# data[].attributes.headline
What Is The National Debt of The United States?”

# data[].attributes.subject
What Is The National Debt of The United States?”

# data[].attributes.attachment_link.title
Economics Research Project - Essay(1)Banking Too big to fail

# data[].attributes.attachment_link.title
ECO research project essayNational Debt Crisis

# data[].attributes.headline
Twin Pillars of Banking:Commercial & Investing 

# data[].attributes.subject
Twin Pillars of Banking:Commercial & Investing 

# data[].attributes.attachment_link.title
Economics Research Project - Essay Macro

# data[].attributes.headline
"In the U.S. for full-time work (35 hours or more), women annually earned 60 percent in 1955, 79 percent in 2010 and 83 percent in 2014 as compared to men, according to Francine Blau and Lawrence Kahn, J of Economic Literature, in September 2017. This gap has remained almost unchanged in 2018."

# data[].attributes.subject
"In the U.S. for full-time work (35 hours or more), women annually earned 60 percent in 1955, 79 percent in 2010 and 83 percent in 2014 as compared to men, according to Francine Blau and Lawrence Kahn, J of Economic Literature, in September 2017. This gap has remained almost unchanged in 2018."

# data[].attributes.attachment_link.readable_text
"#Me Too" movement has drawn attention to the mistreatment, harassment, and sexual assault of women in general and in the workplace. However, it has also rekindled the controversy of wage earnings discrimination against women in the workplace, even though the gap has narrowed since 1955.

In the U.S. for full-time work (35 hours or more), women annually earned 60 percent in 1955, 79 percent in 2010 and 83 percent in 2014 as compared to men, according to Francine Blau and Lawrence Kahn, J of Economic Literature, in September 2017. This gap has remained almost unchanged in 2018. It is narrower between black women and black men as opposed to white women and white men. In Utah the gap is worse (ranking 49th in the nation). What explains the persistence of wage earnings gap and its slow down since the 1980s?

Wage earnings gap will arise if women have skills associated with low-wage occupations. For example, a Utah Women and Leadership Project study from December 2016 finds that more than 40 percent of Utah women work in two occupational groups with income gaps ranging from 14 percent to 59 percent from the average for all professions in the state ($31,446). Women in Utah have lower participation rates in higher paid occupations, such as construction and extractive industry, installation, maintenance and repair, and architecture and engineering.

As compared to other countries, the U.S. has a higher wage gap between lower and higher skills. Thus it creates a greater wage gap in the U.S. since women are concentrated in lower-skilled occupations. The paradox is that in Utah men and women have almost the same levels of education, at the associate and the bachelor's degree levels, but still have one of the worst earnings gap. Studies show that even though women have made much progress in entering higher paid occupations, they still lag behind men in occupations requiring skills in math, science, engineering and finance.

What about the earnings gap within the same occupations, with the same education and experience? It could be due to attributes, such as experience, turnover, absenteeism and part-time work. As the study by Blau and Kahn shows, even though experience in general has narrowed nationally between men and women, the above characteristics could lead to less specific training and experience in particular occupations, lower productivity and hence lower wages. Such factors matter more for women who face the problem of balancing work and family (more so in Utah due to large family size).

The report, Workplace Gender Gap in the Oct. 23, 2018 Wall Street Journal, finds that aside from experiencing harassment in technical and senior management positions, the share of women decreases at every step of the management ladder. Their share in industries, such as health care systems, retail, banking and consumer finance, tech and software, and engineering, declines at each level of senior positions as compared to their share at the entry level.

"#Me Too" movement has made business executives aware of the discrimination against women in the workplace. This movement has also made women realize their self-worth and made them more assertive in demanding equal treatment in the workplace. However, as WSJ reports, women CEO-founders of companies with less than $15 million of investor financing pay themselves less compensation than men, mainly due to the shortage of financial support by venture capitalists.

Evidence cannot discount discrimination against women in hiring, pay, promotion, and lack of mentoring and other support structure in the labor market. According to McKinsey study for US News and World Report, 2018, Utah ranks second from the top in the economy's performance and third from the top in education, but ranks 35th from the top in opportunity. Hopefully, senior executives in businesses and institutions will realize the loss of economic wealth to the nation if women's potential is not fully recognized and utilized.

According to philosopher John Rawls' concept of justice, in the meritocratic system of the free market, the distribution of income and wealth is just, "only if everyone has the same opportunity to develop his or her own talents. Only if everyone begins at the same starting line ... the winners of the race deserve their rewards."

Mathur is former chairman and professor of economics, emeritus, Department of Economics, Cleveland State University, Cleveland, OH. He blogs at mathursblogonomics.blogspot.com.

# data[].attributes.attachment_link.description
"#Me Too" movement has drawn attention to the mistreatment, harassment, and sexual assault of women in general and in the workplace. However, it has also rekindled the controversy of wage earnings discrimination against women in the workplace, even though the gap has narrowed since 1955. In the U.S.

# data[].attributes.headline
"Overall, women still earn about 20 percent less than their male counterparts.That shortfall can vary widely depending on where you live.In Utah, for example, women only make about 57 cents for every dollar a man does."

# data[].attributes.subject
"Overall, women still earn about 20 percent less than their male counterparts.That shortfall can vary widely depending on where you live.In Utah, for example, women only make about 57 cents for every dollar a man does."

# data[].attributes.attachment_link.readable_text
As it stands, a woman makes about 80 cents for every dollar a man does nationwide. But that shortfall can vary widely depending on where you live.

A new report by GOBankingRates determined pay gaps between men and women across each state by analyzing data from the Census Bureau's 2016 American Community Survey.

In some states, like Wyoming and Utah, women make only a little more than half what their male counterparts earn - in part because the jobs in those areas are weighted heavily toward the energy-producing industry.

And there's no state in the country where earnings between the genders are equal, GoBankingRates found.

"In every single state women are earning less" said, Cameron Huddleston, a life and money expert for GoBankingRates, "and, in most states, women are earning less in every career field."

In Washington, D.C., which comes the closest to parity, women earn 83 cents on the dollar. (See map below.)

# data[].attributes.attachment_link.title
These states pay women much less than men

# data[].attributes.attachment_link.description
As it stands, a woman makes about 80 cents for every dollar a man does nationwide. But that shortfall can vary widely depending on where you live. A new report by GOBankingRates determined pay gaps between men and women across each state by analyzing data from the Census Bureau's 2016 American Community Survey.

# data[].attributes.attachment_link.title
What does a trade war look like? We explain

# data[].attributes.headline
Cyber crime is the only criminal enterprise with a 'help desk'

# data[].attributes.subject
Cyber crime is the only criminal enterprise with a 'help desk'

# data[].attributes.attachment_link.description
Six Videos 2018 2018 Music Videos Musicales 2018 2018 Video Love Hindi Song 2018 2018 Musical 2018 Lunch Funny Videos 2018 Top Videos Artist Videos 2018 Video Hindi 2018 2018 Video Kaila Beach Stormy Danielle 2018 Video 2018 Songs 2018 Videos 1 5 2018 2018 Bokep Video Korea Selingkh New Songs 2018 Video 2018 Maram Susli Black History Videos 2018 Belmont 2018

# data[].attributes.headline
GARY SHILLING: Tech innovation will drive economic growth

# data[].attributes.subject
GARY SHILLING: Tech innovation will drive economic growth

# data[].attributes.attachment_link.title
video about new technology and economic growth - Bing video

# data[].attributes.attachment_link.description
A look at why the United States and China are moving closer to a potential trade war

# data[].attributes.attachment_link.description
Private Student Loan No Cosigner Student Loan How Does Student Loans Work Student Loan Consolidation Gov Student Loan GuideWell Financial Chinese Student Loans Federal Student Loans Login Loans for Poor Credit Are Student Loans Forgiven Obama Student Loans Unsecured Loans Student Loan Network Consolidation Review Student Loan Calculator

# data[].attributes.attachment_link.description
Private Student Loan No Cosigner Student Loan How Does Student Loans Work Student Loan Consolidation Gov Student Loan GuideWell Financial Chinese Student Loans Federal Student Loans Login Loans for Poor Credit Are Student Loans Forgiven Obama Student Loans Unsecured Loans Student Loan Network Consolidation Review Student Loan Calculator

# data[].attributes.attachment_link.readable_text
The biggest economic issue for the future is closing the skills gap and retraining workers who have been displaced from their old jobs that have been automated. Both the US unemployment rate and the total job openings have been relatively unchanged in the past year. The unemployment rate in January was 4.8%, down only 0.1% from the same time in 2016. The total job openings were 5.5 million in Dec. 2016, up from a mere 100,000 the same time in 2015. We simply don't have people with the right skills to fill millions of jobs, yet many of them are still underemployed or living in poverty.

