In the comments to this post, Tom Kelley provided a worthwhile digression on the topic that I felt deserved a wider audience, so with his permission, here’s Tom’s response:
Given that the trucking industry has been my sandbox for quite some time, I can safely extend Megan’s prognosis to also include the low long-term risk of job losses due to self-driving vehicles.
Frankly, I have to be wary of any “expert” who can’t even get the name of his source (the American Trucking Associations — yes, plural — not the American Trucker Association) transcribed correctly.
Apart from the myriad technical issues standing in the way of driverless trucks, the insurmountable barrier is anti-competitive trucking regulations passed on behalf of the government’s favorite white elephant, the rail industry. Invariably, these regulations are tarted up under some guise of safety (Let’s see, was it a truck or a train that blew the town of Lac-Mégantic off the map??? Hmm).
The bottom line is that any change that would have the slightest possibility of making trucking more productive is quickly met with massive dis-information campaigns, and even more massive lobbying from the rail industry. Even the most minor dimensional changes designed to reflect the current realities of truck freight transportation stand little if any chance of making it past regulators with a permanent disdain for free enterprise.
We can’t have electronically actuated brakes on trucks because the regulators have no grasp of brakes or electronics, and somebody wants to replace the driver with electronics? Seriously? Of course these same folks seen to have no problem flying cross-country at 500 MPH in a commercial jetliner that is literally flown by wire.
And even if the government types were perfect actors in this little tale, then you have the American tort law system, run/regulated by, for, and about the trial lawyers. Even with professional truck drivers who can deftly avoid putting incompetent car drivers on their way to a Darwin award, hundreds of four-wheeler drivers still manage to commit suicide-by-truck every year, followed quickly by their otherwise destitute estates suing innocent trucking companies for millions.
Can’t you just hear the jury summation now: “The eeevvilll trucking company wanted to save a few pennies by outsourcing the driver’s job to a microchip! The must be punished! My client, a fourth cousin of the homeless man who jumped off a bridge in front of a truck MUST be awarded $10 million for the pain and suffering from losing a relative he never met. No justice, no peace!”
No insurance company in their right mind would insure a driverless truck for real-world operation.
There’s no question that the technology is available to make the concept work, I was on-board numerous autonomous vehicles of all sizes back in 1997.
It will take several major societal shifts before any serious degree of autonomy makes it into real world trucking operations.
I’m far from being a Luddite, but I find Megan McArdle‘s analysis of the low short-to-medium term risk of job losses due to self-driving vehicles to be pretty convincing:
… my objections are actually to the understanding of the trucking industry works and of self-driving vehicles. Fully automated trucks, with no drivers at all, are probably going to arrive later than Santens thinks, take longer to roll out than he projects, and displace fewer workers than he thinks they will. I’m not saying it will never happen. I’m just skeptical that this is going to be a major policy problem in the next two decades.
Start with what truckers do, and how many of them there are. Santens quotes the American Trucker Association to get 3.5 million. The Bureau of Labor Statistics puts that figure a bit lower, around 2.8 million. More importantly, only 1.6 million of those are long-haul truckers. The rest are “driver/sales” employees or “Light truck or delivery services drivers.” Those are short-haul services that will not quickly be replaced by automated cars, both because chaotic urban roads are harder for autonomous vehicles to handle and because part of the job is loading and unloading the truck (something that long haul drivers may also do).
Also: Why would we assume that the advent of driverless trucks would be bad for trucking support jobs? Those folks are doing stuff like maintenance or loading that still has to be done. Moreover, other jobs will be created, in designing and maintaining the new systems. Someone has to map all those roads.
But I think it will be a while before we get to a fully autonomous vehicle with no people in it. The “driverless truck” that Santens links is not actually driverless; it’s partially autonomous. If it foresees something it can’t deal with, such as heavy snow, it signals to the driver to take over; if the driver doesn’t respond, it slows to a stop. That’s an improvement in the lives of truck drivers, not a job killer.
