Biden’s Economic Team Suggests Focus on Workers and Income Equality [feedly]

Biden's pledges re labor seem to be coming true. Hope this teams wins its args within the new admin, and has a plan to overcome the certain 

GOP blockade

Biden's Economic Team Suggests Focus on Workers and Income Equality
https://www.nytimes.com/2020/11/30/business/biden-economics-yellen-labor.html

WASHINGTON — President-elect Joseph R. Biden Jr. formally announced his top economic advisers on Monday, choosing a team that is stocked with champions of organized labor and marginalized workers, signaling an early focus on efforts to speed and spread the gains of the recovery from the pandemic recession.

The selections build on a pledge Mr. Biden made to business groups two weeks ago, when he said labor unions would have "increased power" in his administration. They suggest that Mr. Biden's team will be focused initially on increased federal spending to reduce unemployment and an expanded safety net to cushion households that have continued to suffer as the coronavirus persists and the recovery slows.

In a sign that Mr. Biden plans to focus on spreading economic wealth, his transition team put issues of equality and worker empowerment at the forefront of its news release announcing the nominees, saying they would help create "an economy that gives every single person across America a fair shot and an equal chance to get ahead."

Mr. Biden's picks include Janet L. Yellen, the former Federal Reserve chair, as Treasury secretary; Cecilia Rouse of Princeton University, to head the White House Council of Economic Advisers; and Neera Tanden of the Center for American Progress think tank, to run the Office of Management and Budget. All three have focused on efforts to increase worker earnings and reduce racial and gender discrimination in the economy.

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Ms. Tanden said in February that rising income inequality was the consequence of "decades of conservative attacks on workers' right to organize" and that labor unions "are a powerful vehicle to move workers into the middle class and keep them there."

The two other nominees to Mr. Biden's Council of Economic Advisers, Jared Bernstein and Heather Boushey, are economists who have pushed for policies to advance workers and labor rights, and who advised Mr. Biden in his campaign as he built an agenda that featured several longstanding goals of organized labor, like raising the federal minimum wage and strengthening "Buy America" requirements in federal contracting.

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Ms. Boushey has also been a vocal advocate of policies to help working families, including providing up to 12 weeks of paid family and medical leave. In an interview last week, Ms. Boushey said such a policy was especially critical during the pandemic, "when lives are at stake."

William E. Spriggs, the chief economist for the A.F.L.-C.I.O. labor union, hailed the selections, saying in an email on Monday that "we have not had a C.E.A. as focused on the role of fiscal policy and full employment since President Johnson."

The team has embraced increased federal spending to help households and businesses during the pandemic, a position that was highlighted in an op-ed article that Ms. Tanden and Ms. Boushey wrote with two co-authors in March, urging policymakers to spend big even though it would require borrowing large sums of money.

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"Given the magnitude of the crisis," they wrote, "now is not the time for policymakers to worry about raising deficits and debt as they consider what steps to take."

Mr. Biden also named Adewale Adeyemo, a senior international economic adviser in the Obama administration, as deputy Treasury secretary.

The nominees, who require Senate confirmation, will be introduced on Tuesday. Another of Mr. Biden's picks, the former Obama adviser Brian Deese, has been tapped to lead the National Economic Council but was not included in Monday's announcement.

Mr. Biden's team includes several labor economists, including Ms. Yellen, who has been a longtime champion of workers and has at times suggested allowing the unemployment rate to run low for a longer period of time without worrying about inflation — an idea some economists thought imprudent but which has since become more widely accepted. While at the Fed, she balanced her preference for a strong labor market with inflation concerns and political constraints.

In the early 2000s, Ms. Yellen was instrumental in persuading the Fed's policy-setting committee to coalesce around targeting a 2 percent inflation rate instead of the zero inflation rate that Alan Greenspan, the Fed chair at the time, originally favored. The Fed raises rates to slow the economy and offset inflationary pressures, so targeting slightly higher inflation opened the door to longer periods of cheap borrowing that can lead to stronger economic demand and lower unemployment.

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Neera Tanden, nominated to run the Office of Management and Budget, has said that labor unions "are a powerful vehicle to move workers into the middle class and keep them there."Credit...Lexey Swall for The New York Times

As Fed chair from 2014 to 2018, Ms. Yellen favored a patient approach to policy-setting that weighed concerns that prices might heat up as joblessness dropped against a preference for pulling more workers into the labor market.

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In one wonky 2016 speech, she suggested that allowing the labor market to expand without raising interest rates might help to reverse damage by pulling people in from the sidelines and prompting others to look for better jobs. She was criticized for the remarks, and later backed away from such an approach in word if not in deed. She and her colleagues lifted interest rates to fend off inflation pressures, but did so at a very slow pace, prompting criticism. Those rate increases have since been viewed as too aggressive and faulted for prematurely snuffing out a more robust labor market expansion.

