Happy Labor Day! Robert Samuelson asks a pertinent question today: “Where did our raises go?” He’s right to ask:

Since the start of the century, blue-collar wages have gone up a dismal 0.6 percent per year, adjusted for inflation. Over the past two years they’ve gone up… zero percent.

Samuelson would like us to believe this is because of spiraling health care costs: employers are paying so much more for health care benefits that they can’t afford to pay us any more in actual wages. Anything is possible, I suppose, but as you all know, the BLS keeps track of something called the ECI, or Employer Cost Index, which tracks the total average cost of employing somebody: wages, benefits, office space, payroll taxes, etc. Naturally this means they track the cost of health care benefits, and since they do that there’s no reason not to break it out separately and let everyone see it. And they do:

As you can see, this matches several other charts I’ve posted over the past few years. Health care costs have subsided a lot since the early aughts and are barely growing at all these days. In fact, the employer cost of health care has been essentially flat since the end of the recession.

It’s true that corporations are doing well these days, with healthy profits and strong growth. It’s also true that they aren’t giving most of their employees much in the way of raises. There’s a reason for that, but health care ain’t it.

Happy Labor Day.

I believe today it’s Hilbert’s turn at stardom after our brief dachshund diversion last week. Here he is on the fence, keeping a close eye on our neighbor’s backyard, which grows more cat friendly by the day. This is because the folks who bought the house two years ago (!) have left it empty the entire time and just let the garden grow. Every six months or so they come by with a weed wacker and slice everything down some, probably because their neighbor on the other side complains to the association. Personally, I sort of wish it had been left alone, just to see how jungle-like it could get. In any case, the cats like it best when it’s overgrown, probably because they know that means I can’t find them when they hop over to cruise around. Cats.

If this is just a black box, you're doing it wrong.Mint Images via ZUMA

The service sector is the prime driver of the US economy these days, and its productivity growth is pretty meager. Why? Brad DeLong recommends an article by Michael van Biema and Bruce Greenwald that was written in 1997: “I thought it was coherent and might well be right 20 years ago. I think it is coherent and might possibly be right today.” I agree, though my interpretation is a bit of a hop and a jump from what van Biema and Greenwald actually say:

There are a number of current explanations for why productivity growth has stalled in the service sector. A common one is that the issue is simply a matter of measurement….A second common explanation for the lag in the service sector’s productivity growth is that since the 1970s, manufacturing workers, faced with the threat of losing their jobs to low-wage employees overseas, have learned to work harder and smarter, but service workers, who typically have much less exposure to global competitive pressure, have not….A third and mind-numbingly familiar explanation is that output in the service sector is far below its potential because of a number of macroeconomic factors.

….A radically different view will be presented here. We will contend that the problem is not a lack of resources; rather, it is that service sector companies operate below their potential and increasingly fail to take advantage of the widely available skills, machines, and technologies. The main reason the service sector has not reached its total potential output is management. If managers were focused energetically and intelligently on putting the existing technologies, labor force, and capital stock to work, rapid productivity growth would follow. To be sure, the management challenges are more severe in the service sector than in the manufacturing sector. However, the high productivity levels attained by leading-edge service companies indicate that attention from management can result in vastly improved performance throughout the service economy.

The authors go on to explain in some detail why poor management is likely to be the reason that so many service-sector companies perform weakly, and I kind of agree. But I’d put it more bluntly: unless they’re forced to at the point of a metaphorical gun—as so many manufacturing managers were in the 70s and 80s—service-sector managers are lazy. But they’re lazy in a very specific way: they don’t really understand technology; they don’t want to understand technology; and they refuse to bother making their underlings understand technology. They much prefer to do all they stuff they enjoy doing instead: schmoozing customers, holding meetings, reading and writing reports, and so on.

As near as I can tell, this hasn’t changed much in the past 20 years, and it’s surprisingly true even in tech companies themselves. Compared to a bank manager, managers at, say, Facebook, are much more likely to understand (and enjoy) technology that’s consumer facing, but they still don’t care much about the technology behind logistics and marketing and operations. It’s just too boring. And so they leave money on the table. But so does everyone else, so hardly anyone notices since plenty of cash is rolling in anyway.

This needs to change. In the same way that successful companies in the 50s benefited from rigorous old-school management techniques that needed to be daily routines, successful companies today need to really, truly, and rigorously insist that everyone from the vice presidents down understands and uses the best possible technology. Stop complaining that it’s boring. Stop complaining that it’s hard to use. Stop complaining that typing is hard because of your arthritis or whatever your excuse of the week is. If you’re not spending ten hours out of every week deeply engaged with other managers and lower-level workers about the technology that runs your company and how to make it better, then you’re probably wasting your time. Most of you probably spend more time understanding your latest favorite videogame or internet chatroom than you do on the technology that your entire company sits on top of.