All democratic theories, whether Socialistic or bourgeois, necessarily take in some concept of the dignity of labor. If the have-not were deprived of this delusion that his sufferings in the sweat-shop are somehow laudable and agreeable to God, there would be little left in his ego save a belly-ache. Nevertheless, a delusion is a delusion, and this is one of the worst. It arises out of confusing the pride of workmanship of the artist with the dogged, painful docility of the machine. The difference is important and enormous. If he got no reward whatever, the artist would go on working just the same; his actual reward, in fact, is often so little that he almost starves. But suppose a garment-worker got nothing for his labor: would he go on working just the same? Can one imagine him submitting voluntarily to hardship and sore want that he might express his soul in 200 more pairs of pantaloons?
H.L. Mencken, “Types of Men 4: The Worker”, Prejudices, Third Series, 1922.
I missed this post a few weeks back from Kevin Drum at Mother Jones, pointing out that we won’t really know the full impact of the Los Angeles experiment with significantly higher minimum wages:
So my near neighbor of Los Angeles is poised to raise the minimum wage to $15. How should we think of that?
Personally, I’m thrilled. Not because I think it’s a slam-dunk good idea, but because along with Seattle and San Francisco it will give us a great set of natural experiments to figure out what happens when you raise the minimum wage a lot. We can argue all we want; we can extrapolate from other countries; and we can create complex Greek-letter models to predict the effects — but we can’t know until someone actually does it.
So what do I think will happen? Several things:
In the tradeable sector, such as clothing piece work and agriculture, the results are very likely to be devastating. Luckily, LA doesn’t have much agriculture left, but it does have a lot of apparel manufacture. That could evaporate completely (worst case) or perhaps migrate just across the borders into Ventura, San Bernardino, and other nearby counties. Heavier manufacturing will likely be unaffected since most workers already make more than $15.
In the food sector, people still need to eat, and they need to eat in Los Angeles. So there will probably be little damage there from outside competition. However, the higher minimum wage will almost certainly increase the incentive for fast food places to try to automate further and cut back on jobs. How many jobs this will affect is entirely speculative at this point.
Other service industries, including everything from nail salons to education to health care will probably not be affected much. They pretty much have to stay in place in order to serve their local clientele, so they’ll just raise wages and pass the higher prices on to customers.
Likewise, retail, real estate, the arts, and professional services probably won’t be affected too much. Retail has no place to go (though they might be able to automate some jobs away) while the others mostly pay more than $15 already. The hotel industry, by contrast, could easily become less competitive for convention business and end up shedding jobs.
While I’m certainly in favour of people being able to afford to live on their base income, I’m afraid that this experiment is going to hurt a lot of already at-risk poor people who will have few other options if their jobs go away. I’m especially amused that LA-area union reps are now reported to be pushing to exempt the businesses where their members work (so that unions will have an effective monopoly on low-wage jobs because non-unionized companies would have to pay a higher wage). That, after putting all their organizational muscle behind getting the minimum wage raised in the first place. That’s a high grade of cynicism.
In The Observer, Amy Alkon suggests that following the “lean in” advice may lead to unanticipated problems for a lot of women:
Remember junior high? Well, the reality is, if you’re a woman, you never really get to leave.
This rather depressing truth about adult mean girls isn’t one you’ll read in Facebook COO Sheryl Sandberg’s best-selling book, Lean In.
Unfortunately, according to a near mountain of research on sex differences, the “You go, career girl!” advice Ms. Sandberg does give is unrealistic and may even backfire on women who take it.
The problem starts with her book’s title, unreservedly advising women to “lean in” — to boldly assert themselves at the office — without detailing the science that lays out the problems inherent in that.
Ms. Sandberg goes clueless on science throughout her book; for example, never delving into what anthropological research suggests about why women are not more supportive of one another and why it may not be reasonable for a woman to expect other women in her workplace to be supportive of her in the way men are of other men and even women.
