Will Robots Take Our Children’s Jobs?

From today’s New York Times:

Like a lot of children, my sons, Toby, 7, and Anton, 4, are obsessed with robots. In the children’s books they devour at bedtime, happy, helpful robots pop up more often than even dragons or dinosaurs. The other day I asked Toby why children like robots so much.

“Because they work for you,” he said.

What I didn’t have the heart to tell him is, someday he might work for them — or, I fear, might not work at all, because of them.

It is not just Elon MuskBill Gates and Stephen Hawking who are freaking out about the rise of invincible machines. Yes, robots have the potential to outsmart us and destroy the human race. But first, artificial intelligence could make countless professions obsolete by the time my sons reach their 20s.

You do not exactly need to be Marty McFly to see the obvious threats to our children’s future careers.

Say you dream of sending your daughter off to Yale School of Medicine to become a radiologist. And why not? Radiologists in New York typically earn about $470,000, according to Salary.com.

But that job is suddenly looking iffy as A.I. gets better at reading scans. A start-up called Arterys, to cite just one example, already has a program that can perform a magnetic-resonance imaging analysis of blood flow through a heart in just 15 seconds, compared with the 45 minutes required by humans.

Maybe she wants to be a surgeon, but that job may not be safe, either. Robots already assist surgeons in removing damaged organs and cancerous tissue, according to Scientific American. Last year, a prototype robotic surgeon called STAR (Smart Tissue Autonomous Robot) outperformed human surgeons in a test in which both had to repair the severed intestine of a live pig.

So perhaps your daughter detours to law school to become a rainmaking corporate lawyer. Skies are cloudy in that profession, too. Any legal job that involves lots of mundane document review (and that’s a lot of what lawyers do) is vulnerable.

Software programs are already being used by companies including JPMorgan Chase & Company to scan legal papers and predict what documents are relevant, saving lots of billable hours. Kira Systems, for example, has reportedly cut the time that some lawyers need to review contracts by 20 to 60 percent.

As a matter of professional survival, I would like to assure my children that journalism is immune, but that is clearly a delusion. The Associated Press already has used a software program from a company called Automated Insights to churn out passable copy covering Wall Street earnings and some college sports, and last year awarded the bots the minor league baseball beat.

What about other glamour jobs, like airline pilot? Well, last spring, a robotic co-pilot developed by the Defense Advanced Research Projects Agency, known as Darpa, flew and landed a simulated 737. I hardly count that as surprising, given that pilots of commercial Boeing 777s, according to one 2015 survey, only spend seven minutes during an average flight actually flying the thing. As we move into the era of driverless cars, can pilotless planes be far behind?

Then there is Wall Street, where robots are already doing their best to shove Gordon Gekko out of his corner office. Big banks are using software programs that can suggest bets, construct hedges and act as robo-economists, using natural language processing to parse central bank commentary to predict monetary policy, according to Bloomberg. BlackRock, the biggest fund company in the world, made waves earlier this year when it announced it was replacing some highly paid human stock pickers with computer algorithms.

So am I paranoid? Or not paranoid enough? A much-quoted 2013 study by the University of Oxford Department of Engineering Science — surely the most sober of institutions — estimated that 47 percent of current jobs, including insurance underwriter, sports referee and loan officer, are at risk of falling victim to automation, perhaps within a decade or two.

Read the complete article here.

Racism at Work in America: Unemployment in Black and White

From today’s New York Times Editorial Board:

The recent finding by The New York Times that black students are still vastly underrepresented at the nation’s top colleges and universities is one sign of how little the country has managed to do to close racial gaps.

Unemployment rates among black workers give a similarly gloomy picture. The jobless rate for black Americans is generally about twice that of white Americans, a ratio that improves only somewhat in “good” times, like the present, and persists no matter the level of educational attainment. The overall unemployment rate for black workers is now 7.4 percent and for white workers is 3.8 percent. For college-educated workers, the recent average jobless rate was 4.2 percent for blacks, compared with 2.5 percent for whites.