Ms. Yellen also walked a careful line when it came to issues like inequality. In one 2014 speech, she suggested that widening income and wealth inequality might be incompatible with American values — "among them the high value Americans have traditionally placed on equality of opportunity" — a remark Republicans criticized.

Much has changed since Ms. Yellen was at the Fed — in ways that could allow her to embrace some of her more labor-friendly instincts if she is confirmed to the Treasury. While the Treasury secretary's direct economic power is somewhat limited, the position holds significant sway as a fiscal policy adviser to Congress and the president, as well as oversight of tax policy through the Internal Revenue Service.

Inflation, once seen as a real and looming threat, has been low for more than a decade. Inequality, once labeled a political and liberal issue, is increasingly recognized as a real economic constraint by Democrats and Republicans alike.

Yet some progressive groups have raised concerns that Mr. Biden's team could pivot too quickly to try to reduce the federal budget deficit once the pandemic subsides, citing past comments by Ms. Yellen and Ms. Tanden.

Economists on the left have become increasingly comfortable with deficit spending, and Ms. Yellen has long favored government intervention as a way to get the economy going during times of trouble. But she has also said America's debt load is unsustainable, and has generally favored taxation as an offset to increased spending.

Mr. Biden, too, has expressed support for borrowing money to aid the current recovery, but sought to offset the cost of other economic proposals — like an infrastructure bill and actions to mitigate climate change — with tax increases on high earners and corporations.

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In a 2018 interview at the Charles Schwab Impact conference in Washington, Ms. Yellen said the U.S. debt path was "unsustainable" and offered a remedy: "If I had a magic wand, I would raise taxes and cut retirement spending." Last year, she described the need to overhaul the nation's social safety net programs as "root canal economics."

But Ms. Yellen has made clear that she does not see deficit reduction as a priority during the current crisis and that the federal government should spend what is necessary to weather the pandemic. In July, she testified before Congress with Ben S. Bernanke, another former Fed chair, and called for substantial federal support.

"With interest rates extremely low and likely to remain so for some time, we do not believe that concerns about the deficit and debt should prevent the Congress from responding robustly to this emergency," she said. "The top priorities at this time should be protecting our citizens from the pandemic and pursuing a stronger and equitable economic recovery."

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Janet L. Yellen, the Treasury secretary nominee, has called for significant federal economic support to weather the pandemic.Credit...Eric Thayer for The New York Times

Many Republicans, however, have once again begun warning about the deficit and citing mounting debt levels as a reason to avoid another large virus spending package.

Bridging those concerns will fall to both Ms. Yellen and Ms. Tanden, whose role as the White House budget director will put her in the center of fiscal fights with Congress.

Some liberal groups have raised concerns over Ms. Tanden's 2012 remarks to C-SPAN about potential cuts to safety-net programs as part of a long-term deal to reduce federal debt.

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In that interview with the network, Ms. Tanden said that the restructuring of Social Security, Medicare and Medicaid must be "on the table" in conversations about long-term deficit reduction and noted that the Center for American Progress had made such proposals.

But in 2017, as Republicans prepared to approve a $1.5 trillion tax cut, Ms. Tanden showed no desire to return to deficit reduction in a future administration. "The rule seems to be deficits only matter for Democratic presidents," she wrote on Twitter. "And that rule needs to die now. We should not have to clean up their mess."

Liberal senators, including Elizabeth Warren of Massachusetts and Sherrod Brown of Ohio, cheered the selections of Mr. Biden's team, including Ms. Yellen and Ms. Tanden. Mr. Brown said on Twitter that Ms. Tanden was "smart, experienced, and qualified" and demanded that Senate Republicans confirm Mr. Biden's team.

Republicans did not unite in opposition, though when asked about Ms. Yellen, Senator Josh Hawley, Republican of Missouri, criticized her as being a "good example of the corporate liberals."

"She's somebody who clearly has done the bidding of the big multinational corporations," he said. "Her record on trade is astoundingly terrible."

Liberal economists welcomed the picks. "There are reasons to be hopeful," said Stephanie Kelton, a professor at Stony Brook University and the author of the book "The Deficit Myth," which makes a case that budget deficits are not inherently bad.

Ms. Kelton helped with economic agenda-setting during the Biden campaign as a task force member, and said the fact that people like Mr. Bernstein and Ms. Boushey were included among the economic thinkers was a reason to hope that progressive ideals would have a voice at the table. That said, Ms. Kelton said she remained wary that there would be continued attention to deficits and deficit reduction.

