“…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
“Unintended Consequences offers deep and well-argued analyses on almost every issue.” - The New York Times
“…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
“Unintended Consequences should be read by anyone who takes for granted the superiority of progressive taxation and has not thought carefully about the trade-offs involved.” - The New Republic
“…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
“…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
“A full-throated defense of economic dynamism.” - The Wall Street Journal
“There are an amazing number of good ideas and interesting points made in Unintended Consequences. The thinking underlying it, and the obvious depth of understanding of the author, are very impressive.” - Steven Levitt, coauthor of Freakonomics; 2004 John Bates Clark Medal
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
“…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
AI Summary.Administrative tax data show that entrants to the taxi and limousine services industry after online ridesharing platforms appeared were more likely to be young, female, White, and U.S.-born, and to combine driving income with wage and salary jobs. Average net earnings of entrants fell to $2,110, consistent with driving being used to supplement income.
Katharine Abraham, John Haltiwanger, Claire Hou, et al.National Bureau of Economic Research
Date Posted:
From 2013-2019, drivers in the taxi/rideshare industry grew six-fold to 1.3mm. The mean entrant in 2016 had net earnings of just $2,110, as the share of drivers supplementing other wage and salary earnings rose from <20% in 2011 to over 70% in 2015.
How did ridesharing platforms change who drives and what they earn?
Core argument: Average net earnings of entrants to the Taxi and Limousine Services industry (NAICS 4853) fell to $2,110 by 2016, while 2011 nonemployer incumbents averaged $12,290 in net earnings (in 2015 dollars), according to administrative tax data.
Using administrative tax data, we explore the effects of the introduction of online ridesharing platforms on entry, employment, and earnings in the Taxi and Limousine Services industry [NAICS 4853]. New entrants were more likely to be young, female, White, and U.S. born, and to combine earnings from ridesharing with wage and salary earnings. The first two panels of Figure 4 display the gross receipts and net earnings of the 2011 NAICS 4853 nonemployer incumbents and of entrants to the industry. Incumbents had net earnings that averaged just $12,290 (in 2015 dollars) in 2011. Beginning in 2013, the net earnings of NAICS 4853 entrants began to fall off sharply. By 2016, the average NAICS 4853 entrant had net earnings of just $2,110. The decline in average nonemployer earnings and increased propensity to combine nonemployer self-employment with a wage and salary job among NAICS 4853 entrants are consistent with earlier findings that many app-based drivers use driving to supplement or smooth their earnings rather than as a primary source of income
Takeaways by Macro Roundup® AI
Average net earnings of entrants to the Taxi and Limousine Services industry (NAICS 4853) fell to $2,110 by 2016, while 2011 nonemployer incumbents averaged $12,290 in net earnings (in 2015 dollars), according to administrative tax data.
Entrants to NAICS 4853 following the introduction of online ridesharing platforms were more likely to be young, female, White, and U.S. born, and to combine ridesharing earnings with wage and salary earnings.
The decline in average nonemployer earnings and the greater propensity of NAICS 4853 entrants to pair self-employment with a wage and salary job are consistent with earlier findings that many app-based drivers drive to supplement or smooth earnings rather than as a primary income source.
Related Articles:
Consumer Morsel: The Gig Is Up – In A Good Way— Bank of America internal data show the share of its customers receiving income from gig platforms reached 3.8% on a three-month moving average, above the prior peak, after stalling and then resuming an uptrend. Ridesharing has driven the increase and is now the largest gig category, while social commerce and delivery shares have moderated.
AI Summary.Survey data show 6.30% of US workers who switched to remote work after the pandemic moved states, compared with 3.58% of those who kept commuting, and plausibly exogenous changes in employer remote-work policies predict both higher remote work and higher interstate migration. Remote workers staying with the same employer are more likely to move states.
Alexander Bick, Adam Blandin, Karel Mertens, et al.Federal Reserve Bank of St. Louis Working Papers
Date Posted:
Is Database:
Database
The rise in the work-from-home share accounts for more than half of the rise in overall interstate migration since 2019, and states with greater WFH opportunities experienced more out-migration.
Does remote work increase interstate migration?
Core argument: In the Real-Time Population Survey, 6.30% of workers who switched to work from home after Covid moved states since February 2020, compared with 3.58% of workers who commuted both before and after Covid.