The role of education in our society has become extremely critical to our survival as a nation. We aren't keeping up with the changing demands of the economy, the immense competition brought on by outsourcing and the speed of which technology has disrupted every industry. A strong education is the path not just out of poverty but also to a prosperous life of freedom and security. The problem is that one in every five adults globally has no formal education, which is a total of 682 million people, and jobs that require formal education are the ones expected to grow by nearly 8% in the next seven years.

While industries, such as healthcare and technology, will have the highest growth during that period of time, farming and production will be in decline by over 3%. Many, like bank tellers and postal service mail carriers, will be victims of automation and will be scrambling to figure out how to acquire the right skills to transition into a new career. In our recent study with Konica Minolta, we found that half of companies believe that automation will remove at least 10% of their headcount by 2020. The jobs, and tasks, that are most likely to be automated are those that are repetitive in highly structured environments, and McKinsey found that they comprise about half of all activities in the US economy, totaling $2.7 trillion in wages.

Our education system is not adapting quick enough to these labor changes, yet the cost of education has risen significantly since 1995, up 179% for private universities and 296% for public universities. While these costs have accelerated, millennials are earning 20% less than boomers did when they were that age. Even for students who are fortunate enough to attend college, many are stuck with loans that they may never pay back, and with a degree that doesn't have staying power as it once did. Colleges need to become more affordable and promote the skills, jobs, and industries of the future if they want to stay relevant and help the economy.

Under Obama, The White House planned to invest in STEM education for people looking to break into technology-related fields, and spend six times the current amount to keep our workers competitive in the global economy. The government will be an important player in helping retrain and retool workers so they are able to get more highly skilled jobs. The future of government training initiatives is unclear with the Trump administration, and the future of public education is at stake with Betsy DeVos, the new education secretary, whose views are counter to her post.

Amidst our great economic challenge is some shining light. While technology is shredding jobs, it has also enabled people to take a wide variety of online courses for free or a minimal fee. Automation will also remove some jobs that Americans don't want and make highly skilled workers more productive. To meet the needs of today's workforce, we need to ensure that what students are learning actually reflects our current needs, and that we are investing in our people so they can help fill the skills gap and create a brighter future for everyone.
This article is part of Quartz Ideas, our home for bold arguments and big thinkers.

# data[].attributes.attachment_link.title
The biggest economic issue facing America is not job creation

# data[].attributes.attachment_link.description
The biggest economic issue for the future is closing the skills gap and retraining workers who have been displaced from their old jobs that have been automated. Both the US unemployment rate and the total job openings have been relatively unchanged in the past year.

# data[].attributes.attachment_link.readable_text
The rapid improvements in technology have transformed how we work, and in most cases have made our jobs easier. But it's having another effect too - removing the need for a human worker altogether.

The technology boom shows no sign of slowing. A report released in November 2017 by McKinsey Global Institute found that up to 800 million global workers will lose their jobs to new technology by 2030.

[Read more: The best robots to buy for Christmas]

The findings add to a study carried out by Deloitte, the Big Four accountancy firm, and the University of Oxford in 2014, which predicted that 35% of the jobs we do today in the UK could go to robots by 2034. Here are some jobs from yesteryear that have already gone and some that are starting to be phased out.

Switchboard operator

It was a job ceated by a technology revolution, but the days of manual telephone switchboards are long gone. In the olden days, a switchboard operator would have to physically connect calls by inserting phone plugs into the relevant jacks. They would also be able to participate in the call.

In the largest exchanges, supervisors whizzed around on roller skates to keep up with all of their staff. Switchboard operators still exist within organisations today, although the systems are completely computerised.

Bowling alley pinsetter

We often take for granted the fact that all bowling alleys have machines to pick up our fallen pins and rearrange them - as well as computers keeping a tally of our scores on a screen.

In earlier times, a bowling alley pinsetter would be waiting at the end to pick up all the knocked-down pins and put them back in place. It could be a dangerous job if the players weren't paying attention!

Lift operator

Everyone who has used a lift knows that it's not difficult - press a button and you're on your way. But the first lifts could not automatically stop perfectly on the level you wanted. Instead, they were manually controlled by a large lever, and a lift operator would have to judge when to stop the lift as well as opening and locking the doors.

The technology on board today's user-operated lifts now does all that for you. You'll still find lift operators in a few luxury hotels where the clients are too rich to press buttons for themselves - and in the BT Tower in London, where the lift travels so fast to the 34th floor viewing area that some passengers need to be reassured.

Film projectionist

When cinemas began, a film projectionist was needed to run mechanical projectors with 35mm celluloid rolls. It was quite a physical and task that required an experienced operator to load the film reels and change them to keep the film running without a hiccup.

Now we have turned to digital projectors that are like professional-quality BT TV boxes, so simple that anyone working in a cinema can load movies. As a result, the role of film projectionists has been diminished to near extinction, although some arthouse cinemas still have 35mm projectors to show prints of classic films.

[Read more: What is artificial intelligence?]

Knocker-upper

How did people get up in the morning before alarm clocks existed? Up until around the 1920s, those who had to wake early relied on a knocker-upper (or knock-up) who would use a truncheon or long stick to hit your window until you woke up.

Since then we've moved onto wind-up clocks, before shifting again to digital alarm clocks and swapping alarm clocks completely for our smart phones. But here's a question: who knocked up the knocker-uppers?

Bridge toll collector

Bridge toll collectors still exist but their days are numbered as we move onto automated solutions. The Dartford Crossing is a prime example of this, which has removed all its toll collection booths in favour of an electronic number plate recognition system.

The newer system uses sophisticated ANPR cameras mounted above each lane, logging every vehicle's number plate as it passes through. Drivers can pay before or up to 24 hours after incurring a charge on the phone, via text, online or in local shops. The system is used across the world today.

Check-out cashier

"Do you need any bags today?" the cashier usually asks. But perhaps not for long. Self-service checkouts are found in nearly every supermarket in the UK now, and it only takes one or two operators to manage a dozen checkouts or more.

Self-checkouts aren't confined to small basket shops - most supermarkets have full self-service checkouts with conveyor belts, while others let you scan as you shop using a handheld scanner. Now one person can monitor a dozen self-checkouts, to correct the mistakes we make as customers.

Railway station ticket seller

Similarly to cashiers, railway stations up and down the country now have machines where passengers can buy and collect tickets, and many remote stations are unmanned unless the ticket inspectors are making a random check.

It's only a matter of time before all types of tickets can be ordered online and collected from self-operating machines at the station. Confused tourists trying to understand the rules of an off-peak time advanced supersaver fare will be the only ones looking for an open ticket window.

Factory worker

The number of factory workers in manufacturing has fallen sharply because of technological intervention, enabling machines to take on the repetitive heavy labour. One factory in China has replaced 90% of its human workers with robots already, a move which it says has resulted in fewer defects and an increase in production.

Robots now carry out the majority of tasks on their own, meaning only a few human staff members are required to keep an eye on them and carry out maintenance. They're not always better, though, as Elon Musk found out when he replaced much of Tesla's workforce with robots, then had to bring the humans back when the robots couldn't keep up with demand.

[Read more: Get the speed you need with our Superfast fibre broadband]

# data[].attributes.attachment_link.title
9 human jobs that have been taken over by robots

# data[].attributes.attachment_link.description
The rapid improvements in technology have transformed how we work, and in most cases have made our jobs easier. But it's having another effect too - removing the need for a human worker altogether. The technology boom shows no sign of slowing.

# data[].attributes.attachment_link.title
Essay Final Project assignment The US Poverty Crisis

# data[].attributes.headline
The growth of industrialization and urbanization is also in part responsible for the rising poverty rates.

# data[].attributes.subject
The growth of industrialization and urbanization is also in part responsible for the rising poverty rates.

# data[].attributes.attachment_link.title
Growing poverty in America | The Economist

# data[].attributes.headline
The US Poverty Crisis (Research Project)

# data[].attributes.subject
The US Poverty Crisis (Research Project)

# data[].attributes.body
40 million Americans living in poverty. 1% considered to be the rich and the rest 99% sharing what is left of the economy. Did you know that the US has the highest growing poverty rates in the rich world?This could be a crisis of income inequality as the gap between the rich and the poor grows bigger even as poverty levels slightly fall.

