Amazon to Host Job Fair for 50,000 Positions

50,000 new jobs in America today should be good news: a tight job market requiring employers to compete for workers with consequent boosts in their salaries. This is certainly good news for the American working man or woman who has just undergone a seven year “drought” period since the Great Recession. But how long will these jobs last?

Wasn’t it precisely these jobs of selecting and packaging which today only humans can do  efficiently but for which robot substitutes are rapidly being developed. One retailer currently testing them points out that these machines run 24 hours a day. “They don’t get sick,” he says. “They don’t smoke.” (See our July 23 blog, “Another Race for Jobs between Robots and Humans—Packaging.”)

The only way these newly-employed human workers could protect their jobs would be to unionize while they are still needed.

An Amazon Fulfillment Center in Tracy, Calif., last November. PHOTO: NOAH BERGER/REUTERS

 

Amazon.com Inc. aims to fill 50,000 new positions in the U.S. by hosting a giant job fair next week, where it will be making offers on the spot.

The event, scheduled for Aug. 2 in a dozen locations around the country including 10 of its warehouses, shows how Amazon is pushing to make good on its pledge to hire 130,000 full- and part-time employees, as it competes with other logistics companies for hard-to-find workers.

With fulfillment of the hiring pledge, which is targeted for mid-2018, the online retailer’s U.S. workforce would swell to around 300,000, compared with 30,000 in 2011.

Still, the current logistics labor market is tight, according to supply-chain industry executives. The crunch is expected to worsen as retailers and logistics companies start preparing for the holiday-shopping season, for which hiring can begin as early as September.

“It’s clear people have choices. That is obvious,” said John Olsen, vice president of Amazon’s world-wide operations human resources. Amazon is counting on competitive wages, benefits and programs like one that pays for tuition to attract job candidates, he said.

Nearly 40,000 of the newly offered jobs are full-time at the company’s fulfillment centers, including some facilities that will open in the coming months. Most of the remainder are part-time positions available at Amazon’s more than 30 sorting centers. The additions are equal to roughly 14% of the company’s world-wide head count as of the end of the first quarter.

Starting wages for the hourly workers vary based on location. For example, a full-time warehouse position starts at $13 to $14 an hour in Baltimore, while a similar job near Tampa in Ruskin, Fla., starts at $11.

Wages have been rising rapidly in the logistics industry as companies increasingly compete for the same workers, said Brian Devine, senior vice president at ProLogistix, one of the largest logistics-staffing companies in the U.S. Unemployment rates in some major logistics hubs are lower than they were a year ago ahead of the holiday season, considered the peak period for e-commerce-related employment, when hundreds of thousands of seasonal workers are added to the ranks.

“We continue to order more and more stuff online,” Mr. Devine said. “The workers that used to work in the retail stores, now we need those same workers in warehouses.”

But because warehouses tend to be grouped together in areas with good access to highways, airports and population, “there aren’t enough people to fill all these jobs,” he added.

Amazon’s warehouse job-fair events, held coast-to-coast, will introduce applicants to current Amazon workers and allow them to tour the warehouse, Mr. Olsen said.

People can also apply online. While some jobs will be available to start immediately, many will be in new warehouses opening in the next couple of months, in locations such as Oklahoma City and Jacksonville, Fla.

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Private Company, Put in Charge of Hospital E.R., Overcharges

Another typical story of privatization—profiteering from someone else’s misery and pain—lifted from The New York Times.

By JULIE CRESWELL, REED ABELSON and MARGOT SANGERKATZ, July 25, 2017  for The New York Times

Early last year, executives at a small hospital an hour north of Spokane, Wash., started using a company called EmCare to staff and run their emergency room. The hospital had been struggling to find doctors to work in its E.R., and turning to EmCare was something hundreds of other hospitals across the country had done. That is when the trouble began. Before EmCare, about 6 percent of patient visits in the hospital’s emergency room were billed for the most complex, expensive level of care. After EmCare arrived, nearly 28 percent got the highest level billing code.

On top of that, the hospital, Newport Hospital and Health Services, was getting calls from confused patients who had received surprisingly large bills from the emergency room doctors. Although the hospital had negotiated rates for its fees with many major health insurers, the EmCare physicians were not part of those networks and were sending high bills directly to the patients. For a patient needing care with the highest-level billing code, the hospital’s previous physicians had been charging $467; EmCare’s charged $1,649. . . .

After slipping on some wet leaves outside her house in Crescent City, Calif., in February, Debra Brown, a 60-year-old county accounting clerk, wound up at Sutter Coast Hospital. She is paying off her deductible, but her insurer covered most of her remaining hospital bill. She was shocked to get an additional bill from a doctor who she said never identified himself and only briefly touched her broken ankle. That physician worked for EmCare. Her portion of the bill is more than $500.

“Now I’m going to have to pay this bill off, and I can’t afford to see a doctor about my high blood pressure medication,” Ms. Brown said. “This is insane, and it’s greedy.”

Nationwide, more than one in five visits to an in-network emergency room results in an out-of-network doctor’s bill, previous studies found. But the new Yale research, released by the National Bureau of Economic Research, found those bills are not randomly sprinkled throughout the nation’s hospitals. They come mostly from a select group of E.R. doctors at particular hospitals. At about 15 percent of the hospitals, out-of-network rates were over 80 percent, the study found. Many of the emergency rooms in that fraction of hospitals were run by EmCare. . . .

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Nearly a quarter of all emergency room doctors now work for a national staffing firm, according to a 2013 Deutsche Bank report. EmCare in particular has thrived. Founded in the 1970s, it has grown rapidly in recent years.