Jim Tankersley covers economic and tax policy. Over more than a decade covering politics and economics in Washington, he has written extensively about the stagnation of the American middle class and the decline of economic opportunity. @jimtankersley

Jeanna Smialek writes about the Federal Reserve and the economy. She previously covered economics at Bloomberg News, where she also wrote feature stories for Businessweek magazine. @jeannasmialek

Alan Rappeport is an economic policy reporter, based in Washington. He covers the Treasury Department and writes about taxes, trade and fiscal matters in the era of President Trump. He previously worked for The Financial Times and The Economist. @arappeport


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Cancelling Plans for a Robo-Apocalyse? [feedly]

Cancelling Plans for a Robo-Apocalyse?
https://conversableeconomist.blogspot.com/2020/06/cancelling-plans-for-robo-apocalyse.html

We know from historical experience that it's common to hear prophesies about how new automation technologies will wipe out jobs (for examples, see here,  here, here, here, and here) We also know that that the past can be an imperfect guide to the future. Leslie Willcocks offers a number of reasons to believe that claims of future job loss may be overstated in "Robo-Apocalypse cancelled? Reframing the automation and future of work debate" (Journal of Information Technology, 35:4, pp. 286-302, freely available online at present). Specifically, Willcocks offers eight "qualifiers" as to why claims of job loss from robotics, automation, and artificial intelligence are not likely to be as large as often feared. Here are is qualifiers, with a few words of explanation:  

Qualifier 1 – job numbers versus tasks and activities. 

When you look more closely at estimates that one-third or one-half of jobs will be "automated," the evidence actually tends to show that one-third to one-half of jobs will be changed in the future by use of  technology. Maybe some of those jobs will disappear, but in many other cases, the job itself will evolve, as jobs tends to do over time. Of course, it's a lot less exciting to have a headline which says: "The information technology you use at your job is going to keep changing change in ways that affect what you do at work."

Qualifier 2 – job creation from automation

An overall view of the effects of automation on jobs also needs to take into account how, over time and in the present, automation has also led to the creation of many new jobs. Lest we forget, the US unemployment rate before the pandemic hit was under 4%, which certainly doesn't look like evidence that total jobs are being reduced. 

Qualifier 3 – is technology (ever) a fire-and-forget missile?

Technology tends to phase in slowly, often more slowly than enthusiasts may predict. Willcocks writes: "Our own research suggests that implementation challenges are very real in the context of automation, especially for large organizations with a legacy of information technology (IT) investments, infrastructure and outsourcing contracts. There are also cultural, structural and political legacies that will shape the speed of implementation, exploitation and reinvention. In particular, we found in the
2017–2019 period organizations running up against 'silo challenges' – in respect of technologies, data, processes, skill bases, culture, managerial mindsets and organizational structures – that slow adoption considerably."

Qualifier 4 – technology: born perfect? perfectible?

"Informed sources also point to the fact that the kind of AI we have today is narrow or weak AI, able to perform a specific kind of problem or task. Nearly all refer to the reality of the Moravec Paradox, that is, the easy things for a 5-year-old human are the hard things for a machine, and vice versa ..." 

Qualifier 5 – distinctive human strengths at work

"Manyika et al. (2017) developed a highly useful (though not exhaustive) framework of 18 human capabilities needed at work, and likely to be needed in the future. These divide into sensory perception, cognitive capabilities, natural language processing, social and emotional capabilities and physical capabilities. They found that automation could perform 7 capabilities at medium to high performance, but their modelling suggests that automation tools are nowhere near able to perform the other 11 capabilities (e.g. creativity, socio-emotional capabilities) to an above human level, and that it would be anything between 15 and 50 years before many tools could. Furthermore, humans tend to use a number of capabilities in specific workplace contexts, and machines are not, and will not be good any time soon, at combining capabilities, let alone being integrated to deal with complex real-life problems ... ... In sum, too little consideration is given to distinctive human qualities that are not easily codifiable or replaceable, especially in combination, and are likely to remain vital at work. Perhaps the direction of travel should be not for replicating human strengths but for automation to be focused on what humans cannot do, or do not want to do."

Qualifier 6 – ageing populations, demographics and automation

Birth-rates have been falling around the world, populations have been aging, and the size of the workforce in many countries is either not rising much or actually declining: "Declining birth
rates and ageing populations across the G20 may well see workforce growth decline to 0.3% a year, leaving a workforce too small to maintain current economic growth, let alone meet espoused aspirational targets." The global economic future in many countries, based on demography, looks more likely to involve labor shortages than labor surpluses. 

Qualifier 7 – automation, skills and productivity shortfalls

It may be that fears over the robo-apocalyse are not so much about the rising abilities of robots as about the shortages of skills from humans. Willcocks writes: "There is an irony here in that, while many studies are predicting large job losses as a result of automation, we are also seeing skills shortages reported across many sectors of the G20 countries. These shortages are not necessarily just in areas relating to designing, developing, supporting or working with emerging digital, robotic and automation
technologies. Demographic changes, plus skills mismatches and shortages, feed into productivity issues at macro and organizational levels. Therefore, it is increasingly likely that despite the lack of attention given to the issue by most studies, major economies over the next 20 years are going to experience large productivity shortfalls even to maintain their present economic growth rates, let alone achieve their espoused growth targets. Automation and its productivity contribution may turn out to be a coping,
rather than a massively displacing phenomenon."

