The NYT had an interesting column making the case for publicly funded open research to speed the development of artificial intelligence. It’s good to see some clear thinking about alternatives to research supported by government-granted patent monopolies. Can we talk about prescription drugs now?
The NYT had an interesting column making the case for publicly funded open research to speed the development of artificial intelligence. It’s good to see some clear thinking about alternatives to research supported by government-granted patent monopolies. Can we talk about prescription drugs now?
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The NYT had an interesting piece on how Japanese workers are increasingly working well into their sixties, as a declining population has led to somewhat of a labor shortage. The piece rather bizarrely offers this as an explanation for why wages aren’t rising, since it says that older workers are paid less.
That could be true, but it would imply serious discrimination if older workers are paid less than younger workers with the same productivity. Alternatively, if older workers are paid less because they are actually less productive, then this would not explain why average wages are not rising in the face of a labor shortage.
It is also worth noting that the piece repeatedly describes the declining numbers of workers as a problem. This is 180 degrees at odds with the view that robots are going to take all the jobs and we won’t have any work for people. It is incredible that we have ostensibly serious people who are both worried that an aging population will leave us with too few workers and rapid productivity growth (i.e. robots) will leave us with too few jobs. As they say in economics, “which way is up?”
The NYT had an interesting piece on how Japanese workers are increasingly working well into their sixties, as a declining population has led to somewhat of a labor shortage. The piece rather bizarrely offers this as an explanation for why wages aren’t rising, since it says that older workers are paid less.
That could be true, but it would imply serious discrimination if older workers are paid less than younger workers with the same productivity. Alternatively, if older workers are paid less because they are actually less productive, then this would not explain why average wages are not rising in the face of a labor shortage.
It is also worth noting that the piece repeatedly describes the declining numbers of workers as a problem. This is 180 degrees at odds with the view that robots are going to take all the jobs and we won’t have any work for people. It is incredible that we have ostensibly serious people who are both worried that an aging population will leave us with too few workers and rapid productivity growth (i.e. robots) will leave us with too few jobs. As they say in economics, “which way is up?”
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A Washington Post article discussed the future prospects for the Affordable Care Act now that the repeal efforts seem to be defeated. At one point, the article referred to the cost-sharing subsidies in the program, which cover out-of-pocket expenses for moderate-income households. It reports that these subsidies will “cost about $7 billion this year and $10 billion in 2018.”
It would have been useful to put these numbers in a context that would be meaningful to readers. The 2017 figure is equal to roughly 0.18 percent of total spending and the 2018 number would be roughly 0.25 percent. On a per person basis, the 2017 number is equal to about $21 for every person in the country, while the 2018 number would be around $30 for every person in the country.
A Washington Post article discussed the future prospects for the Affordable Care Act now that the repeal efforts seem to be defeated. At one point, the article referred to the cost-sharing subsidies in the program, which cover out-of-pocket expenses for moderate-income households. It reports that these subsidies will “cost about $7 billion this year and $10 billion in 2018.”
It would have been useful to put these numbers in a context that would be meaningful to readers. The 2017 figure is equal to roughly 0.18 percent of total spending and the 2018 number would be roughly 0.25 percent. On a per person basis, the 2017 number is equal to about $21 for every person in the country, while the 2018 number would be around $30 for every person in the country.
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If the United States is to have more rapid economic growth, as most folks seem to want, then it needs more rapid productivity growth. Productivity growth is the key factor allowing rising living standards through time.
This is basically definitional. It means more output of goods and services per hour of work. It can allow us to have more stuff or work fewer hours and have the same stuff.
When we consider this simple logical point, it is bizarre that one of the attacks against Amazon is that it is costing jobs in retail. If Amazon is costing jobs in retail, it is increasing productivity in the sector. It is allowing us to get by fewer workers, meaning that workers can instead be available to do things like provide child care, install solar panels, or do many other useful things. Or, we can all work less.
Of course, they may not be the same workers and some people may get screwed in the process, but this is a larger problem of policy. For example, the Federal Reserve Board is quite deliberately trying to slow the rate of job creation by raising interest rates. Let me repeat that since it seems many people involved in policy debates somehow haven’t noticed: the Federal Reserve Board is quite deliberately trying to slow the rate of job creation by raising interest rates.
If Amazon and other online sellers were not eliminating jobs in retail, the Fed would be raising interest rates faster in response to a more rapid rate of job creation. Insofar as increased productivity in retail is slowing the rate of job creation, it is allowing for jobs to be created in other sectors which would not otherwise exist.