In the American Community Survey (ACS), annual interstate migration [AIM] among adults ages 18-64 fell from 2.75% in 2005 to 2.23% in 2010. AIM rose from 2.40% in 2019 to 2.66% in 2022. Data from the Real-Time Population Survey (RPS) provide micro evidence that access to WFH increases interstate migration. [Fig. 4 shows] that 6.30% of workers who switched to WFH post-Covid moved states since February 2020, [compared to] 3.58% of workers who commuted both pre- and post-Covid. A potential concern [is]that the pandemic increased the desire to move across states and a large share of these moves involve WFH, but WFH itself was not necessary for those moves to happen [and thus not causal]. Using novel questions in the RPS - whether workers who commuted prior to the pandemic did so due to job characteristics, personal preferences, or employer requirements, and whether employer WFH policies had changed since 2020 - we find that plausibly exogenous changes in employer WFH policies predict higher rates of WFH and higher rates of interstate migration. Finally, consistent with the interpretation that WFH reduces the benefit of living near a workplace, we find that (i) among workers who remain with their pre-pandemic employer, WFH workers are more likely to move states, and (ii) among workers who move states WFH workers are less likely to change employers.
Takeaways by Macro Roundup® AI
In the Real-Time Population Survey, 6.30% of workers who switched to work from home after Covid moved states since February 2020, compared with 3.58% of workers who commuted both before and after Covid.
Annual interstate migration among U.S. adults ages 18–64 in the American Community Survey fell from 2.75% in 2005 to 2.23% in 2010, then rose from 2.40% in 2019 to 2.66% in 2022.
Plausibly exogenous changes in employer work-from-home policies predict higher rates of work from home and higher rates of interstate migration; among workers staying with pre-pandemic employers, those working from home are more likely to move states.
Related Articles:
Working From Density— Within the same metropolitan-area income quartile, denser neighborhoods have a higher share of jobs that can be done remotely. The authors argue this pattern suggests increased telework raises willingness to pay for housing in high-density places, where leisure amenities and nonwork social interaction are more available.
Remote Work Is Less Common Than We Thought— New Bureau of Labor Statistics estimates show hybrid remote work is substantially less common than other surveys indicated, while fully remote work matches other estimates at about one in ten workers, making fully remote slightly more common than hybrid. Nearly one in five college-educated workers are fully remote, and nearly 40% of advanced-degree holders work hybrid or fully remote.
Remote Work, Three Years Later— Remote work has reduced office utilization but not yet office occupancy, because most firms are locked into long-duration leases. Baseline estimates suggest remote work will exert 0.8 percentage points of upward pressure on the office vacancy rate near-term, 2.3 more over the following five years, and 1.8 thereafter.
AI Summary.Cultural individualism accounts for about one-third of cross-country differences in working from home, with the shift from the lowest-individualism country (Taiwan) to the highest (the US) associated with 0.7 more fully paid work-from-home days per week, and 1.1 more among college graduates. The authors find individualism explains more of this variation than industry mix, population density, or lockdown stringency.
Pablo Zarate, Mathias Dolls, Steven Davis, et al.National Bureau of Economic Research
Date Posted:
Is Database:
Database
A measure of individualism accounts for about 1/3 of the cross-country variation in work-from-home rates, with WFH most prevalent in the Anglosphere and least in Asia. @PabloZarate98 @I_Am_NickBloom @Jose_MariaRD @cevatgirayaksoy
Does culture explain why working from home varies across countries?
Core argument: Cultural factors, specifically Individualism, account for about one-third of cross-country differences in work from home, with the move from Taiwan's lowest Individualism score to the highest in the US associated with 0.7 more full paid WFH days per week.
We examine how work from home varies across countries and across US workers. Our key finding is that cultural factors – specifically Individualism – account for about one-third of the differences across countries. Figure 3 shows the bivariate relationship between individualism and WFH. Moving from the country with the lowest Individualism score (Taiwan) to the one with the highest (the US) is associated with 0.7 more full paid WFH days per week (1.1 among college graduates). Individualism explains far more of the variation than industrial composition, population-weighted density, or lockdown stringency. Across US workers, industry and population density are the two most important determinants. But cultural factors are still statistically significant. Respondents who reside in counties that voted for Joe Biden in 2020 by a larger margin WFH at higher rates even after accounting for industry, state-level wages, population density, and a battery of demographics.