Qualifier 8 – exponential increases in work to be done

Information technology isn't just about automating existing work. Among other changes, it brings with it an explosion of available data, which needs to be managed, examined, stored, protected against cybersecurity threats, integrated with regulatory and legal requirements, and more. Willcocks writes: 

Consider how many organizations are self-reportedly at breaking point despite work intensification, working smarter and the application of digital technologies to date. Then reflect on how the exponential data explosion, the rise in audit, regulation and  bureaucracy and the complex, unanticipated impacts of new technologies are already interacting, and increasing the amount of work to be done, and the time it takes to get around to doing productive work. I would propose a new Willcocks Law to capture some of what is happening,  namely 'work expands to fill the digital capacity available'. Far from the headlines, a huge if under-analysed work creation scheme may well be underway, to which automation will only be a part solution.

Taking these factors together, it is not at all obvious that artificial intelligence, information technology, and robots are going to reduce the number of jobs. Instead, it seems more plausible that they will reshape jobs, potentially both for better and for worse. 

This issue of the Journal of Information Technology includes a set of short comments on the Willcocks paper. I was especially struck by the comments by Kai Riemer and Sandra Peter  in "The robo-apocalypse plays out in the quality, not in the quantity of work" (pp. 310–315). They point out some possible negative consequences of information technology in the workplace. For example,  if the "easier" tasks are automated, then the remaining human work tasks may be more difficult and less rewarding, and it may be harder for new workers to leap up the learning curve and gain experience. Jobs may have more pressure from automated oversight, with a corresponding pressures for more intense work and reductions in personal autonomy and human interaction. Information technology may also make alternative labor market arrangements like "gig" work more common, in a way that creates a group of less-secure jobs.  

On the other side, Marleen Huysman comments in "Information systems research on artificial intelligence and work: A commentary on "Robo-Apocalypse cancelled? Reframing the automation and future of work debate" (pp. 307-309): "By developing hybrid AI, tools will become our new assistants, coaches and colleagues and thus will augment rather than automate work."

The connecting thread here is that there is little doubt that technology will affect the nature of future jobs. But instead of focusing on a robo-apocalypse of losses in the number of jobs, we would probably be better served by focusing on changes in the qualities of jobs, and in particular on improving skill levels in ways that will help more workers to treat these technologies as complements for their existing work, rather than as substitutes. 

 -- via my feedly newsfeed

NYT Wants to Talk About Higher Wages, but Doesn’t Want to Talk About the Real Reasons Wages are Low [feedly]

I welcomed the NYT --  or anyone's --  call for higher wages. Dean adds the issue of super high salaries of CEOs, and the financial sector, and doc and lawyer professionals. The Times gives a sideswipe at collective bargaining ["workers stealing from each other" -- a complete pile of horseshit, in my experience]. Dean does not mention it. 

Weird, to me. If you do not empower collective bargaining, i.e., unionization, the laws of capitalism's worst tendencies will prevail over other reforms: inequality will not recede.

NYT Wants to Talk About Higher Wages, but Doesn't Want to Talk About the Real Reasons Wages are Low
http://feedproxy.google.com/~r/beat_the_press/~3/lYnD5bsNOKE/

It's good to see the New York Times making the case for higher wages in an editorial. Unfortunately, they get much of the story confused.

First off, the essence of the case is that higher wages will lead to more consumption, which will spur growth. This is true, but higher pay is not the only way to generate more demand. We also get more demand with larger budget deficits, lower interest rates, and a smaller trade deficit.

But that is the less important problem with the piece. The bigger problem is the assertion that the failure of pay to keep pace with productivity growth over the last four decades is due to higher profits.

"Wages are influenced by a tug of war between employers and workers, and employers have been winning. One clear piece of evidence is the yawning divergence between productivity growth and wage growth since roughly 1970. Productivity has more than doubled; wages have lagged far behind."

In fact, a rising profit share only explains about 10 percent of the gap between productivity growth and the median wage since 1979. The overwhelming majority of the gap is explained by rising high end wages — the money earned by CEOs and other top execs, high pay in the financial sector, the earnings of some workers in STEM areas, and high-end professionals, like doctors and dentists.

For some reason, the NYT never wants to talk about the laws and structures that allow for the explosion of pay at the top. This would include factors like our corrupt corporate governance structure, that essentially lets CEOs determine their own pay, a bloated financial sector that uses its political power to steer ever more money in its direction, longer and stronger patent and copyright monopolies, and protectionist barriers that largely shield our most highly paid professionals from both foreign and domestic competition. (Yes, this is all covered in Rigged [it's free].)

Readers can speculate on why these topics are almost entirely forbidden at the NYT, but if we want to be serious about addressing low wages, we have to look where the money is, and most of it is not with corporate profits. And, just to remind people why this matters, the minimum wage would be $24 an hour today if it had kept pace with productivity growth since 1968.

