Are our jobs safe? For some, yes. For others, we need to act quickly.

(Originally posted on August 8, 2017 at https://medium.com/@jeremyerdman)

Natalie, a friend of mine and accountant at the time, attended a presentation for software intended to hasten auditing. Accounting demands a lot of time and attention to detail, and busy season requires auditors to spend 12+ hours a day, seven days a week, at work. As expected, the presentation and possibility of more free time excited the crowd. She, however, saw the writing on the wall. She saw that the software’s ability to automate certain components of her work would eventually reduce demand for auditors. She no longer is an accountant and had plans to switch careers before this presentation, but I am certain this presentation did not cause her to second-guess her decision.

The manifestation of artificial intelligence and automation ranges from stereotypical robots depicted in movies to software improvements that make tasks and jobs simpler. In this way, economic changes from artificial intelligence and automation technology will be both very blatant and subtle. Job risk can be as expected as replacing airplane painters with machines that do the same task, for longer hours, and do not require continual costs like wages or health care and as unexpected as the gradual decrease in the number of accountants.

Natalie was correct in recognizing the potential threat of automation to her job, but she had less of a reason to worry compared to many blue-collar workers with lower education levels. In December 2016, the Obama White House put out an Artificial Intelligence, Automation, and the Economy report that discussed upcoming trends in artificial intelligence and automation technology and policy. This report shows the upcoming threat to the lower-paid and less-educated, with 83% of jobs with an hourly wage less than $20 and 44% of jobs requiring less than a high school education being highly automatable.

This data shows the potential for significant social and economic upheaval. Assuming a 40-hour work week, 52 weeks a year, $40 hourly wage comes to $76,800 annually, which is about 36% higher than the median household income of $56,516 in 2015. Based upon this data, at least half of American households would fall into to earning brackets that have a decent chance of losing earnings to automation. Unemployment during the Great Depression peaked at around 25%, and, if we do not take necessary precautions, artificial intelligence and automation can force a similar economic downturn as millions lose their jobs.

The economic threat presented by automation and artificial intelligence is not due to the technology itself. We have seen this cycle before: technology changes, jobs emerge as other disappear, and workers shift. However, past workers have had advocates and organizations, often in the form of unions, to protect them from negative impacts of executive decisions designed to boost profits. Despite the recent onslaught of arguments that union are now corrupt and ineffective, union advocacy brought us the following benefits we now take for granted:

• the standard 40-hour work week
• safer working conditions
• banning of child labor
• health benefits
• aid for work-related injuries

The International Monetary Fund states that union membership has declined 19% since the early 2000’s. This decline removes a safeguard and advocate for many of these workers, who may have no clue their job is at risk and have no contingency plan in place. This decline shows no sign of reversing, as right-to-work laws become more common. Right-to-work laws, as stated by the Heritage Foundation, provide workers the option of joining a union rather than requiring it as a condition of employment. The Foundation argues against union membership by asserting that workers should not pay for union membership because they usually do not notice the benefits of membership. This argument is flawed. If a union does it’s job correctly and protects workers against incoming threats, then workers will not see all of the benefits accrued through union membership because the union stops problems from growing and directly impacting employees. Sadly, arguments against unions stick. A few days ago, workers at a Nissan plant in Mississippi voted against unionizing by a two-to-one margin. This trend continues the slow march towards a reduction in workers’ ability to prepare against automation and lay-offs as companies continue seeking ways to increase dividends to shareholders.

