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A spate of recent reports is challenging an article of faith — that the modern economy is sticking it to the little guy by offering up no wage increases for years. This research documents back-to-back income increases in 2015 and 2016, and suggests that the main problem now is not stagnant wages, but a shortage of labor.
But don't get too excited: Economic reports actually conflict, writes my colleague Chris Matthews. And there is a major fact many are leaving out: Even though earnings have turned upward since 2015, they are still barely higher, adjusted for inflation, than two decades ago.
New study: The Brookings Institution released a new paper this week that argues that you have to examine longer term time horizons. When you look in particular at lower wage categories, you find that employers have not raised wages much at all for more than 40 years. "After adjusting for inflation, wages are only 10 percent higher in 2017 than they were in 1973, with annual real wage growth just below 0.2 percent," the report states.
"If we think about the broadest sense of the American dream, we think about the next generation being better off than this one," says Jay Shambaugh, director of Brookings' Hamilton Project. "But a 20-year old with a high school education is no better off today than the same person would have been 40 years ago."
Billy Beane, the analytics-driven general manager of the budget-strapped Oakland A's, shook up sports and corporate boardrooms by melding overlooked, under-valued players into oddball yet cheap and winning teams. His magic, dubbed Moneyball in the book by Michael Lewis, enshrined a new job category in serious sports — director of analytics.
Yes, but: There is one big thing that his technique never accomplished: win Beane a championship.
Enter artificial intelligence: Some pro-sports teams are exploring how machine-learning, the leading form of AI, might help where Moneyball has fallen short. Richard Zemel, an AI consultant for the Toronto Raptors, tells Axios that among things that could transform a season would be forecasting an opposing team's next play, or signaling whether, if you swap out one player for another, "we go on to win the championship."
Be smart: As of now, AI in sports is in its infancy — forecasting is far in the future, and it's meanwhile being used for psychological profiles of potential recruits. But Zemel, a professor at the University of Toronto and research director at the Vector Institute, said he's working to automate the human insight of a good coach, which he explained in a paper he co-authored last year.
As sanctions become ever tighter, remittances from North Korean laborers working abroad have become a crucial economic underpinning for the Kim regime, providing much needed hard currency, and funding imports. No one knows precisely how many North Koreans are working in China and elsewhere, or how much they are sending home. But their numbers, writes Chris in another post, are estimated at 19,000 to 100,000, and the amount they are remitting about $300 million a year.
Why it matters: As you see in the visualization above, by our colleague Chris Canipe, North Korea is increasingly reliant on trade with China, as former partners like India and Japan have bailed in protest of the country's nuclear ambitions.
Yes, but: China has cut off imports of coal, Pyongyang's principal export, and as of Jan. 1, China will halt natural gas sales to the country and limit oil shipments to 2 million barrels a day (although it's not clear whether that is an actual reduction in oil sales). So the remittances are becoming more and more vital to the regime.
Could a basic income protect against the rise of robots? (West Australian's Belinda Tasker)
New AI theory has the community buzzing (Quanta's Natalie Wolchover)
Alibaba and Tencent have eclipsed Silicon Valley in global mobile pay (WSJ's Newley Purnell)
How Gen Z shops in the age of Amazon (Axios)
A car is a job (Bloomberg's Nathaniel Bullard)
Regulating Big Tech would be harder than it looks (Axios)
When is a trade surplus not a trade surplus? When it's between the U.S. and the U.K., both of whom claim a surplus with the other. Last year, for instance, the U.K. said it sold 10 million pounds more goods and services to the U.S. than it imported; but the U.S. said the number was actually $1 billion, and that the surplus was all America's, according to the FT's Valentina Romei and Federica Cocco.
What's been happening: This sort of mirror-imaging has gone on since 2006, and there has been no getting to the bottom of it, despite a 2007 investigation by the International Monetary Fund. Perhaps it's that politics favor the discrepancy, though economists on both sides of the Atlantic claim to be trying to figure out the persistent gap.
For example: In one category, there is an especially yawning difference — services. In 2015, the U.S. claimed to have a $13 billion surplus in such businesses with the U.K., but the U.K. reported a $34 billion surplus with the U.S.
Will Donald Trump squawk? American trade deficits are among the most invective-filled items on President Trump's agenda. But the U.K. numbers show that the reality is not always clear cut. Regardless, as London Daily Telegraph's Andrew Lilico wrote earlier this year, "I'm going to stick my neck out here and suggest that the Trump administration is likely to trust good ol' American-made data over nasty imported foreign data."