1
Opinion
A Question of Honor, Fairness and PTSD
Vietnam veterans are suing the armed forces, arguing that they had PTSD when they were given other-than-honorable discharges.
2
U.S.
Homeless Rates in U.S. Held Level Amid Recession, Study Says, but Big Gains Are Elusive
Overall homelessness remained the same from 2011 to 2012, but the federal government will likely be unable to end homelessness for at risk-populations and veterans by 2015, a Department of Housing and Urban Development report said.
3
World
Singapore Aims to Curb Stress on Students
The government of Singapore will stop releasing the names of top-performing students in an effort to put less academic stress on young people.
4
Technology
Telecoms Merger in Austria Could Open Door to Further Consolidation
After it was rejected by the national regulator, the combination of 3 Austria and Orange Austria appears headed for approval after the intervention of the E.U. competition commissioner.
5
Technology
Robotic Gadgets for Household Chores
Devices that clean your floor and mow your lawn are coming within reach of the average consumer’s pocketbook.
6
N.Y. / Region
Holiday Balls of Fun
A bounty of Christmas ornaments at shops in New York could mean that you need more than one tree.
7
U.S.
Same-Sex Issue Pushes Justices Into Overdrive
The Supreme Court’s speedy decision to hear two cases on gay marriage could result in a split decision that would provide benefits to couples in some states, but permit other states to forbid same-sex marriages.
8
Business Day
Aramco Says Cyberattack Was Aimed at Production
Saudi Aramco, Saudi Arabia’s national oil company, says a hacker attack last August was limited to office computers and did not hit systems that could affect operations.
9
World
Uganda: Oil Industry Regulations Passed
Lawmakers passed legislation on Friday intended to regulate Uganda’s nascent oil industry, but critics say it gives too much authority over the industry to the nation’s energy minister.
10
World
For Iran, Unrest in Syria Is Noise, Not Brutal War
Iran’s leaders insist that the conflict in Syria, their main ally in the Arabic world, is manageable and ultimately will be resolved to their advantage.
11
World
Grappling With Italian Steel Plant That Provides and Pollutes
Citing serious health concerns, a court ordered sections of the giant Ilva plant closed, but the government issued a contradictory decree for production to continue.
12
U.S.
113th Congress: This Time, It’s Out With the New
Instead of fresh faces, many of the recently elected members of the House of Representatives are career bureaucrats and policy wonks with deep histories in politics and government.
13
14
Opinion
Censoring Myself for Success
The pressures of the music industry encouraged me to change the truth and soul of my songs.
15
U.S.
Storm Sirens’ Last Wail
A decision to dismantle tsunami sirens on the Oregon coast has some residents concerned that the new warning system — texts and phone calls — will not reach everyone.
16
U.S.
Land Routes Blocked, Smuggling Rises Sharply on California Coast
As security along the Mexican border has tightened, the waters off Southern California have been teeming with smugglers, as drug cartels seek new avenues to move illicit cargo into the United States.
17
N.Y. / Region
Where Theory and Research Meet to Jam About the Mind
In its third year, Qualia Fest, a gathering of musically inclined philosophers and neuroscientists, will continue to promote the overlap of theorists and practical researchers through music.
18
Science
Ideas for Colorado River Include a Feeder Pipeline
A Bureau of Reclamation report expected this week includes a potentially contentious idea to build a pipeline and export water from the Missouri River to feed the depleted Colorado River.
19
N.Y. / Region
Timeline of the New York City Housing Authority’s Response
It was only after volunteer groups raised alarms in the weeks after Hurricane Sandy that the city began a large-scale effort to reach out to stranded residents in the most affected areas.
20
World
Kenya: 3 Killed in Mosque Attack
A grenade thrown at worshipers leaving a mosque in a Somali neighborhood in Nairobi killed three people and wounded 15 on Friday evening, the city’s police chief said.The faithful do not learn.
http://krugman.blogs.nytimes.com/2012/12/10/technology-and-wages-the-analytics-wonkish/
Technology and Wages, The Analytics (Wonkish)
Obviously
I’m getting a lot of reaction to my stuff on robots and all that. (My
copy-editor, last night: “Thank God, it’s not about the fiscal cliff!”)
My sense is, however, that a lot of the reaction, both positive and
negative, involves misunderstanding the economic logic, with some
readers believing that technological progress can never hurt workers,
others believing that rapid productivity growth always hurts workers;
neither is true. So here’s an attempt to explain what’s going on in the
theory; cognoscenti will recognize it as nothing more than an exposition
of JR Hicks’s analysis of the whole thing in his 1932 Theory of Wages (pdf).