Good technology, diligently and rigorously applied, is what differentiates companies today. Use it. Hire only people who are willing to use it. And fire anyone who won’t.

Johannes Schmitt-Tegge/DPA via ZUMA

Philip Kennicott, the Washington Post’s art and architecture critic, has a fascinating piece today about the new Glenstone museum in Potomac, Maryland. The Glenstone is part of something new to me:

It is self-consciously a museum built in the spirit of the nascent “slow art” movement, which is a reaction to larger forces afoot in the art market, democratic culture and the age of Instagrammable art.

….“We’ve all had the ‘Mona Lisa’ moment,” says Thomas Phifer, the architect who worked closely with the Raleses to design the 204,000-square-foot Pavilions. The “Mona Lisa” moment is a sense of despair at the impossibly crowded galleries of the Louvre in Paris, where the room devoted to the Mona Lisa is a scene of pure chaos as tour groups jostle and throng and sometimes shove one another in hopes of getting close enough to snap a cellphone picture of the world’s most famous painting. “You walk into that room and you’re with 400 of your closest friends and maybe you can get a glimpse of the Mona Lisa,” Phifer says of a pervasive and frustrating experience that is becoming more common at museums around the world.

Long story short, the Glenstone plans to restrict visitors to 400 per day so that people have plenty of room and plenty of time to appreciate what they’re seeing. There are some pretty obvious pros and cons to this approach, and they’re all discussed in interesting detail in the article.

The most obvious problem to me is a simple one: how do you best restrict access if you think too many visitors are ruining your museum? You can charge a lot, but that hardly seems fair to art lovers of limited incomes. (Glenstone has free admission.) You can make it first-come-first-serve, but that obviously creates its own set of unfairnesses. You could make visitors take a short test to weed out all the folks who are there not for any love of art, but just because some guidebook wrote it up, but that’s just stupid.

I have a different, more organic idea: ban tour buses. Would this work? A museum expert would have to weigh in. But it would cut back on visitors; it would eliminate a lot of people who don’t care about art but are just there because it’s a stop on the tour; and it would get rid of the horrid mini-throngs that wend their way mindlessly through the museum like rats through the stomachs of snakes. It sure seems like it’s worth a try. Hell, there are whole cities that I think should experiment with this.

But it also reduces revenue, and how does that get made up? I haven’t figured out that part yet.

I recommend “The New Reading Environment,” from the editors in this month’s issue of n+1. It’s not really excerptable, but this being a blog and all, naturally I’ll try. And why not? Among all the recent changes in the reading (and writing) environment that the n+1 editors bemoan, the habit of constantly excerpting bits of other people’s writing somehow escapes their steely gaze. I suspect this was just an oversight, but here I go anyway:

Newspaper and magazine editors track page views, unique page views, time on-site, and, for the publishers willing to pay thousands a year, scroll depth — the exact point at which readers give up. Twitter, meanwhile, is a scrolling record of bad reading habits. Retweets of pieces one hasn’t finished; parts of pieces one wants to read but isn’t ready to endorse; fragments that cause one to click away in disgust. A reader argues with a stranger about whether they’ve actually read the piece, only to discover that the stranger is the author. The author, a reader herself, knows all about bad reading habits.

The intimacy between online writers and readers determines how we read and write….Blogs felt like gatherings of the like-minded, or at least the not completely random. Even those who stridently disagreed shared some basic premises and context — why else would they be spending time in the comments section of a blog that looked like 1996? Today’s internet, by contrast, is arbitrary and charmless. On social media, criticism once confined to the comments now comes as free-range abuse directed at other readers. Readers can address all parties instantaneously — writers, editors, publishers, and the world. And so writers who publish online peer into the fishbowl of readerly reception. Drop in some flakes and watch the fish swarm.

….All this is on your mind as you wait for your piece to go up….Then things take a turn. Readers lose patience, and the careful quoting, like snipping coupons with precision, becomes tearing — into lines, phrases, and points. The space grows for misinterpretation, co-optation, and misunderstanding. All it takes is one podcast host with a grudge and a modest following, like an Evangelical pastor of yore, for a small hell to break loose in your mentions.

….Some writers choose to bulletproof pieces in advance against these poisoned pinpoints — each this is not to say or in other words a dull sword wielded against willful misunderstanding….But self-imposed tentativeness has not produced an age of anxious writing. Instead the new style is simultaneously careful and strident, low-key and declarative. Articles are luridly headlined and. Extravagantly. Punctuated. Arguments sit right at the top, just like we were taught to do in high school — except now the enemy is not lack of clarity, it’s impatience.