Takeaways by Macro Roundup® AI
Cultural factors, specifically Individualism, account for about one-third of cross-country differences in work from home, with the move from Taiwan's lowest Individualism score to the highest in the US associated with 0.7 more full paid WFH days per week.
Among college graduates, the gap between the lowest- and highest-Individualism countries is associated with 1.1 more full paid WFH days per week, and Individualism explains far more variation than industrial composition, population-weighted density, or lockdown stringency.
Across US workers, industry and population density are the two most important determinants of working from home, while respondents in counties that voted for Joe Biden in 2020 by larger margins work from home at higher rates even after accounting for industry, state-level wages, density, and demographics.
Related Articles:
Remote Work, Three Years Later— Remote work has reduced office utilization but not yet office occupancy, because most firms are locked into long-duration leases. Baseline estimates suggest remote work will exert 0.8 percentage points of upward pressure on the office vacancy rate near-term, 2.3 more over the following five years, and 1.8 thereafter.
Does Working from Home Boost Productivity Growth?— After controlling for each industry's pre-pandemic productivity trend, there is essentially no statistically significant relationship between how easily an industry's work can be done remotely and its excess productivity growth during the pandemic.
Work From Home and the Office Real Estate Apocalypse— The authors estimate New York City office values fell 45% in 2020 and 39% in the longer run, a $453bn value destruction, with lower-quality buildings hit hardest as tenants shifted to higher-quality space. They argue this has implications for local public finances and financial sector stability.
AI Summary.After controlling for each industry's pre-pandemic productivity trend, there is essentially no statistically significant relationship between how easily an industry's work can be done remotely and its excess productivity growth during the pandemic.
John Fernald, Ethan Goode, Huiyu Li, and Brigid MeisenbacherFederal Reserve Bank of San Francisco
Date Posted:
John Fernald @sffed finds little evidence that the shift to remote/hybrid work associated with the pandemic has “either substantially held back or boosted the rate of productivity growth.”
Does remote work boost industry productivity growth?
Core argument: After subtracting each industry's average annualized productivity growth for 2006–2019 from its pandemic average, the relationship between teleworkability and excess pandemic productivity growth is essentially flat and not statistically significant.
To better isolate the association with the shift to remote work during the pandemic, Figure 3 controls for pre-pandemic trends by removing each industry’s average annualized productivity growth for 2006–2019 from its pandemic average. Hence, the vertical axis now captures the amount by which an industry’s pandemic productivity growth exceeded or fell short of its pre-pandemic pace. In Figure 3, the nearly flat blue line reflects that there is essentially no relationship between teleworkability and excess pandemic productivity growth. Although the association is still slightly positive, the relationship is much weaker than in Figure 2 and is not statistically significant.
Takeaways by Macro Roundup® AI
After subtracting each industry's average annualized productivity growth for 2006–2019 from its pandemic average, the relationship between teleworkability and excess pandemic productivity growth is essentially flat and not statistically significant.
The association between industry teleworkability and productivity growth remains slightly positive once pre-pandemic trends are controlled for, but is much weaker than in the uncontrolled comparison.
Related Articles:
Remote Work, Three Years Later— Remote work has reduced office utilization but not yet office occupancy, because most firms are locked into long-duration leases. Baseline estimates suggest remote work will exert 0.8 percentage points of upward pressure on the office vacancy rate near-term, 2.3 more over the following five years, and 1.8 thereafter.
Work From Home and the Office Real Estate Apocalypse— The authors estimate New York City office values fell 45% in 2020 and 39% in the longer run, a $453bn value destruction, with lower-quality buildings hit hardest as tenants shifted to higher-quality space. They argue this has implications for local public finances and financial sector stability.
The Geography of Working From Home Begins to Shift Again— Areas with the highest shares of people working from home are mostly central cities of metropolitan areas or places hosting large corporate headquarters, including Cupertino, California and Redmond, Washington, home to Apple and Microsoft. Working from home appears most popular in places close to concentrations of offices and other workplaces.
AI Summary.U.S. manufacturing output per hour has grown about 0.2% a year since 2009, below the overall economy and peer economies in Europe and Asia except Japan, with motor vehicle manufacturing productivity falling 32% from 2012 through last year. Unlike warehouses and hospitals, manufacturers face foreign competition and cannot pass higher labor costs to customers.