# data[].attributes.attachment_link.keywords[]
continuously updated us national debt clock real time us debt clock

# data[].attributes.attachment_link.description
US National Debt Clock : Real Time U.S. National Debt Clock

# data[].attributes.attachment_link.readable_text
The United States could simply make more money to pay its bills, said Stephanie Kelton, an economics professor at Stony Brook University. But taken to an extreme, that could lead to higher inflation. - Mark Wilson/Getty Images

The federal deficit - the gap between the revenue the government brings in and what it spends - grew to nearly $780 billion in the 2018 fiscal year, according to the Treasury Department.

That's an increase of nearly 17 percent over the previous year, driven largely by the Trump tax cuts, as well as increased military spending. Senate Majority Leader Mitch McConnell called the numbers "very disturbing" in an interview with Bloomberg, pinning the blame for the increase on Medicare, Medicaid and Social Security.

While there are economic limits to how much the U.S. government can and should borrow, what that limit is or how close it may be tough to say.

"There's no quick and easy answer," said Harvard economist Kenneth Rogoff. "It's clear that the U.S. can bear a lot more debt than it has at today's low interest rate."

Even with higher annual deficits spurred by tax cuts that will add over a trillion dollars to the debt in the next 10 years, the United States is not nearing unsustainable debt levels, said Stephanie Kelton, a professor of economics and public policy at Stony Brook University.

"Some people would say the red lights are flashing, and we're all sticking our heads in the sand and ignoring the clear and present danger," she said. "I don't see a clear and present danger."

Kelton said the United States, like Japan, will always be able pay its debts since it controls its own currency. It can simply create more money to pay its bills.

Taken to an extreme, that strategy can lead to higher inflation. And Kelton said it matters what the government uses its borrowed money to do - whether or not the spending will make the future economy more productive.

However, while there may be economic room for higher U.S. debt, politically, the threshold may be significantly lower.

"The likely scenario is there will be pressure to cut spending," said Robert Pollin, director of the Political Economy Research Institute at the University of Massachusetts-Amherst. "If the Trump administration is committed to continuing to increase military spending, the only place where you can get a substantial amount of savings out of the rest of the budget is in health care."

"I think the best compliment I can give is not to say how much your programs have taught me (a ton), but how much Marketplace has motivated me to go out and teach myself." - Michael in Arlington, VA

# data[].attributes.attachment_link.description
The federal deficit - the gap between the revenue the government brings in and what it spends - grew to nearly $780 billion in the 2018 fiscal year, according to the Treasury Department. That's an increase of nearly 17 percent over the previous year, driven largely by the Trump tax cuts, as well as increased military spending.

# data[].attributes.attachment_link.readable_text
WASHINGTON - The national debt is $21 trillion and counting.

The federal deficit soared last year to $779 billion and is projected to approach $1 trillion in 2019.

For most Americans, it's difficult to comprehend a dollar figure that has that many digits. ($1 trillion, when written out in long form, is $1,000,000,000,000. Yes, that's 12 zeroes.) The numbers are so huge that they almost seem surreal.

But the impact of the rising national debt and federal deficit is very real, even for average Americans, financial experts warn.

So here's what you should know about the debt and the deficit - and why you should care.

Deficit and debt: What's the difference?

The terms deficit and debt often appear in the same government reports that spell out the country's financial woes. But they're not the same.

Put simply, the deficit refers to the difference between what the federal government spends and the revenue it takes in annually. The debt is the amount of money the federal government must borrow to cover years of budget deficits.

Both are on the rise.

The deficit hit $779 billion in the fiscal year that ended Sept. 30 because tax revenues are not keeping pace with government spending, the Treasury Department announced Monday. That's a 17 percent increase over the previous year - the highest deficit in six years.

And it could have been worse. The year's deficit would have been even higher if not for a shift in the timing of certain payments, the Treasury said.

Treasury Secretary Steven Mnuchin suggested that the rising deficit was the result of "irresponsible and unnecessary spending." But a separate report released earlier this month by the nonpartisan Congressional Budget Office said the jump was fueled in part by the tax cuts Congress approved last year.

As for the national debt, it continues to climb at a staggering pace. Right now, it's more than $21 trillion and literally soaring by the second. To keep track, you almost need a clock. Luckily, there are several operated by various groups that show just how fast the debt is piling up.

Things haven't always been this bleak. In 2000, the federal government had a surplus of $236 billion and the national debt was less than $6 trillion, according to the Treasury Department.

What's the impact?

More debt and higher deficits not only harm the economy, they dip into the pocketbooks of average Americans, said Maya MacGuineas, president of the nonpartisan Committee for a Response Federal Budget.

For starters, they drive up interest rates, which leads to slower economic growth. Slower growth leads to lower wages, which results in a lower standard of living for Americans, MacGuineas said.

To pay for years of deficits, the federal government must borrow money. Roughly half of the U.S. debt is held by foreign countries, such as China, Japan and Saudi Arabia. China alone holds more than $1 trillion in U.S. debt.

Borrowing at that level is financially irresponsible, MacGuineas said. "We have a global sugar daddy that is allowing us to borrow at an unsustainable level," she said.

Why is it unsustainable? Because the more we borrow, the more we pay in interest to those countries.

Interest on U.S. debt is projected to total $7 trillion over the next decade and, by 2026, will become the third largest category of the federal budget, according to the Peter G. Peterson Foundation, a nonpartisan organization dedicated to addressing the country's long-term fiscal challenges.

"That's $7 trillion going out on the door," said Michael Peterson, the Peterson Foundation's chairman and chief executive officer.

Interest on U.S. debt is projected to total $7 trillion over the next decade and, by 2026, will become the third largest category of the federal budget, according to the Peter G. Peterson Foundation. (Photo: J. Scott Applewhite, AP)

In other words, that's $7 trillion that could be spent on things like roads, bridges, schools and other programs that benefit Americans every day.

There are other implications, too.

Higher interest rates reduce the amount of private capital available for investments, which hurts economic growth and wages and leaves the U.S. with less flexibility to respond to a financial crisis like the Great Recession of 2008, Peterson said.

The U.S. had relatively modest debt when the Great Recession hit, Peterson said, so that meant the government could direct many of its financial resources into a stimulus package to help rescue the economy.

Remember what happened then? Some $831 billion was spent on tax credits, health care, schools, energy, roads and other construction projects to save jobs and get the economy back on its feet. Financial analysts disagree on how effective the package proved to be in correcting the economy. But many argue that it was a significant factor in the economic recovery.

If the country continues its current path of mounting debt, it may not have the ability to respond to such unforeseen crises in the future, Peterson said. That means another recession could be deeper, longer and more painful.

How does it affect you?

Let us count the ways.

And we'll start with how much you earn.

Debt not only suppresses economic growth, it suppresses future wages. The Congressional Budget Office projects that average income in 30 years will be $5,000 less per year if the national debt continues its current trajectory. Using that same data, the Peterson Foundation calculates that average income for a family of four will drop by $16,000 over the next three decades if debt rises as projected.

That means you'll have less money to spend on daily necessities like food, gas and clothing or to put extra money in your savings account or your 401(k).

As we've already mentioned, rising debt and deficits can lead to higher interest rates. Higher interest rates mean it will cost more to borrow money to buy a house or a car, and paying for college tuition or starting your own business will become more expensive.

Higher interest rates also affect credit card purchases, so expenses like buying gas or groceries or even going on vacation will cost more.

Government programs like food stamps or unemployment benefits that help the most vulnerable in society could face cuts if the government has less money to spend. It also may be more difficult to prop up financially strapped programs, like Medicare, which is projected to run out of money by 2026, and Social Security, which is expected to be insolvent by 2034, unless benefits are cut or other steps are taken to shore up the programs.

Are Americans worried?

Apparently not.

Americans view economic issues, such as improving the jobs situation, strengthening the economy and reducing the budget deficit, as less important policy priorities than just a few years ago, according to a national survey in January by the Pew Research Center.

Just 48 percent of those surveyed said cutting the deficit should be a top policy priority for the president and Congress, down from 63 percent in 2014. A year earlier, in 2013, roughly 72 percent of Americans cited the deficit as a top priority, the highest at any point in the past two decades.

Getting people to care about the debt and the deficit is a challenge "because you are basically saying to people that we need to raise taxes and cut spending today so that in the future we don't have to raise taxes and cut spending even more," MacGuineas said.

It's a hard sell, she said.

"We would rather have the federal government do a lot of things today and not pay for it rather than put together an economic plan that would help grow the economy in a more continuous and lasting manner," MacGuineas said. "It's greedy. It's those of us who are in charge right now saying we want it all without paying for it."