Its sales pitch to hospitals is that it can find high-quality doctors and run emergency rooms more efficiently. It offers a software program called RAP & GO (short for Rapid Admission Process and Gap Orders) that it says speeds admissions and potentially produces “significant new hospital revenue.”

Some doctors say the staffing companies save them from the administrative headaches of billing and scheduling.

In addition to its work in emergency rooms, EmCare has been buying up groups of anesthesiologists and radiologists. In these hospital specialties, it is hard for patients to shop, and out-of-network billing is common.

EmCare’s size and reach have made some doctors wary of criticizing its practices. According to Dr. Carol Cunningham, an emergency room physician in Ohio, that is especially true in places where there is little alternative to working for a large staffing company. “You may have trouble finding something in the area,” she said.

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But some doctors outside the E.R. have been less reticent. Dr. Gregory Duncan, chief of surgery at Sutter Coast, the hospital in Crescent City, Calif., said patients started complaining about bills they received after EmCare took over the emergency room in 2015.

“I discovered a pattern of inflated bills and out-of-network bills,” he said. “What they are doing is egregious billing.”

Dr. Duncan, who also sits on the county health care district board, has joined with other elected officials in asking Sutter Coast to terminate its contract with EmCare.

In response, Mitch Hanna, the chief executive of Sutter Coast, said in an email that the hospital chose EmCare because of its ability to fully staff its emergency department. He added that he understood EmCare was working to bring two large commercial insurers into its network by the end of the year.

EmCare said in early February that it planned to reach agreements with insurers for most of its doctors. The company also said it was working with insurers, hospitals, lawmakers and others to make sure patients get appropriate care “without creating undue financial burden.” The American College of Emergency Physicians favors an approach in which out-of-network emergency room doctors are paid a standard rate.

California recently passed a law setting a maximum amount that out-of-network doctors can charge patients. Other states, including Florida and New York, have also passed laws to limit surprise bills.

But many state efforts to reduce surprise billing have been met by fierce lobbying from doctors who oppose efforts to weaken their bargaining position, said Chuck Bell, the programs director at the consumer advocacy group Consumers Union.

 

Plenty of Jobs Available but Few Workers Are Eligible

Because of the importance of this article, we are reprinting it in its entirety. America has befouled its own workforce, of which it was justly proud.  American skills and workers  could accomplish anything, we believed. Nothing comparable has happened since the Opium Wars of the Nineteenth Century, when the English forced the Chinese to addict their own people in order to enfeeble them and make them compliant to British rule. In the present situation, however, we have inflicted this disability on ourselves.

Does this addicting of our nation go back to Oliver North and the Iran-Contra Affair, when drugs from Nicaragua were allowed to enter our country to pay for arms for the Contras? Is this when the Right Wing first conceived of using drugs to debilitate the Left Wing —and have they succeeded beyond their wildest dreams?

By NELSON D. SCHWARTZ, July 25, 2017 for The New YorkTimes

YOUNGSTOWN, Ohio — Just a few miles from where President Trump will address his blue-collar base here Tuesday night, exactly the kind of middle-class factory jobs he has vowed to bring back from overseas are going begging.

It is not that local workers lack the skills for these positions, many of which do not even require a high school diploma but pay $15 to $25 an hour and offer full benefits. Rather, the problem is that too many applicants — nearly half, in some cases — fail a drug test.

The fallout is not limited to the workers or their immediate families. Each quarter, Columbiana Boiler, a local company, forgoes roughly $200,000 worth of orders for its galvanized containers and kettles because of the manpower shortage, it says, with foreign rivals picking up the slack.

“Our main competitor in Germany can get things done more quickly because they have a better labor pool,” said Michael J. Sherwin, chief executive of the 123-year-old manufacturer. “We are always looking for people and have standard ads at all times, but at least 25 percent fail the drug tests.”

The economic impact of drug use on the work force is being felt across the country, and perhaps nowhere more than in this region, which is struggling to overcome decades of deindustrialization.

getimage-1.aspx A forge welder at Columbiana Boiler.

Indeed, the opioid epidemic and, to some extent, wider marijuana use are hitting businesses and the economy in ways that are beginning to be acknowledged by policy makers and other experts.

A federal study estimated that prescription opioid abuse cost the economy $78.5 billion in 2013, but that does not capture the broader effect on businesses from factors like lost productivity, according to Curtis S. Florence, who led the research for the National Center for Injury Prevention and Control.

“That’s definitely a conservative estimate,” Mr. Florence said. “It’s very hard to measure how it affects employers, but if we could, it would be in addition to what we see here.”

The effect is seen not just in the applicants eliminated based on drug screening, but in those deterred from even applying. In congressional testimony this month, the Federal Reserve chairwoman, Janet L. Yellen, linked increased opioid abuse to declining participation in the labor force among prime-age workers.

The Fed’s regular Beige Book surveys of economic activity across the country in April, May and July all noted the inability of employers to find workers able to pass drug screenings.

“It’s not just a matter of labor participation; there is also a lot of collateral economic damage,” said Alan B. Krueger, a Princeton economist who wrote a widely discussed paper on the subject last year.

Were it not for the drug issue, said Mr. Krueger, who served as chairman of the Council of Economic Advisers under President Barack Obama, workers trapped in low-wage jobs might be able to secure better-paying, skilled bluecollar positions and a toehold in the middle class.

“This hasn’t gotten as much attention as the participation issue, but we could potentially match perhaps 10 percent of the population in better jobs,” he said. “That could have a positive, cascading effect on wages.”

Plants like Mr. Sherwin’s can help provide that ladder. But workplace considerations — not social conservatism or imposition of traditional mores — make employee drug use an issue.

