Posts Tagged ‘Unemployment’
“Bureaucracy defends the status quo long past the time when the quo has lost its status”*…
… which is one of the reasons that they’re hard to update. Kevin Baker describes a 1998 visit to the IRS Atlanta Service Center and ponders its lessons…
… the first thing you’d notice would be the wires. They ran everywhere, and the building obviously hadn’t been constructed with them in mind. As you walked down a corridor, passing carts full of paper returns and rows of “tingle tables,” you would tread over those wires on a raised metal gangway. Each work area had an off-ramp, where both the wires and people would disembark…
… The desks were covered with dot matrix paper, cartons of files, and Sperry terminals glowing a dull monochromatic glow. These computers were linked to a mainframe in another room. Magnetic tapes from that mainframe, and from mainframes all over the country, would be airlifted to National Airport in Washington DC. From there, they’d be put on trucks to a West Virginia town of about 14,000 people called Martinsburg. There, they’d be loaded into a machine, the first version of which was known colloquially—and not entirely affectionately—as the “Martinsburg Monster.” This computer amounted to something like a national nerve center for the IRS. On it programs called the Individual Master File and the Business Master File processed the country’s tax records. These programs also organized much of the work. If there were a problem at Martinsburg, work across the IRS’s offices spanning the continent could and frequently did shut down.
Despite decades of attempts to kill it, The IRS’s Individual Master File, an almost sixty-year old accumulation of government Assembly Language, lives on. Part of this strange persistence can be pegged squarely on Congress’s well-documented history of starving the IRS for funding. But another part of it is that the Individual Master File has become so completely entangled in the life of the agency that modernizing it resembles delicate surgery more than a straightforward software upgrade. Job descriptions, work processes, collective bargaining agreements, administrative law, and technical infrastructure all coalesce together and interface with it, so that a seemingly technical task requires considerable sociological, historical, legal, and political knowledge.
In 2023, as it was in the 1980s, the IRS is a cyborg bureaucracy, an entangled mass of law, hardware, software, and clerical labor. It was among the first government agencies to embrace automatic data processing and large-scale digital computing. And it used these technologies to organize work, to make decisions, and to understand itself. In important ways, the lines between the digital shadow of the agency—its artificial bureaucracy—and its physical presence became difficult if not impossible to disentangle….
Baker is launching a new Substack, devoted to exploring precisely this kind tangle– and what it might portend…
This series, called Artificial Bureaucracy, is a long-term project looking at the history of government computing in the fifty-year period between 1945-1995. I think this is a timely subject. In the past several years, promoters and critics of artificial intelligence alike have talked up the possibility that decision-making and even governance itself may soon be handed over to sophisticated AI systems. What draws together both the dreams of boosters and the nightmares of critics is a deterministic orientation towards the future of technology, a conception of technology as autonomous and somehow beyond the possibility of control.
These visions mostly ignore the fact that the computerization of governance is a project at least seventy years in the making, and that project has never been determined, in the first instance or the last, primarily by “technological” factors. Like everything in government, the hardware and software systems that make up its artificial bureaucracy were and are subject to negotiation, conflict, administrative inertia, and the individual agency of its users.
Looking at government computing can also tell us something about AI. The historian of computing, Michael Mahoney has argued that studying the history of software is the process of learning how groups of people came to put their worlds in a machine. If this is right—and I think it is—our conceptions of “artificial intelligence” have an unwarranted individualistic bias; the proper way to understand machine intelligence isn’t by analogy to individual human knowledge and decision-making, but to methods of bureaucratic knowledge and action. If it is about anything, the story of AI is the story of bureaucracy. And if the future of governance is AI, then it makes sense to know something about its past…
Is bureaucracy the future of AI? Check it out the first post in Artificial Bureaucracy, from @kevinbaker@mastodon.social.
* Laurence J. Peter
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As we size up systems, we might recall that it was on this date in 1935 that President Franklin D. Roosevelt signed the Social Security Act. A key component of Roosevelt’s New Deal domestic program, the Act created both the Social Security program and insurance against unemployment.
