Jul 11, 2019

Axios AM

By Mike Allen
Mike Allen

😎 Happy Thursday! Today's Smart Brevity count: 1,441 words ... 5½ minutes.

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1 big thing ... Exclusive: The next big inequality crisis
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Data: McKinsey Global Institute. Map: Andrew Witherspoon/Axios

Think polarization and inequality are bad now?

  • Buckle up: Axios' Kim Hart writes that big cities are poised to get bigger, richer and more powerful — at the expense of the rest of America, a report out later today from McKinsey Global Institute will show.

Why it matters: Automation may end up adding more jobs than it destroys, but the McKinsey analysis of 315 cities and more than 3,000 counties shows that only the healthiest local economies will be able to adapt to the coming disruption.

  • Wide swaths of the country, especially already-distressed rural regions, are in danger of shedding more jobs.
  • The 25 most prosperous cities, which have led the recovery from the Great Recession, are poised to get stronger.
  • Those megacities could claim at least 60% of job growth through 2030.

The big picture: The labor market will become more polarized, according to McKinsey's 113-page "The future of work in America."

  • On one end of the spectrum are a few dozen successful cities with diversified economies and a lot of young, highly educated workers.
  • On the other end are "trailing" cities and rural regions with aging workforces, lower education levels and jobs that are highly susceptible to automation.

Between those extremes is a group of thriving niche cities, such as Sunbelt cities popular with retiring baby boomers and college towns.

  • There's also a broader "mixed middle," including stable cities like St. Louis and unique economies like Lancaster, Pa.

Making matters worse, workforce mobility is at historic lows, meaning far fewer people are moving to new counties or states.

  • "And when they do move, they go to places very similar to where they came from," said McKinsey partner Susan Lund, one of the leaders of the research.
  • That means people from distressed areas aren't finding their way into more prosperous ones, deepening their sense of being left behind — and likely leading to greater social and political turmoil.

What's next: It's going to be up to local and federal policy makers to proactively create employment paths for the those most likely to face displacement, Lund said.

  • "Lifting up these places will not just happen naturally," she said. "It will take a concerted effort."

📖 Go deeper: The full report from McKinsey Global Institute, "The future of work in America: People and places, today and tomorrow," will post here at 5 p.m. ET.

2. Who automation will hurt most, least
¹ Data for 1971–74 and 1976–79 extrapolated as no comparable question was asked during those years. Data: Census Bureau. Graphic: McKinsey Global Institute

Automation will have the biggest impact on entry-level and older workers, because more of their jobs tend to be routine or physical in nature and are most likely to be taken over by machines and algorithms.

  • It will also affect some of the country's largest occupational categories: office support, food service, production work, customer service and retail sales, according to the forthcoming McKinsey Global Institute report.

Axios' Kim Hart writes that almost 40% of U.S. jobs are in categories expected to shrink between now and 2030.

  • The hollowing out of middle-wage work will likely continue, per the report, without deliberate intervention to provide workers with skills they need to get higher-paying jobs.

Women may be better positioned than men for the automation-era jobs, with McKinsey data suggesting women could capture 58% of net job growth through 2030.

  • That's largely because of women's heavy representation in health professions and personal care work.
  • The catch: Many of those jobs are not high-paying.

🏙️ Sign up here for Kim Hart's new weekly newsletter, Axios Cities.

3. Labor secretary digs deeper hole
Photo: Alex Wong/Getty Images

Trump insiders tell Axios' Jonathan Swan that Labor Secretary Alex Acosta did little to help himself at his high-stakes news conference defending his handling of the Jeffrey Epstein case when he was a federal prosecutor in Florida.

  • Trump hates being goaded into action by media outcries.
  • A source close to the president said there was "zero" chance he fires Acosta right away. "Zero," the source repeated.
  • But allowing for Trump's impetuousness, another close source said: "I wouldn't say zero."

Between the lines: Trump will decide Acosta's fate based in part on his instinct about how Acosta performed on camera, and how the awkward presser plays.

  • In part, this is Trump as theater critic, making decisions almost as a detached observer of his own administration.

The bottom line: Acosta remains in a tough, shaky position.

  • The secretary has no ideological support with conservatives close to Trump.
  • And his TV performance wasn't particularly strong.
4. Pic du jour
Courtesy The New York Times

N.Y. Times Quote of the Day, in "A Team and a Parade for Everyone" ... Megan Rapinoe, addressing the crowd after the ticker-tape parade in New York honoring the U.S. women’s national team for its second consecutive World Cup victory:

  • "We have to be better, we have to love more and hate less. Listen more and talk less. It is our responsibility to make this world a better place."
5. ⚡Breaking

"Nationwide raids to arrest thousands of members of undocumented families have been scheduled to begin Sunday," the NY. Times reports.