It is also worth noting that productivity growth has been extraordinarily slow in the last decade, as in the opposite of fast. This is the main reason for the slow growth in the recovery. In other words, the economy’s main problem has been too few job-killing robots.
(Yes, distribution is a problem and we should talk about things like patents and protectionism for doctors and other professionals, but let’s keep it simple for now.)
If the United States is to have more rapid economic growth, as most folks seem to want, then it needs more rapid productivity growth. Productivity growth is the key factor allowing rising living standards through time.
This is basically definitional. It means more output of goods and services per hour of work. It can allow us to have more stuff or work fewer hours and have the same stuff.
When we consider this simple logical point, it is bizarre that one of the attacks against Amazon is that it is costing jobs in retail. If Amazon is costing jobs in retail, it is increasing productivity in the sector. It is allowing us to get by fewer workers, meaning that workers can instead be available to do things like provide child care, install solar panels, or do many other useful things. Or, we can all work less.
Of course, they may not be the same workers and some people may get screwed in the process, but this is a larger problem of policy. For example, the Federal Reserve Board is quite deliberately trying to slow the rate of job creation by raising interest rates. Let me repeat that since it seems many people involved in policy debates somehow haven’t noticed: the Federal Reserve Board is quite deliberately trying to slow the rate of job creation by raising interest rates.
If Amazon and other online sellers were not eliminating jobs in retail, the Fed would be raising interest rates faster in response to a more rapid rate of job creation. Insofar as increased productivity in retail is slowing the rate of job creation, it is allowing for jobs to be created in other sectors which would not otherwise exist.
It is also worth noting that productivity growth has been extraordinarily slow in the last decade, as in the opposite of fast. This is the main reason for the slow growth in the recovery. In other words, the economy’s main problem has been too few job-killing robots.
(Yes, distribution is a problem and we should talk about things like patents and protectionism for doctors and other professionals, but let’s keep it simple for now.)
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Morning Edition host Rachel Martin introduced an interview with Tom Nickels, spokesperson for the American Hospital Association by referring to Republican efforts to “fix” the nation’s health care system. This implies that the Republicans are trying to make the system better. This is certainly not obvious since all of their proposals are likely to take away insurance from tens of millions of people.
It shouldn’t be too hard to use neutral terms, like “change” or simply refer to efforts to repeal the Affordable Care Act. There is no reason for NPR to attribute good motives to the Republicans, especially when there is zero evidence to support this view of their actions.
Morning Edition host Rachel Martin introduced an interview with Tom Nickels, spokesperson for the American Hospital Association by referring to Republican efforts to “fix” the nation’s health care system. This implies that the Republicans are trying to make the system better. This is certainly not obvious since all of their proposals are likely to take away insurance from tens of millions of people.
It shouldn’t be too hard to use neutral terms, like “change” or simply refer to efforts to repeal the Affordable Care Act. There is no reason for NPR to attribute good motives to the Republicans, especially when there is zero evidence to support this view of their actions.
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That’s the arithmetic according to the Washington Post. The article told readers that Wisconsin governor Scott Walker claims he is giving $3 billion in economic incentives to the Taiwanese manufacturer Foxconn. The company, in turn, says that it will build a factory that will eventually employ 3,000 people. It would have been helpful to include the arithmetic so it was clear how much Scott Walker planned to spend for each job that Foxconn claims it will create. (Foxconn has not always followed through on its promises, as the piece points out.)
It also would have been worth mentioning the importance of these jobs to Wisconsin’s labor market. The state currently has 472,000 manufacturing jobs (it added 7,900 in the last year), so the jobs pledged by Foxconn would increase this figure by just under 0.6 percent.
Addendum
As several comments noted, the Washington Post had a follow up piece that gives more details on this deal. The 3,000 jobs figure is the number who are originally expected to be employed in the factory when it is projected to be completed in 2020. Foxconn said the number of people employed has the “potential to grow” to 13,000. It appears that the full $3 billion in subsidies is at least partly contingent on the number of jobs actually created, although the terms do not seem to be clear at this point.
That’s the arithmetic according to the Washington Post. The article told readers that Wisconsin governor Scott Walker claims he is giving $3 billion in economic incentives to the Taiwanese manufacturer Foxconn. The company, in turn, says that it will build a factory that will eventually employ 3,000 people. It would have been helpful to include the arithmetic so it was clear how much Scott Walker planned to spend for each job that Foxconn claims it will create. (Foxconn has not always followed through on its promises, as the piece points out.)