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“The lightest product we make is 1,500 pounds, and they go up to 250,000 pounds,” Mr. Sherwin said as workers pulled a barrel-shaped steel container from a glowing forge amid a shower of sparks. “If something goes wrong, it won’t hurt our workers. It’ll kill them — and that’s why we can’t take any risks with drugs.”

Even as many states decriminalize recreational marijuana use, or allow access by prescription for medical use, “relaxing drug policies isn’t an option for manufacturers in terms of insurance and liability,” said Edmond C. O’Neal of Northeast Indiana Works, a nonprofit group that provides education and skills training.

“We are talking to employers every day, and they tell us they are having more and more trouble finding people who can pass a drug test,” he said. “I’ve heard kids say pot isn’t a drug. It may not be, but pot will prevent you from getting a job.”

At Warren Fabricating & Machining in Hubbard, Ohio, where at least four out of 10 applicants test positive for drug use, Regina Mitchell, a co-owner, has a workaround. She set up an apprentice program, enlarging her hiring pool by de-emphasizing experience or existing skills.

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“It takes more time and money to train and evaluate someone, but I can have confidence the person is drug-free, comes to work on time and won’t call in sick,” Ms. Mitchell said.

For smaller businesses like hers, the financial cost of the opioid epidemic in particular goes well beyond the inability to fill open positions.

It has long been a point of pride for Ms. Mitchell that her company covers the cost of health insurance for its 150 workers and their families. But over the last three years, the company has paid for five dependents of employees to go through drug treatment, costing a quarter of a million dollars.

Last year, when a member of an employee’s family gave birth to a baby found to be addicted to opiates, the company paid $300,000 for three months of treatment in a neonatal intensive-care unit.

“Imagine the money we could save or invest as a company if I were able to hire drug-free workers on the spot,” Ms. Mitchell said. “But that’s just not the environment we are in.”

Of the applicants who test positive at her company, Ms. Mitchell said, half fail because of marijuana use, with opiates and other harder drugs accounting for the remainder. Because tests for marijuana pick up the drug for up to a month after exposure, many local manufacturers are anxious about Ohio’s plan to permit medical marijuana use in the near future.

“I don’t know if you smoked it this weekend or this morning,” Ms. Mitchell said. “I can’t take that chance.”

An apprentice at her company, Andrew DeMattia, watched a machinist, Paul Wysenski, work on a generator component.

The biggest employers face similar challenges in their search for suitable hires, especially with the national unemployment rate now at 4.4 percent, down from 8.2 percent five years ago.

“We’re definitely seeing an increase in the percentage of failures,” said Patrick Bass, chief executive of Thyssenkrupp North America. The company, whose regional headquarters are in Chicago, employs 15,000 people in the United States and makes elevators and construction equipment as well as specialized systems and materials for the automotive industry.

With 120 positions open for more than three months, Mr. Bass said, “it puts a strain on the organization,” including increased overtime costs and longer waits to fulfill orders from customers.

To fill jobs, Mr. Bass said, his company is relying more on outside placement agencies that prescreen applicants. “We are literally recruiting for production line jobs, which we didn’t have to do in the past,” he said.

Back in Youngstown, Chris Cruciger and his father, Bill, are taking a similar approach at their roofing firm, Roof Rite. But instead of reaching out to recruiters, they are working with a local nonprofit group, Flying High, which provides job training and drug treatment and sends candidates only if they have completed a screening process and four months of skills development.

“We could take on twice as many projects if we had more suitable workers,” Chris Cruciger said. “There are people who can barely read and write, but if they can do a good job as a roofer, they can earn $20 an hour or more and have a career.”

It’s a slow process, Bill Cruciger said, but it beats having to interview dozens of otherwise promising applicants who clam up when a drug test is mentioned.

“You hit that moment of silence, and they just put their head down,” he said. “We leave the door open and tell them they are eligible to come back once they’re clean. But we’ve yet to have anybody return.”

 

Another Race for Jobs between Robots and Humans—Packaging

More on the advance of robotics as the gap closes between machine and human.

 

Robot developers say they are close to a breakthrough—getting a machine to pick up a toy and put it in a box.

It is a simple task for a child, but for retailers it has been a big hurdle to automating one of the most labor-intensive aspects of e-commerce: grabbing items off shelves and packing them for shipping.

Mechanical engineer Parker Heyl adjusts a robotic arm at RightHand Robotics’ test facility in Somerville, Mass. PHOTO: SIMON SIMARD FOR THE WALL STREET JOURNAL

Several companies, including Saks Fifth Avenue owner Hudson’s Bay Co.  and Chinese online retailer JD.com Inc., have recently begun testing robotic “pickers” in their distribution centers. Some robotics companies say their machines can move gadgets, toys and consumer products 50% faster than human workers.

Retailers and logistics companies are counting on the new advances to help them keep pace with explosive growth in online sales and pressure to ship faster. U.S. e-commerce revenues hit $390 billion last year, nearly twice as much as in 2011, according to the U.S. Census Bureau. Sales are rising even faster in China, India and other developing countries.

That is propelling a global hiring spree to find people to process those orders. U.S. warehouses added 262,000 jobs over the past five years, with nearly 950,000 people working in the sector, according to the Labor Department. Labor shortages are becoming more common, particularly during the holiday rush, and wages are climbing. [God forbid!]

Picking is the biggest labor cost in most e-commerce distribution centers, and among the least automated. Swapping in robots could cut the labor cost of fulfilling online orders by a fifth, said Marc Wulfraat, president of consulting firm MWPVL International Inc.

“When you’re talking about hundreds of millions of units, those numbers can be very significant,” he said. “It’s going to be a significant edge for whoever gets there first.” [There’s even a race between the robots!]

