To get prime-age men back to work, get them off opioids - Axios
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To get prime-age men back to work, get them off opioids

Opioid use may be responsible for a fifth of the record number of prime working-age American men who have chosen to fully drop out of the work force and no longer seek a job. In a new paper delivered at the Brookings Institution today, Alan Krueger, a professor at Princeton, described a strong correlation between high opioid use and low labor force participation among men 25 to 54 years old.

Where the correlation is highest: Here is a chart of Krueger's county-by-county study, showing the strongest impact in Mississippi, which has 10 of the top 25 counties on the list. Six are in Arkansas; and four each are in Alabama and North Carolina.

Data: Brookings; Chart: Chris Canipe / Axios

The 10 counties with the highest correlation:

  1. Stone County, Miss.
  2. Marion County, Miss.
  3. Sebastian County, Ark.
  4. Boone County, Ark.
  5. Crawford County, Ark.
  6. Clarke County, Miss.
  7. Forrest County, Miss.
  8. Columbus County, N.C.
  9. Scotland County, N.C.
  10. Surry County, N.C.

The background: For decades, the U.S. labor force participation rate — the number of men aged 25 to 54 who are either working or trying to find work — stayed above 90%. Around 1970, the rate began falling, but never below 90% — until the 2008 financial crash. As of last month, it was at 88.4%.

But Krueger blames opioids, not the crash: The fault is with doctors who are exceptionally free with prescriptions, not pain reported by patients. "Despite the massive rise in opioid prescriptions in the 2000s, there is no evidence that the incidence of pain has declined," he said.

Some more of Krueger's findings:

  • 47% of these men take pain medication daily. About two-thirds said the medicine was prescription pain medication. "And these figures likely understate the actual proportion of men taking prescription pain medication given the stigma and legal risk associated with reporting taking narcotics," he said.
  • Look at this shocker: 40% of these men say pain prevents them from working full time on jobs for which they are qualified.
  • And this one: "Those who have difficulty dressing, running errands, walking or concentrating have a much lower participation rate than those who are blind or have difficulty seeing or hearing."
  • These men are sick: 43% say their health is fair or poor, compared with 12% of working men and 16% of unemployed men still in the work force.
  • Their most common ailments: walking, climbing stairs and concentrating, remembering and making decisions.

The bottom line: If policymakers want to reduce the malaise and alienation around the country, reduce opioid prescriptions: "The opioid crisis and depressed labor force participation are now intertwined in many parts of the U.S.," Krueger writes. "Addressing the opioid crisis could help support efforts to raise labor force participation and prevent it from falling further."

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How Macy's lost $11 billion in value in 3 years

Photo: Bebeto Matthews / AP

Former Macy's CEO Terry Lundgren takes in on the chin in a new feature in Bloomberg Businessweek, which quotes one retail consultant as saying that Lundgren's 2005 decision to double Macy's size with the purchase of May Department Stores, was "one of the top 5 worst decisions in retail history."

Why it matters: Amazon aside, Macy's has made numerous mistakes — like doubling down on department stores the same year Amazon Prime debuted — which have hastened the retailer's decline and put it in a position to see its profits halved over the past three years.

Macy's existential test, per Bloomberg: "The premise of a department store—to be able to buy a mattress and pajamas in the same place — is still valuable. But today that place is called Amazon, and there you can buy toothpaste, too, and have it all delivered in two days. So the question is, What do department stores have that Amazon doesn't?"

  • New CEO Jeff Gennette is a Macy's lifer who believes the answer to that question is Macy's sales staff.
  • "Macy's needs to turn its associates into Apple geniuses who can engage and have personal information about their customers on their iPads," Robin Lewis, who publishes a retail strategy newsletter, tells Businessweek. "If Gennette can get personal profiles on the 10 percent of his customers who account for over 50 percent of his business, he can market to people individually, as Amazon does."
Even if Macy's executes, more closures are likely ahead: If Macy's is to succeed by selling to its core base of shoppers, that will still require the firm to shrink.
  • There are more than 660 Macy's stores in America, but CFO Karen Hoguet says that only 245 would be "critical" assets if the company were to start over today.
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Students worked illegal overtime to assemble iPhoneX in China

Staff members work on the production line at the Foxconn complex in the southern Chinese city of Shenzhen, southern China, in 2012. Photo: Kin Cheung / AP

Students have been working illegal overtime hours to assemble the iPhoneX at Apple's main supplier in Asia, the Financial Times reports. Six high school students told the FT they often work 11-hour days in a Foxconn factory, where they were told they must get "work experience" in order to graduate.