It also would have been worth mentioning the importance of these jobs to Wisconsin’s labor market. The state currently has 472,000 manufacturing jobs (it added 7,900 in the last year), so the jobs pledged by Foxconn would increase this figure by just under 0.6 percent.
Addendum
As several comments noted, the Washington Post had a follow up piece that gives more details on this deal. The 3,000 jobs figure is the number who are originally expected to be employed in the factory when it is projected to be completed in 2020. Foxconn said the number of people employed has the “potential to grow” to 13,000. It appears that the full $3 billion in subsidies is at least partly contingent on the number of jobs actually created, although the terms do not seem to be clear at this point.
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At a speech in Youngstown Ohio last night, Donald Trump talked about the loss of manufacturing jobs in the state and told his audience:
“They’re all coming back. They’re all coming back. They’re coming back. Don’t move. Don’t sell your house.”
Actually, they were coming back (at least some of them) before President Trump took office, but the state is again losing manufacturing jobs.
Manufacturing Employment in Ohio
Source: Bureau of Labor Statistics.
Employment in manufacturing in Ohio had increased by 4,700 in the year from January 2016 to January 2017. In the five months since January 2017, it has fallen by 5,400. If this rate of job loss continues, Ohio will lose almost 70,000 jobs manufacturing jobs, more than 10 percent of employment in the sector, over a two-term Trump administration.
At a speech in Youngstown Ohio last night, Donald Trump talked about the loss of manufacturing jobs in the state and told his audience:
“They’re all coming back. They’re all coming back. They’re coming back. Don’t move. Don’t sell your house.”
Actually, they were coming back (at least some of them) before President Trump took office, but the state is again losing manufacturing jobs.
Manufacturing Employment in Ohio
Source: Bureau of Labor Statistics.
Employment in manufacturing in Ohio had increased by 4,700 in the year from January 2016 to January 2017. In the five months since January 2017, it has fallen by 5,400. If this rate of job loss continues, Ohio will lose almost 70,000 jobs manufacturing jobs, more than 10 percent of employment in the sector, over a two-term Trump administration.
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Neil Irwin had an interesting Upshot piece highlighting a new paper by J.W. Mason arguing that slow productivity growth is in large part due to slow GDP growth. The basic argument is that if growth were faster, labor markets would be tighter, and companies would have more reason to invest in labor saving equipment.
While this argument strikes me as undoubtedly true, there is another aspect to productivity growth that is often missed. One thing that is even easier than replacing workers with equipment is simply not replacing workers. In other words, most employers can run stores, restaurants, or other businesses with fewer workers. The cost of this is likely to mean that customers have to wait longer to be served.
This could mean, for example, that when you get to the checkout counter at a supermarket you have to wait ten or fifteen minutes in line rather than having someone immediately available immediately to serve you. The same would apply to lines at fast food restaurants or the pace of service at a sit-down restaurant. Instead of having workers available for customers at all times (which means they do nothing, some of the time), employers will make customers wait.
This would show up as an increase in productivity as conventionally measured. Output would be unchanged, but fewer workers are employed than in the good service scenario. In principle, if we have perfect productivity data, this would not be the case, since the longer wait times should be reported as a deterioration in quality and therefore a price increase, which would mean lower output. But we don’t have perfect data, so in our productivity numbers, longer wait times mean higher productivity (and vice versa).
Neil Irwin had an interesting Upshot piece highlighting a new paper by J.W. Mason arguing that slow productivity growth is in large part due to slow GDP growth. The basic argument is that if growth were faster, labor markets would be tighter, and companies would have more reason to invest in labor saving equipment.
While this argument strikes me as undoubtedly true, there is another aspect to productivity growth that is often missed. One thing that is even easier than replacing workers with equipment is simply not replacing workers. In other words, most employers can run stores, restaurants, or other businesses with fewer workers. The cost of this is likely to mean that customers have to wait longer to be served.
This could mean, for example, that when you get to the checkout counter at a supermarket you have to wait ten or fifteen minutes in line rather than having someone immediately available immediately to serve you. The same would apply to lines at fast food restaurants or the pace of service at a sit-down restaurant. Instead of having workers available for customers at all times (which means they do nothing, some of the time), employers will make customers wait.
This would show up as an increase in productivity as conventionally measured. Output would be unchanged, but fewer workers are employed than in the good service scenario. In principle, if we have perfect productivity data, this would not be the case, since the longer wait times should be reported as a deterioration in quality and therefore a price increase, which would mean lower output. But we don’t have perfect data, so in our productivity numbers, longer wait times mean higher productivity (and vice versa).
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