Start with the notion of an aggregate production function, which relates economy-wide output to economy-wide inputs of capital and labor. Yes, that sort of aggregation does violence to the complexity of reality. So?
Furthermore, for current purposes, hold the quantity of capital fixed and show how output varies with the quantity of labor. We expect the relationship to look like the lower curve in this figure (we’ll get to the upper curves in a minute):
Now,
in a perfectly competitive economy (don’t worry, we’ll talk about what
happens if not in a minute), we would expect the labor force to achieve
full employment by accepting whatever real wage is consistent with said
full employment. And what is that real wage? It’s the marginal product
of labor at that point — which, graphically, is the slope of the
aggregate production function where it crosses the vertical blue line.
Now suppose that we have technological progress. This manifests itself — indeed, in this context is basically defined as — an upward shift in the production function. I’ve shown two alternative curves, to make a point. Technology A and technology B are drawn so as to yield exactly the same level of output at full employment — which also says that both would lead to exactly the same rise in measured labor productivity. But they don’t have the same effect on real wages! Technology A is just a proportional upward shift in the original production function — which is “Hicks-neutral” technological change. As a result, the slope of the function where it crosses the blue line rises by that same proportion: real wages rise by the same amount as productivity.
But technology B is different — the gains are bigger at lower levels of employment, which is to say higher ratios of capital to labor (because the amount of capital is held fixed for this exercise). As a result, it is much flatter where it crosses the full employment line — which says that it would lead to much lower real wages than technology B. In fact, as I’ve drawn it, it leads to lower real wages than under the original technology.
What we’ve just seen, then, is that the effect of technological progress on wages depends on the bias of the progress; if it’s capital-biased, workers won’t share fully in productivity gains, and if it’s strongly enough capital-biased, they can actually be made worse off.
So it’s wrong to assume, as many people on the right seem to, that gains from technology always trickle down to workers; not necessarily. It’s also wrong to assume, as some (but not all) on the left sometimes seem to — e.g., William Greider — that rapid productivity growth is necessarily jobs- or wage-destroying. It all depends.
What’s happening right now is that we are seeing a significant shift of income away from labor at the same time that we’re seeing new technologies that look, on a cursory overview, as if they’re capital-biased. So we could be looking at my technology B story above.
There are, however, other possibilities — including the possibility that the fact that we don’t actually have perfect competition is playing a big role here.
So that’s the story so far. And it’s important stuff."
Start with the notion of an aggregate production function, which relates economy-wide output to economy-wide inputs of capital and labor. Yes, that sort of aggregation does violence to the complexity of reality. So?
Furthermore, for current purposes, hold the quantity of capital fixed and show how output varies with the quantity of labor. We expect the relationship to look like the lower curve in this figure (we’ll get to the upper curves in a minute):
Now suppose that we have technological progress. This manifests itself — indeed, in this context is basically defined as — an upward shift in the production function. I’ve shown two alternative curves, to make a point. Technology A and technology B are drawn so as to yield exactly the same level of output at full employment — which also says that both would lead to exactly the same rise in measured labor productivity. But they don’t have the same effect on real wages! Technology A is just a proportional upward shift in the original production function — which is “Hicks-neutral” technological change. As a result, the slope of the function where it crosses the blue line rises by that same proportion: real wages rise by the same amount as productivity.
But technology B is different — the gains are bigger at lower levels of employment, which is to say higher ratios of capital to labor (because the amount of capital is held fixed for this exercise). As a result, it is much flatter where it crosses the full employment line — which says that it would lead to much lower real wages than technology B. In fact, as I’ve drawn it, it leads to lower real wages than under the original technology.
What we’ve just seen, then, is that the effect of technological progress on wages depends on the bias of the progress; if it’s capital-biased, workers won’t share fully in productivity gains, and if it’s strongly enough capital-biased, they can actually be made worse off.
So it’s wrong to assume, as many people on the right seem to, that gains from technology always trickle down to workers; not necessarily. It’s also wrong to assume, as some (but not all) on the left sometimes seem to — e.g., William Greider — that rapid productivity growth is necessarily jobs- or wage-destroying. It all depends.
What’s happening right now is that we are seeing a significant shift of income away from labor at the same time that we’re seeing new technologies that look, on a cursory overview, as if they’re capital-biased. So we could be looking at my technology B story above.
There are, however, other possibilities — including the possibility that the fact that we don’t actually have perfect competition is playing a big role here.
So that’s the story so far. And it’s important stuff."
.
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