The post NYT Wants to Talk About Higher Wages, but Doesn't Want to Talk About the Real Reasons Wages are Low appeared first on Center for Economic and Policy Research.

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Xinjiang offers real-site photos to debunk satellite images ‘evidence’ of ‘detention centers’ [feedly]

Xinjiang offers real-site photos to debunk satellite images 'evidence' of 'detention centers'
http://www.ecns.cn/news/politics/2020-11-29/detail-ihaehypt7617374.shtml

The "detention center" (geographic coordinates: 38.8367N, 77.7056E) claimed by ASPI, is actually a gerocomium in Markit county, Kashi Prefecture, Xinjiang

Locations that had been marked as "concentration camps" by some Western media and an Australian institute were found to be administration buildings, nursing homes, logistics centers or schools, as Northwest China's Xinjiang Uygur Autonomous Region on Friday offered videos and photos to debunk accusations which used satellite images as "evidences."

For a long time, some Western media and institutes, especially the Australian Strategic Policy Institute (ASPI), have been keen on using satellite images as "evidence" for their claim of Xinjiang's expanding "concentration centers," a term that has been firmly opposed by Chinese authorities.

For example, in a report called "Documenting Xinjiang's Detention System" by ASPI, buildings with outer walls in Xinjiang were all considered as "detention centers."

"This is absurd. As a matter of fact, they [locations marked] are just civil institutions," Eljan Anayt, spokesperson of the Xinjiang regional government, told a press conference in responding to a question from CNN.

The "detention center" (geographic coordinates: 38.9950N, 77.6682E) claimed by ASPI, is actually an elementary school in Yantaq township, Markit county, Kashi Prefecture, Xinjiang

"The 'detention center' of Turpan city mentioned in the report is actually a local administrative building; the 'detention center' of Kashi is, in fact, local high school buildings. They are all marked on Google Maps, Baidu Maps, and I have photos of them," the spokesperson said, showing photos of these locations at the press conference.

Eljan said that those so-called "independent think tanks" like ASPI are not academic research centers, but anti-China tools manipulated by the US government.

The "detention center" (geographic coordinates: 39.8252N, 78.5501E) claimed by ASPI, is actually a logistics park in Bachu county, Kashi Prefecture, Xinjiang

ASPI has become an infamous institute for manipulating fake news to hype so-called forced labor in Xinjiang. It is also exposed to receive huge amount of money from the US and disgraced itself as being an anti-China tool for the US.

ASPI's "research" is simply subjective fabrications filled with preconceptions and hostility. Their sources and clues were either from American anti-China nongovernmental organizations, or some unverifiable and untraceable "eyewitness evidence," Eljan said, noting that the international community has also denounced such poor performance of confounding black and white and fabricating lies.

"I want to emphasize that Xinjiang is an open region, and there is no need to learn about it through satellite images. We welcome all foreign friends with objective, unbiased stance to come to Xinjiang and to know a real Xinjiang," the spokesperson said.

 -- via my feedly newsfeed

BizInsider: Amazon is expanding its logistics empire like never before to prepare for this holiday season — and it still may not be enough [feedly]

A tale of late stage monopoly capitalism -- a private corporation bigger than most nations, with footprints in a 100 nations, too big to fail -- esp in the pandemic. What to do? you can call out "nationalization". But who in the US govt can run Amazon

Amazon is expanding its logistics empire like never before to prepare for this holiday season — and it still may not be enough
https://www.businessinsider.com/amazon-logistics-empire-faces-toughest-challenge-black-friday-pandemic-holiday-2020-11?utm_source=feedly&utm_medium=webfeeds

The inside of an Amazon fulfillment center in Robbinsville, New Jersey on December 2, 2019.

REUTERS/Lucas Jackson/File Photo

• Amazon has massively scaled up its workforce and logistics network to respond to the surge in online shopping during the holiday season due to the pandemic.
• The e-commerce giant has hired more than 400,000 employees, grown its delivery fleet to include a total of 80 planes and 50,000 delivery trucks, and has expanded its warehouse space by more than 50%.
• But Amazon still faces some major challenges, including high worker turnover rates, capacity issues, and unknowns surrounding COVID-19.
• Visit Business Insider's homepage for more stories.

As Black Friday kicks off the holiday shopping season in the US, few companies have had to prepare quite like e-commerce and logistics giant Amazon.

An Amazon spokesperson told Business Insider the company is confident in the capacity it has added and its delivery speeds while still being able to keep employees safe.

But the unprecedented nature of the COVID-19 pandemic and its impact on online shopping means even with those preparations, Amazon's logistics empire will be in for one of its toughest challenges yet.

Amazon has built one of the world's largest logistics networks, currently operating 1,466 facilities globally that span more than 326 million square feet, according to logistics consulting firm MWPVL. A year ago, by MWPVL's count, those totals stood at 1,068 facilities and just shy of 249 million square feet.