The lack of advocates and protections for workers causes the coming economic shift to threaten many Americans’ ability to find work. This threat, however, is a symptom of a larger problem with the American workforce. We do not see workers and employees as people, but as replaceable cogs in a machine. If we did not treat people as machines, then the substitution of human beings for automation would not occur as effortlessly as it has. We can trace this mindset back to the introduction of the assembly line, which broke down highly skilled labor into small, repeatable tasks. As a result, a sizable portion of our current workforce has become replaceable and dispensable as employers and companies seek workers to fill very narrow and niche roles. If we want to create an economy of the future, then we need to begin focusing on providing the tools and runway for workers to cultivate their skills and talents. We must advocate for and push forward a suite of policies that achieves the following:

• Strengthen the safety net for workers and families who lose their income due to automation and artificial intelligence
• Develop robust retraining programs to shift these workers into roles more suited for an automation-dominated economy
• Create trade-based education programs to equip coming generations for careers of the future

Most importantly, advocacy for these sort of policies cannot come only from the working class. We all must push for these sort of policies. If blue-collar workers and families lose their jobs and livelihoods to automation, then we all will suffer. As we learned from the Great Recession, our fortunes are intertwined, and it is our moral obligation to catch each other when we fall, help each other up, and move forward. It is the American way.

The link between International Aid and National Security is less obvious than we thought. (So let’s spell it out)

(Originally posted on Medium at: https://medium.com/@jeremyerdman)

We have a moral imperative to help those in less fortunate positions than us. Moreover, the more the US provides for and safeguards the well-being of the less fortunate in the less developed world, the greater dividends we see on our investment. Creating strong and stable communities throughout the world reduces their susceptibility to chaos in the midst of drought, famine, or political upheaval; in turn, this investment reduces the likelihood of needing to intervene after a despot or other leader has capitalized on the chaos and began to consolidate power. This is important because, as we have learned from recent history, the US has an affinity for trying to overthrow despots.

Why am I choosing to write about this connection? It seems pretty straight forward, right? Well, apparently, it is not. Back in March, the White House released its budget, and it cuts the Department of State and US Agency for International Development (USAID)’s budget by 28 percent. How does the White House justify this cut? Budget Director Mick Mulvaney explains:

“This is a ‘hard power’ budget. It is not a ‘soft power’ budget,”

According to Reuters, this statement refers to the president’s desire to prioritize direct military power over the influence fostered through development aid. Such prioritization will likely result is more demonstrations of force, like the US Navy’s arrival off the coast of North Korea in June.

USS Ronald Reagan (front) and USS Carl Vinson and (back R) sail with Japanese navy ships (Picture: Retuers)

While such actions may dissuade unfavorable actions by a despot in the short term, demonstrations of force do not help address underlying issues as to why the despot is in power to begin with. Moreover, demonstrations of power do not always dissuade against unfavorable action, as North Korea has continued to test its ballistic missiles despite the US’s increased Navy presence.

The uncertainty behind the effectiveness of military intervention and demonstrations of force underscores the need for continued investment in foreign aid. USAID’s scope of work is detailed on their blog:

Spending less than 1 percent of the total federal budget, USAID works in over 100 countries to:

• Promote broadly shared economic prosperity
• Strengthen democracy and good governance
• Protect human rights
• Improve global health
• Advance food security and agriculture
• Improve environmental sustainability
• Further education
• Help societies prevent and recover from conflicts
• Provide humanitarian assistance in the wake of natural and man-made disasters

The list above shows the wide range of needs that USAID fulfills around the world. Their operations and grants help less developed nations grow, but they also ensure that nations remain stable. How does their aid help promote stability? In my last blog, I discuss the plight of coal communities and their susceptibility to Trump’s coal message due to crippling economic conditions. I state that fear regarding one’s poor economic conditions and uncertain livelihood makes it impossible to plan for and invest in the future. Fear and desperation for change makes someone either more likely to cling to a despot’s promise for radical change or unable to stop his/her ascent.

To fight fear, we must inspire hope. We need to foster opportunity. In 2010, USAID approached Wilfred Charles’s community in Malawi with the opportunity to install an irrigation system. Wilfred, a farmer, pastor, husband, and father of four, joined with 269 volunteers to build irrigation canals. The work was hard. So hard, in fact, that the volunteers dwindled down to Wilfred and five other men. The six men worked for three years to finish the canals, but their work quickly turned around benefits for their community. Their labor and dedication provided for larger yields, which allowed for families to send their children to school, build houses, and have more economic opportunities.