The hard truth is that the persistence of twice-as-high joblessness for black workers has led policy makers to accept it is as normal. Just look at the Federal Reserve. Monetary policy is supposed to foster stable prices and full employment. But the Fed has historically favored inflation fighting over boosting employment, a policy bias that generally leads it to raise interest rates before the job market is as strong as possible, as measured by low unemployment and rising pay for all groups of workers. The Fed has already raised rates twice this year and many Fed officials appear to favor a third increase by year’s end, with evident disregard for the fact that black unemployment is now at levels that prevailed for white workers in 2012, when the economy was still very much in the shadow of the Great Recession.

Another hard truth is that even when the economy picks up and employers are on a hiring binge, black people have a harder time getting jobs and are paid less than similarly situated white workers. That is exactly what happened from 1996 to 2000, the last genuinely hot job market, and it points clearly to racial discrimination, not just in hiring, but in a range of public policies that disproportionately affect black people. These include the dearth and high cost of child care, which harms single mothers the most; poor public transportation in many rural and suburban areas, which makes keeping a job difficult; and mass incarceration of black men and the barriers to employment that go with it.

Other factors include erosion and weakness in the enforcement of labor standards and legal safeguards. The wage gap between black and white workers is larger now than it was in 1979 or in 2000, and has grown the most for college graduates.

The whole economy is weighed down by the higher unemployment among black Americans, in part because it deprived the economy of consumer demand, the main engine for growth. Worse, the job and wage gap signals a loss of human potential, a singularly valuable form of capital. The economy cannot be said to be at full employment while black workers lag behind their white counterparts. Nor can the society be said to be just or healthy.

How the wealth gap between restaurant goers and their servers is​ widening

Andrea Gillette lined up the bottles of fruit-flavored cocktails behind the bar. The guy who leans a ladder against the big chalkboard to write out the day’s fresh fish selection had just about wrapped up.

Floors were swept, sliced lemons were crammed into a plastic bin, the trendy garage-door-style windows facing the shaded patio thrown open. Corey Ahrens brewed coffee.

Chip Kasper, the general manager, called out to the weekday crew at Fish City Grill, a bright, modern seafood restaurant at CityLine, a massive$1.5bndevelopment 20 miles north of downtown Dallas. Anchored by an almost 10,000-worker State Farm campus, CityLine also features a crop of buzzy fast-casual spots, a Whole Foods Market and a salon offering eyelash extension packages for upwards of $300.

It’s one of a handful of projects that have shifted the economic center of gravity of the nation’s fourth largest metro area; as a result, the northern suburbs of Dallas are some of the fastest-growing cities in the country.

“Got nine minutes to pre-shift!”

A little over a year ago, Fish City’s owner was worried this wasn’t going to happen.

In the roughly two decades since Bill Bayne and a partner opened Half Shells – the seed of what would become a chain of 20 restaurants – Bayne said he and his wife, who now own the Fish City company, have made a point to remember the names of workers at every level.

He takes pride in his ability to retain workers in an industry that sees high turnover. Still, as he prepared to open the chain’s outpost at CityLine he encountered an unanticipated hurdle.

He couldn’t find workers.

Bayne recalled sending his longtime kitchen manager, Frankie Argote, to “ride the rails” in search of people who looked like they might be cooks and to restaurants, where he asked managers whether they had employees who might be able to pick up more shifts. Argote recalled coming back and asking his boss, “Do we want to be cooking or serving?” Because he was struggling to find enough people to do both.

“This [location] has been probably the most challenging,” Bayne said.

As major corporate employers have swarmed places such as CityLine and the areas that surround them, a corresponding explosion of restaurants and bars has left business owners such as Bayne tapping into an almost-dry well of talent. Over the last five years, the number of jobs in food services and drinking places in the Dallas-Plano-Irving metropolitan division increased by 30.4%, according to Bureau of Labor Statistics data. That’s almost twice as fast as growth in those jobs nationally, which was 17.9% for the same time period.