  • "The operation, backed by President Trump, had been postponed, partly because of resistance among officials at his own immigration agency."
6. New: Mayor Pete's plan to counter racism

Mayor Pete with the Rev. Al Sharpton at the Essence Festival in New Orleans on Sunday. Photo: Paras Griffin/Getty Images

Mayor Pete Buttigieg, whose campaign was sidetracked when a white South Bend police officer shot a black man in that city, tells Rachel Martin on NPR's "Morning Edition" that he has a new plan aimed at countering racial inequality:

  • "If you are a white candidate, it is twice as important for you to be talking about racial inequity."

His Douglass Plan, named for abolitionist Frederick Douglass, would establish a $10 billion fund for black entrepreneurs over five years, invest $25 billion in historically black colleges, legalize marijuana and expunge past drug convictions, cut the prison population in half, and introduce a new Voting Rights Act.

7. Supreme Court amps up populism
Court takes official portrait on Nov. 30. Photo: Chip Somodevilla/Getty Images

The Supreme Court has become a primary force in the country's often-apoplectic anger as populism rises, Axios Future editor Steve LeVine writes.

  • In a remarkable series of cases spanning more than six decades, the court and other federal judicial bodies have fundamentally altered how we speak to each other, how we vote and elect our leaders, and how we stay safe.
  • Why it matters: They also may have helped to deepen political polarization.

In the most recent substantial case, the justices last month prohibited legal challenges to partisan gerrymandering, which may lead to a free-for-all in which parties in power draw congressional district lines to favor themselves.

  • "It's not individual cases, but this role of the Supreme Court in American life that contributes to polarization," said Adam Winkler, a constitutional law professor at UCLA. "It's become a political hotbed."
  • "The Supreme Court has ... changed freedom of religion, of speech, abortion, criminal justice, property rights," said Ilya Somin, a leading libertarian law professor at George Mason University.

What's next: The court is poised to drop some political bombshells during the 2020 campaign, writes Axios' Sam Baker.

  • Cases include abortion, guns and immigration.
8. How streaming changes TV
Illustration: Giacomo Gambineri/The New York Times

"In their rush to match Netflix, competitors ... are ordering a slew of content," Jonah Weiner writes in the forthcoming N.Y. Times Magazine, in "The Great Race to Rule Streaming TV":

TV has long been a medium defined by familiarity — comforting narrative rhythms, stabilizing themes, repeatable formulas. ...
By contrast, the animating force behind today’s best streaming TV is a horizon-expanding sense of unpredictability, whether it’s the slippery narratives of offbeat magical-realist series like Netflix’s "Russian Doll" the impressionistic, shaggy-dog plots of "High Maintenance" (which began as a web series before moving to HBO); or the jarring encounters with broadly unfamiliar perspectives typical of "Larry Charles' Dangerous World of Comedy," a Netflix documentary series about the role of laughter in strife-torn international locales.
This means that characters can change as shows progress, instead of retracing the tightly drawn circuits of personality typical of network protagonists. Episode lengths have become similarly elastic — 60 minutes here, 16 minutes there — as has pacing.

Worthy of your time.

9. Netanyahu tests limits of power
Courtesy TIME

Israeli Prime Minister Benjamin Netanyahu this month passes David Ben-Gurion as the country's longest-serving leader. From a TIME interview:

  • On whether he has played a role in increasing the divide between U.S. and Israeli Jews: "I don’t think I’ve been a polarizing figure at all."
  • On his options in the corruption investigations he faces: "There’s a perfectly good immunity law in Israel. Whether I’ll need it or not, first let’s see what happens in the hearing."
10. 1 last Bug
A VW Beetle is serviced in Germany in 1954. Photo: Albert Riethausen/AP

The iconic VW Beetle ceased production in Mexico yesterday, AP reports:

  • The last of the 5,961 Final Edition versions of the Beetle — this one painted "stonewash blue" — rolled out under a confetti shower as a mariachi band sang the classic Mexican tune "Cielito Lindo."
  • Why it matters: Germany's VW "Bug" was an example of globalization, sold and recognized all over the world; an emblem of the 1960s counterculture in the U.S.; and a landmark in design, as recognizable as a Coke bottle.
Photo: Oded Balilty/AP
Mike Allen

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