Joyce Benenson, a psychologist at Emmanuel College in Boston, doesn’t have Sandberg’s high profile, but she’s done the homework (and research) that’s missing from Sandberg’s book, laying it out in a fascinating science-based book on sex differences, Warriors and Worriers: The Survival of the Sexes.
What’s the difference between a wage subsidy and a minimum wage? What is the cost of a wage subsidy to taxpayers? We take a look at the earned income tax credit and how it affects low-skilled workers. We also discuss Nobel Prize-winning economist Edmund Phelps’ work on wage subsidies.
Tim Worstall explains why we can easily disregard the calls to panic about the impending invasion of our new robotic overlords:
Essentially, what [economist Joe] Stiglitz is saying is that under certain conditions the advance of the robots means that we all lose our jobs and the capitalists, the people who own the robots, get to have all of the economy. And one can see his mechanism to get there: if robots become ever more productive then yes, we can see the idea that there will be more robots and fewer people employed by the capitalists and so on. But it’s still impossible for that end state to arrive: simply because we non-capitalists aren’t going to let it.
So, let’s recast that end state. There’s the 1% (the plutocrats, the capitalists, whatever) and then there’s us, the 99%. Robots become ever more productive and we the 99% all lose our jobs working for the capitalists. Hmm, tant pis in one telling of this story because as Karl Marx pointed out that’s a precondition for true communism, that we overcome the scarcity problem. But even leaving that aside what is going to happen next?
That 1% owns all the robots and gets all the production from them. We, the 99%, have no jobs and thus no incomes. We cannot purchase any of that robotic consumption from the capitalists. This is the very point that Stiglitz is making, that the capitalists will own and consume 100% of the robotic output. Well, yes, OK, but what are we the 99% going to do? This new peasantry: do we all just wander around the fields until we keel over from starvation? No, quite obviously we don’t. Sure, the robots are more efficient than we are, produce things for much lower prices. But we don’t have any of the currency with which we can buy that production. So, what are we going to do?
Science does not need women any more than it needs foot fetishists, pole-vaulters, or Somalis. What science needs (if an abstraction such as science can be said to need anything) is scientists. If they happen also to be foot fetishists, pole-vaulters, or Somalis, so be it: but no one in his right mind would go to any lengths to recruit for his laboratory foot fetishists, pole-vaulters, or Somalis for those characteristics alone.
It is true, of course, that women are demographically underrepresented in the ranks of scientists, but so are many other groups. (This means, of course, that others are overrepresented.) This may be for more than one reason: lack of aptitude or interest, for example, or deliberate or subtle obstructiveness. But historical attempts to recruit scientists according to some demographic criterion or other have not been met with success, even as far as the advancement of science itself is concerned, and have been made by the very worst dictatorships that in other respects have been abominable. Social engineering and engineering are two very different activities. It would be no consolation to know while on a collapsing bridge and about to plunge into the deep ravine below that it had been built by a truly representative sample of the population, and was therefore a monument to social justice.
Suppose that, instead of Science needs women, other slogans based upon exactly the same logic hung over the arrivals hall: Heavyweight boxing needs Malays, for example, Football needs dwarf goalkeepers, Quantity surveying needs bisexuals, Lavatory cleaning needs left-handers: the absurdity of the argument would be immediately apparent. In fact the categorization both of human activities and humans themselves being almost infinite, the obsession with demographic representation as the most important criterion of fairness or social justice is virtually without end. The search for social fairness in this sense can lead only to perpetual conflict, much as the imposition of parliamentary democracy has done in countries in which it is not an organic outgrowth of their history, and as a true parliamentary regime in the European Union would very soon do.
I’ve had a few friends over the years who seemed to somehow be able to spend extended time in China. This article may explain how at least a few of them funded their stays:
In 2010, Mitch Moxley wrote a story for The Atlantic entitled “Rent a White Guy,” relating the story of his trip to Dongying where he pretended to be the representative of a non-existent California-based company that was allegedly building a factory in the city. His Canadian friend Ernie, hired to play the role of director, delivered a speech before a large crowd in which he “boasted about the company’s long list of international clients.” After the speech, “confetti blasted over the stage, fireworks popped […] and Ernie posed for a photo with the mayor.” The article has nothing to say about the extent of the scam. Were Mitch Moxley and his friend Ernie giving a boost to a local company or were the attendees being asked to invest in a company that didn’t exist?