“An imbalance between rich and poor is the oldest and most fatal ailment of all republics”*…
In a stark sign of the economic inequality that has marked the pandemic recession and recovery, Americans as a whole are now earning the same amount in wages and salaries that they did before the virus struck — even with nearly 9 million fewer people working.
The turnaround in total wages underscores how disproportionately America’s job losses have afflicted workers in lower-income occupations rather than in higher-paying industries, where employees have actually gained jobs as well as income since early last year.
In February 2020, Americans earned $9.66 trillion in wages and salaries, at a seasonally adjusted annual rate, according to the Commerce Department data. By April, after the virus had flattened the U.S. economy, that figure had shrunk by 10%. It then gradually recovered before reaching $9.67 trillion in December, the latest period for which data is available.
Those dollar figures include only wages and salaries that people earned from jobs. They don’t include money that tens of millions of Americans have received from unemployment benefits or the Social Security and other aid that goes to many other households. The figures also don’t include investment income…
The figures document that the vanished earnings from 8.9 million Americans who have lost jobs to the pandemic remain less than the combined salaries of new hires and the pay raises that the 150 million Americans who have kept their jobs have received.
The job cuts resulting from the pandemic recession have fallen heavily on lower-income workers across the service sector— from restaurants and hotels to retail stores and entertainment venues. By contrast, tens of millions of higher-income Americans, especially those able to work from home, have managed to keep or acquire jobs and continue to receive pay increases.
“We’ve never seen anything like that before,” said Richard Deitz, a senior economist at the Federal Reserve Bank of New York, referring to the concentration of job losses. “It’s a totally different kind of downturn than we’ve experienced in modern times.”
The figures also underscore the unusually accelerated nature of this recession. As a whole, both the job losses that struck early last spring and the initial rebound in hiring that followed have happened much faster than they did in previous recessions and recoveries. After the Great Recession, for example, it took nearly 2 1/2 years for wages and salaries to regain their pre-recession levels…
One reason why the job losses have had relatively little impact on the nation’s total pay is that so many of the affected employees worked part time. The average work week in the industry that includes hotels, restaurants and bars is just below 26 hours. That’s the shortest such figure among 13 major industries tracked by the government. The next shortest is retail, at about 31 hours. The average for all industries is nearly 35 hours.
The recovery in wages and salaries helps explain why some states haven’t suffered as sharp a drop in tax revenue as many had feared. That is especially true for states that rely on progressive taxes that fall more heavily on the rich. California, for example, said last month that it has a $15 billion budget surplus. Yet many cities are still struggling, and local transit agencies, such as New York City’s subway, have been hammered by the pandemic.
The wage and salary data also helps explain the steady gains in the stock market, which have been led by high-tech companies whose products are being heavily purchased and used by higher-income Americans, such as Apple iPads, Peloton bikes, or Amazon’s online shopping.
This week, the New York Fed released research that underscored how focused the job losses have been. For people making less than $30,000 a year, employment has fallen 14% as of December. For those earning more than $85,000, it has actually risen slightly. For those in-between, employment has fallen 4%…
Some companies have cut wages in this recession, but on the whole the many millions of Americans fortunate enough to keep their jobs have generally received pay raises at largely pre-recession rates. Some of those income gains likely reflect cost-of-living raises; the Commerce Department’s wage and salary data isn’t adjusted for inflation…
Truman Bewley, a retired Yale University economist who wrote a book about the concept of sticky wages, said that most companies have a key core of workers they rely on through hard times and are reluctant to cut pay for them.
And there’s another reason, Bewley said, why many companies cut jobs instead of pay. While researching his book, he said a factory manager told him why his company did so: “It gets the misery out the door.”
More at: “Sign of inequality: US salaries recover even as jobs haven’t.”
See also “More Than 33 Million Americans Have Filed for Unemployment During Coronavirus Pandemic.” source of the image above.
And to compare the U.S. to other countries, try this nifty interactive visualization.