Why it matters: Apple dealt with iPhoneX production issues that delayed its launch. Providing flexible student labor is one of the incentives that China's Henan province offers to keep Foxconn there, the FT said. Foxconn said it offers the internship program in cooperation with local governments and schools.

What the companies said: Apple and Foxconn acknowledged they were aware of cases of interns working overtime and were addressing the issue. The companies said the students were compensated and working voluntarily at the factory, but Apple said the students "should not have been allowed to work overtime."

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Toymakers depend on Amazon for holiday survival

Wonder Workshops "dash" robot. Photo: Mark Lennihan / AP

Wonder Workshop, maker of the kid-friendly, programmable robots dot and dash, which were runaway hits two Christmases ago, is back with a new offering this year — and it tells the Wall Street Journal that it's going all-in on Amazon's Launchpad program in the hopes of making the 2017 holiday shopping season a success.

Why it matters: Toy manufacturers used to rely on their relationships with brick-and-mortar retailers — and the negotiated placement and display of their products on store shelves — to drive sales during the all-important holiday season. But Amazon's dominance of the growing share of online sales has made adopting an Amazon-first strategy a no brainer for many toymakers.

Wonder Workshop is a participant in Amazon's Launchpad program, a section of the site it devotes to unproven products made by startups.

  • 2100 startups participate, and are given special promotion on Amazon's website, dedicated company pages and inclusion on Amazon gift lists.
  • This enables companies like Wonder Workshop to scale up faster than similar manufacturers could have dreamed of in the past, but it also makes these companies particularly reliant on Amazon as a distributor.
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Three big things for the EV charging industry

Illustration: Lazaro Gamio / Axios

The electric vehicle industry is at a tipping point, but policy and awareness-raising still matters. Those are some of the messages from Anne Smart, the VP for public policy with ChargePoint that has the world's largest network of EV charging stations, who spoke to Axios recently.

Here are three of the things the industry is working on:

1. Use the "Environmental Mitigation Trust" money. Smart says a top ChargePoint priority right now is ensuring that states are aware of their opportunity to use a combined $2.7 billion from the federal settlement with VW over its diesel emissions scandal.

  • Money from the trust can be used for a variety of transportation-related electrification initiatives, including up to 15% for charging infrastructure specifically.
  • States must identify lead agencies by December 1 to oversee the efforts.
  • Smart called the settlement an important way to help expand charging access in interior states and a wider range of communities overall.

"Creating these corridors of fast-chargers will help enable more EV adoption and will also connect the coasts a bit better. We think it's really important that states use this funding to focus on ways to provide transportation electrification to all communities, to figure out how we can leverage this public funding, particularly in disadvantaged communities, and how we can bring electrification to new technologies," she said.

2. Man the battle stations against current tax plan. Smart said there's a broad and active group of players in EVs and related industries battling the provision in the House tax package that would end consumer tax credits for buying electric cars.

  • "This is important to a lot of players and it is something that we can all agree on," Smart said during a visit to Washington, D.C., last week, noting there are "coalitions forming around the country."
  • The effort includes environmentalists, automakers and charging companies, she said.

3. Spread the news on current availability. Two numbers that are key to widespread EV adoption are a $35,000 price point and 200 miles of range. Smart said EVs are at a "tipping point" with a suite of new offerings and announcements by automakers, but that the overall electrification sector needs to better expand awareness of what's out there — like the recent availability of the Chevy Bolt in all 50 states — and what's coming soon.

"There's still a lot of room to grow on EV education," Smart said.

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Elon Musk's new truck said to have a revolutionary new battery

Musk with the Tesla semi truck. Photo: Tesla

When Elon Musk guaranteed that the new Tesla semi-truck would last 1 million miles without breaking down, experts assumed he was talking about the drive train, not the ultra-sensitive battery. But a person familiar with the truck tells Axios that he meant the battery, too.

Why it matters: A battery going that far would have multiple times the longevity of any commercial vehicle battery in use now or announced for release, and would help make Tesla's Semi competitive with diesel-burning competitors (since the battery is estimated to cost $170,000 on top of the $100,000-plus cost of the truck itself).