….To be a reader is to suffer. The endless call-and-response that leaves writers forever relitigating their work . . . all this is for our sake? In the not so distant past, we could sit with an article and decide for ourselves, in something resembling isolation, whether it made any sense or not. Now the frantic give-and-take leaves us with little sovereignty over our own opinions. We load up Twitter to discover some inscrutable debate (“Why is everyone fighting about the Enlightenment?”), usually over a series of misinterpretations, which in the space of an hour or two has ended friendships and caused major figures to leave the platform. The task then becomes to read in reverse — clicking backward through a series of quote-tweets to reconstruct the original offending article, and try to understand who’s on what side, so you can know precisely what to think and where it will land you, socially.

It’s worth noting that good writing is very hard to excerpt. That’s because it’s composed with a certain precision, each part hanging on its surrounding paragraphs in a way that makes it hard to pull sentences out of context and not leave the whole thing a mess. This is in contrast to another bad habit of modern online writing that the n+1 editors somehow miss: massive, bloated overwriting.

In the age of print, a long article was often a marker of quality: given the constraints of page counts and design considerations, a long article usually meant that multiple editors had decided it was worth the space. As a heuristic, long = important wasn’t a bad one, and many of today’s writers grew up imbibing it. Unfortunately, by the time they grew up they were freed from the constraints of print without quite realizing that those constraints created the heuristic in the first place. So now they write interminable pieces, assuming that this connotes authority and gravity. But it doesn’t. Mostly it just means bloat, which is one reason that tl;dr has become such a common epithet among readers. For some reason online editors allow this, either because they’re too busy, or too inexperienced, or too unwilling to fight with writers. So these pieces go on and on even if they don’t need to, partly to soothe the writer’s ego and partly because cutting a 5,000-word piece to 2,000 words is hard work.

On the other hand, it sure makes excerpting easy.

Anyway, I’ll stop now, even though no editor is around to figuratively start tapping her toes in impatience. I’ll just say that this piece, among other things, does a good job of describing why writers need to practice better Twitter hygiene. Twitter is a very peculiar, artificial environment, heavily populated by a smallish group of flamers and trolls and ideologues who represent a tiny fraction of the real world but a huge fraction of Twitter. Obsessing over their (usually) tedious (usually) puerile vitriol does nothing good for your writing and nothing good for your mental health. It’s like worrying about a group of zealots warning you that the world will end soon thanks to the dire effects of magnesium-coated baseball cores. Why on earth would anyone voluntarily allow themselves to lose sleep over something like this?

When you write, pretend you’re writing for people you respect. Block or mute all the folks who are (usually obviously) reading you in bad faith and getting their jollies from hurling insults into the ether. Don’t pretend that you can read this stuff and not let it affect you. You probably can’t. So don’t.

Donald Trump is making America great again:

Ford Motor Co. has ditched plans to import its Focus compact vehicle from China to the U.S. starting next year, citing an expected hit from import tariffs the Trump administration put into effect in July. Ford had planned to begin shipping a new version of the Focus from China, starting in the second half of 2019. But the 25% tariff now in place upended the economic case for importing the vehicle, said Kumar Galhotra, head of Ford North America.

….Ford recently discontinued U.S. production of the Focus, but said it would re-enter the market next year as a small crossover utility vehicle made in China. The decision to nix the import plan means the Focus nameplate will no longer be sold in the U.S., a spokesman said.

So now there will be no Focus at all. It probably doesn’t matter much, but it demonstrates the peril of ill-advised tariffs. Sure, this hurts China a bit, but it does nothing to change the fact that manufacturing the Focus in America doesn’t make sense for Ford. There will be no new jobs for American workers and no new assembly lines. So what was the point?

Trump has said twice this month that car companies are moving back to Pennsylvania.

Bernard Swiecki of the Center for Automotive Research notes, “There are no assembly plants in Pennsylvania at all.”

— Daniel Dale (@ddale8) August 30, 2018

The latest Washington Post/ABC poll says that Donald Trump’s approval rating is down to 36 percent. Booyah! This means he’s once again approaching the 27 percent crazification factor that represents his floor of support. Even Republicans are losing that loving feeling.

Most likely this result is an outlier, and nothing much is really going on. We’ll have to wait for other polls to find out. But I’ll enjoy this one while I can.

Sens. Chuck Schumer and Martin Heinrich think that GDP is a pretty imperfect measure of economic growth. So they want some new statistics:

The idea, they say, is to shed light on where economic prosperity is showing up across different income groups — and, potentially, where it’s not. The bill, the Measuring Real Income Growth Act of 2018, would require the Bureau of Economic Analysis (BEA), which releases quarterly GDP numbers, to also report how growth is distributed along the income scale. The bureau would have to put together distributional measures of economic growth to be released with quarterly and annual GDP reports starting in 2020, laying out how growth shows up across each decile of earners and the top 1 percent.