"It's not what our grandparents would have done," she said. "They said, 'We want to make sure we leave the economy stronger for the next generation.'"

More: 15 ways to make your savings last in retirement and keep pace with inflation

More: Don't make these financial mistakes: 10 ways you should never use your credit card

More: From investing to debt to budgeting, 19 financial mistakes millennials should avoid

More: Tax cuts, spending helping push national debt to historic high, new report says

Read or Share this story: https://www.usatoday.com/story/news/politics/2018/10/16/government-spending-how-rising-federal-debt-deficit-impact-americans/1589889002/

# data[].attributes.attachment_link.title
The national debt and the federal deficit are skyrocketing. How it affects you

# data[].attributes.attachment_link.description
WASHINGTON - The national debt is $21 trillion and counting. The federal deficit soared last year to $779 billion and is projected to approach $1 trillion in 2019. For most Americans, it's difficult to comprehend a dollar figure that has that many digits. ($1 trillion, when written out in long form, is $1,000,000,000,000.

# data[].attributes.headline
The Beneficial Proliferation of Technology

# data[].attributes.subject
The Beneficial Proliferation of Technology

# data[].attributes.attachment_link.title
Research ProjectThe Beneficial Proliferation of Technology

# data[].attributes.attachment_link.title
11 Facts About Education and Poverty in America

# data[].attributes.attachment_link.readable_text
Paltry Pay

The last couple of decades have been terrible for American workers without much education. New research calculates just how bad, and offers some evidence as to why that is.

In short, they face a double whammy. Less-educated Americans, especially men, are shifting away from manufacturing and other jobs that once offered higher pay, and a higher share are now working in lower-paying food service, cleaning and groundskeeping jobs. Simultaneously, pay levels are declining in almost all of the fields that employ less-educated workers, so even those who have held onto jobs as manufacturers, operators and laborers are making less than they would have a generation ago.

Perhaps the single most shocking number in a new review of employment and earnings data by researchers at the Hamilton Project, a research group within the Brookings Institution, is this one: The median earnings of working men aged 30 to 45 without a high school diploma fell 20 percent from 1990 to 2013 when adjusted for inflation.

A group of people not earning much to begin with, in other words, has seen earnings plummet to $25,500 in 2013 from $31,900 in 1990 (both numbers are in 2013 dollars). Men with a high school diploma did only a little better, with a 13 percent decline in median earnings over the same span. Women did better than men, but it has been no era of riches for less-educated women either; those without a high school diploma saw a 12 percent decline in median earnings, and those with a high school diploma or some college a 3 percent gain.

The difficulties of American workers, and especially those with low levels of education, have been well documented. What makes the latest analysis, by Melissa S. Kearney, Brad Hershbein and Elisa Jácome, interesting is in some ways its simplicity. They focused on a slice of census data that avoids some of the more contentious dimensions of these debates.

They are using data over a relatively long period, 23 years, that includes three recessions and three recoveries, so the results should be little affected by exactly where we stand within the economic cycle. They focus on people between ages 30 and 45, so the numbers shouldn't be much affected if people choose to stay in school longer or retire earlier. They focus only on those who worked at least 750 hours during the year, sidestepping the debate over whether millions of Americans who have left the work force are doing so voluntarily or because they don't think there are good job opportunities available to them.

There are two common stories for why this has been such a hard couple of decades for less-educated American workers.

Image

Low-wage workers, many in the fast-food industry, demonstrated last week, in New York and around the nation, to demand a minimum wage of $15 an hour. Credit Spencer Platt/Getty Images

First, there is the decline of the number of jobs in manufacturing and other industries that once paid less-skilled workers good wages, a result of technology and globalization. Second, there are changing norms around worker pay and the workplace - less union power, for example, a lower minimum wage when adjusted for inflation, and a culture in corporate America of cutting labor costs to the bone.

It would be dangerous to read too much into a relatively simple crunching of census data, but the Hamilton Project numbers offer some evidence for both.

First, there really is a shift away from the sectors where less-educated workers can earn a decent living. In 1990, 40 percent of the prime-age male workers without a high school diploma worked as operators and laborers, a number that declined to 34 percent in 2013. Jobs in food service, cleaning and groundskeeping nearly doubled in the same span, to 21 percent from 11 percent. But it wasn't an even trade: Pay for operators and labors was $25,500 in 2013, compared with $20,400 for the food, cleaning and groundskeeping category.

You're not imagining it. The jobs that are being created for less-educated workers really do pay less than the ones that are being lost. That suggests that globalization and technological change - the shifts that are making those machine operator jobs fewer and farther between - are a factor in depressed wages.

But the shift in occupational categories, the researchers found, accounts for only about a third of the decline in pay for men without a high school degree and one-sixth of the decline for those with a degree. A bigger effect is downward pressure on pay in jobs held by low-education workers across the board.

So not only did people shift from higher-paying fields to lower-paying ones, but inflation-adjusted pay also fell in all of those jobs. For example, production work - manufacturing, largely - was the highest-paying category for men without a high school diploma in 2013, paying them $28,000. But that sector was both smaller (29 percent of such workers, down from 31 percent) and paid less (down from $33,600) than it did in 1990.

The drop in pay across the board for low-education workers hints more at some of those factors around employers' bargaining power and practices. Both factors could come into play, though. For example, perhaps a rise in automation and globalization is eliminating manufacturing jobs, and the people who once held those jobs are now competing for work as janitors and food preparers, and the additional supply is helping to depress wages in those fields.

"One thing that's always bothered me about the political debate is people want to say either it's globalization and technology, or it's institutions," said Ms. Kearney, who is director of the Hamilton Project and a professor at the University of Maryland. "But of course it's both."

Correction:

Because of an editor's error, an earlier version of this article gave an incorrect age range for the working men without a college diploma whose median earnings fell 20 percent from 1990 to 2013. They were aged 30 to 45, not 25 to 54.

A version of this article appears in print on , on Page A3 of the New York edition with the headline: Why Less Educated Workers Are Losing Ground on Wages. Order Reprints | Today's Paper | Subscribe

# data[].attributes.attachment_link.title
Why American Workers Without Much Education Are Being Hammered

# data[].attributes.attachment_link.description
Paltry Pay The last couple of decades have been terrible for American workers without much education. New research calculates just how bad, and offers some evidence as to why that is. In short, they face a double whammy.

# data[].attributes.headline
HAVING A HIGHER/LOWER EDUCATION AFFECTS HIGHER/LOWER INCOME

# data[].attributes.subject
HAVING A HIGHER/LOWER EDUCATION AFFECTS HIGHER/LOWER INCOME

# data[].attributes.attachment_link.title
research essayHAVING A HIGHERLOWER EDUCATION AFFECTS HIGHERLOWER INCOME

# data[].attributes.attachment_link.title
Research Essay - MacroeconomicsGender Pay Gap

# data[].attributes.headline
President Trump’s Policies Regarding Raising the Standard of Living for the Poor in the U.S.

# data[].attributes.subject
President Trump’s Policies Regarding Raising the Standard of Living for the Poor in the U.S.

# data[].attributes.attachment_link.title
Final Research paper Macro Econ President Trump’s Policies Regarding Raising

# data[].attributes.attachment_link.title
Final Project EssayTechnology and Unemployment

# data[].attributes.attachment_link.readable_text
I'm not greatly enamoured of Bernie Sanders and his approach to public policy. Not that that's any great surprise to anyone I would think. His reaction to whatever the situation or problem is always seems to devolve to our need for more government. Given that I think that a goodly portion of our problems could be solved by getting rid of certain government functions and even levels that we already have of course I'm not going to be greatly enamoured. However, at times, he does identify a real problem. It is, for example, true that the big banks are too big. They need to be cut down to size more than a little bit. Given that this is so what slightly worries me is that Bernie isn't, nor are most other people to be fair, opting for the policy which is both simple and will actually work. We know this because it has been used elsewhere and worked there. It is, essentially, to tax them into changing their behaviour.

Over at Salon there's a list of the ways we could shrink the banks:

Sanders has a two-part approach to breaking up the banks and knows who can do it

There are three ways we can break up the banks:

Pass a law putting some sort of cap on the size of the balance sheet of financial companies, usually non-deposit liabilities. Caps, such as Senator Brown's SAFE Banking Act, are generally proposed around 2 or 3 percent of GDP.
Have the council of regulators known as the Financial Stability Oversight Council (FSOC), on which the Treasury Secretary serves as chair, declare the largest firms to be too risky and that they must be broken up (Section 121).
Have the Federal Reserve, along with the FDIC, determine that the "living wills" of the biggest banks, which are plans for how they can fail without bringing down the economy, are not credible, and thus the banks must be broken up (Section 165d).