A 2010 CNN report cited one ad posted on The Beijinger by a company called “Rent A Foreigner.” The story describes one foreigner who had police knock on his door one day, “after a financial company he worked at for a couple of months in Xi’an […] allegedly swindled millions of yuan out of clients.”
It’s commonplace in China to see expats paid exorbitant fees as dancers, singers, musicians, or models, often regardless of talent. I have seen unattractive models, dancers who couldn’t dance, and singers who couldn’t sing. One of my friends was once paid handsomely to play bass at a live concert. The thing was, he didn’t know how to play bass — so they left his instrument unplugged and he plucked at the strings as if he had some clue as to what he was doing. Several of the musicians were also pantomiming to a prerecorded track, but the track had no bass, so my friend was pretending to play a part that didn’t exist. No one in the crowd seemed to notice though, and he was paid more than twice what the Chinese band members, who were actually rather talented musicians, earned.
At Coyote Blog, Warren Meyer lays out his simple but effective plan to help African-Americans:
Legalize drugs. This would reduce the rents that attract the poor into dealing, would keep people out of jail, and reduce a lot of violent crime associated with narcotics traffic that kills investment and business creation in black neighborhoods. It would also reduce the main excuse for petty harassment by police that falls disproportionately on young black men. No its not a good thing to have people addicted to strong narcotics but it is worse to be putting them in jail and having them shooting at each other.
Bring real accountability to police forces. When I see stories of folks absurdly abused by police forces, I can almost always guess the race of the victim in advance. I used to be a law-and-order Conservative that blindly trusted police statements about every encounter. The advent of cell-phone video has proven this to be supremely naive.
Eliminate the minimum wage (compromise: eliminate the minimum wage before 25). Originally passed for racist reasons, it still (if unintentionally) keeps young blacks from entering the work force. Dropping out of high school does not hurt employment because kids learn job skills in high school (they don’t); it hurts because finishing high school is a marker of responsibility and other desirable job traits. Kids who drop out can overcome this, but only if they get a job where they can demonstrate these traits. No one is going to take that chance at $10 or $15 an hour**
Voucherize education. It’s not the middle class that is primarily the victim of awful public schools, it is poor blacks. Middle and upper class parents have the political pull to get accountability. It is no coincidence the best public schools are generally in middle and upper class neighborhoods. Programs such as the one in DC that used to allow urban poor to escape failing schools need to be promoted.
You could argue that decriminalizing drugs is somehow wrong … but if you’re looking at the harm inflicted by drug abuse and comparing it to the harm to African-American communities in particular, you would have to admit that it’s significantly worse with drug prohibition than it would be under a legal drug-use scenario. Reforming the police? Check what kinds of stuff show up in my Militarization-tagged posts — if that doesn’t convince you, you can’t be convinced.
The minimum wage is one of those issues that seems beneficial to the poor, because it means they get a higher wage on the job than they might get otherwise — what isn’t seen is that this limits the number of jobs that a poor person may have access to. Our education system is not adequately equipping people for the working world, and the more we expect the schools to teach, the less they can teach in the way of life-skills. A bad school can negatively impact someone’s entire working life. In education especially, one size does not fit all. Having more varied educational offerings makes it much more likely that children will be able to get the kind of education they need to succeed in life.
In The Federalist, Nichole Russell agrees that it is nearly impossible to “have it all” (a real career and a family) … at the same time, anyway:
The conversation about mothers in the workforce seems to be at once continuous and clamoring. Rarely does a working mother nail the problem and solution without sounding too whiny or too arrogant. Yet a recent commentary in Forbes comes as close to any as I have seen recently, complete with some eyebrow-raising admissions. If more men and women — parents and CEOs — viewed this exhausting issue with such clarity, perhaps we could finally work towards a solution.