Stories like Wilfred’s demonstrate the power and necessity of foreign aid and the opportunity we will destroy through a 28% cut to USAID’s budget. Whether you care about national security, the well-being of less developed nations, or both, foreign aid invests in the future of others and creates a more stable world. As the world becomes more and more connected, we need to recognize that investing in others, like Wilfred and his family, makes all of us better off.

How we can wrap our heads around Trump’s problematic Paris and coal decisions (Hint: It’s not about Trump)

So, President Trump has announced his intention to withdraw from the Paris Climate Agreement. What’s more, he intends to jumpstart coal production—a massive polluter. I’m a part of the 69 percent of Americans who want to restrict carbon dioxide emissions from coal. Trump’s agenda is misguided, rooted in his desire for applause that risks the livelihoods of future generations. It feels like a punch in the gut.

Rather than strike back, I decided to try to understand his stance on climate change policy, to look at the source of applause: Trump voters in coal country. The more I’ve investigated the circumstances of voters in coal counties of West Virginia and Kentucky, the more I approach our differences on climate change with empathy rather than confusion or anger.

Trump’s promise to bring back coal jobs plays into a narrative that pits the coal industry’s success against the presence of environmental regulation. Yes, policies regulating dumping of waste and control of toxic pollutants do make operating coal plants more expensive, but putting sole blame on these regulations is misguided. The reduction in coal’s profitability and resulting jobs truly stems from an esteemed Republican economic principle: competition. This competition comes in both competition against coal itself—natural gas—and competition against human labor—automation. Columbia University estimated that 49 percent of the decline in domestic coal consumption came from the increase in natural gas production. This decline in coal consumption compounds with a decrease in needed labor. The Brooking’s Institute explains that most coal mining now takes place in Wyoming instead of Appalachia, and the mining style in Wyoming is more automated and extracts 11 times more coal per employee than mining in Appalachia. The decline of coal isn’t a result of superfluous or flagrant environmental regulation—it’s from competition and innovation from the energy sector.

Trump’s anti-environmental regulation message, while not seeing the full picture, appeases coal country’s fear regarding their socioeconomic future. Coal communities throughout Appalachia are currently ravaged by high unemployment and poor health. In 2014, the New York Times’ Upshot identified the ten hardest counties in live in America, with six of the ten in Eastern Kentucky’s coal country. A snapshot into some of these counties provides more insight to their designation by the New York Times. Kentucky’s Martin and Clay counties’ median household income is half that of the nationwide mean with more than double the national average for percentage below the poverty level.[i] Moreover, obesity rates in Clay County have reached 50 percent compared to 36.5 percent nationwide.[ii] A further investigation into the health detriments of coal mining show that areas of Appalachia in close proximity to coal production as well as the greatest levels of coal mining have higher levels of cardiopulmonary disease, hypertension, lung disease and overall mortality.[iii] [iv] The decrease in employment and high rate of health issues due to coal mining resulted in a disproportionately high amount of opioid prescriptions from the mid-1990s to 2010. As a result, states with historically high amount of coal mining, like Kentucky and West Virginia, rank one and three in the nation for drug overdose deaths in 2015. The combination of all these factors show communities desperately in need of an economic boost, which they believe is only impeded by environmental regulation.

If environmental regulation is not responsible for the decline of the coal industry and the culprit of these communities’ instability, why are these regulations constantly under attack? Of any factor that could impact the livelihoods of coal communities, environmental regulation is the easiest to demonize for two reasons:

1. Specific policies, like the Clean Power Plan, are easier to pinpoint and attack than general market trends
2. Solving the problem through repealing regulations is simpler to enact and articulate than fighting shifting markets and technology

These two reasons show coal communities’ appeal and support of Trump’s coal vision because it can improve their quality of life quickly and avoids the work required to shift the economic engine of their communities towards different industries.

