- Steve LeVine
- Jul 30
Future of Work
Welcome back. Please invite your friends and colleagues to join the conversation. Let me know what you think about what you are reading here and in the daily stream. Just reply to this email, or drop me an email at firstname.lastname@example.org. Let's start with a question about our changing mobility...
1 big thing: We have stopped moving
Rebecca Zisser / Axios
From the first, Americans have been on the move in "Great Migrations" for a better life, like those of the last century that saw poor blacks and whites go from the south for higher-paying work in northern cities. But no longer. Starting around 1980, working class Americans have largely stood still, and a primary reason is real estate prices, according to new research.
In a new paper, the University of Chicago's Peter Ganong and Daniel Shoag found that high rent in America's most economically vibrant areas make these moves a money loser for lower-skilled workers. As my colleague Chris Matthews writes, the paper proposes a potential answer to a question that has nagged researchers and political observers in the current anti-establishment wave: why people in the decaying rust belt don't just move.
- What's to blame: Beginning in the middle of the 20th century, they say, state and local zoning regulations have increasingly slowed housing growth in the most attractive cities, thus driving up real estate prices.
- One eye-popping number: According to economists at the University of Chicago and Cal Berkeley, land use restrictions have lowered GDP growth by 50% since 1964. That's not a typo: Chang-Tai Hsieh and Enrico Moretti say GDP growth would have been double the last half-century were it not for land-use restrictions.
2. Many Americans are too drugged-out to work
Chris Canipe / Axios
A slew of reports finds a fresh reason for the chronic inability of American companies to fill skilled jobs: not a lack of skills, and hence a training-and-education crisis, but a surfeit of drug abuse. Simply put, prime working-age Americans without a college diploma are often too drugged-out to get the best jobs. Opioids remain at high levels, but the surge in drug use is now heroin and the powerful contaminant fentanyl.
The reports suggest a circularity to the crisis in America's rust and manufacturing belts: the loss of jobs and wage stagnation has led to widespread disaffection, alienation and drug abuse; and drug abuse has led to joblessness, hopelessness and disaffection.
- LinkedIn's Chris Cutter found a West Virginia company where "up to half of applicants either fail or refuse to take mandatory pre-employment drug screens." The executive of another company called the drugs epidemic "probably the biggest threat in manufacturing, period."
- "In Congressional testimony earlier this month," Cutter writes, Federal Reserve chair Janet Yellen related opioid use to a decline in the labor participation rate. The past three Fed surveys on the economy, known as the Beige Book, explicitly mentioned employers' struggles in finding applicants to pass drug tests as a barrier to hiring."
But the numbers are all over the map. Some employers and economists say up to half of job applicants do not clear drug tests; others say it is 25%. In the chart above, Indeed economist Jed Kolko, using data from the U.S. Current Population Survey, found that 5.6% to 5.7% of working-age adults didn't work last year because of illness or disability, an unknown percentage of which were because of drug use.
3. War, trade or inequality?
Lazaro Game / Axios
Eight months after the shock U.S. presidential election, economists and other social scientists are still debating the rise of Trumpism and right-wing populism in the west more generally.
So Chris Matthews combed through recent papers on the political wave. Three of the most interesting ideas he found:
- Boston University's Douglas Kriner and Francis Shen of the University of Minnesota say that if just three states had suffered fewer casualties in Iraq and Afghanistan, Hillary Clinton might today be president.
- Harvard economist Dani Rodrik: we are watching the predictable result of more relaxed international trade and the rise of financial globalization.
- And James Montier, chief strategist at GMO, the investment manager: crippling inequality explains the anti-establishment revolt.
4. Worthy of your time
Baidu's "Android play" may end up more like Nokia (Axios)
How ImageNet transformed AI research, and possibly the world (Quartz's Dave Gershgorn)
Meet the Bermuda shell company that Uber used to acquire Otto (Gizmodo's Kate Conger)
Samuel Huntington, a prophet for the Trump era (WP's Carlos Lozada)
Why women aren't CEOs, by women who were almost there (NYT's Susan Chira)
Toyota's battery leap may vastly increase the range of electric cars (Axios)
5. 1 splashy thing
Musk on Friday.
Steve Jurvetson / Creative Commons
Elon Musk pulled off another in his streak of glitzy product debuts, producing an outpouring of exultant reviews from wowed journalists riding in his new mass-market electric, the Tesla Model 3, late Friday evening.
- Among the nuggets of news in Musk's typically showy ceremony, he updated the count of pre-orders for the $35,000 electric — more than 500,000, each putting down $1,000 for a place in line to buy the car. It's a third more than the official count of about 370,000 given last year.
- Why it matters: If consumers truly embrace electric and autonomous cars, it could be more important in the big picture than the debut of the iPhone a decade ago: not only a seminal moment in tech and culture, but a transformation of energy and transportation, the biggest industries on the planet.
- Hence, let's watch but withhold judgement: The mark of an indisputable shift will be millions of orders for multiple years running. As it stands, we have Tesla's cachet, built on years of setting the standard for vehicular cool; an impressive number of orders for a single year; and a thumb's up from the car's first riders. What we do not have is definitive proof of a mass market.