In the piece, succinctly titled, “Female Company President: I’m sorry to all the mothers I worked with,” Katharine Zaleski recounts how, while employed in high-powered editorial positions at The Washington Post and The Huffington Post, she regularly scoffed at the work ethic of other women just because they were mothers, either mentally or by failing to support the decisions they made related to work and family.
She reveals this penitent anecdote: “I secretly rolled my eyes at a mother who couldn’t make it to last minute drinks with me and my team. I questioned her ‘commitment’ even though she arrived two hours earlier to work than me and my hungover colleagues the next day.”
What’s just as surprising as her admission that she evaluated a mother’s work-related achievements on a different scale than she did other employees is the equally important truth that the workforce isn’t just a tough place for moms because of their male bosses. “For mothers in the workplace, it’s death by a thousand cuts – and sometimes it’s other women holding the knives. I didn’t realize this – or how horrible I’d been – until five years later, when I gave birth to a daughter of my own.”
Zaleski goes on to discuss how she lamented her status as a new mom and employee only briefly before she determined to find a solution, both for her daughter so she wouldn’t feel “trapped” and other moms facing the same struggle. She wound up co-founding a startup called PowertoFly that matches women in technical positions they can do from home.
While many conservatives and liberals alike might call this an abandonment of the feminist theory, I think it actually expresses the heart of feminism — not radical left-wing feminism, but one of the few Oprah gems I agree with: “You can have it all, just not at the same time.”
In his Forbes column last week, Tim Worstall made the point that perhaps the biggest economic story of the last century has been the economic emancipation of women:
There’s an interesting little rumpus going on over the new book by Robert Putnam on the class divide in American lifestyles. Put very simply, the middle and upper classes seem to take marriage and child rearing seriously and the poor have a more, umm, chaotic approach. Looking at the various think pieces that have been done on this book I find myself astonished by the way that the most important salient and relevant fact is simply not being mentioned. Marriage is many things but among them is that it is an economic contract. And the terms of that contract have changed: thus it’s not even remotely surprising that behaviour has changed too.
Which brings me to that headline: that the economic emancipation of women is the most important single fact of the past century. That past really was a different place. We can argue if we want to about whether that economic emancipation is complete (the famous womens’ 77 cents to mens’ dollar, or is it a motherhood pay gap and so on) but let’s leave that for another time. What is obviously and glaringly true is that women are much freer economically than they were a century ago. Wages for women back then were distinctly lower than they were for men. And no, this wasn’t particularly discrimination: some large part of what most people were hired for was physical muscle. Men have more of this so they got paid more. There were also strong social norms: I’m not quite sure of pre-WWI America but in my native UK the only respectable jobs for an adult woman (ie, something that the bourgeois would be happy to see their daughters go into) were nursing or teaching. And as a result of this paucity of choice the wages were low in both professions (there’s a strong truth to the point that the rising wages of both teachers and nurses in recent decades are the result of their being free to work in other sectors these days).
The result of both of these things was that the wages of a female worker were not, except at the most basic, basic, level, sufficient to raise a child let alone support a family. I’m not saying that being a single parent these days is easy but it is at least possible as tens of millions of people are showing us.
Which brings us to marriage: yes, this is many things. Love, sex, companionship and so on. But it is also an economic contract (the only proof we need of this is to read some divorce settlements)
and marriage always has been an economic contract. Pretty much since humans arrived as a species it has been necessary to have two parents around in order for a child to have a reasonable chance of survival to an age where it would have its own children. This was true of hunter gatherer societies, of agricultural ones, of industrial ones, feudal and so on. It really is only in this past century, more so in the past 50 years, that it’s been possible for one person to both earn a living and raise a child or children. Yes, obviously people did do so as a result of having to do so but it wasn’t something that anyone did by choice simply because of the penury that resulted from their doing so. And yes, all of this is much more true of women than men.