But thanks to a range of factors, the fertile job-hunting fields north of Dallas are essentially off limits to many prospective workers.

Read the entire article here.

A Better Deal for American Workers

From today’s New York Times by Sen. Chuck Schumer (D-NY):

Americans are clamoring for bold changes to our politics and our economy. They feel, rightfully, that both systems are rigged against them, and they made that clear in last year’s election. American families deserve a better deal so that this country works for everyone again, not just the elites and special interests. Today, Democrats will start presenting that better deal to the American people.

There used to be a basic bargain in this country that if you worked hard and played by the rules, you could own a home, afford a car, put your kids through college and take a modest vacation every year while putting enough away for a comfortable retirement. In the second half of the 20th century, millions of Americans achieved this solid middle-class lifestyle. I should know — I grew up in that America.

But things have changed.

Today’s working Americans and the young are justified in having greater doubts about the future than any generation since the Depression. Americans believe they’re getting a raw deal from both the economic and political systems in our country. And they are right. The wealthiest special interests can spend an unlimited, undisclosed amount of money to influence elections and protect their special deals in Washington. As a result, our system favors short-term gains for shareholders instead of long-term benefits for workers.

And for far too long, government has gone along, tilting the economic playing field in favor of the wealthy and powerful while putting new burdens on the backs of hard-working Americans.

Democrats have too often hesitated from taking on those misguided policies directly and unflinchingly — so much so that many Americans don’t know what we stand for. Not after today. Democrats will show the country that we’re the party on the side of working people — and that we stand for three simple things.

First, we’re going to increase people’s pay. Second, we’re going to reduce their everyday expenses. And third, we’re going to provide workers with the tools they need for the 21st-century economy.

Over the next several months, Democrats will lay out a series of policies that, if enacted, will make these three things a reality. We’ve already proposed creating jobs with a $1 trillion infrastructure plan; increasing workers’ incomes by lifting the minimum wage to $15; and lowering household costs by providing paid family and sick leave.

Read the entire op-ed here.

FED Chair says risk of financial crisis increases if Trump deregulates economy

From today’s LA Times by Jim Puzzanghera:

Federal Reserve Chairwoman Janet L. Yellen told senators Thursday that the risk of another financial crisis would increase if some Trump administration proposals to roll back regulations were enacted.

In her second straight day of Capitol Hill testimony, she walked back her statement last month that she didn’t expect another financial crisis “in our lifetimes.”

“I think we can never be confident there won’t be another financial crisis,” Yellen told members of the Senate Banking Committee.

The U.S. has “done a great deal” since the 2008 crisis to strengthen the financial system, she said. That includes forcing banks to hold more capital to cover potential losses as part of the 2010 Dodd-Frank financial regulatory overhaul law.

“It is important that we maintain the improvements that have been put in place that mitigate the risk and the potential damage,” Yellen said.

President Trump has promised to dismantle Dodd-Frank, which Republicans have said has been too burdensome for banks.

In a report last month ordered by Trump, Treasury Secretary Steven T. Mnuchin proposed sweeping regulatory reductions, including changes that would reduce capital requirements for the biggest banks.

Yellen said she would not favor reducing those capital requirements.

Read the entire article here.

Gamers vs. Gainful Employment: Young Men Are Choosing Leisure Over Labor

A noticeable trend has emerged in the last decade: younger men are staying out of the labor force for longer periods of time or altogether. The cause? Economists increasingly focus on the growth of the “gamer” culture: men play more video games than women, and apparently they prefer the leisure of gaming to the frustration of personal growth that comes with gainful employment in the economy.

Past studies have shown an increasing prevalence of younger men to either avoid work or otherwise work intermittently, instead staying home and playing video games all day. This trend has intensified with the development of online gaming, where individuals play other individuals in live action games that happen in real time through various internet game providers.