The spokesperson told Business Insider that Amazon has expanded its logistics network square footage by around 50% this year.

That's before taking into account its vast fleet of delivery trucks and planes, and of course, workers — all of which have seen their numbers grow significantly this year.

The pandemic-fueled boom in online shopping is predicted to continue into the holiday shopping season — particularly in places like the US where the virus is still widespread and in-person shopping presents a more significant health risk. The National Retail Federation expects holiday sales this year will grow by as much as 5.2% this year even amid massive economic turmoil and a spike in unemployment.

Amazon's existing dominance in e-commerce has helped it benefit enormously from this trend: the company reported $96.1 billion in revenue during its third quarter, up 37% from the same quarter in 2019. But the increased demand has also driven up Amazon's costs, up 34% to $89.9 billion in those same time periods, including what it says have been around $4 billion in COVID-19 related costs this year.

Amazon's expanding footprint

Ahead of this holiday season, Amazon, as well as its delivery and shipping partners, sellers, and competitors, have had to scramble even harder to ramp up capacity than in previous years.

Between January and October, Amazon hired 427,300 workers, bringing its total global workforce to 1.2 million, The New York Times reported Friday. That's a 50% increase from the 798,000 workers Amazon employed as of December 31, 2019.

An Amazon spokesperson told Business Insider that it has hired around 250,000 workers within operations roles alone since February to deal with increased demand. On top of that, the company announced it's looking to bring on 100,000 seasonal workers this holiday season.

What's less clear is how many of those operational employees have stuck around. Multiple warehouse workers told Business Insider that it's rare to see coworkers last more than six months in the job due to the grueling conditions.

A recent investigation by Reveal found that the serious injury rate at Amazon's warehouses in 2019 was 7.7 per 100 employees, or "33% higher than in 2016 and nearly double the most recent industry standard," and that Amazon is aware of its safety issues and has misled the public on the topic. 

Frontline employees working for Amazon have repeatedly gone on strike, filed whistleblower complaints with regulators, and sued the company to draw attention to what they say are unsafe working conditions during the pandemic, and the company has admitted that at least 19,000 workers have tested positive for COVID-19.

"The turnover rate is ridiculous, like, I've never seen a turnover rate like that in my life," a longtime HR professional who worked at Amazon's fulfillment center in Charlotte, North Carolina, from April to September, told Business Insider, adding that her HR team was severely understaffed to handle the wave of new hires.

"It's tough to ramp up on such short notice with the [current] working environment and the ability for recruiting is very limited," SJ Consulting Group president Satish Jindel told Business Insider.

Amazon said that it has invested millions in pandemic safety measures and it values the health and safety of employees.

After struggling with widespread delays earlier in the pandemic and pushing Prime Day to October, Amazon has invested in additional logistics infrastructure as well.

Amazon has added "2,200 delivery trucks, further reducing dependence on other carriers, which are anticipating delays and increasing surcharges in November and December," according to a report from consulting firm Bain & Co.

An Amazon spokesperson said its delivery service partners operate more than 50,000 branded last-mile delivery vans, and that the company has leased 12 Boeing 767-300 cargo jets, bringing its fleet to more than 80.

"There's a lot of capacity that has been added. The question is, is that capacity going to show up on time, and is that going to be enough to deal with the volumes that all of these guys are expecting?" Morgan Stanley analyst Ravi Shanker told Business Insider.

"[Amazon has] been able to run at peak-season volumes for most of the year, which obviously is a pretty unprecedented situation," he said, adding that "historically, peak season has been a 30% to 40% volume boost versus the rest of the year. The question is, does that hold true this year as well, and I think that's the biggest unknown at this point."

Read more: This chart shows Amazon's one-day shipping has significantly rebounded, but many sellers still face long delays getting their own shipments to warehouses

Outsourcing, insourcing, last-mile

The true extent of Amazon's hiring spree and logistics ramp up — and whether it's ready for the holiday rush — is hard to know in part because of its dependence on third parties, such as its delivery service providers and other major shipping companies like UPS and FedEx, all of whom are facing their own capacity challenges.

"No matter how much Amazon is adding, they still have to rely on other people to provide drivers and trucks that are in short supply," said Jindel, the consultant for SJ Consulting Group.

Jindel told NBC News that UPS and FedEx are expecting shortfalls of 7 million packages per day.

Amazon has become increasingly self-reliant in recent years — MWPVL estimates it's on track to ship around 67% of orders through its own logistics network this year and eventually increase that to 85%, according to Bloomberg.

However, Cathy Robertson, founder and president of Logistics Trends and Insights, told Business Insider that she had "a bit of concern due to [Amazon's] recent press release encouraging customers to pick up packages from its hub locations/alternative pick-up locations."

