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Situational awareness: In a fresh broadside, President Trump today threatened to subject almost 10 times more Chinese goods to U.S. tariffs. The total tariffs on $467 billion in imports would add up to almost everything the Asian giant sells to the U.S. Axios contributor Bill Bishop reports that Beijing doesn't seem likely to blink soon.
Okay let's start with ...
1 big thing: The lower-wage jobs surge
Three-quarters of U.S. jobs created since the 2008-'09 financial crash pay less than a middle-class income, according to an Axios analysis of U.S. Labor Department data by Naema Ahmed.
What's going on: On Friday, the Bureau of Labor Statistics reported that the economy continued a 94-month jobs growth streak. It added 201,000 jobs, and the fastest wage growth since June 2009.
Why it matters: Not all jobs are created equal.
- Since the crash, about 75% of new jobs have paid less than $50,000 a year, putting them just above the $45,000 annual middle-class threshold for a household.
- Professions that were once the backbone of the middle class have been vanishing, and similar professions have not been bubbling up to take their place, report the WP's Andrew Van Dam and Heather Long.
- Most wage growth since 2009 has been concentrated in the extreme lows and highs.
Each bubble in the chart represents an occupation group as defined by the BLS. The horizontal position of the bubble is the median annual earnings, and the vertical position is the total change in number of jobs in the profession. The size of the bubble represents the total number employed, and color corresponds to change in inflation-adjusted annual earnings.
Go deeper: Are you in the middle class?
2. Not the belt that China expected
Five years ago, China announced "Belt and Road," an estimated $1 trillion initiative to build six economic corridors around the world, amounting to one of the largest infrastructure projects in history. So far, though, it's not materializing that way.
This from Jonathan Hillman, of the Center for Strategic and International Studies, in the Axios Expert Voices series:
- According to a new study, Chinese investment is just as likely to go outside the six corridors as within them, making the initiative appear less coordinated than Beijing hoped — and some critics have feared.
- Rather than following Beijing’s grand designs, much of the belt's activity to date looks more scattered and opportunistic.
- The exception is the China–Pakistan Economic Corridor, the only project connecting China with a single country. Its power plants, roads and other projects total some $62 billion in investment.
The gap between China’s official plans and actual activities suggests that interest groups are skewing President Xi Jinping’s signature initiative. Without specific criteria for what qualifies, the Belt and Road Initiative has grown to encompass cyberspace, the Arctic, and even outer space — and there are now BRI-branded fashion shows, marathons and art exhibits.
- As the list of functions and geographies grows, more interest groups enter the battle for spoils. Without more rigorous Chinese oversight, there is no reason to expect this competition to converge on the six economic corridors.
Why it matters: Beijing’s control problem could provide an opportunity for its partners and competitors, including the U.S., to reshape parts of the belt, minimizing costs for U.S. interests and maximizing value for global development.
3. What you may have missed this week
You were away. You were insanely busy. Never mind — here is a recap of the top stories at Future this week:
- When U.S. trade partners retaliate, they will impact these places
- Around the world, the trouble with wages comes from big companies
- The AI revolution is creeping up slowly on people, companies and nations
- AI's braintrust is in a money-fueled spat over what gets studied
4. Worthy of your time
The future of infectious disease in the U.S. (Peter Hotez - Axios)
The math patterns all around you (Emily Driscoll - Quanta) (animation)
Robbed of her Nobel, she's received a different $3 million prize (Antonia Noori Farzan - WP)
Preparing for the next financial crisis (Ben Bernanke, Tim Geitner, Henry Paulson - NYT)
Anatomy of an AI system (Kate Crawford, Vladan Joler - AI Now Institute)
5. 1 anniversary thing: Amazon's HQ2 idea is 1 year old
A year ago, Amazon ignited a coast-to-coast North American frenzy with a contest to host its second headquarters, a behemoth office park for up to 50,000 employees. Though it hasn't yet declared who won, Amazon itself has already triumphed.
- Axios' Erica Pandey reports: In an age when data is king, Amazon got 238 major cities across the U.S. and Canada to reveal many of their most intimate secrets, contained in often-voluminous applications for the prize — for free.
- "Amazon, a trillion-dollar company, just had taxpayers effectively subsidize one of the greatest economic development data bases ever put together," Richard Florida, a professor at the University of Toronto, tells Axios.
Companies have conducted headquarters site searches in the past, but none has come close to the scale of the Amazon HQ2 pursuit. That's because Amazon is "not just looking for HQ2," says Joe Parilla of the Brookings Institution. "They're looking for where they're going to put the next data center, the next logistics center, the next R&D facility."
Much of the quantitative data is publicly available, Parilla says. What matters is the qualitative data cities offered up — they let Amazon in on their wildest dreams.
- The sort of details that might be in a typical HQ2 application include plans for new train stations or shopping complexes — information the city's own residents wouldn't have, he says.
As an illustration of how secret this detail is, Montgomery County, MD, one of the 20 HQ2 finalists, responded to a FOIA request from the NYT with a 10-page list of the financial incentives it offered — with every line redacted.