Driverless cars will lead to increased worker productivity

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Dan Neil writes about the inevitability of driverless cars and brings up an interesting benefit: Americans will suddenly have more time on their hands.

The one brilliant part of the U.S. economic profile is productivity. It turns out, Americans are a little nutty when it comes to work.

If autonomy were fully implemented today, there would be roughly 100 million Americans sitting in their cars and trucks tomorrow, by themselves, with time on their hands. It would be, from an economist’s point of view, the Pennsylvania oil fields of man-hours, a beautiful gusher, a bonanza of reverie washing upon our shores.

In the history of human civilization, has there ever been a society to offer so much uninterrupted head space to so many? Europe’s medieval monastic tradition created scholars, true, but only a relative handful…

It’s possible that all these suddenly idle driver/passengers will waste their gift, texting, watching TV or worse. But many of them, like me, would beaver into work, happy to get a jump on the day.

And here’s the best part. I always get my best ideas in the car—in solitude, watching the unwinding of the road, hearing the thrum of the tires. You know that space, right?

Hurray – more time to work! Neil might be excited about this but I first think of all the opportunities for mixing the boundaries of home and work even further. Thinking more broadly, is productivity something we want to continue to chase as a society? Do Americans really need to be working more?

On the other hand, this could be a big boon for several sectors. Think about media companies: Americans would then have on average something like 40-60 minutes more per day to consume television shows, websites, podcasts, music, etc. Or perhaps it could give rise to all sorts of services and car add-ons; I’m thinking of the Honda Odyssey commercials from a while back showing moms going to the minivan to relax and get a facial.

 

Brookings: who reaches middle-class affected by race, family’s social class, gender

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A new report from the Brookings Institution examines who makes it to the middle class through achieving a number of benchmarks. A summary of the findings:

The study breaks life down into stages (for instance, adolescence) and gives benchmarks for each of those stages (in that case, graduation from high school with a grade-point average above 2.5, no criminal convictions and no involvement in a teenage pregnancy).

They then studied children over time, analyzing whether they met those benchmarks and projecting whether they would make it to the middle class — defined as the top three quintiles of income — by age 40.

Unsurprisingly, the researchers found that success seems to beget success — meeting each benchmark makes one more likely to meet the next. Moreover, the effect accumulates. A child who meets all the criteria from birth to adulthood has an 81 percent chance of being middle class. A child who meets none has only a 24 percent chance…

Race matters as well. About two in five black adolescents met the benchmark of graduating from high school with a decent grade point average, no children and no criminal record by the age of 19. About two in three white adolescents did.

And from the introduction of the Brookings report:

The reality is that economic success in America is not purely meritocratic. We don’t have as much equality of opportunity as we’d like to believe, and we have less mobility than some other developed countries. Although cross-national comparisons are not always reliable, the available data suggest that the U.S. compares unfavorably to Canada, the Nordic countries, and some other advanced countries. A recent study shows the U.S. ranking 27th out of 31 developed countries in measures of equal opportunity.

People do move up and down the ladder, both over their careers and between generations, but it helps if you have the right parents. Children born into middle-income families have a roughly equal chance of moving up or down once they become adults, but those born into rich or poor families have a high probability of remaining rich or poor as adults. The chance that a child born into a family in the top income quintile will end up in one of the top three quintiles by the time they are in their forties is 82 percent, while the chance for a child born into a family in the bottom quintile is only 30 percent. In short, a rich child in the U.S. is more than twice as likely as a poor child to end up in the middle class or above.

This shouldn’t be too surprising: despite the American cultural emphasis on working hard and getting ahead (a story told by both political parties at their 2012 conventions), certain traits increase the likelihood of achieving a middle-class life. Hard work only goes so far; other social factors such as family background, race, and gender make a difference.

I am intrigued by how the report defines the middle-class life stages as defined by the Social Genome Model (p.3-4 of the report):

1. Family Formation. Born at normal birth weight to a non-poor, married mother with at least a high school diploma.

2. Early childhood. Acceptable pre-reading and math skills AND behavior generally school-appropriate.

3. Middle childhood. Basic reading and math skills AND Social-emotional skills.

4. Adolescence. Graduates from high school w/GPA >= 2.5 AND Has not been convicted of a crime nor become a parent.

5. Transition to adulthood. Lives independently AND Receives a college degree or has a family income >= 250% of the poverty level.

6. Adulthood. Reaches middle class (family income at least 300% of the poverty level).

Why exactly these stages?