* Plutarch
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As we examine equity, we might send foundational birthday greetings to Pierre le Pesant, sieur de Boisguilbert; he was born on this date in 1646. A French lawmaker and a Jansenist, he is best remembered as one of the inventors of the notion of an economic market– he championed free trade in opposition to Colbert‘s mercantilist views (which generated government revenues through duties and tariffs).
But he is also noteworthy as the champion of a single tax on each citizen (in lieu of all tariffs, customs, and other trade-related fees) that in some ways presaged Henry George‘s proposals.
“Since the nation is defined by its inherent virtue rather than by its future potential, politics becomes a discussion of good and evil rather than a discussion of possible solutions to real problems”*…
Nathan Tankus (@NathanTankus) put his undergraduate studies at John Jay College of Criminal Justice on hold to become a full-time economics writer and researcher (he is Research Director at The Modern Money Network). He has been a visiting researcher at the Fields Institute and a research assistant at the University of Ottawa. He has also written for the Review of Keynesian Economics, Truthout and the financial blog Naked Capitalism. But he’s perhaps best known for (and most closely-followed on) his newsletter Notes on the Crises, from whence…
The election has come and gone, a winner has been announced and now the fallout begins. While the details are still being hashed out, and president Trump along with most of the Republican party are not accepting the results (at least not yet), my interest is not so much in the near term partisan fights but the implications of what’s happened for the future of the Coronavirus Depression. To understand this, we must look to the results in the U.S. senate. What we find there is an exceedingly mixed result. Republicans have 50 seats, Democrats have 48 seats and the final results will come from two senate runoff elections in Georgia. Even if the Democrats win those two races, that thin margin would require each and every senator to agree to pass whatever they want to pass. As I said in my pre-election piece:
This means we could possibly go until February 2021 before seeing another economic package. Worse, that package may even require a Democratic senate to become law. It’s possible that even that scenario is optimistic — it could then take a significant amount of time for Democrats to agree on a package among themselves. What happens to millions upon millions of people in that agonizing waiting period? A winter filled with a third wave of Coronavirus and no economic support to individuals is a recipe for absolute disaster — over 200,000 Americans have already died.
Since I wrote this the third wave of Coronavirus has taken off and it seems more likely than ever that we will not have an economic package passed in February. In other words, I worry that fiscal cliffication is just going to intensify. Indeed, it’s hard to imagine anything being able to break it at this point. The 2022 midterms are a long time away and there is no guarantee that the outcome would break the deadlock. We’ll likely see some sort of package go through congress in 2021 but it will very likely not be timely as the most optimistic scenarios laid out above had hoped. Meanwhile, the need is no less…
There are some overly rosy possible scenarios circulating financial twitter that make reviewing the unemployment situation important. Headline unemployment is still elevated but it is no longer at the high levels of the spring. However, this hides the damage that is happening underneath. Headline unemployment has mostly been driven by the behavior of temporary layoffs… But the real damage is in the permanent job losses.
The distinction between temporary layoffs and permanent job losses is very underemphasized in economic reporting and has led to the underlying economic damage from being missed in a lot of economics coverage. My colleagues Alex Williams and Skanda Amarnath at Employ America did a great job of making this point in their piece “The Shock and The Slog” last month. While there has been a lot of recovery in temporary layoffs, there has been a steady increase in permanent layoffs and it will likely keep on increasing as more businesses shutter and the effects of expanded benefits start filtering through the economy (and our economic data). It’s also important to emphasize that labor force participation of individuals 15-64 has only partially recovered from a very steep drop, which makes headline unemployment appear rosier than it is.
Worse still, the third wave of Coronavirus is in full swing. New York City schools could be shut as early as Monday, and indoor dining should probably already be shut. This second wave of shutdowns will be more economically harmful than the first wave because any savings they had were exhausted by the first wave and it is most likely that most affected businesses have already exhausted their access to credit (and perhaps even their willingness to take on more debt). It’s likely that the second wave of shutdowns will accelerate permanent job losses while the temporary job losses generate renewed drops in demand. In other words, the economic situation has still been deteriorating and it will likely get hammered at a time where fiscal support is, at best, months away.