Musk announced his truck with typical showmanship (see photo above), but fleet owners who buy cargo trucks are not typically given to whims of cool and style. "They decide on the total cost of ownership," John Rapaport, a co-founder of Repower, a consultant to truck fleet owners, tells Axios. "They are very sophisticated buyers. They understand how to model out all of the variables."

By the numbers: In his Nov. 16 unveiling of the Semi, Musk said the truck will travel 500 miles on a charge when it goes on sale starting in 2019, which is a lot; Mitsubishi's new eCanter has 62.5 miles of range on a charge. Given that the standard lithium-ion battery lasts 1,000 charge-discharge cycles before replacement is recommended, that would add up to about 500,000 miles.

  • But a typical tractor-trailer in the U.S. will travel 100,000 miles a year or more, according to industry data. Meaning that, if Musk's truck operates like most electrics including Tesla's own passenger vehicles, it would deliver only about five years of use before the battery needs replacing.
  • Truck drivers are also likely to use Tesla's 30-minute fast-charging technology almost every time their battery runs out, and not the slower recharging system, thus subjecting the pack's physics to regular, enormous stress, said Venkat Viswanathan, a professor at Carnegie Mellon University.
  • Musk has not disclosed his planned sticker price, but experts estimate that the Semi could be $300,000, about twice the cost of new diesel trucks. Very few fleet owners would spend that kind of money if the battery needs replacing so soon, even if they do save about $100,000 in diesel over the five years of ownership, as Tesla estimates.

That Musk instead plans to guarantee 1 million miles of travel, as we have been told, suggests his team has tinkered with the truck in unprecedented ways so that the battery can undergo 2,000 charge-recharge cycles, twice the usual number, Viswanathan said.

In a series of tweets, Nikola Motor Company, a rival truckmaker, yesterday speculated that Musk is modeling his battery pack not on his passenger vehicles, but on his stationary batteries — the Powerwall that he markets for use in buildings and homes. Such a configuration — installing many more battery cells than actually required, and running them at relatively low charging voltage — would make the system much more durable, Viswanathan said.

In an email exchange, Tony Seba, who teaches at Stanford University, adds that self-driving technology will make the Semi more efficient, and suggests that drivers may not be permitted to fully discharge the batteries. "If you don't fully charge and discharge a battery, it's going to last far longer than if you do," Seba said.

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Online retailers are making every day Cyber Monday

AP

A decade ago, Cyber Monday was embraced by online retailers as a strategy to capture the business of shoppers who were using their office broadband to catch up on holiday shopping after Thanksgiving break.

  • But what started as a way to attract the attention of small segment of shoppers has turned into a Frankenstein's monster that eclipses even Black Friday in terms of total sales and has strained the websites and logistics networks of some of America's biggest retailers, Bloomberg reports.

Why it matters: It's cheaper for retailers to spread out extra holiday traffic evenly throughout the prime holiday shopping season, so retailers like Amazon, Walmart, and Best Buy have already initiated steep discounts on popular items, hoping to avoid surges in traffic that caused trouble for websites of Target, Macy's and Gap in 2015 and 2016.

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Alibaba pushes even bigger into physical retail

Alibaba chairman Jack Ma (Kin Cheung / AP Photo)

Alibaba Group has agreed to invest around $2.87 billion for a 36.16% stake in Chinese hypermart operator Sun Art.
Why it matters: This is a major shot at both Amazon and Wal-Mart in the battle for global retail supremacy.
In terms of Amazon, this is just Alibaba's latest addition to a brick-and-mortar wall that predates and towers over Whole Foods and automated convenience stores. If Alibaba chooses to go physical in the U.S., it will have much a lead in terms of both experience and data.
  • Per Reuters: "Alibaba has invested upwards of $9.3 billion in brick-and-mortar stores since 2015. It has launched many un-staffed concept shops in the past year, including grocery and coffee stores."
For Wal-Mart, Alibaba aligning itself with Sun Art is a direct challenge to its China business.
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Uber to buy 24,000 Volvos for self-driving push

Uber headquarters in San Francisco. Photo: Eric Risberg / AP

Uber plans to buy up to 24,000 cars from Volvo in an effort to prepare a fleet of self-driving on-demand vehicles, per Reuters. The XC90s, equipped with autonomous technology and priced at $46,900 in the U.S., will be delivered between 2019 and 2021.

