would actually win that competition.” This strikes me as a case of the common political fallacy where the motivations of one’s political opponents are assumed to be the inverse of one’s own: if conservatives are in favor of less government, the left must be in favor of more government. But this isn’t very plausible; most liberals and leftists that I’m aware (including me) see government as a means of achieving social justice and equality, not as an end in itself.

    

  In general, I’m very much in favor of doing redistribution by just handing people unconditional cash rather than subjecting them to bureaucratic tests and restrictions. In the specific case of health care, however, I’m not persuaded. This is not because I think government health care is inherently desirable, but because I think just giving people money to purchase their own health care violates the communist principle that underpins social rights in the welfare state.
• Only that they are based on the principle of from each according to ability, to each according to need. In a capitalist society with an unequal distribution of income, “ability” becomes “ability to pay”. This principle, that contributions to the welfare state should be proportional to income, is well established– although in practice it is of course deeply contested. What is more difficult is determining what qualifies as “need”.
• However, simply giving everyone an equal amount of money is a solution that breaks down in cases where, for reasons that are basically outside the control of individuals, needs are very unequally distributed. And health care is the pre-eminent case of this. Some people simply require more health care than others, whether because they happen to be genetically predisposed to illness, or because they get hurt in an accident, or because they get cancer, or because they happen to be a woman.
• This is why it makes sense for Medicare to be organized the way it is: from each according to their ability to pay (though this principle is compromised because not all income is subject to Medicare taxes), and to each according to their need for health care services. Setting things up this way creates political and policy problems, of course, because someone has to decide what counts as a health care “need”. Hence all the debates we’ve been having about Cadillac health plans, comparative effectiveness research, death panels, etc. Moreover, there will inevitably be a struggle to define just which health conditions are truly involuntary, and which reflect individual decisions regarding, e.g., diet and exercise.

• If you just hand people money and tell them “go buy some health care”, you’re doing an injustice to those who have higher health care costs through no fault of their own. If you tell them to “go buy some health insurance” instead, then you either create a market where insurers will only take healthy applicants, or you go in the direction of mandates on insurers to accept people and mandates on individuals to buy insurance. At that point, you’re basically back to guaranteeing people access to the health care they need, rather than telling them to buy as much health care as they want.

    

  Things like health care are a challenge for the way I like to think about the welfare state. My preference is for a kind of communist-libertarian synthesis in which we are all guaranteed substantive equality without requiring the state to micro-manage our decisions. The best way to do that is through simple, unconditioned transfers like Basic Income. However, such schemes will always be complicated by the ways in which needs are substantively and quantitatively unequal, and thus formal equality of income results in substantive inequality of condition

3 more annotations...

• But Pear also inadvertently contributed to misunderstandings and misinformation about the unemployment insurance (UI) program and failed to point out essential facts about its operations and justification.
• “I don’t see why you have to go more than 59 weeks. In fact, we need some incentives for people to get back to work. A lot of these people don’t want to work unless they get really high-paying jobs, and they’re not going to get them ever. So they just stay home and watch television. I don’t mean to malign people, but far too many are doing that.”
• This would also have been a good moment for the article to have mentioned that there are more than four unemployed workers for every available job. The experience of most unemployed workers is that they call and write and email employers and never hear a word back. Indeed, the evidence suggests that workers who receive UI do more job search than those who never receive benefits. They have every incentive to look hard because: a) their benefits are cut off if they don’t look, b) the benefits are so low (averaging less than $300) they barely amount to the minimum wage for a 40-hour work week, and c) most people are embarrassed or even ashamed to be jobless, even though the fault lies with the economy and not them.

• The Republicans want to set new and punitive barriers to benefits in front of the unemployed, including drug tests and high school GED requirements, perhaps to paint a picture of them as undeserving. There’s no good reason to subject people to humiliation who have worked hard and earned insurance benefits. They are not the reason employers are sitting on record profits and refusing to hire. They did not engineer the $8 trillion housing bubble that crashed the economy.

   

2 more annotations...

• Then Hasler got restless. He started a personal project, writing his own history of the entire Western arts canon, from music to architecture. He began to conceive of software that might allow him to visualize the connections between artworks, but he lacked tech skills. So at 26, he left the coffeehouse, paid off his investors, and plunged into Washington's media-arts scene. He taught himself programming. He wrote case studies for Innovations, a journal of international development founded by Phil Auerswald, a professor at George Mason University who was also a regular at the coffeehouse. Then it was off to Buenos Aires for a year, where he created an apprenticeship at an interactive media-arts lab called Estado Lateral. "My first job for them was literally folding electrical cords," he says. In his spare time, he traveled the country playing polo.
• But his essential experience--tacking swiftly from job to job and field to field, learning new skills all the while--resembles the pattern that increasingly defines our careers. According to recent statistics, the median number of years a U.S. worker has been in his or her current job is just 4.4, down sharply since the 1970s.
• The first is a marked decline in the "long job"--that is, the traditional 20-year capstone to a career. Simultaneously, there's been an increase in "churning"-- workers well into their thirties who have been at their current job for less than a year. "For some reason I don't understand, employers seem to value having long-term employees less than they used to," says Henry Farber, an economist at Princeton. Farber has been documenting the decline in job tenure in papers with titles such as "Is the Company Man an Anachronism?" (Answer: yes.)
• All these changes put more pressure on the individual--to provide our own health care, bridge gaps in income with savings, manage our own retirement planning, and invest in our own education to keep skills marketable and up to date. Financial commitments like homeownership or starting a family are a much tougher proposition when one, you can't expect to stay in a place for long and two, you can't expect to ever earn more in real terms than you do at age 40, as recent surveys at Payscale.com suggest.
• many members of the American workforce, Hasler included, aren't pining for a return to the era of the long job. Today, Hasler is waiting tables at a high-end restaurant in Cambridge, Massachusetts, where his longtime girlfriend is finishing a PhD in psychology. He has applied to the MIT Media Lab's Center for Civic Media