Hit by the recession: “Architecture revenue down 40% since 2008”

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Amongst those hit hard by the economic crisis and the downturn in the housing and building industries, don’t overlook architects:

Between 2008 and 2011, gross revenue at architecture firms fell from over $44 billion to $26 billion. More than 28 percent of positions disappeared…

Architecture is dependent on construction, which is notoriously cyclical – usually three or four times more volatile than the market, says Kermit Baker, the AIA’s chief economist and a professor at the Harvard Graduate School of Design. “It’s been devastating,” he says. “Construction activity has been down 50 or 60 percent – architecture has a long tradition of trying to survive the construction cycle, and it’s extremely challenging because architecture firms are by and large small- and medium-size firms.”…

But the highly competitive market has also encouraged innovation. The percentage of architectural firms that employ LEED-accredited professionals has doubled since 2008, from one-third of all firms to two-thirds. Baker, who helped prepare the report, says sustainable design is a way for firms to distinguish themselves in a crowded field. But it also demonstrates a larger, permanent shift toward environmental awareness…

Particularly in small practices, architecture firms are expanding their range, fostering talents in interior design, construction, or environmental planning. Again, this multidisciplinary shift reflects a desire to compete in a crowded market, but it also speaks to a larger trend toward “one-stop-shop” firms where clients can find everything they need. Progressives have been advocating closer contact between design professionals for ages, and the recession has made it pay off.

Even before the recession, relatively few homes were constructed with the aid of architects.

Thinking more broadly, economic prosperity and hardship leads to changes in the more cultural aspects of society. In response to these changes, architects have expanded into two areas, sustainability and design, which could lead to different kinds of buildings in the years to come.

Sociological concepts that help explain why some companies are telling employees to avoid work email at home

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Some companies are telling their employees to not check their work email at home:

In recent years, one in four companies have created similar rules on e-mail, both formal and informal, according to a recent survey by the Society for Human Resource Management. Firms trying out these policies include Volkswagen, some divisions of PricewaterhouseCoopers and shipping company PBD Worldwide.

For the vast majority of companies and federal offices, the muddying of work and personal time has had financial advantages. Corporations and agencies, unable to hire, are more productive than ever thanks in part to work-issued smartphones, tablets and other mobile technology, economists say…

“There is no question e-mail is an important tool, but it’s just gone overboard and encroached in our lives in a way where employees were feeling like it was harder and harder to achieve a good balance,” said Robert Musslewhite, chief executive of the Advisory Board, a health and education research and software-services firm.

Official numbers show just one in 10 people brings work home, according to a Labor Department report in 2010. But economists say that figure is wildly conservative because it counts only those who are clocking in those hours for extra pay.

Three sociological ideas shed some light on this:

1. This increased level of stress might be due to the mixing of the front-stage and back-stage performances of employees. Sociologist Erving Goffman wrote about these two settings, the first where we play a role, in this case as employee, and this requires emotional and physical energy. In the latter setting, we can let down our guard. Checking work email at home means this back-stage setting is interrupted.

2. This reminds me of the work by sociologist Christena Nippert-Eng on the symbolic boundaries between home and work. We place home and work in certain mental categories and so crossing these boundaries can create some difficulties. Sociologist Ray Oldenberg suggested another way around these two symbolic boundaries: we need “third places” like coffee shops and pubs where workers can relax and interact with other citizens in settings distinct from work and home.

3. A few centuries ago, more average citizens may have mixed home and work as people worked in their homes or very near by. It wasn’t until the industrial era that more employees had to travel further to their workplaces, creating a larger physical difference between home and work that also translated into more symbolic difference. Perhaps this story about email is a reminder that at this point in history we are swinging back to mixing  home and work because of technology that transcends physical boundaries.

Response to economic crisis: Irish government cutting support of homeownership

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A conference on housing in Ireland suggests the Irish government is reversing course and will no longer be supporting homeownership:

STATE SUPPORT for the principle of home ownership is at an end after almost 100 years, a national housing conference has heard.

Encouraging people to buy their homes had been seen by the State as a social good, as well as an economic one, but there was now a definite shift in policy, UCD sociology professor Tony Fahey said.

Tenant purchase schemes were dying out and local authorities were no longer offering loans to private buyers. The policy now is households need to be assisted by the State if they can’t afford to rent, not if they can’t afford to buy.