"This tells me that they, like UPS and FedEx, are facing capacity issues which in turn will result in delays," she said.

Several Amazon merchants told Bloomberg earlier this week that some products are taking more than a week to deliver to US customers that would normally take one to two days, and that they've been forced to fulfill orders themselves out of a concern that Amazon's warehouses have hit capacity. 

"How well they move their own packages within their logistics network and how much they move in their network will be watched carefully," Robertson said.

Amazon has spent billions this year on adding last mile and delivery capacity, as well as increasing inventory closer to customers, a spokesperson told Business Insider.

Managing expectations

Jindel said shippers, sellers, and e-commerce companies alike have been trying to train consumers to shop earlier this year to avoid a backlog at the end of the year, and Jindel said that consumers are increasingly valuing predictable shipping times over speed.

Amazon customers are "perfectly okay with things taking two or three instead of one or two days," Jindel said, adding that "speed, while it's of value, people like to have it — predictability and certainty of when they're going to get it, that has equal value."

Amazon and other logistics companies have also had several months of operating at peak volume to help them prepare.

"Back in March, nobody knew what to expect. This was a completely new playbook and everyone was kind of floundering a little bit. Now, all these guys are going in eyes wide open," he said.

But ultimately, Shanker added, the biggest challenge Amazon faces "is the challenge that they and anybody else has faced all year, which is the fear of the unknown."

 -- via my feedly newsfeed

More Bad News About the Pandemic Recession: Longer Hours [feedly]

More Bad News About the Pandemic Recession: Longer Hours
http://feedproxy.google.com/~r/beat_the_press/~3/Lj_DFJTwGj8/

We know that the economy is likely to get worse in the immediate future as the pandemic is spreading out of control in most parts of the country. However, the latest data on average weekly hours indicates we may be facing a longer term issue that has not generally been anticipated.

In a normal recession we see both a loss of jobs and a reduction in hours for those who managed to keep their jobs. The shortening of hours is a better way for employers to deal with reduced demand for labor, since it keeps workers attached to their jobs. (This is the argument for worksharing as an alternative to unemployment.) However, in this recession we are actually seeing some lengthening of the average workweek, not the usual shortening.

The chart below compares the change in the average workweek from 2007 to 2009 and from 2019 to 2020. For 2020, I have used the most recent two months' data (September and October) to just take the period where the economy was operating at a level somewhat close to normal.

Source: Bureau of Labor Statistics and author's calculations.

As can be seen, we see a very different picture in the pattern of work hours between the two recessions. The average workweek for all employees, fell by 1.5 percent in the Great Recession. By contrast, it increased by 1.2 percent from 2019 to September and October of this year. Some of this was undoubtedly due to composition effects. In the Great Recession, like most recessions, construction and manufacturing were the hardest hit sectors. These sectors have longer average hours than most, so job loss in these sectors will automatically reduce the length of the average workweek.

To control for this, I have compared the change in average hours in the two recessions for production and non-supervisory workers in several major sectors. Starting with the overall average, the difference is even sharper. The drop in the Great Recession was 2.0 percent, compared to a 1.6 percent increase in the Pandemic Recession.

Looking at major sectors, there was a drop in the length of the average workweek of 3.0 percent in manufacturing in the Great Recession compared to 1.0 percent in this recession. This may be explained largely by the fact that manufacturing was much harder hit in the Great Recession.

This explanation doesn't fit for other sectors. Average hours fell by 1.1 percent in retail in the Great Recession, they rose by 2.2 percent in this recession. In the broad category of professional and business services, hours fell by 0.1 percent in the Great Recession, they have risen by 1.8 percent in this recession.

In education and health care, average hours fell by 1.0 percent in the Great Recession, they have risen by 1.9 percent in this recession. In the category leisure and hospitality, which includes hotels and restaurant workers, hours fell by 2.7 percent in the last recession, compared to a drop of just 0.2 percent in this recession. Hours in other services, which includes areas like laundry, gyms, and hair salons, fell by 1.4 percent in the Great Recession, they have risen by 1.9 percent in this recession.    

The rise in hours this recession is a really big deal because it accentuates the unemployment problem. To take the simple arithmetic, if the average workweek is 3 percent longer because of a change in employer behavior, with our pre-pandemic employment of roughly 150 million, that means 4.5 million fewer jobs given the same demand for labor. The real world will of course always be more complicated, but the basic story would apply. Longer hours means fewer jobs.

This is likely to matter not just for the immediate future when the pandemic limits employment in large areas of the economy, but also in the longer term, as we adjust to work structures that have been permanently altered as a result of the recession. As I have written elsewhere, the increase in telecommuting is likely to be enduring, meaning that there will be many fewer jobs serving a smaller population of commuters. 

One way of dealing with this reduction in employment opportunities is to have shorter workweeks/work years. Unfortunately, it seems we are now headed in the wrong direction.  