Greg IpWall Street Journal
Date Posted:
As the UAW strike gets underway, @greg_ip notes that American manufacturing productivity is lagging peer economies. Since 2009, manufacturing output per hour has grown at only 0.2% per year in the US.
Is weak manufacturing productivity the core problem facing American labor?
Core argument: U.S. manufacturing output per hour has grown just 0.2% a year since 2009, below the overall economy and peer economies in Europe and Asia, with the exception of Japan.
Since 2009, manufacturing output per hour in the U.S. has grown just 0.2% a year, well below the economy as a whole and peer economies in Europe and Asia, except Japan. In motor vehicle manufacturing, the picture is especially bad: From 2012 through last year, productivity plummeted 32%, though some of this was no doubt due to pandemic disruptions. Warehouses and hospitals can pass the cost of higher wages and reduced hours to customers without being undercut by foreign competitors. Manufacturers don’t have that luxury. That’s why Detroit is recoiling at the UAW’s demands. While their output per employee is among the highest of 11 global manufacturers ranked by consultants AlixPartners, so are their costs per vehicle. The lowest cost: China’s.
Takeaways by Macro Roundup® AI
U.S. manufacturing output per hour has grown just 0.2% a year since 2009, below the overall economy and peer economies in Europe and Asia, with the exception of Japan.
Productivity in U.S. motor vehicle manufacturing fell 32% from 2012 through last year, though part of that decline reflected pandemic disruptions.
Detroit automakers rank among the highest in output per employee of 11 global manufacturers ranked by AlixPartners, but also among the highest in cost per vehicle, with China's costs the lowest.
Related Articles:
Autoworkers Have Good Reason to Demand a Big Raise— Inflation-adjusted average hourly pay for US production and nonsupervisory workers has risen 13% over 20 years, about 0.6% a year, while the average hourly wage for auto production-line workers has fallen 30%. General Motors, Ford and Stellantis earned a combined $42bn in net income over 12 months.
Auto Union Boss Wants 46% Raise, 32-Hour Work Week in ‘War’ Against Detroit Carmakers— The United Auto Workers union has demanded a 46% raise, a return to traditional pensions, and a 32-hour work week from the three Detroit automakers. The companies say meeting those demands would raise labor costs by $80bn and lift total pay and benefit expenses to more than $150 an hour from about $64.
EV Boom Remakes Rural Towns in the American South— Automakers have announced more than $110bn in electric-vehicle investments in the US, with about half directed to Southern states and most of the remainder to Great Lakes states including Michigan, Ohio and Indiana. Great Lakes auto employment, though still nearly double the South's, has fallen 34% over two decades to 382,000 workers.
AI Summary.A list of standout US metropolitan growth areas spans Sun Belt boomtowns such as Austin and Nashville, Midwestern cities including Cincinnati and Columbus, and Philadelphia, but no Florida metros. All but Phoenix and Philadelphia sit in Republican-voting states, while all but Huntsville and Oklahoma City have Democratic or nonpartisan mayors.
Justin FoxBloomberg
Date Posted:
.@foxjust highlights 15 cities that have 5-year job growth at a much faster pace than the rest of their states. He notes that, other than Phoenix and Philadelphia, all are in states that voted GOP in 2020 but all but two have Democratic mayors.
What do the fastest-growing US metro areas have in common?
Core argument: All but two of the standout metro areas — Phoenix and Philadelphia — are in states that voted Republican in the 2020 presidential election, while all but Huntsville and Oklahoma City have Democratic or Democratic-sounding nonpartisan mayors in their largest cities.
This list has a little of everything. It includes Indianapolis, of course, along with perennial powerhouses Dallas-Fort Worth and Phoenix, boomtowns Austin and Nashville and much-discussed up-and-comers Boise, Fayetteville-Springdale-Rogers, Oklahoma City and Raleigh. But there are also some under-the-radar growth stories (Charleston, Huntsville) moderate Midwestern successes (Cincinnati, Columbus, Des Moines) and one true surprise: Philadelphia? Really?! There is not, however, a single city from Florida. What unites the standouts? All but two, Phoenix and Philadelphia, are in states that voted Republican in the 2020 presidential election, while in all but two, Huntsville and Oklahoma City, the mayors of the largest cities are either Democrats or nonpartisan officials who sound a lot like Democrats.
Takeaways by Macro Roundup® AI
All but two of the standout metro areas — Phoenix and Philadelphia — are in states that voted Republican in the 2020 presidential election, while all but Huntsville and Oklahoma City have Democratic or Democratic-sounding nonpartisan mayors in their largest cities.