Until recently, robots had to be trained to identify and grab each item, which is impractical in a distribution center that might stock an ever-changing array of millions of products.

Automation companies such as Kuka AG, Dematic Corp. and Honeywell International Inc. unit Intelligrated, as well as startups like RightHand Robotics Inc. and IAM Robotics LLC are working on automating picking.

In RightHand Robotics’ Somerville, Mass., test facility, mechanical arms hunt around the clock through bins containing packages of baby wipes, jars of peanut butter and other products. Each attempt—successful or not—feeds into a database. The bigger that data set, the faster and more reliably the machines can pick, said Yaro Tenzer, the startup’s co-founder.

RightHand Robotics co-founders Leif Jentoft, left, and Yaro Tenzer PHOTO: FOR THE WALL STREET JOURNAL

Hudson’s Bay is testing RightHand’s robots in a distribution center in Scarborough, Ontario.

“This thing could run 24 hours a day,” said Erik Caldwell, the retailer’s senior vice president of supply chain and digital operations, at a conference in May. “They don’t get sick; they don’t smoke.”

JD.com is developing its own picking robots, which it started testing in a Shanghai distribution center in April. The company hopes to open a fully automated warehouse there by the end of next year, said Hui Cheng, head of JD.com’s robotics-research center in Silicon Valley.

Swisslog, a subsidiary of Kuka, sells picking robots that can be integrated into the company’s other warehouse automation systems or purchased separately. The company sold its first unit in the U.S., to a large retailer, earlier this year, said A.K. Schultz, Swisslog’s vice president for retail and e-commerce. Mr. Schultz declined to name the retailer.

Previous waves of warehouse automation didn’t lead to sudden mass layoffs, partly because order volumes have been growing so fast. And automated picking is still at least a year away from commercial use, robotics experts say. The main challenge lies in creating the enormous databases of 3D-rendered objects that robots need to determine the best way to grip new objects. [But ultimately the machines have to win out, as they did in the game of “Go” recently, and 262,00 humans will be out of work.]

Some companies hope to speed development by making some research public. Amazon.com Inc. will hold its third annual automated picking competition at a robotics conference in Japan later this month. For the first time, entrants won’t know in advance all the items the robots will need to pick.

At the University of California, Berkeley, a team is simulating millions of attempts to pick 10,000 objects. Funded by Amazon, Siemens AG and others, the project is meant to build an open-source database for use in any automation system, said Ken Goldberg, the professor leading the project.

“With 10,000 objects, I’m surprised how well it did,” he said. “I would love to show it 100,000 examples and see how well it performs after that.”

[We are continually astonished by the heartlessness of so many WSJ articles that express only the management side of issues and appear oblivious to the human consequences.]

 

Where Is Trump’s Great National Infrastructure Program Today?

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The President during his campaign for the presidency talked of a $1 trillion program to repair our nation’s infrastructure—bridges, railroads, highways, etc. As it promised to put to work that large workforce idled by the present economy and require a long-absent bipartisan effort, most of us have awaited this event with considerable hope. The following information on where it stands was extracted from an  article in this Sunday’s New York Times—not too hopeful, unfortunately.

By GLENN THRUSH, July 23, 2017 for The New York Times

In the White House, Mr. Trump has continued to dangle the possibility of “a great national infrastructure program” that would create “millions” of new jobs as part of a public-private partnership to rival the public works achievements of Franklin Delano Roosevelt and Dwight D. Eisenhower. He chastises anyone who forgets to include it near the top of his to-do list, telling one recent visitor to the Oval Office, “Don’t forget about infrastructure!”. . .

Mr. Trump’s team has yet to produce the detailed plan he has promised to deliver “very soon,” and the president has yet to even name any members to a new board he claimed would greenlight big projects.

Unlike the transformative 20th-century efforts the president likes to cite at his rallies, any plan that eventually emerges will not rely exclusively on federal funds. Instead, it will try to use $200 billion in federal spending to attract an additional $800 billion in investment from private investors and local governments over the next 10 years.

Its hybrid nature is its greatest virtue. It’s also a drawback. Democrats and centrist Republicans remain skeptical of its limited scope. House conservatives remain hostile toward any big, new federal funding program. As a result, Mr. Trump’s top advisers and Republicans on the Hill are uncertain on how to proceed and unsure what is even possible given the party divisions exposed by the Obamacare repeal effort. . . .

“Infrastructure is in my opinion very popular,” the president said in April. “It’s going to be bipartisan. And I’m going to use it in another bill. That’s an important bill.”

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“Right now, it doesn’t appear that they have a plan,” said Richard L. Trumka, president of the A.F.L.-C.I.O., who is pushing for more federal spending. “The president doesn’t know what his own party wants, and he’s not sure what he wants. He can’t get his own party to pony up the money for infrastructure.” . . .

Mr. Trump plans to name members of the infrastructure panel in the coming weeks. But contrary to what he told The Wall Street Journal this year, the committee won’t have the authority to approve or reject projects, according to an administration official. Instead it will serve in a broader advisory capacity. . . .

Senate Democrats are increasingly unwilling to work with Mr. Trump on anything. Nor is there consensus among Republicans on how to proceed. . . .

The idea of an all-in-one bill combining tax reform and infrastructure also has internal skeptics. Treasury Secretary Steven Mnuchin shot it down at a meeting with House members recently, arguing that a combined tax and infrastructure bill was “too big to pass,” according to notes taken by an attendee. . . .

For his part, Mr. Trump is most concerned about being able to tell voters his plan hit the $1 trillion mark — raising concerns that the administration will simply include previously scheduled local projects in its overall tally to claim victory. . . .