The second two work through Dodd-Frank; the first would work through Congress.
...
Sanders is clearly saying that he wants to push on the first ("legislation passed") and second ("secretary of treasury to determine") approaches, two projects you can do at the same time.

No, this isn't the way to do it at all.

Our basic problem is that the big banks are simply too big. There's no way we can let them go bust: they're big enough that if they do then they'll take all of the financial system down with them. Thus they will always be bailed out however much they get wrong. That's what's known as moral hazard. And it's also true that because everyone knows all of this then they can borrow money more cheaply than smaller banks that we might allow to go bust. That is, once having gained a certain size they're then subsidised, by that implicit assurance, into getting ever bigger just as we don't want them to.

This is a real problem, it's not just the millennials shouting about The Man on Wall Street. However, targets, regulations, these just aren't the way to do it. Those banks are intensely capitalist organisations and the way to deal with capitalists is to hit them in the wallet. We should thus tax them into changing their behaviour.

For example, what really makes them too big is that they have deposits from too many people. And many of those deposits are too large. Small deposits are all insured by the FDIC (up to $100,000 per person per bank I think these days?) and larger ones are not: unless they're at those too big to fail banks which have that implicit insurance guarantee. So, just charge those too big to fail banks a similar to the FDIC fee on those deposits. We would probably vary it a bit depending on what those deposits are. Overnight or money market funds are much riskier (from the banking point of view) than bond issues for example. So, vary the insurance rate according to the riskiness of the deposit. And just say, folks, if you're a bank with more than $x hundred billion in deposits then you will be paying these new insurance fees. On the amount by which you are in excess of the size we want you to be.

This has several merits: government gets some money while solving the problem for example. It works directly on what we're actually worried about, the excessive sizes and risks of those deposits bases. There's no bureaucratic wrangling, it's just a price. And joy of joys we know that it actually works. For George Osborne imposed exactly such a bank levy on the British banks and they have all been shrinking their deposit bases under the weight of that tax.

What's even better is that Obama has proposed something very similar and we can dust off that proposed legislation. Obama was slightly wrong in that he wanted to tax the size of the asset base, but that's not what we're worried about, the deposit base is. So, all Bernie or anyone else has to do is adopt this simple policy to deal with this known and agreed upon problem. And the joy of this simple policy is that we also know that it works. So, why not?

I'm a Fellow at the Adam Smith Institute in London, a writer here and there on this and that and strangely, one of the global experts on the metal scandium, one of the rare earths. An odd thing to be but someone does have to be such and in this flavour of our universe I am. ...

# data[].attributes.attachment_link.title
If Bernie Sanders Wants To Break Up The Big Banks Why Not Do It The Simple Way That Works?

# data[].attributes.attachment_link.description
I'm not greatly enamoured of Bernie Sanders and his approach to public policy. Not that that's any great surprise to anyone I would think. His reaction to whatever the situation or problem is always seems to devolve to our need for more government. Given that I think that a goodly [...]

# data[].attributes.attachment_link.readable_text
Donald, listen, whatever you've done so far, whatever you've messed up, there's one thing you could do that would make up for a lot. It would be huge! Terrific! It could change our world for the better in a big-league way! It could save us all from economic disaster! And it isn't even hard to grasp or complicated to do. It's simple, in fact. Reinstitute the Glass-Steagall Act. Let me explain.
g
In the world of romance, if you break up with someone, it's pretty simple (emotional complications aside). You're just not together anymore. In the world of financial regulation, it used to be as simple as that too. It was like installing a traffic light at a dangerous intersection to avoid deaths. In 1933, when the Glass-Steagall Act was passed, it helped break up the biggest banks of the day and for good reason: They had had a major hand in triggering the most disastrous economic depression our country ever experienced.

This article originally appeared at TomDispatch.com. To stay on top of important articles like these, sign up to receive the latest updates from TomDispatch.com.

Certain divisions of those banks were no longer allowed to coexist with others. The law split the parts of banks that placed bets by creating and trading certain risky securities and those that took deposits and provided loans. In other words, it ensured that the investment bank and the commercial bank would no longer cohabit. Put another way, it separated bankers with a heinous gambling habit from those who only wanted a secure nest egg. It was simplicity itself.

After 1933, the gamblers and savers went their separate ways, which proved a boon for the economy and the financial system for nearly seven decades. Then legislators, lobbyists, bankers, and regulators started to chisel away at the wall separating those two kinds of banks. By November 1999, President Bill Clinton signed into law the Gramm-Leach-Bliley Act that repealed the Glass-Steagall Act totally. The abusive marriages of gamblers and savers could once again be consummated.

And who doesn't remember the result: the financial crisis of 2007-08 that led to taxpayer-funded bailouts, subsidies, loans, and sweetheart fraud-settlement deals. Just as the crash of 1929 had been catalyzed by the manufacturing of shady "trusts" stuffed with shady securities, this crisis was enabled by the big banks that engineered complex assets stuffed with subprime mortgages and other loans that were sold around the world.

Under President Obama, the 2010 Dodd-Frank Act was signed into law. The act sought to limit the ability of big banks to trade the riskiest types of securities. Through inclusion of something called the "Volcker Rule," Dodd-Frank prohibited the trading of securities (even if with many loopholes). What it didn't do was actually break up the big banks again. That meant another 1933 still awaited its moment.

Then along came the bizarre 2016 presidential election campaign during which, strangely enough, Democrats and Republicans found one issue on which they had some common ground: the banking system. Key figures in both parties agreed that it was time to stop the investment bank and the commercial bank from commingling. Bernie Sanders ran on a campaign to break up the banks-and so did Donald Trump. At at an October campaign rally in Charlotte, North Carolina, Trump even stated, "It's time for a 21st-century Glass-Steagall."

The Democratic National Committee platform offered a similar message. "Banks," it said, "should not be able to gamble with taxpayers' deposits or pose an undue risk to Main Street. Democrats support a variety of ways to stop this from happening, including an updated and modernized version of Glass-Steagall as well as breaking up too-big-to-fail financial institutions that pose a systemic risk to the stability of our economy."

The Republican National Committee wasted even fewer words making the point in their platform: "We support reinstating the Glass-Steagall Act of 1933 which prohibits commercial banks from engaging in high-risk investment." And it didn't even suggest that the act should be "modernized" or mention a "21st-century" version that didn't do what the 20th-century one had done.

For the first time since its repeal, in other words, a return to the Glass-Steagall Act had bipartisan support. It couldn't have been simpler, right? Two parties, one idea: split banks into two pieces. But then, as if you hadn't already guessed, it got complicated.

Breaking Up, Republican Style

In the new administration, two key figures are now offering quite different and conflicting views of what a resurrection of the Glass-Steagall Act might mean. At his Senate confirmation hearings, Steven Mnuchin, former Goldman Sachs partner and Trump's nominee to be secretary of the Treasury, faced Senator Maria Cantwell (D-Wash.) as she bluntly asked "Do you support returning to Glass-Steagall?"

He replied, "I don't support going back to Glass-Steagall as is. What we've talked about with the president-elect is perhaps we need a 21st-century Glass-Steagall. But, no, I don't support... taking a very old law and say we should adhere to it as is."

Cantwell then pressed him further: "And so, is that the position of what the Republican platform was? Because I thought it was Glass-Steagall?"

To this, Mnuchin responded, "Again, the Republican platform did pass at the convention Glass-Steagall and...[when] we talked about policy with the president-elect, our view is we need a 21st-century Glass-Steagall."

The skepticism in the room was thick enough to cut with a knife. Here, after all, was a man who had made windfall profits on the fallout from the 2007-08 "too big to fail" financial crisis by organizing a cadre of hedge fund billionaires to buy the collapsed IndyMac Bank at a discount. He then proceeded to foreclose on some of its mortgages and resell it for a $2.5 billion profit. Why should such a man want to restrict banking activity, Glass-Steagall-style, when his loan practices had allowed him to make a fortune off the taxpayer bailouts that were the result of not doing so? What would the point be when a crisis, as history had just shown, forced the federal government to subsidize risk and failure?

The only problem he faced: The Republican platform said he should.

Last month, testifying before the Senate Banking Committee and under questioning from Senator Elizabeth Warren, he backtracked even further: "The president said we do support a '21st-century Glass-Steagall,' that means there are aspects of it that we think may make sense. But we never said before we support a full separation of banks and investment banking."