So how do we bring these coal communities on board with our vision for America as a clean and green technology innovator? We must help them recognize that making this transition is in their best interest, while also addressing the very real fears when it comes to their livelihood and security. We all can understand fear and anxiety that cripples our ability to plan for the future and focuses all our energy on immediate survival. For these communities, it is challenging and threatening to plan for a future that may never happen if they cannot survive their current reality. Therefore, we need to invest in programs and policies that boost these communities like:

• Job retraining programs
• Ensuring health care for millions by protecting the Affordable Care Act
• Maintaining safety-net programs like Social Security
• Increased funding for opioid addiction

This is only a sample of policies and programs that could help, but we need to invest in and support a suite of policies to improve these communities’ livelihoods. Until we do so, attempts to pull coal communities into a clean- and green-technology vision will fall on deaf ears.

The disagreement between those of us who want to address climate change and coal communities reminds me of the AJ+ video of CIA agent Amaryllis Fox. In this video, she says “if you hear [your adversary] out, if you are brave enough to really listen to their story, you can see that, more often than not, you might have made some of the same choices.” Their opposition to addressing climate change does not stem from pure ignorance or disdain for science, but because their livelihood depends on it. We need to recognize and address these communities’ struggles, and once we do that, we can work together to address climate change and build a stronger America.

 

 

 

[i] U.S. Census Bureau. 2014. “American Community Survery.” American FactFinder: 2014 ACS 1-year estimates. Washington, DC: U.S. Department of Commerce.

[ii] Haygood, W. “Kentucky Town of Manchester Illustrates National Obesity Crisis.” The Washington Post. Web. 12 July 2010.

[iii] Krause, E. 2016. “Addressing the Distributional Impacts of U.S. Climate Policy: Characteristics of Compensation.” University of Washington, Daniel J. Evans School of Public Policy and Governance.

[iv] Hendryx, M. and M.M. Ahem. 2008. “Relations Between Health Indicators and Residential Proximity to Coal Mining in West Virginia.” American Journal of Public Health 98(4): 669-671.

In a U.S.-Mexican Trade War, No One Wins

In the first week of his presidency, we have seen Donald Trump move forward on some of his campaign promises through withdrawal from the TransPacific Partnership (TPP) and ordering the construction of the wall along the U.S.-Mexico border. These actions seek to posture his administration as tough on the international stage and putting America’s needs first. However, what happens when other nations refuse to bend to Trump’s will, as Mexico refuses to finance the wall? Sean Spicer, Trump’s Press Secretary, stated that the administration was considering a 20% tax on Mexican imports in order to finance the wall.[i] The logic behind the tax is simple: higher prices for Mexican imports should drive down American demand for such products and harm the Mexican economy.

 

The rationale behind this tax stems from a single assumption that appears to guide most of Trump’s decision-making:

 

• America, as the world’s largest economy and super power, can withstand and outlast any other country or economy in a trade war

 

Through this assumption, Trump hopes that a 20% import tax would cripple the Mexican economy into submission and believes that the American economy can survive any sort of economic retaliation from Mexico. He is most likely correct. America would most likely outlast Mexico in a trade war, but outlasting Mexico does not mean that America wins. An import tax mostly falls on the consumer, and this tax would be regressive, meaning that the burden falls heavier on lower-income households. The result: many working class Americans—those who swung heavily towards Trump this election—will be feeling the most acute pain in their wallets. As Senator Lindsey Graham said on twitter, “any policy proposal that drives up the costs of Corona, tequila, or Margaritas is a big-time bad idea. Mucho Sad.” Mucho sad, indeed, Senator Graham.

[i] http://www.cnn.com/2017/01/26/politics/donald-trump-mexico-import-tax-border-wall/