The one thing that is not in dispute is the monumental need to do something. The American Society of Civil Engineers estimates that $4.6 trillion is needed to fix crumbling highways, bridges, transit systems and waterworks, and to build out the nation’s power grid and broadband networks.

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But lawmakers from states with rural populations are concerned that local governments will have to collect tolls or raise fees to bankroll projects that are not profitable enough to attract big investors. “My concern is, that works very well for large urban states, but it’s not really feasible for rural states like Maine, where you simply can’t generate the same kind of revenue,” Senator Collins said. . . .

In the absence of a concrete proposal to sell, Mr. Trump’s staff has focused on what it can control — cutting regulations and harvesting “low-hanging fruit” to show some progress, in the words of one administration official. . . .

Mr. Trump ended the week with what seemed like a genuinely new, if modest, proposal: a plan to create a council to streamline federal permitting coupled with an online “dashboard” to track federal projects. . . .

One problem. A similar law was passed in 2015. The two senators who introduced the legislation — Senator Claire McCaskill, a Missouri Democrat, and Senator Rob Portman, an Ohio Republican — felt blindsided.

Someone simply forgot to give the two senators a heads-up — and the president veered off script to make the project seem as if it were his idea.

Don’t Fear the Robots—or Not!

We have been running numerous articles about how automation and artificial intelligence will gradually—or not so gradually—put us out of work. Now along comes an article by a professor at Stanford that attempts to console us for the loss of those jobs by promising the creation of many more jobs, but as what exactly? As servants to the rich—thanks a lot! Isn’t this rather rubbing our noses in our inequality?

By JERRY KAPLAN, July 22, 2017 for The Wall Street Journal

 The field of artificial intelligence is now more than a half-century old, and today we are seeing one of its periodic hype cycles, with commentators fretting that the next generation of robots will bring massive unemployment.

Such studies naturally raise concerns that we may be on the brink of an unprecedented employment crisis. But robots aren’t mechanical people. They are a new wave of automation, and like previous waves, they reduce the need for human labor. In doing so, they make the remaining workers more productive and their companies more profitable. These profits then find their way into the pockets of employees, stockholders and consumers (through lower prices).

This newfound wealth, in turn, increases demand for products and services, compensating for lost jobs by employing even more people. In a recent paper prepared for a European Central Bank conference, the economists David Autor of MIT and Anna Salomons of Utrecht  . . . concluded that “country-level employment generally grows as aggregate productivity rises.”

Employees worked alongside robotic arms at a Mercedes-Benz factory in Bremen, Germany, Jan. 24. PHOTO: KRISZTIAN BOCSI/BLOOMBERG NEWS

The historical record provides strong support for this view. After all, despite centuries of progress in automation and recurrent warnings of a jobless future, total employment has continued to increase relentlessly, even with bumps along the way.

More remarkable is the fact that today’s most dire projections of jobs lost to automation fall short of historical norms. A recent analysis by Robert Atkinson and John Wu of the Information Technology & Innovation Foundation quantified the rate of job destruction (and creation) in each decade since 1850, based on census data. They found that an incredible 57% of the jobs that workers did in 1960 no longer exist today (adjusted for the size of the workforce).  [But isn’t this the point—just what landed us where we are today without enough jobs to go around?]

Workers suffering some of the largest losses included office clerks, secretaries and telephone operators. They found similar levels of displacement in the decades after the introduction of railroads and the automobile. Who is old enough to remember bowling alley pin-setters? Elevator operators? Gas jockeys? When was the last time you heard a manager say, “Take a memo”?

In the face of such evidence, why do so many experts and futurists continue to warn of an impending crisis? The crux of their argument is that the coming wave of artificially intelligent computers and robots can do virtually any job that a human can do, so everyone’s job is on the chopping block. As the logic goes, if artificial intelligence is getting so smart that it can recognize cats, drive cars, beat world-champion Go players, identify cancerous lesions and translate from one language to another, won’t it soon be capable of doing just about anything a person can?

Not by a long shot. What all of these tasks have in common is that they involve finding subtle patterns in very large collections of data, a process that goes by the name of machine learning. The kinds of data vary, of course. It might be pixels in cat photos, bytes streaming from a dashboard camera, millions of computer-generated games of Go, digital X-rays or volumes of human-translated documents.

But it is misleading to characterize all of this as some extraordinary leap toward duplicating human intelligence. . . . These programs present no more of a threat to human primacy than did automatic looms, phonographs and calculators, all of which were greeted with astonishment and trepidation by the workers they replaced when first introduced.

And robots may not be welcome in the growth occupations of the future. As we become wealthier, consumers are likely to allocate an increasing share of their income to premium services. This is precisely the segment of the economy where personal care, face-to-face interaction and demonstrations of skill are critical to the value delivered.

Luxury hotels are not prized because they are more efficient but because their staff is more attentive. People pay more to watch a barista brew their latte than for a comparable product from a vending machine, and I somehow doubt that our grandchildren will want to tell their troubles to a robotic bartender or prefer to stick their hands in a manicure machine. In the future, the masses may make do with simple-minded domestic robots while the upper crust hires ever more butlers and maids. . . .   [Great, Dr. Kaplan! Now, does being a butler require a college degree?]

This trend may begin to play out in our own lifetimes. Many consumers are likely to conclude in the next decade or so that they no longer need to have a car of their own. What’s called “transportation as a service” (autonomous taxis, on-demand vehicles and ride sharing) will save the typical American family more than $5,000 a year, according to think tank RethinkX.