“It had been an article of faith for almost 100 years that home ownership was a social good and should be supported by the State . . . The historic roll the State played in putting up capital for housing won’t be repeated.”

Americans tend to think we are a nation of homeowners but there are several countries that have higher rates of homeownership. Ireland is one such country:

The highest home ownership is in Romania (96pc), followed by Lithuania (91pc), Hungary (89pc), Slovakia (89pc), Estonia (87pc), Latvia (87pc), Bulgaria (87pc), Norway (85pc), Iceland (84pc), Spain (83pc), Slovenia (81pc), Malta (79pc), Czech Republic (77pc) and Greece (76pc).

Ireland comes in at 73.7pc, while 70pc of people in the UK own their own homes.

Irish home ownership levels have dropped from a high of 79pc in the 1990s to just short of 74pc at the start of this century, according to a new book on the economy, ‘Sins Of The Father’ by Conor McCabe.

Ireland is now facing the consequences of a burst housing bubble in the last few years.

While Ireland is facing their own issues, I wonder if the US government might make a similar shift or at least pull back from supporting homeownership through public policy and government rhetoric. Thus far, it doesn’t look like this has happened much. But, if the mortgage interest deduction disappears and/or younger Americans continued to avoid buying homes, perhaps things could change quite a bit here as well.

However, even if the policies changed, this doesn’t necessarily mean the cultural value of homeownership will change quickly.

Americans react to economic prosperity by moving more?

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Amidst a number of supposed indicators of economic recovery, I found one to be particularly interesting: there was a slight uptick in mobility in 2011.

As a whole, Americans were slowly finding ways to get back on the move. About 12 percent of the nation’s population, or 36.5 million, moved to a new home, up from a record low of 11.6 percent in 2011.

Among young adults 25 to 29, the most mobile age group, moves also increased to 24.6 percent from a low of 24.1 percent in the previous year. Longer-distance moves, typically for those seeking new careers in other regions of the country, rose modestly from 3.4 percent to 3.8 percent.

I have always found American mobility numbers fascinating. In a record low year for mobility (2011), more than 1 in 10 Americans moved. Even though longer-distance moves are less frequent, even moving between residences can often be a big task.

And this story hints that some of this mobility is due to choice; when economic times are bad like in recent years, mobility is decreased but when the economy improves, people have more opportunities to move. If this is indeed the case and we take the argument further, could we suggest Americans celebrate economic prosperity and success by being less rooted and moving more?

With the rise of single-person households, why would Money magazine report family income for their best places to live?

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I was recently looking at Money‘s 2012 list of the 2012 Best Places To Live and noticed something strange: they report family income and not household income. For example, look at the figures for Naperville, Illinois, #53 on the list (how Naperville has fallen so far on this list after being very near the top less than 10 years ago is another topic for another day): the median family income is $123,511.

Why does this matter? The median family income is generally higher than the median household income because the first only counts households with relatives living together while the second can include single-person households (as well as households with roommates and non-relatives.) This is not a small issue: tied for the most common household type in the United States today is the single-person household.

According to 2011 census data, people who live alone–nearly 33 million Americans–make up 28% of all U.S. households, which means they are now tied with childless couples as the most prominent residential type, more common than the nuclear family, the multigenerational family and the roommate or group home. These aren’t just transitional living situations: over a five-year period, people who live alone are more likely to remain in their current state than anyone else except married couples with children.

Perhaps Money‘s readers are primarily in family households but this still skews the data for the best place to live. Perhaps the feature should really be called the “Best Places for Families to Live”?

(Note: there is another issue for Naperville. The population in Money is listed at 152,600 while the Census reports a 2011 estimate of 142,773.)

Selecting a 4 digit pin code is hardly random

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There are 10,000 possible pin codes that could be made with four digits (0-9) but what pins we select to use are hardly random:

What he found, he says, was a “staggering lack of imagination” when it comes to selecting passwords. Nearly 11% of the 3.4 million four-digit passwords he analyzed are 1234. The second most popular PIN in is 1111 (6% of passwords), followed by 0000 (2%). (Last year SplashData compiled a list of the most common numerical and word-based passwords and found that the “password” and “123456” topped the list.)