In this context, the only game left in town is the Federal Reserve. Taking on responsibility for state and local governmental responses is the last thing that the Federal Reserve wants to do. However, the Federal Reserve has a mandate to to pursue maximum employment and price stability and meeting its maximum employment mandate requires it to use the tools it has available to do so…
Why the Fed is the last, best hope against post-Corona economic devastation and how that might work: “What is the Future of Fiscal Policy Now That the Election is Over?“
* “In the politics of eternity, the seduction by a mythicized past prevents us from thinking about possible futures. The habit of dwelling on victimhood dulls the impulse of self-correction. Since the nation is defined by its inherent virtue rather than by its future potential, politics becomes a discussion of good and evil rather than a discussion of possible solutions to real problems. Since the crisis is permanent, the sense of emergency is always present; planning for the future seems impossible or even disloyal. How can we even think of reform when the enemy is always at the gate?” – Timothy Snyder, On Tyranny: Twenty Lessons from the Twentieth Century
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As we muse on Modern Monetary Theory, we might recall that it was on this date in 1994 that Noel Edmonds appeared on BBC television to announce the winning numbers in the first UK National Lottery. the draw was 30, 3, 5, 44, 14 and 22; the bonus was 10; and seven jackpot winners shared a prize of £5,874,778.
“Everybody’s talkin’ about hard times / Like it just started yesterday”*…
Humanity is richer than it has ever been. We live longer than we ever have; people have access to an endless supply of culture, knowledge, and consumer goods, all from a small device in their pocket. So why are we all so pissed off all the time?
That’s the question political economist Mark Blyth and hedge fund manager Eric Lonergan tackle in their recent book, Angrynomics, which examines the economic roots of rising personal stress and growing popular anger. Blyth and Lonergan look at the transformations of our daily lives and the larger economy over the past 40 years, from the deregulation of finance to the rise of big tech, and explain why these steps that have added to GDP have come at the expense of personal stability. What’s pitched as bringing flexibility and dynamism to the economy has translated into constant economic uncertainty for most people, which breeds anxiety and stress, and thus anger…
A conversation with co-author (and Brown University political economist) Mark Blyth (@MkBlyth) about why the economy has made us pissed off at everything: “We’re All Mad As Hell, Thanks to Late Capitalism.”
* Prince, “Ol’ Skool Company”
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As we work to lower the heat, we might recall that it was on this date in 1933 that President Franklin D. Roosevelt announced the Civil Works Administration. Intended as a short-term agency charged quickly to create jobs for millions of unemployed Americans through the hard winter of 1933–34, it was closed in March of 1934– having provided work for 4 million workers who laid 12 million feet of sewer pipe and built or improved 255,000 miles of roads, 40,000 schools, 3,700 playgrounds, and nearly 1,000 airports.
CWA was effectively replaced by the Works Progress Administration (WPA), which operated on a much larger scale. Almost every community in the United States had a new park, bridge or school constructed by the agency.
Pity the poor photographers…
In this photo illustration a Lego shark chomps down on a Lego figure holding a Greek flag as other figures holding an Italian (L), Portuguese (C) and Spanish flag look on over a sea of Euro coins on September 27, 2011 in Berlin, Germany. Europe is continuing to wrestle with the ominous prospect of a Greek debt default that many fear could spread panic and push the already fragile economies of Italy, Portugal and Spain into a Eurozone crisis with global repercussions. (Photo by Sean Gallup/Getty Images)
The Greeks aren’t the only ones sick of the euro crisis. Photographers are reaching the end of their tether too, struggling to shoot images of euro coins in various states of distress to illustrate the story. Though some of the photos are absurd, they still get published — because news outlets are equally desperate…
Read the whole sad story in “Photographer Fatigue: The Absurd Quest for Euro Crisis Images” in Spiegel Online.
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As we reach for our hankies, we might recall that it was during this month in 1930 that over 6,000 unemployed New Yorkers took to street corners selling apples at five cents apiece. As Herbert Hoover unhelpfully observed, “Many persons left their jobs for the more profitable one of selling apples.”
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