Properly understood, all economic values are subjective. Some items have useful applications, but the relative value of those applications is itself subjective; there’s nutritional value in a pound of cauliflower, and there’s nutritional value to an ounce of Beluga caviar, and the difference in the price between the two is based on no objective criterion. Even scarcity does not explain the difference: There are more diamonds in this world than there are autographed photos of Anthony Weiner, but try giving your wife the latter for your anniversary and you’ll get a short and possibly violent lesson in the subjectivity of value. In fact, it is the subjectivity of value that makes exchange possible — if our values and preferences were perfectly aligned, we’d never trade anything for anything else, because we’d all value every item and service at precisely the same level, and there would therefore be no incentive to engage in commerce. That our preferences should be non-uniform ought not be surprising — our lives are non-uniform, too. If I operate an apple orchard, I am probably not going to buy apples from you at any price, unless perhaps they are a different sort of apple than the ones I grow. The rancher and the fisherman each assigns a different value to beef and fish than does his opposite number. Disagreement is fundamental.
The crude version of exchange — which is, unhappily, the common version — is inclined to suspect that there is an objectively correct price for a good, and that profit comes from duping somebody into paying more than the correct price for it. That error is fundamental to Marxism and other anti-capitalist philosophies, and it is implicit in such social phenomena as the anti-advertising movement, “Buy Nothing Day,” and similar political tendencies. But that bias does relatively little harm in the heads of greying Marxists, peddlers of “profit is a crime” banalities, and Occupy riff-raff. Where it is truly destructive is in the disorganized thoughts of the large majority of ordinary people with no particularly strong political commitments or economic orientation. Consider these phrases: “An honest day’s work for an honest day’s pay,” “just wages,” “fair price,” “obscene profits,” “price gouging,” “excessive executive compensation.” For any of those phrases to have any intellectual content, then there must be a price that is in some non-subjective sense the correct one. But if economic values are subjective — and they are — then “an honest day’s work for an honest day’s pay” can only mean one thing, that being the payment of an agreed-upon wage for an agreed-upon performance of labor, with “honest” referring only to the fulfillment of the agreement and saying nothing substantive about the terms of the agreement itself.
In Forbes, Tim Worstall looks at last week’s announcement that China is (slightly) lowering their economic growth forecast.
On that larger scale though what people are worrying about is this. Catch up growth is easier than growth from the technological frontier. What is meant by this is that it’s a great deal easier to generate economic growth if you have an example in front of you of how to do things. To take a trivial example, if you can go and buy a mobile phone, take it apart to see how it works, it’s a lot easier to copy that technology than it is to invent it for the first time. And this is true of how you make cement, how you put up buildings, how you farm a field and so on. And at root that’s what economic growth is: becoming more efficient at doing all of these things as well as everything else. Each time you become more efficient at doing one task you free up resources to be doing something else. Thus you get both the original thing plus the new one from the same resources: this is the very definition of economic growth.
However, there’s a limit to such catch up growth. In certain areas China is right at that technological frontier (in some areas ahead of the rest of the world in fact). Which is where things become more difficult: there’s no one to copy. Therefore that invention has to happen domestically. This is obviously more difficult. But also it rather requires a certain set of institutions. The rule of law, property rights and so on. These aren’t things that China notably has (although things are very much better than they were decades ago). It’s those headwinds that need to be beaten. Bringing in these new institutions, embedding them in the society and the economy, without causing so much disruption as to slow down growth while they are done.
The standard jargon for this is “middle income trap”. To be crude about it the general feeling is that it’s pretty easy to go from dirt poor to middling income. The essence is really just to stop doing stupid things that hold economic development back. China’s done that very well even though they did start from a very low level of an immense number of very stupid things that Maoism did to hold economic growth back. The middle income trap is where the transition over to those institutions that promote technological frontier growth don’t appear (or are not imposed). And thus the stunning growth peters out.
When you think about World War One, you think of men fighting to death in the mud. All to often the immense contribution of women as nurses, medics, ammunition workers and so many more has been forgotten. This special episode salutes all the women who served in the Great War.