The list of standout metro areas spans Indianapolis, powerhouses Dallas-Fort Worth and Phoenix, boomtowns Austin and Nashville, up-and-comers Boise, Fayetteville-Springdale-Rogers, Oklahoma City and Raleigh, and Midwestern successes Cincinnati, Columbus and Des Moines.
No Florida city appears on the list of standout metro areas, which includes under-the-radar growth stories Charleston and Huntsville along with the surprise of Philadelphia.
AI Summary.Follow-up probing in household surveys reveals that about one in 10 workers who initially report working for an employer is actually an independent contractor on at least one job, which nearly doubles the estimated independent contractor share of the main-job workforce to roughly 15%. Young, less educated, and lower-hours workers are more likely to be miscoded.
Katharine Abraham, Brad Hershbein, et akNational Bureau of Economic Research
Date Posted:
15% of American workers are independent contractors, according to a Gallup survey that was carefully constructed to avoid data problems that had previously plagued the space. @kgahome @BHershbein @bethtruesdale
Do household surveys undercount the independent contractor workforce?
Core argument: Roughly 1 in 10 workers who initially report working for an employer on one or more jobs is, upon probing, an independent contractor on at least one of those jobs.
We find that, upon probing, roughly one in 10 workers who initially reports working for an employer on one or more jobs (and thus is coded as an employee) is in fact an independent contractor on at least one of those jobs. Incorporating these miscoded workers into estimates of work arrangement on the main job nearly doubles the share who are independent contractors, to about 15 percent of all workers. Young workers, less educated workers, workers of color, multiple-job holders, and those with low hours are more likely to be miscoded. Taking these workers into account substantively changes the demographic profile of the independent contractor workforce. Our research indicates that probing in household surveys to clarify a worker’s employment arrangement and identify all low-hours work is critical for accurately measuring independent contractor work.
Takeaways by Macro Roundup® AI
Roughly 1 in 10 workers who initially report working for an employer on one or more jobs is, upon probing, an independent contractor on at least one of those jobs.
Incorporating these miscoded workers nearly doubles the share classified as independent contractors on their main job, to about 15 percent of all workers.
Young workers, less educated workers, workers of color, multiple-job holders, and those with low hours are more likely to be miscoded, and accounting for them substantively changes the demographic profile of the independent contractor workforce.
AI Summary.The U.S. Bureau of Labor Statistics projects the country's more than 700,000 electricians will grow about 7% over the next decade, against a 5% average for all occupations. Electricians report being booked months out and struggling to hire, and many are raising wages and prices as federal climate incentives worth several hundred billion dollars take effect.
Amrith RamkumarWall Street Journal
Date Posted:
A shortage of electricians is likely to be a headwind to the energy transition. 30% of union electricians are btw 50-70 years old and close to retirement. The average annual electrician salary rose from $50k to $60k btw 2018 and 2022. @WSJ
Are there enough electricians to meet electrification demand?
Core argument: The Bureau of Labor Statistics expects the U.S. total of more than 700,000 electricians to grow about 7% over the next decade, slightly faster than the 5% nationwide average.
The current total of more than 700,000 electricians in the U.S. is expected to grow about 7% over the next decade, slightly faster than the nationwide average of 5%, according to the Bureau of Labor Statistics. The climate law will put several hundred billion dollars’ worth of incentives into the economy designed to accelerate the energy transition and boost clean-energy supply chains in the U.S. Electricians say they are booked several months out and struggling to find enough workers to keep up with demand. Many are raising wages and prices and worried that they won’t be able to keep up as government climate incentives kick in. “I’m tired of telling people I can’t help them,” said Brian LaMorte, co-owner of LaMorte Electric Heating and Cooling in Ithaca, N.Y., which does residential heat-pump installations and electric-service upgrades.
Takeaways by Macro Roundup® AI
The Bureau of Labor Statistics expects the U.S. total of more than 700,000 electricians to grow about 7% over the next decade, slightly faster than the 5% nationwide average.
Electricians report being booked several months out and struggling to find enough workers, and many are raising wages and prices to cope with demand.
The climate law will put several hundred billion dollars' worth of incentives into the economy to accelerate the energy transition and boost U.S. clean-energy supply chains, and electricians worry they won't keep up as those incentives kick in.