What will we do with that extra money? Spend it, of course—on vacations, clothes, restaurant dinners, concert tickets, spa days and more. That means increased demand for flight attendants, hospitality workers, tour guides, bartenders, dog walkers, tailors, chefs, ushers, yoga instructors and masseuses, even as artificial intelligence reduces the need for drivers, warehouse workers and factory operators.

The irony of the coming wave of artificial intelligence is that it may herald a golden age of personal service. If history is a guide, this remarkable technology won’t spell the end of work as we know it. Instead, artificial intelligence will change the way that we live and work, improving our standard of living while shuffling jobs from one category to another in the familiar capitalist cycle of creation and destruction.

—Dr. Kaplan is an adjunct professor at Stanford University, where he teaches about artificial intelligence. His latest book is “Artificial Intelligence: What Everyone Needs to Know” (Oxford University Press).

 

 

 

Don’t Tinker With Nafta. Fix It.

  
 Once upon a time the auto industry was the lifeblood of American manufacturing. Today we have largely given it away. Who has benefited? Certainly not the Mexican auto workers, who are not allowed to unionize and are paid less than $3.00 an hour.
The North American Free Trade Act has only made thing worse for auto workers. In this editorial from The New York Times two union leaders urge the President to put some teeth in his renegotiation of Nafta.

 

By JERRY DIAS and DENNIS WILLIAMS, 22 July, 2017 for The New York Times

President Trump has opened a renegotiation of the North American Free Trade Act with the aim of reducing the United States’ trade deficit and creating better paying jobs. We, as the presidents of the two unions representing 245,000 workers in the North American auto assembly and parts supply industry, support the concept of meaningful Nafta renegotiation.

But we are concerned that the summary of objectives released by the Trump administration this week is vague and could fall far short of what American and Canadian workers had hoped Nafta renegotiation would achieve in restoring balanced trade, job security and fair wages.

Nafta has failed autoworkers in all three countries it covers: Canada, the United States and Mexico. No amount of spin can erase the fact that the agreement caused the closing of thousands of American and Canadian plants and the hemorrhaging of thousands of jobs.

The auto industry is one of the world’s most valuable, reaching $1.3 trillion in total global exports in 2015, and representing 8 percent of all global exports. Trade rules shape where, and how, the industry develops. Nafta has made things worse across the continent.

In 1993, the United States had an automotive trade deficit with Mexico of $3.5 billion. By 2016 that deficit had grown to $45.1 billion. For auto parts, the United States’ deficit with Mexico was $100 million in 1993; by 2016, it was 200 times larger, at $23.8 billion. In terms of Canadian trade with Mexico, the overall automotive deficit has increased fourfold under Nafta, to $8.7 billion from $1.6 billion.

Yet Mexican workers have not benefited from this bad deal. Mexican wages have stagnated in real terms since Nafta was enacted in 1994. The average autoworker in Mexico makes $3.00 an hour or less, despite healthy industry profits. Labor standards continue to be dismal, since Mexican workers are prevented from exercising their rights and bargaining for better wages and working conditions. The government, employers and the main Mexican autoworkers union, the Confederation of Mexican Workers, frequently collude to maintain a system of “protection contracts” without workers’ consent. At the Honda plant in El Salto, Jalisco, the company fired the leaders of an independent union, and locked union members out of the plant.

In 2011, PKC, a Finnish auto parts company in Ciudad Acuña, Coahuila, thwarted its employees’ efforts to choose their own union to negotiate a collective bargaining agreement. The company interfered with a union election and terminated employee labor activists. BMW pledged in July 2014 to spend $1 billion to build a factory in the northern state of San Luis Potosí days after signing a protection contract with the Confederation of Workers of Mexico notarized by a Labor Ministry official. They will be paid slightly over a dollar an hour and wages will top out at $2.50. To this day workers at both plants continue to be denied the right to freely negotiate with automakers.

These common abuses have had a lasting economic impact as companies move from Canada and the United States to take advantage of workers who lack basic rights and are underpaid. Mexico has yet to develop a free and democratic trade union movement, and that’s at the heart of the problem.

This has created an uneven playing field. Since Nafta went into effect, the United States has experienced a net loss of 10 vehicle assembly plants and Canada has lost four plants; Mexico nearly doubled its number of factories, gaining eight. Mexico now has nearly half of North America’s auto jobs, but Mexicans buy less than 8 percent of all vehicles sold in North America.

Modern trade agreements pit workers against one another by design. Autoworkers in the United States, Canada and Mexico must collaborate to ensure that the renegotiation of Nafta delivers gains for all.

Despite Nafta, the North American auto industry remains a powerhouse of advanced manufacturing, innovation and economic activity. Directly responsible for two million jobs across the continent, the industry serves as the anchor for supply chains including auto parts producers, suppliers of raw materials and service providers. For every auto assembly job, there are at least nine to 10 other jobs created — these are often good jobs with above average wages.

Where have all the auto workers gone in this picture?

Meaningful Nafta renegotiations must comprehensively focus on balanced trade that provides real wage growth for American, Canadian and most especially Mexican workers, whose suppressed wages are harmful for all three countries.

A proper trade agreement should eliminate sweetheart provisions that allow corporations to sue governments in secretive tribunals over regulations that protect workers and the environment. It must tackle unfair trade practices like currency manipulation by countries seeking to lower the cost of their exports. Finally, all three countries must step up to the plate and make lasting commitments to invest in infrastructure, crack down on corporations that manipulate tax laws to send jobs overseas and commit to immigration laws that stop businesses from exploiting immigrant workers.

The renegotiation of Nafta offers an opportunity for real progress that must not be squandered with minor tweaking. We must not let this opportunity to fix the broken Nafta legacy slip away.