Warren responded incredulously, "Tell me what '21st-century Glass-Steagall' means if it doesn't mean breaking up those two parts. It's an easy question."

Mnuchin replied, "It's actually a complicated question.... We never said we were in favor of Glass-Steagall. We said we were in favor of a 21st-century Glass-Steagall. It couldn't be clearer." Which, of course, couldn't have been murkier.

And then there's that other former Goldman Sachs man, Gary Cohn, Trump's director of the National Economic Council. He had quite a different Glass-Steagall tale to tell Senator Warren. According to Bloomberg News, he insisted that he "generally favors banking going back to how it was when firms like Goldman focused on trading and underwriting securities, and companies such as Citigroup Inc. primarily issued loans." That sounds a lot like breaking up the banks.

This division and the as-yet unresolved nature of the Trump administration response to the Glass-Steagall question could, in the face of another financial crisis, come back to haunt us all, if it translates into more bailouts and systemic failures.

The Democrats' Dilemma

As with the proverbial difficulty of chewing gum and walking at the same time, certain Democrats seem to find the very idea of supporting both Dodd-Frank and a new Glass-Steagall Act perplexing. Many of them have promoted the idea that no big bank actually failed in the Great Recession moment (which was true only because those banks got huge infusions of federal aid to remain solvent). As a result, they avoided all responsibility for the way the repeal of Glass-Steagall allowed too-big-to-fail banks to come into existence in the first place.

In the process, they also conveniently ignored the way the big banks lent money to, or funded, the investment banks that did fail like both of my former employers, Bear Stearns and Lehman Brothers. Without those loans or that funding, those outfits couldn't have purchased the overload of toxic assets that, in the end, imploded the whole system.

President Obama summed up this position when he told Rolling Stone in 2012, "I've looked at some of Rolling Stone 's articles that say, 'This didn't go far enough, we didn't institute Glass-Steagall' and so forth, and I pushed my economic team very hard on some of those questions. But there is not evidence that having Glass-Steagall in place would somehow change the dynamic. Lehman Brothers wasn't a commercial bank; it was an investment bank. AIG wasn't an FDIC-insured bank; it was an insurance institution. So the problem in today's financial sector can't be solved simply by re-imposing models that were created in the 1930s." He needed a more astute team.

Hillary Clinton took a similar tack in her campaign and it may have contributed to her devastating election loss. The continued promotion of such fallacies does not bode well for the future of the party if it continues to adopt that view. A return to a safer system on the other hand, would be more populist-and far more popular.

Glass-Steagall's Bipartisan Past

Fortunately, current legislation is circulating in Congress that would promote the long-term stability of the financial system by restoring Glass-Steagall for real. HR 790 ("Return to the Prudent Banking Act of 2017") is one of two reinstatement bills in the House of Representatives. It has 50 co-sponsors from both parties and its passage is being spearheaded by Marcy Kaptur (D-Ohio) and Walter Jones (R-North Carolina). The second bill, HR 2585, sponsored by Mike Capuano (D-Massachusetts), bears a close relationship to Senate bill S 881 (the "21st-Century Glass-Steagall Act of 2017"), sponsored by Elizabeth Warren (D-Massachusetts) and nine cosponsors including John McCain (R-Arizona), Maria Cantwell, and Angus King (I-Maine). Either of the bills, if enacted, would do the same thing: break up the banks.

Even before Roosevelt began his first term, congressional Republicans had initiated an investigation into bankers' practices. In early 1933, as Roosevelt was preparing to take office with an incoming Democratic Senate, outgoing Senate Banking and Currency Committee chairman Peter Norbeck, a Republican from South Dakota, hired former New York Deputy District Attorney Ferdinand Pecora to lead the Senate Banking Committee in a new investigation.

Later known as the Pecora hearings, they would shed light on the kinds of financial manipulations by unscrupulous bankers that had led to the crash of 1929. They would also provide the new president with the necessary populist political capital to enact America's most sweeping financial reforms. No less crucial was the way banking leaders aligned themselves with Roosevelt's new program. Duty to country over balance sheets seemed then to be the order of the day, even on Wall Street. (It's not an attitude that lasted into the 21st century.)

Two days after his inauguration, for instance, Roosevelt invited incoming National City Bank Chairman James Perkins to the White House for a secret meeting. The next day, under Perkins' direction, his bank board passed a resolution splitting apart its trading and deposit-taking divisions. Chase National Bank chairman Winthrop Aldrich, a major financial power player, lent a hand as well. Both Perkins and he would back the new Glass-Steagall bill. (Lest you think that all was sweetness and light, they were also convinced that it would diminish the strength of their main competitor, the Morgan Bank.)

Three days after Roosevelt called Perkins to the White House, Aldrich's views on breaking up the banks hit the front page of the New York Times when he announced that Chase National Bank and Chase Securities Corporation would become separate entities, effectively enforcing the bill before it even became law. It wasn't simple-the Chase Securities Corporation was the biggest of its kind in the world-but it happened.

Aldrich then took part in a series of private meetings with the president at the White House about the pending legislation. Without the support of Aldrich and Perkins, it's possible that the bill wouldn't have passed. After all, a far weaker version proposed during the previous administration of Herbert Hoover hadn't.

The Glass-Steagall Act also created the Federal Deposit Insurance Corporation to insure citizens' bank deposits. This left commercial banks with a choice to make. If they took deposits and made loans, they could not speculate with depositors' money. If they wanted to create and speculate, they were on their own. There's much to be said for protecting hardworking Americans in this fashion.

How the Walls Came Tumbling Down

In the 1980s, the walls between investment and commercial banking first began to crumble. The deregulation of the financial sector that followed would prove to be as bipartisan as the passage of Glass-Steagall had been. In 1982, as the Republican presidency of Ronald Reagan began, Congress passed the Garn-St. Germain Act, deregulating the kinds of investments that savings and loan banks could make to include riskier real estate loans. This had the effect of exacerbating the savings and loan debacle, which hit its pinnacle in the late 1980s. By 1989, more than 1,000 S&L banks in the United States would crash and burn. In total, the crisis wound up costing about $160 billion, $132 billion of which was footed by taxpayers. And the suppliers of risky S&L securities tended to be the big banks.

In 1987, still in the age of Reagan, Federal Reserve Chairman Alan Greenspan, a past board member of JPMorgan, said that non-bank subsidiaries of bank holding companies could sell or hold "bank ineligible securities"-that is, securities prohibited by Glass-Steagall, including mortgage securities, asset-backed securities, junk bonds, and other derivative products. The move exacerbated the S&L crisis, but it also offered an avenue for commercial banks to stock up on some of the securities at the heart of that crisis.

And so commercial banks began investing in hedge funds, whose very purpose in life is to gamble on securities, stocks, and commodities. In 1998, in an early warning of what the future might hold, one of them, Long Term Capital Management, crashed and nearly brought down the whole financial system with it. 55 commercial banks had invested in it using depositors' money to back their bets. Only an emergency meeting of the presidents of the major banks at the Federal Reserve averted a larger economic meltdown, but because Glass-Steagall was still in place, they had to figure out how to save themselves. No government bailouts were forthcoming.

Having narrowly avoided disaster, Wall Street only plunged deeper into financial deregulation. In 1999, Glass-Steagall itself was repealed. On December 21, 2000, Congress passed the Commodity Futures Modernization Act deregulating derivatives trading. The big commercial banks then merged with investment banks, insurance companies, and brokerage firms. By 2007, the assets of those big banks had tripled. The four largest-Bank of America, JPMorgan Chase, Citigroup, and Wells Fargo-by then controlled (and still control) more than half the assets of the banking system.

In the fall of 2007, that system finally started buckling because of the problems of Citigroup, not because of the investment banks, which would not have been covered by Glass-Steagall. The catastrophe that hit Citigroup makes it clear just how crucial the repeal of that act was to the financial meltdown to come. Citigroup would "require" a taxpayer-financed bailout of $45 billion, $340 billion in asset guarantees, and $2 trillion in near-0% Federal Reserve loans between the fall of 2007 and 2010. That in itself was staggering and Citigroup wasn't alone. Federal Reserve Chairman Ben Bernanke would later testify that, by 2008, 11 out of the 12 biggest commercial banks were "insolvent" and had to be bailed out. The entire banking system was rotten to the core and the massive buildup of bad paper, high leverage, and speculative bets (derivatives) that made disaster inevitable can be traced directly back to the repeal of Glass-Steagall.