According to a recent paper published by the economists Erik Hurst, Mark Aguiar, Mark Bils and Kerwin Charles at the Bureau of Economic Research:

By 2015, American men 31 to 55 were working about 163 fewer hours a year than that same age group did in 2000. Men 21 to 30 were working 203 fewer hours a year. One puzzle is why the working hours for young men fell so much more than those of their older counterparts. The gap between the two groups grew by about 40 hours a year, or a full workweek on average.

Although many economists have pointed to other factors including technological innovation, globalization, and the rise of service sector work, the paper argues that a significant percentage of younger men staying away from work can be traced to the rise of the “Gamer Culture.” That raises important questions about the gender gap at work, including the wage gap, but also whether productivity is stifled by a culture of technological fetishism that worships gadgets that enhance leisure activities rather than increase actual productivity on the job.

For a thorough review of the paper and this growing trend, read here.

Robocalypse Now? Central Bankers Argue Whether Automation Will Kill Jobs

From today’s New York Times by Jack Ewing:

SINTRA, Portugal — The rise of robots has long been a topic for sci-fi best sellers and video games and, as of this week, a threat officially taken seriously by central bankers.

The bankers are not yet ready to buy into dystopian visions in which robots render humans superfluous. But, at an exclusive gathering at a golf resort near Lisbon, the big minds of monetary policy were seriously discussing the risk that artificial intelligence could eliminate jobs on a scale that would dwarf previous waves of technological change.

“There is no question we are in an era of people asking, ‘Is the Robocalypse upon us?’” David Autor, a professor of economics at the Massachusetts Institute of Technology, told an audience on Tuesday that included Mario Draghi, the president of the European Central Bank, James Bullard, president of the Federal Reserve Bank of St. Louis, and dozens of other top central bankers and economists.

The discussion occurred as economists were more optimistic than they had been for a decade about growth. Mr. Draghi used the occasion to signal that the European Central Bank is edging closer to the day when it will begin paring measures intended to keep interest rates very low and bolster the economy.

“All the signs now point to a strengthening and broadening recovery in the euro area,” Mr. Draghi said. His comments pushed the euro to almost its highest level in a year, though it later gave up some of the gains.

But along with the optimism is a fear that the economic expansion might bypass large swaths of the population, in part because a growing number of jobs could be replaced by computers capable of learning — artificial intelligence.

Policy makers and economists conceded that they have not paid enough attention to how much technology has hurt the earning power of some segments of society, or planned to address the concerns of those who have lost out. That has, in part, nourished the political populism that contributed to Britain’s vote a year ago to leave the European Union, and the election of President Trump.

“Generally speaking, economic growth is a good thing,” Ben S. Bernanke, former chairman of the Federal Reserve, said at the forum. “But, as recent political developments have brought home, growth is not always enough.”

In the past, technical advances caused temporary disruptions but ultimately improved living standards, creating new categories of employment along the way. Farm machinery displaced farmworkers but eventually they found better paying jobs, and today their great-grandchildren may design video games.

But artificial intelligence threatens broad categories of jobs previously seen as safe from automation, such as legal assistants, corporate auditors and investment managers. Large groups of people could become obsolete, suffering the same fate as plow horses after the invention of the tractor.

Read the entire article here.

House Republicans Are Trying to Pass the Most Dangerous Wall Street Deregulation Bill Ever