Berry says that a whopping 26.83% of all passwords could be guessed by attempting just 20 combinations of four-digit numbers (see first table). “It’s amazing how predictable people are,” he says…

Many of the commonly used passwords are, of course, dates: birthdays, anniversaries, the year you were born, etc. Indeed, using a year, starting with 19__ helps people remember their code, but it also increases its predictability, Berry says. His analysis shows that every single 19__ combination be found in the top 20% of the dataset…

Somewhat intriguing was #22 on the most common password list: 2580. It seems random, but if you look at a telephone keypad (or ATM keypad) you’ll see those numbers are straight down the middle — yet another sign we’re uncreative and lazy password makers…

The least-used PIN is 8068, Berry found, with just 25 occurrences in the 3.4 million set, which equates to 0.000744%. (See the second table for the least popular passwords.) Why this set of numbers? Berry guesses, “It’s not repeating pattern, it’s not a birthday, it’s not the year Columbus discovered America, it’s not 1776.” At a certain point, these numbers at the bottom of the list are all kind of “the lowest of the low, they’re all noise,” he says.

This is a great example of two things:

1. There are often patterns among supposedly “random” numbers.

2. Humans don’t particularly like to use “random” numbers but instead prefer numbers that are meaningful to them (which corresponds with them being able to remember their codes).

Moving poor families to better neighborhoods doesn’t improve jobs, education but does boost happiness

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A new study suggests happiness is one of the primary benefits of poor families moving to better neighborhoods:

When thousands of poor families were given federal housing subsidies in the early 1990s to move out of impoverished neighborhoods, social scientists expected the experience of living in more prosperous communities would pay off in better jobs, higher incomes and more education.

That did not happen. But more than 10 years later, the families’ lives had improved in another way: They reported being much happier than a comparison group of poor families who were not offered subsidies to move, a finding that was published on Thursday in the journal Science.

And using the gold standard of social surveys — the General Social Survey, in which researchers have questioned thousands of Americans of all income levels going back to the 1970s — researchers even quantified how much happier the families were. The improvement was equal to the level of life satisfaction of someone whose annual income was $13,000 more a year, said Jens Ludwig, a professor of public policy at the University of Chicago and the lead author of the study…

“Mental health and subjective well-being are very important,” said William Julius Wilson, a sociology professor at Harvard whose 1987 book “The Truly Disadvantaged” pioneered theory about concentrated poverty. “If you are not feeling well, it’s going to affect everything — your employment, relations with your family.”

This seems to fit with findings from other studies looking at programs like the Gautreaux Program in Chicago or the Moving to Opportunity program that took place in a few big cities. The children of these movers/participants may have better jobs, incomes, and educations down the road but there is not much of an immediate payoff in these areas.

It is too bad Wilson doesn’t go further with his comments. What exactly does better well-being translate into? Improved or more stable family life? Better social relations? Could improved well-being translate into better jobs and higher education down the road?

In 2011, poverty continued to increase in the suburbs

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Here is some data about how poverty is growing in a number of American suburbs:

By 2011, 30 million residents in the nation’s 100 largest metro areas lived below the federal poverty line. That represents an increase of 1.7 million people over 2010, or a growth rate of 5.9 percent. As in previous years, that growth skewed toward suburbs. Suburban communities in the nation’s largest metro areas saw the poor population grow by 6.8 percent compared to a 4.7 uptick in cities, and accounted for almost two-thirds of the increase in the metropolitan poor population (63.4 percent). As was the case in 2010, 55 percent of the metropolitan poor lived in suburbs in 2011, which translates to 2.6 million more poor residents in suburbs than in cities.

The slowing of poverty’s upward trajectory signals a promising—if stubbornly slow—response to the recovery that began to take hold in the wake of the Great Recession, though the soft job market that has prevailed since the recession ended and the unevenness of that recovery can be seen in other troubling income trends. Between 2010 and 2011, 25 of the nation’s largest metro areas experienced a significant increase in income inequality (as measured by the Gini index), compared to 11 regions the year before. Increasing inequality affected a diverse array of regions, from metropolitan Atlanta, Chicago, and San Francisco to Kansas City, St. Louis, and Louisville. In each of these regions, inequality grew alongside rising poverty and falling incomes.

I am most interested in one trend mentioned above: the growing poverty numbers in suburbs. Not only did the poverty rate increase more in suburbs than in cities, there now over 2.5 million more poor residents in suburbs than in cities.

Of course, the growing number of poor people in suburbs are probably not evenly distributed across suburbs (or perhaps even metropolitan regions). I would guess that inner-ring suburbs have higher poverty as do working-class suburbs. How much have declining incomes and persistent unemployment hurt wealthy suburbs?