 

 -- via my feedly newsfeed

Profits over people: frontline workers during the pandemic [feedly]

Profits over people: frontline workers during the pandemic
https://economicfront.wordpress.com/2020/11/24/profits-over-people-frontline-workers-during-the-pandemic/

It wasn't that long ago that the country celebrated frontline workers by banging pots in the evening to thank them for the risks they took doing their jobs during the pandemic. One national survey found that health care workers were the most admired (80%), closely followed by grocery store workers (77%), and delivery drivers (73%). 

Corporate leaders joined in the celebration. Supermarket News quotedDacona Smith, executive vice president and chief operating officer at Walmart U.S., as saying in April:

We cannot thank and appreciate our associates enough. What they have accomplished in the last few weeks has been amazing to watch and fills everyone at our company with enormous pride. America is getting the chance to see what we've always known — that our people truly do make the difference. Let's all take care of each other out there.

Driven by a desire to burnish their public image, deflect attention from their soaring profits, and attract more workers, many of the country's leading retailers, including Walmart, proudly announced special pandemic wage increases and bonuses.  But as a report by Brookingspoints out, although their profits continued to roll in, those special payments didn't last long.

There are three important takeaways from the report: First, don't trust corporate PR statements; once people stop paying attention, corporations do what they want.  Second, workers need unions to defend their interests.  Third, there should be some form of federal regulation to ensure workers receive hazard pay during health emergencies like pandemics, similar to the laws requiring time and half for overtime work.

The companies and their workers

In Windfall Profits and Deadly Risks, Molly Kinder, Laura Stateler, and Julia Du look at the compensation paid to frontline workers at, and profits earned by, 13 of the 20 biggest retail companies in the United States.  The 13, listed in the figure below, "employ more than 6 million workers and include the largest corporations in grocery, big-box retail, home improvement, pharmacies, electronics, and discount retail." The seven left out "either did not have public financial information available or were in retail sectors that were hit hard by the pandemic (such as clothing) and did not provide COVID-19 compensation to workers."

Pre-pandemic, the median wages for the main frontline retail jobs (e.g., cashiers, salespersons, and stock clerks) at these 13 companies generally ranged from $10 to $12 per hour (see the grey bar in the figure below).  The exceptions at the high end were Costco and Amazon, both of which had a minimum starting wage of $15 before the start of the pandemic. The exception at the low end was Dollar General, which the authors estimate had a starting wage of only $8 per hour.  

Clearly, these companies thrive on low-wage work.  And it should be added, disproportionately the work of women of color.  "Women make up a significantly larger share of the frontline workforce in general retail stores and at companies such as Target and Walmart than they do in the workforce overall. Amazon and Walmart employ well above-average shares of Black workers (27% and 21%, respectively) compared to the national figure of 12%."

Then came the pandemic

Eager to take advantage of the new pandemic-driven business coming their way, all 13 companies highlighted in the report quickly offered some form of special COVID-19-related compensation in an effort to attract new workers (as highlighted in the figure below).  "Commonly referred to as "hazard pay," the additional compensation came in the form of small, temporary hourly wage increases, typically between $2 and $2.50 per hour, as well as one-off bonuses. In addition to temporary hazard pay, a few companies permanently raised wages for workers during the pandemic."

Unfortunately, as the next figure reveals, these special corporate payment programs were short-lived.  Of the 10 companies that offered temporary hourly wage increases, 7 ended them before the beginning of July and the start of a new wave of COVID-19 infections. Moreover, even with these programs, nine of the 13 companies continued to pay wages below $15 an hour.  Only three companies instituted permanent wage hikes.   While periodic bonuses are no doubt welcomed, they are impossible to count on and of limited dollar value compared with an increase in hourly wages.  So much, for corporate caring!

Don't worry about the companies

As the next figure shows, while the leading retail companies highlighted in the study have been stingy when it comes to paying their frontline workers, the pandemic has treated them quite well.  As the authors point out:

Across the 13 companies in our analysis, revenue was up an average of 14% over last year, while profits rose 39%. Excluding Walgreens—whose business has struggled during the pandemic—profits rose a staggering 46%. Stock prices rose on average 30% since the end of February. In total, the 13 companies reported 2020 profits to date of $67 billion, which is an additional $16.9 billion compared to last year.

Looking just at the compensation generosity of the six companies that had public data on the total cost of their extra compensation to workers, the authors found that the numbers "paint a picture of most companies prioritizing profits and wealth for shareholders over investments in their employees. On average, the six companies' contribution to compensating workers was less than half of the additional profit earned during the pandemic compared to the previous year."

This kind of scam, where companies publicly celebrate their generosity only to quietly withdraw it a short time later, is a common one.  And because it is hard to follow corporate policies over months, they are often able to sell the public that they really do care about the well-being of their workers.  That is why this study is important—it makes clear that relying on corporations to do the "right thing" is a losing proposition for workers.

 -- via my feedly newsfeed