Today, a fresh bubble is inflating. This time, it's not US subprime mortgages at the heart of a budding banking crisis, but $51 trillion in corporate debt in the form of bonds, loans, and related derivatives. The credit ratings agency S&P Global Ratings has predicted that such debt could rise to $75 trillion by 2020 and the defaults on it are starting to increase in pace. Banks have profited by the short-term creation and trading of this corporate debt, propagating even greater risk. Should that bubble burst, it could make the subprime mortgage bubble of 2007 look like a relatively small-scale event.

What Will the President Do?

On the positive side, there's a growing bipartisan alliance in Congress and outside it on restoring Glass-Steagall. This increasingly wide-ranging consensus reaches from the AFL-CIO to the libertarian Mises Institute, in the Senate from John McCain to Elizabeth Warren, Bernie Sanders, and Maria Cantwell, and in the House of Representatives from Republicans Walter Jones and Mike Coffman to Democrats Marcy Kaptur and Tulsi Gabbard. In fact, just this week, Kaptur and Jones announced an amendment to the pending Financial Choice Act in the House of Representives, that would represent the first genuine attempt to bring to a vote the possibility of resurrecting the Glass-Steagall Act since its repeal.

So, Donald, here's the question: Where do you-the man who, in the course of a few weeks, embraced Middle Eastern autocrats, turned relations with key NATO allies upside down, and to the astonishment of much of the world, withdrew the United States from the Paris climate agreement-stand? In just a few months in office, you've turned the White House into an outpost for your family business, but when it comes to the financial wellbeing of the rest of us, what will you do? Will you, in fact, protect us from another future meltdown of the financial system? It wouldn't be that hard and you were clear enough on this issue in your election campaign, but does that even matter to you today? I noticed that recently, in an Oval Office interview with Bloomberg News, when asked about breaking up the banks, you said, "I'm looking at that right now. There's some people that want to go back to the old system, right? So we're going to look at that."

Your party and your own appointees are split on the subject. Where will you fall? You could still commit yourself to securing the financial wellbeing of our nation for generations to come. You could commit yourself to Glass-Steagall. The question is: Will you?

# data[].attributes.attachment_link.title
Breaking Up the Banks Is Easier Than You Might Think

# data[].attributes.attachment_link.description
Donald, listen, whatever you've done so far, whatever you've messed up, there's one thing you could do that would make up for a lot. It would be huge! Terrific! It could change our world for the better in a big-league way! It could save us all from economic disaster!

# data[].attributes.body
The tax rates on inheritances can be as low as 1 percent or as high as 20 percent of the value of property and cash you inherit. Inheritance should not be taxed because the owner already payed tax for that.
Most people won't have to deal with federal estate taxes, which in 2015 is triggered when an estate has more than $5.43 million of assets.

"But the bar for state estate taxes be can much lower," says A. Timo Lipping, a CFP in New York City, who specializes in estate planning.

"Where the person you are inheriting from lived can make a big difference in how much you actually get to inherit," he explains.

For instance, taxes in Massachusetts and Oregon are levied on estates worth more than $1 million. Meanwhile, New Jersey taxes estates valued at more than $675,000 and residents are also subject to an inheritance tax with a marginal rate up to 16 percent, Lipping adds.

Do you agree? Explain.

# data[].attributes.headline
Why do we have to pay sales tax on a used car?

# data[].attributes.subject
Why do we have to pay sales tax on a used car?

# data[].attributes.body
Consider an example. When you buy a used car from a dealer, they are going to charge you sales tax on the sale of the car. “If you purchase something and do not pay sales tax, you are supposed to report it to your state and pay use tax. Of course, most people don't do this, but that does not make tax go away. Cars are generally more "formalized" transactions involving state registrations, so it is an opportunity for your state to enforce the tax on you, a tax you genuinely owe. "

# data[].attributes.body
Economic inequality is the unequal distribution of income and opportunity between different groups in society. It is a concern in almost all countries around the world and often people are trapped in poverty with little chance to climb up the social ladder. But, being born into poverty does not automatically mean you stay poor. Education, at all levels, enhancing skills, and training policies can be used alongside social assistance programs to help people out of poverty and to reduce inequality.

# data[].attributes.body
Infographics on the distribution of wealth in America, highlighting both the inequality and the difference between our perception of inequality and the actual numbers. The reality is often not what we think it is.

# data[].attributes.attachment_link.title
How to prepare for the next global recession

# data[].attributes.body
Malignant Financial Institutions aka “too-big-to-fail” banks are what . A bank is considered ‘too big to fail’ when its assets and holdings become so large that a shock to said institution would damage the economy as a whole and possibly bring everyone down with it; therefore, the U.S. government whether prudent or not, must bail out these banks to protect the economy, all at the expense of the tax payer. That’s not to say that the banks themselves are bad, simply that they are using money that doesn’t belong to them. In 1933 the Glass-Steagal Act was passed that separated banks into two categories (a single bank could split their assets in two, thus achieving the same goal), the first being commercial and the second being investment. Commercial banks are used for individuals looking to simply save up money and build a retirement or emergency nest egg, as well as for small businesses. Investment banks are for large corporations that need much larger investments as well as for Wall Street stock investments. In 1999, this Act was repealed and allowed for banks to use their customers saving accounts for investments on the stock exchange. It has been argued that such instability led to the Financial Crisis of 2008, but that is not the content of this paper. This is simply to highlight the gross misuse of individual saving accounts for the greed and gain of bankers at the expense of the people they claim to work for.
To solve this Economic Problem I would propose the reinstatement of the Glass-Steagal Act of 1933 to build a firm barrier between the two aspects of banking, investing and saving...

# data[].attributes.body
The biggest economic problem for the U.S. economy is debt. I believe debt is the biggest economic problem for the US because it effects the economy and people as a whole. The U.S. debt is greater than what the U.S. produces in a whole year. The U.S. debt also effects greatly the younger people of this generation and if we do not attempt to lower the debt now, we will receive greater consequences in the future. These consequences can lead to our retirement plans, minimum wage issues, and also government spending issues such as our medical insurance, taxes, and etc. There are also two types of debt the good and the bad, and what the U.S. is experiencing right now is the bad debt. The U.S. is currently is debt of $21 trillion dollars as of March 15, 2018 and it is only rising from there based on the U.S. Nation Debt Clock.

# data[].attributes.attachment_link.readable_text
The U.S. debt is the sum of all outstanding debt owed by the federal government. On March 1, 2021, it surpassed $28 trillion for the first time. The U.S. Treasury Department tracks the current total public debt outstanding and this figure changes daily. The debt clock in New York also tracks it.

The majority of the national debt is debt held by the public. The government owes this to buyers of U.S. Treasury notes including individuals, companies, and foreign governments.

The remaining portion is intragovernmental debt. The Treasury owes this debt to its various departments that hold Government Account Series securities. The biggest owner is the Social Security Trust Fund.

These Government Account Series securities have been running surpluses for years, and the federal government uses these surpluses to pay for other departments. They will come due as people born from 1946 to 1964 retire over the next two decades.

The U.S. National Debt Over Time

The chart below tracks U.S. debt milestones from 1989 to 2021. It has increased by more than 800% during that time. In March 2021, the national debt exceeded $28 trillion. This figure includes both debt held by the public as well as intragovernmental debt.

Why Does the U.S. Have So Much Debt?

There are a few significant reasons as to why the size of the national debt is so big.

Federal Budget Deficits

The national debt is an accumulation of federal budget deficits. Each new spending program and tax cut adds to the debt.

The largest deficit thus far goes to President Barack Obama. He added $8.3 trillion to the debt, a 70% increase. That's due to the ​American Recovery and Reinvestment Act (ARRA) stimulus package, which helped resolve the 2008 financial crisis. He also cut taxes and increased military spending.

Although the national debt under Obama grew the most dollar-wise, it wasn't the biggest percentage increase. That honor goes to President Franklin D. Roosevelt. He only added about $236.1 billion between 1933 and 1945, but that was an increase of about 1,048%. He did this to fight the Great Depression and prepare the U.S. to enter World War II at the start of the 1940s.

President Donald Trump is the second-largest contributor to the debt dollar-wise. He added $7.8 trillion to the debt. This was a 39% increase.

Social Security Trust Fund

Every president borrows from the Social Security Trust Fund. Over the years, the Fund has taken in more revenue than it needed through payroll taxes leveraged on the baby boomer generation.

Ideally, this money should have been invested to be available when members of that generation retire. Instead, the Fund was "loaned" to the government to finance increased spending. This interest-free loan helps keep Treasury bond interest rates low, allowing more debt financing. But, it must be repaid by increased taxes as more individuals retire.