Why it matters: The move comes two weeks after Waymo, the self-driving unit of Google's parent Alphabet that is suing Uber over theft of its trade secrets, announced it was launching fully driverless taxis in a pilot program in Phoenix, Arizona — the first in the industry to do so.

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SoulCycle's Julie Rice named WeWork's chief brand officer

SoulCycle co-founder Julie Rice is now WeWork's chief brand officer. Photo: Alison Yin / AP

SoulCycle co-founder Julie Rice, who resigned from the spin startup in 2016, is joining WeWork as their chief brand officer. She'll focus on promoting community at the billion-dollar company.

Why it matters: WeWork founder Adam Newman told Axios' Steve LeVine in October that one of his main goals is to help re-establish the notion of "lost community" — where for centuries residents of urban areas gathered in bars, cafes and open spaces to hash out the subjects of the day. Rice, who worked as a Hollywood talent agent in the 20 years prior to launching SoulCycle, will now spearhead the project.

Go deeper: WeWork is valued at $20 billion and operates in 19 countries. It recently bought the iconic Lord & Taylor building in Manhattan, a coding academy, and a wave-pool startup in 2016. They're also opening a private elementary school for entrepreneurial kids next fall.

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A theory of cycles suggests a new golden economic age

Illustration: Rebecca Zisser / Axios

As of now, no one knows how to break the grip of low incomes, blighted towns and popular anger in the U.S. and elsewhere. But a Venezuelan economist named Carlota Perez says that, if history is correct, things only look uniquely tough. In her view, government needs to step in now, trigger serious market demand, and dampen financial excess in order to ignite a new golden economic age.

Why it matters: According to Perez, the last couple of centuries have been cycles of such maladies, each time leading to a decades-long period of broad prosperity. If she is right, the question is: How and when do we get to the golden age part?

The background: Lots of scholars resist the notion of cycles — that the arc of history repeats itself, or at least rhymes. The rap against such theory is that human behavior is not a hard science like physics, and thus it's impossible to reliably forecast the next big thing.

But, in American politics, Arthur Schlesinger Jr. found traction among peers with his theory of a repeating cycle of idealism and pragmatism. The message is that, yes, human history is not science. But neither is it chaos, and picking out repeating trendlines helps us figure out how to react to the crisis of the day.

In her work, Perez divides the last two centuries into five technological "surges," the first four of which led to golden economic ages, per a debate at Strategy + Business. They start with the industrial revolution, beginning in the 18th century; and are followed decades later by the age of steam and railways; then of steel and electricity; the age of oil, the car and mass production; and finally the information age, which began in the 1970s and continues today.

  • In the first four, financial manias erupted, until the bubbles burst and led to populist uprisings. Governments of the day stepped in, creating massive economic demand with tax- and debt-supported transcontinental railways, port projects and gun diplomacy in the Victorian boom; and, after World War II, highway construction, policy-backed suburbanization, farm subsidies, and the Cold War.
  • Perez did not respond to emails, but in numerous appearances over the last couple of years, she has suggested that market forces naturally create inequality and political turmoil, thus requiring those state interventions. There was no other way of defusing the crises and spreading the wealth.
  • And neither is there today. That is why she urges similar robust state intervention to usher in a fifth golden age. Perez suggestion — "smart green growth," by which she means renewable energy and the funding of a new urban lifestyle.
  • This is in fact what China is already doing — pouring tremendous amounts of resources into dominating electric cars, solar power, batteries, fast trains, and urbanization, while spending big money to retire legacy industries such as coal and steel. If the West fails to follow suit, and Perez is right, China may enter its own golden age without the U.S. and Europe.

In interviews, economists said a burst of state-prompted demand is probably not all that is required. Michael Gapen, chief economist at Barclays, tells Axios that something must be done about a concentration of economic power, including in Amazon, Apple, Facebook and Google.

"They have amassed a tremendous amount of concentration. There is general economic angst that the benefit is not as diffuse as we need," Gapen said.

Lee Branstetter, an economist at Carnegie Mellon University and co-author of a recent paper on lagging productivity in the U.S., said it's not even clear that the technological and financial pieces are in place for a new golden age. He said artificial intelligence may be the bridge to the next economic burst, but that investment in AI hardware and software is relatively weak.

"I want to believe that we are powering growth for the next several decades, but the dispositive evidence we'd want is not there," he said. "It's possible that slow growth is masking a great economic dawn. It's also possible that that we'll have to wait awhile till we can reorder and substantially impact the economy."