From Mother Jones, June 7, 2017 by Hannah Levintova:
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From the earliest days of his campaign, Donald Trump has opposed the Dodd-Frank Wall Street Reform and Consumer Protection Act, the Obama-era financial reform law passed in response to the 2008 financial crisis.  Trump has characterized it as a “disaster” that has created obstacles for the financial sector and hurt growth. In April, he repeated his promise to gut the existing law.
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“We’re doing a major elimination of the horrendous Dodd-Frank regulations, keeping some, obviously, but getting rid of many,” Trump said in a meeting with top executives during a “Strategic and Policy CEO Discussion,” which included the leaders of major companies like Walmart and Pepsi. He added, “For the the bankers in the room, they’ll be very happy.”
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The Republican Congress shares Trump’s dislike of Dodd-Frank and this week, the House plans to vote on the Financial CHOICE Act, a Dodd-Frank overhaul bill that will, as promised, make banks and Wall Street “very happy” if it becomes law, while undoing numerous financial safeguards for regular Americans. (CHOICE is an acronym for “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.”)
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The bill, sponsored by Rep. Jeb Hensarling (R-Texas), takes aim at some of Dodd-Frank’s main achievements: It guts rules intended to protect mortgage borrowers and military veterans, and restrict predatory lenders. It also weakens the Consumer Financial Protection Bureau’s ability to oversee and enforce consumer protection laws against banks around the country—upending a mix of powers that have helped the CFPB recover nearly $12 billion for 29 million individuals since opening its doors in July 2011. The bill also weakens or outright cuts a number of bank regulations enacted through Dodd-Frank to keep risky investing behavior in check in order to avoid the economic devastation of another financial crisis or taxpayer-funded bailout.

Read the entire article here.

Economic inequality in LA ripens new concerns about future riots

From today’s LA Times by Victoria Kim and Melissa Edelhed:

Nearly 6 out of 10 Angelenos think another riot is likely in the next five years, increasing for the first time after two decades of steady decline. That’s higher than in any year except for 1997, the first year the survey was conducted, and more than a 10-point jump compared with the 2012 survey.

Young adults ages 18 to 29, who didn’t directly experience the riots, were more likely than older residents to feel another riot was a possibility, with nearly 7 out of 10 saying one was likely, compared with about half of those 45 or older. Those who were unemployed or worked part-time were also more pessimistic, as were black and Latino residents, compared with whites and Asians, the poll found.

Researchers theorized that the turnaround may be linked to several factors, including the more polarized national dialogue on race sparked by police shootings in Ferguson, Mo., and elsewhere, as well as by the tenor of last year’s presidential election. Moreover, many parts of L.A. still suffer from some of the economic problems and lack of opportunities that fueled anger before the riots.

“Economic disparity continues to increase, and at the end of the day, that is what causes disruption,” said Fernando Guerra, a political science professor who has worked on the survey since its inception. “People are trying to get along and want to get along, but they understand economic tension boils over to political and social tension.”Los Angeles riots rememberedThere was a moment of silence candlelight vigil in Koreatown to commemoratethe 17th anniversary of the Los Angeles riots. This year’s theme focused on teaching their history to Korean American youth, many of whom were born after the riots, during which tensions between the city’s black and Korean communities exploded.

Although the city’s unemployment rate last year was about half of what it was in 1992, the median income of Angelenos, when adjusted for inflation, is lower than it was around the time of the riots. Poverty rates still remain high at 22%, comparable with the years preceding the riots.

Read the entire article here.

Read coverage of LA Times Special Edition: 25th Anniversary of LA Riots here.

The Great Wage Slowdown of the 21st Century

From today’s NYT “UpShot” Blog  by David Leonhardt:

American workers have been receiving meager pay increases for so long now that it’s reasonable to talk in sweeping terms about the trend. It is the great wage slowdown of the 21st century.

The typical American family makes less than the typical family did 15 years ago, a statement that hadn’t previously been true since the Great Depression. Even as the unemployment rate has fallen in the last few years, wage growth has remained mediocre. Last week’s jobs report offered the latest evidence: The jobless rate fell below 6 percent, yet hourly pay has risen just 2 percent over the last year, not much faster than inflation. The combination has puzzled economists and frustrated workers.

Of course, there is a long history of pessimistic predictions about dark new economic eras, and those predictions are generally wrong. But things have been disappointing for long enough now that we should take the pessimistic case seriously. In some fundamental way, the economy seems broken.

I probably don’t need to persuade most readers of this view, so the better way to think about the issue may be to consider the optimistic case. And last week, in his most substantive speech on domestic policy in months, President Obama laid out that case.

Read the entire article here.