  • Ah yeah, the randian heros of our story - who can get a $10,000 stake to invest in a coffeshop from his parents.  I'm sure he's comfortable without a formal safety net.
• But as he sees it, he's been closing in "concentrically" on a single mission and theme. That is, to seek out "what's most useful and innovative" as he navigates a career full of variation, quick turns, and deeper meaning.
• Marina Gorbis at the Institute for the Future would say that Hasler is practicing a smart strategy for the new world of work.

  • Job skills program at IFTF is sponsored by Apollo/Phoenix.
• Projections from the U.S. Bureau of Labor Statistics can offer a false confidence. "They can say that health care is a growing sector, but exactly what the jobs are going to be, you don't know." In looking ahead to 2020, Gorbis's institute identified big drivers of change such as extended longevity, robotics, and the rise of global connectivity. Then it extrapolated a list of core skills that will be needed in tomorrow's workplace regardless of industry or position.
• bove all, Hasler's desire to synthesize his knowledge and apply it to helping people, and his ability to collaborate with those who have different skills, shows a high degree of social intelligence. In the future, says Gorbis, "everything that can be routinized, codified, and dissected will eventually be done by machines. Social and emotional intelligence is what humans are uniquely good at--at least for the next decade or two."

  • Philip Dick - emotional intelligence is all we have to give as humans; too bad we'll all be neurotic basketcases living through this fragile environment.

•   

  At Google, Stacy Brown-Philpot's current title is senior director of owned and operated properties, which involves improving the user experience for various Google products. But given her history, that will likely change by the end of the year. "My philosophy on career management is all around making changes," she says. "I'm a continual learner, and I've ended up changing jobs every two or three years."
• So she headed out to Stanford for her MBA and made an effort to position herself as someone whose business and accounting skills would be useful to the tech industry. "I spent my two years in business school," she says, "working with startups for free to build my network." Her tactic--repackaging her existing skills, even as she built new ones--is essential for successful four-year-career shifters. It's also easier than it may seem
• Brown-Philpot landed in a sales finance position at Google in 2003. Luckily, she says, her new employer (where my husband, full disclosure, also works) has grown so fast since then that she's been allowed to keep making c
• I do tell younger people to build harder skills in the early part of their career," she says. "Now that I manage hundreds of people, I have much more credibility having done the [technical] work myself."
• That's not such a great story versus someone who's getting promoted or building their scope. We want evidence of somebody who is growing." Intentions matter, in other words, especially when someone seems to be taking a step back or deep into left field. As Gilbert puts it, "I want to hear the plan they had in mind: I liked what I was doing, but I didn't have the depth in design that I needed, so I consciously took this next job with a small design firm."
• t's one thing for dynamos like Hasler or Brown-Philpot to chart their next career move in a growing industry. It's quite different to execute a turnaround when you're not so young anymore and your chosen field is shrinking like a glacier in August. "Anybody over 40 was prepared to have a lifelong job, and they've been crushed," says Penelope Trunk, author of The Brazen Careerist and founder of the career network by the same name. "The layoffs have been so bad, and they've had to adapt faster than anyone in history and learn how to use the Internet on the job. It's almost unfair."
• At first she tried consulting on editorial projects but was surprised that her résumé opened few doors. She attributed the brush-off in large part to her age. Trunk, the career consultant, agrees. The lack of respect for experience is a reality that older job seekers have to swallow, she says: "It's such a fundamental shock to have to compete head to head with 25-year-olds." A good strategy, Trunk adds, is for job seekers to cut anything older than 10 years from their résumés, including the date of their college graduations.
• Gatto's experience holds several lessons. Her serendipitous partnership with Kelleher epitomizes socially intelligent connection in the age of the four-year career. Even those who run professional networks, like Trunk and Touby, recoil at the term networking. "I hate networking," says Touby. "The people who network are desperate, needy. It's the last straw." What should you do instead? Maintain a wide range of relationships with people you actually like.
• As it turns out, not every older worker is frightened by the four-year career. Some people have been living this way for decades, letting their curiosity--or their faster metabolism--guide them. What stands out is their sense of confidence that things can (and will) turn out okay. "What's happening to our society with faster career change is unsettling for some, and for others it's business as usual," says Cheryl Edmonds, 61. "My career has not been a straight line by any stretch."

16 more annotations...

• What do you do to get everyone engaged on this journey? We all have to learn new skills. Being able to live on one set of skills over a career is not realistic. Change is going to happen, not all of it good, in serious ways. Optimists look to all the excitement. Pessimists look to all that gets lost. They're both right. How you react depends on what you have to gain versus what you have to lose. Some are hoping they can duck and it will go away."
• here will always be some business people who take risks for the rest of their lives. But I'm not sure society writ large can handle that kind of instability. All we want is certainty."
• "Building new connections is a critical part of building a new economy," boyd says. "The American education system, as flawed as it is, is great for the creative class because of the way it mixes up networks."
• "Any time there's a radical disruption, everyone rushes to reform a new power structure, to restabilize things. Some people win in this process and some people lose. Tech forces a disruption, but who gets to win? Maybe Steve Jobs is so embraced as a hero because we have this anxiety over control."

2 more annotations...