That’s all fine, but in the meantime here’s something you can already use for much the same purpose:

The blue line shows the total income of the middle fifth as a percentage of total national income. In the 1950s, the middle fifth received about 18 percent of total income. By 2016 that was down to 15 percent. However, this is just a measure of income inequality, and we all know that income inequality is going up. What’s more, it can be deceptive: the middle-fifth share could be going up while national income is going down. That’s hardly the sign of a strong economy.

That’s where the orange bars come in. This is my patented Middle Class Index, and I’ll be the first to concede that it’s pretty arbitrary: it’s just the change in the share of income going to the middle fifth multiplied by the change in real national income times a special constant.¹ It only goes up if both are going up, and it goes up more if either one goes up more. I’ll leave it to real economists to come up with something better, but this at least provides a general sense of how things are going.

For example, in 1950 the MCI was 1.72. Not bad! That’s because national income went up a lot and the share of the middle fifth went up. Conversely, in 2016 the MCI was -0.33. National income went up a little bit, but the middle fifth share declined, so the overall result is negative.

So what should the MCI be? Your guess is as good as mine. Offhand, I’d like to see the share of the middle fifth go up maybe a tenth of a point on a regular basis,² and national income go up by around 3 percent. That produces an MCI of 0.1. Anything above that is usually good news. Anything below it probably isn’t.³

So how was 2017? National income went up 2.4 points, which is OK, but we don’t know yet how the middle class did. As soon as BEA gets around to crunching the numbers for 2017, I’ll report back.

¹OK, fine, the special constant is one-third. There’s no special reason, it just made the index number seem sort of reasonable. Feel free to use your own. The bigger the constant, the more weight you’re giving to an increase in national income.

²Obviously it can’t go up forever, but I’ll worry about that around 2050 or so. If the share of middle-fifth income is back up to 18 percent, we can start thinking about some other measure.

³Probably. It’s possible, of course, for national income to go up a lot while the middle-fifth share goes down enough to produce an actual decrease in middle-fifth income. But that would be rare.

According to the latest CDC survey, the uninsured rate declined during the first quarter of 2018:

This may seem puzzling since enrollment rates for Obamacare went down during signups for this year. But if fewer people signed up for Obamacare, how did the uninsured rate go down?

The answer is pretty simple: the economy continues to be strong and more people are getting jobs—which means that a lot of people are probably dropping Obamacare and signing up for employer insurance. This demonstrates something important: Obamacare isn’t everything. For one thing, it’s a pretty small part of the overall health insurance market. It’s even a pretty small part of the public health insurance market. For another, Obamacare is meant to be part of the social safety net, something that’s available to people if they need it. But like food stamps and unemployment insurance, we’d all prefer that the number of people who need it goes down. Over the past year or so, as the unemployment rate has dropped below 4 percent, the number of people who need Obamacare has almost certainly declined, and this accounts for some of the decline in enrollments.

Personally, I don’t think it accounts for the entire decline. Trump’s attempted sabotage probably had an effect too, though it turns out that he screwed up and did a poor job of sabotage. Generally speaking, however, it looks like there’s a pretty steady share of low-income workers who are willing to pay for Obamacare, and that doesn’t change a lot even when states and the federal government actively try to screw things up. Enrollments go down a little bit if people switch to employer insurance and go up a little bit when competition makes coverage more affordable. Overall, though, these are pretty small effects. Obamacare has done what it can, and that’s not likely to change much until we either improve it or Trump succeeds in destroying it.

Donald Trump striking a pose of mature statesmanship when asked for a comment following John McCain's death.White House pool

Here is Jon Chait on the not-very-surprising revelation that Donald Trump is contemptuous of people with accents and state university degrees:

Deep in a Politico report about President Trump’s attempt to build support for firing Attorney General Jeff Sessions, who Trump loathes for recusing himself from the investigation of a campaign he was part of, is a striking artifact of Trumpism. The president’s swelling complaints against Sessions include the fact that he “doesn’t have the Ivy League pedigree the president prefers” and that Trump “can’t stand his Southern accent.”

Conservatives have spent decades depicting liberals as coastal snobs. Entire campaigns were built from this theme, from Michael Dukakis’s “Harvard Yard boutique” to various Democrats failing to display the requisite enthusiasm for Nascar. Every image of Barack Obama in the right-wing media cast him gazing downward imperiously, a pose that conservatives seemed to think captured his contempt for the good people of the heartland.

Given the attention they have lavished on such picayune details as John Kerry’s failure to order cheesesteak properly, it’s not even possible to imagine what they would do with direct evidence of a president disdaining his attorney general’s University of Alabama law degree and regional accent.

Trump’s entire life has been defined by the constant whiplash of hating all those Harvard elites who look down on him and desperately wanting to be one of them. His populist rants emanate from the former, but his true personality is defined by the latter. If Harvard had been willing to suck it up and give him an honorary doctorate, somebody else would probably be president today.