 Jerry Dias is the national president of the Canadian union Unifor. Dennis Williams is the president of the United Automobile Workers.

 

 

At Last a Big Growth in Pay For the Low Income.

The shift for low-income workers—including restaurant workers and retail cashiers—who make about $10.75 an hour, is a sign that a tightening labor market is delivering better pay to workers who largely haven’t shared in gains since the recession ended eight years ago, according to economists and government data. Last quarter marked the first time since late 2010 that this earning group’s gains outpaced all others, including the 90th, 75th, 50th and 25th percentiles.

      PHOTO: GREG SORBER/ZUMA PRESS

Rising minimum wages in many states is one factor[Isn’t it interesting that WSJ has been constantly warning us that adopting the minimum wage would drastically diminish employment. Where is that prediction now?]

Usual weekly earnings for workers ages 25 and older at the bottom of the pay scale rose 3.4% from a year earlier in the second quarter, according to analysis of newly released Labor Department data. That was stronger than the median gain of 3.2% and the 3.1% improvement for workers at the 90th percentile, who earn more than 9 in 10 other Americans. The percentage increases are based on a four-quarter average of earnings, to smooth out volatility in the data.

Throughout much of the economic expansion that began in mid-2009, wage gains for the lowest-earning Americans trailed behind median wage gains and those of the highest earners. The annual raise for the lowest earners was below 1% annually during 2015, less than half as strong as the median gain.

The recent improvement for low earners coincides with a downward trend in the U.S. unemployment rate, which stood at 4.4% last month, versus 4.9% a year earlier. The unemployment rate for those with less than a high-school education—who make up much of the low-wage workforce—fell even more sharply, to 6.4% last month from 7.5% a year earlier. Tighter labor supply in theory should push up wages.

Wages have been rising swiftly in fields such as restaurants, amusements and gambling, said Jed Kolko, economist at job-search site Indeed. That is an indication that employers need to pay more to attract workers into those fields.

“In a strengthened economy, people spend more on entertainment and eating out, raising demand for workers in those fields,” he said. Those wage gains also at least partially reflect rising minimum wages, which have increased in 21 states this year.

Usual weekly earnings is a different wage measure than the more broadly cited average hourly earnings figure reported in the jobs report each month. The quarterly figure incorporates overtime pay, commissions and tips that might not be captured in the hourly figure.

 Average hourly earnings have been stuck near a 2.5% annual increase for most of the past year and a half. But the jobs report shows stronger wage growth in the lowest-paying broad sector tracked, hospitality.
 Average earnings’ failure to rise even while many Americans doing better reflects a slowdown at the top. “The slowdown has been particularly sharp within the top 5%,” Goldman Sachs economists wrote in a research note Thursday. “One possibility is that some high-wage individuals could be delaying the recording of earnings, given the possibility of a future income tax cut.”

 

Still, higher-earning Americans have fared much better during the expansion. Pay for workers in the 90th percentile has increased nearly 20% since mid-2009. Pay for the 10th percentile worker rose 12.5%, not enough to offset inflation.

“We’re starting to see wage pressure at the two ends—the high-skilled end and the low-skilled end,” Philadelphia Federal Reserve President Patrick Harker said in an interview this month. “Where the squeeze is still happening is the middle-skill jobs.”

He said that could partially reflect new technologies emerging to supplant better-paid workers. For example, he said, sophisticated document-reading software is reducing law firms’ need for armies of young associates to do the task.

Since the recession ended, employment in legal services rose less than 1%. Employment at restaurants and bars is up 24%. [What a relief!]

Last year, the Wireless Zone, a chain of cellphone stores, raised base pay for workers at its company-owned locations to about $18 an hour, but cut back the bonus incentives it offered. As a result, the lowest-paid workers earn more, shrinking the gap between high and low earners. Average pay is little changed, said Dave Staszewski, executive vice president of the Rocky Hill, Conn.-based franchise. He said the change in pay structure was designed to attract scarce workers.

He said ​the strategy has been effective in attracting workers as these job seekers put a bigger emphasis on guaranteed salary rather than potential bonuses.

However, some low-paid workers say the raises are still too small to make a difference. LaShawnda Obie, a Wendy’s worker from Detroit, received a 40-cent increase to $8.90 an hour in January, when Michigan’s minimum wage increased. That is a 4.7% raise—but she said it isn’t enough to support herself and two daughters.

“I still have to sacrifice,” the 28-year-old said. “My kids need underwear and clothes, but I have to push that aside so I can pay rent.”

A Wendy’s Co. spokeswoman said Thursday that wages for individual employees are set by the chain’s franchise operators.

In a May call with investors, Wendy’s Chief Financial Officer Gunther Plosch said the company is “pulling all levers that we can” to overcome an expected 4% increase in labor costs this year.

The chain aims to increase sales to offset rising costs and is “investing in technology on the front end of the house behind mobile ordering and the rollout in kiosks” to reduce the need [for] workers, he said.

Technology can make existing workers more productive, which often coincides with wage increases, but in the longer run it can also eliminate jobs.

Regulators Drop Pursuit of Bankers  

It’s not their money but ours that they are putting in jeopardy. We have only just begun to recover from the Great Recession, brought about by their reckless behavior, while they can’t wait to do it again—since it is we who will suffer, not they. Who will stop them if not the regulators?

By DAVE MICHAELS, July 21, 2017 for The Wall Street Journal

WASHINGTON—Several regulators have dropped pursuit of a long-running plan to restrict bonuses on Wall Street, as part of a wider effort to stop working on unfinished rules put in place after the financial crisis.

Government agencies, including the Securities and Exchange Commission and several banking regulators, were directed under the 2010 Dodd-Frank law to develop compensation rules intended to curb excessive risk taking. Former President Barack Obama, during his last year in office, personally urged regulators to finish the rules before his term ended.

The six agencies delivered a new proposal in April 2016, but that was too late to push through a final version of the rule before President Donald Trump took office in January.

New regulatory agendas unveiled Thursday by the SEC and others show leaders excluded any mention of the restrictions, including longer deferment periods for bonuses and the amount of time payouts are subject to potential clawbacks. The proposal had targeted executives at some of the nation’s largest financial firms, including investment managers and mortgage-finance companies Fannie Mae and Freddie Mac, but the stiffest rules were reserved for big banks.

The shift, disclosed in a semiannual list of pending regulations federal agencies provide to the White House’s budget office, discloses how regulators in the Trump administration have started pulling back from postfinancial crisis rules. New SEC Chairman Jay Clayton has outlined a more business-friendly agenda, including promoting more ways for companies to raise capital in public markets. . . .

“Its pretty outrageous that independent financial regulatory agencies appear to be thumbing their nose at Congress and statutory mandates,” said Andy Green, managing director for economic policy at the liberal Center for American Progress. . . .

Government efforts to restrict traders’ and bankers’ bonuses prompted a lobbying counteroffensive by Wall Street. Financial regulators in turn have struggled for years to craft the joint rule, which Democrats in Congress intended to restrain risk taking at big banks and brokerage firms. . . .

The restrictions would have required the biggest financial firms to defer payment of at least half of executives’ bonuses for four years, a year longer than what is common industry practice.

The plan also would require a minimum of seven years for the biggest firms to claw back bonuses if it turns out an executive’s decisions hurt the institution or if a firm has to restate financial results. . . .

The list also dropped two measures that began under former SEC Chairman Mary Jo White, who was appointed by Mr. Obama. One rule would make it easier for shareholders to vote on board candidates nominated by investors, as opposed to the slate backed by the company. Another would have required companies to disclose more about the racial and gender diversity of corporate boards. Ms. White urged businesses to do more to recruit women and minorities to their boards, saying the “low level of board diversity in the United States is unacceptable.”

—Rachel Witkowski contributed to this article.

 

 

 

Robots Are Replacing Workers Where You Shop

Manufacturing jobs as a major employer in America have mostly vanished. Now retail jobs, currently the leading employer, are seriously threatened and may disappear within fifteen years. Does anyone care?

By SARAH NASSAUER, July 20, 2017 for The Wall Street Journal

Last August, a 55-year-old Wal-Mart employee found out her job would now be done by a robot. . . . Wal-Mart Stores Inc. started using a hulking gray machine that counts eight bills per second and 3,000 coins a minute. The Cash360 machine digitally deposits money at the bank, earning interest for Wal-Mart sooner than if sent by armored car. And the machine uses software to predict how much cash is needed on a given day to reduce excess.

“They think it will be a more efficient way to process the money,” said the employee, who has worked with Wal-Mart for a decade. . . .

A Cash360 machine similar to those now in the back rooms of most of Wal-Mart’s 4,700 U.S. stores. PHOTO: G4S/BANK OF AMERICA

The Cash360 machines in the back of stores let cashiers take out and deposit money from the device directly, granting them access by scanning their hands for unique vein patterns. . . .

The store accountant displaced last August is now a greeter at the front door, where she still earns $13 an hour. . . .

Economists say many retail jobs are ripe for automation. A 2015 report by Citi Research, co-authored with researchers from the Oxford Martin School, found that two-thirds of U.S. retail jobs are at “high risk” of disappearing by 2030.

Self-checkout lanes can replace cashiers. Autonomous vehicles could handle package delivery or warehouse inventory. Even more complex tasks like suggesting what toy or shirt a shopper might want could be handled by a computer with access to a shopper’s buying history, similar to what already happens online today.

At Wal-Mart, self-checkout machines are replacing cashiers at more registers.PHOTO: WESLEY HITT FOR THE WALL STREET JOURNAL

“The primary predictor for automation is how routine a task is,” said Ebrahim Rahbari, an economist at Citi Research. “A big issue is that retail is a sizable percentage of the workforce.”

Nearly 16 million people, or 11% of nonfarm U.S. jobs, are in the retail industry, mostly as cashiers or salespeople. The industry eclipsed the shrinking manufacturing sector as the biggest employer 15 years ago. Now, as stores close, retail jobs are disappearing. Since January, the U.S. economy has lost about 71,000 retail jobs, according to data from the Bureau of Labor Statistics.

“The decline of retail jobs, should it occur on a large scale—as seems likely long-term—will make the labor market even less hospitable for a group of workers who already face limited opportunities for stable, well-paid employment,” said David Autor, an economist at the Massachusetts Institute of Technology.

Earlier this year, Beverly Henderson took a pay cut and gave up her health-care benefits when she left Wal-Mart in the wake of the back-office changes. “I’m 59 years old,” she said. “I never worked on the floor. I’ve always worked office positions and I had no desire.”

She is now an office manager at a local business she says can’t afford to give her the same perks or $16.75 an hour she made after 16 years with Wal-Mart. “I would have never left Wal-Mart. They were paying me decent,” said the Southport, N.C., resident. At Wal-Mart, Ms. Henderson managed store invoices, a job the company used technology to mostly centralize. . . .

Wal-Mart has long squeezed efficiency out of its business, both in stores and throughout its vast supply chain. Although it employs 1.5 million people in the U.S., it has around 15% fewer workers per square foot of store than a decade ago, according to an analysis by the Journal. . . .

And so it goes. . . .