Investment From Other Countries

Foreign countries like China and Japan buy Treasurys to invest their export proceeds that are denominated in U.S. dollars. They are happy to lend to America-their largest customer-so that it will keep buying their exports.

Low Interest Rates

The U.S. government has benefited from low interest rates. It couldn't keep running budget deficits if interest rates skyrocketed. Why have interest rates remained low? Purchasers of Treasury bills are confident that the U.S. has the economic power to pay them back. During recessions, foreign countries increase their holdings of Treasury bonds as a safe-haven investment.

The Debt Ceiling

Congress sets a ceiling on the debt but raises it frequently. Since 1960, Congress has modified the U.S. debt limit 78 times, with more sure to come. President Trump signed the Bipartisan Budget Act of 2019 that suspended the public debt limit through July 31, 2021. On Aug. 1, 2021, the debt ceiling became $28.4 trillion-equal to the amount of the national debt. Congress will need to decide what to do once again-raise the debt ceiling, suspend it, or require the government to make changes in order to reduce the debt.

How the Large U.S. Debt Affects the Economy

In the short run, the economy and voters benefit from deficit spending because it drives economic growth and stability. The federal government pays for defense equipment, health care, building construction, and contracts with private businesses. New employees are then hired and they spend their salaries on necessities and wants, like gas, groceries, new clothes, and more. This consumer spending boosts the economy. As part of the components of GDP, federal government spending contributes around 7%.

Over the long term, debt holders could demand larger interest payments. This is because the debt-to-GDP ratio increases and this high ratio of debt to gross domestic product (GDP) tells investors that the country might have problems repaying them. That's a newer-and worrying-occurrence for the U.S. Back in 1988, the national debt was only half of what the U.S. produced that year.

Lower demand for Treasurys also puts downward pressure on the dollar because its value is tied to the value of Treasury securities. As the dollar value declines, foreign holders get paid back in a currency that is worth less than when they invested. That further decreases demand. Many of these foreign holders would become more likely to invest in their own countries. At that point, the U.S. would have to pay higher interest payments.

Congress knows a debt crisis isn't far away. In less than 20 years, the Social Security Trust Fund won't have enough to cover the retirement benefits promised to people born from 1946 to 1964. That could mean higher taxes once the high U.S. debt rules out further loans from other countries.

# data[].attributes.attachment_link.title
How Did the US National Debt Get So Big?

# data[].attributes.attachment_link.description
The U.S. debt is the sum of all outstanding debt owed by the federal government. On March 1, 2021, it surpassed $28 trillion for the first time. The U.S. Treasury Department tracks the current total public debt outstanding and this figure changes daily. The debt clock in New York also tracks it.

# data[].attributes.attachment_link.readable_text
The U.S. debt is the sum of all outstanding debt owed by the federal government. On March 1, 2021, it surpassed $28 trillion for the first time. The U.S. Treasury Department tracks the current total public debt outstanding and this figure changes daily. The debt clock in New York also tracks it.

The majority of the national debt is debt held by the public. The government owes this to buyers of U.S. Treasury notes including individuals, companies, and foreign governments.

The remaining portion is intragovernmental debt. The Treasury owes this debt to its various departments that hold Government Account Series securities. The biggest owner is the Social Security Trust Fund.

These Government Account Series securities have been running surpluses for years, and the federal government uses these surpluses to pay for other departments. They will come due as people born from 1946 to 1964 retire over the next two decades.

The U.S. National Debt Over Time

The chart below tracks U.S. debt milestones from 1989 to 2021. It has increased by more than 800% during that time. In March 2021, the national debt exceeded $28 trillion. This figure includes both debt held by the public as well as intragovernmental debt.

Why Does the U.S. Have So Much Debt?

There are a few significant reasons as to why the size of the national debt is so big.

Federal Budget Deficits

The national debt is an accumulation of federal budget deficits. Each new spending program and tax cut adds to the debt.

The largest deficit thus far goes to President Barack Obama. He added $8.3 trillion to the debt, a 70% increase. That's due to the ​American Recovery and Reinvestment Act (ARRA) stimulus package, which helped resolve the 2008 financial crisis. He also cut taxes and increased military spending.

Although the national debt under Obama grew the most dollar-wise, it wasn't the biggest percentage increase. That honor goes to President Franklin D. Roosevelt. He only added about $236.1 billion between 1933 and 1945, but that was an increase of about 1,048%. He did this to fight the Great Depression and prepare the U.S. to enter World War II at the start of the 1940s.

President Donald Trump is the second-largest contributor to the debt dollar-wise. He added $7.8 trillion to the debt. This was a 39% increase.

Social Security Trust Fund

Every president borrows from the Social Security Trust Fund. Over the years, the Fund has taken in more revenue than it needed through payroll taxes leveraged on the baby boomer generation.

Ideally, this money should have been invested to be available when members of that generation retire. Instead, the Fund was "loaned" to the government to finance increased spending. This interest-free loan helps keep Treasury bond interest rates low, allowing more debt financing. But, it must be repaid by increased taxes as more individuals retire.

Investment From Other Countries

Foreign countries like China and Japan buy Treasurys to invest their export proceeds that are denominated in U.S. dollars. They are happy to lend to America-their largest customer-so that it will keep buying their exports.

Low Interest Rates

The U.S. government has benefited from low interest rates. It couldn't keep running budget deficits if interest rates skyrocketed. Why have interest rates remained low? Purchasers of Treasury bills are confident that the U.S. has the economic power to pay them back. During recessions, foreign countries increase their holdings of Treasury bonds as a safe-haven investment.

The Debt Ceiling

Congress sets a ceiling on the debt but raises it frequently. Since 1960, Congress has modified the U.S. debt limit 78 times, with more sure to come. President Trump signed the Bipartisan Budget Act of 2019 that suspended the public debt limit through July 31, 2021. On Aug. 1, 2021, the debt ceiling became $28.4 trillion-equal to the amount of the national debt. Congress will need to decide what to do once again-raise the debt ceiling, suspend it, or require the government to make changes in order to reduce the debt.

How the Large U.S. Debt Affects the Economy

In the short run, the economy and voters benefit from deficit spending because it drives economic growth and stability. The federal government pays for defense equipment, health care, building construction, and contracts with private businesses. New employees are then hired and they spend their salaries on necessities and wants, like gas, groceries, new clothes, and more. This consumer spending boosts the economy. As part of the components of GDP, federal government spending contributes around 7%.

Over the long term, debt holders could demand larger interest payments. This is because the debt-to-GDP ratio increases and this high ratio of debt to gross domestic product (GDP) tells investors that the country might have problems repaying them. That's a newer-and worrying-occurrence for the U.S. Back in 1988, the national debt was only half of what the U.S. produced that year.

Lower demand for Treasurys also puts downward pressure on the dollar because its value is tied to the value of Treasury securities. As the dollar value declines, foreign holders get paid back in a currency that is worth less than when they invested. That further decreases demand. Many of these foreign holders would become more likely to invest in their own countries. At that point, the U.S. would have to pay higher interest payments.

Congress knows a debt crisis isn't far away. In less than 20 years, the Social Security Trust Fund won't have enough to cover the retirement benefits promised to people born from 1946 to 1964. That could mean higher taxes once the high U.S. debt rules out further loans from other countries.

# data[].attributes.attachment_link.title
How Did the US National Debt Get So Big?

# data[].attributes.attachment_link.description
The U.S. debt is the sum of all outstanding debt owed by the federal government. On March 1, 2021, it surpassed $28 trillion for the first time. The U.S. Treasury Department tracks the current total public debt outstanding and this figure changes daily. The debt clock in New York also tracks it.

# data[].attributes.body
A rising economic issue is minimum wage. People are either for or against raising the minimum wage. Some good things that could come with this is that peoples lively hood would be increased which increases the satisfaction of the workers. But for the pay that the one person would be getting you could actually hire two workers. So amount of jobs would decrease. Over all minimum wage jobs are for experience and not for providing for your family.

# data[].attributes.attachment_link.readable_text
Minimum wage workers in 18 states will see larger paychecks starting Jan. 1, according to the Economic Policy Institute, thanks primarily to minimum wage increases approved by either voters or state legislatures.

Maine's minimum wage workers will get the biggest pay raise, an 11 percent increase from $9 an hour to $10 an hour, as part of a ballot measure approved by the state's voters in 2016.

Minimum wage employees will get a 90 cent hourly increase in Colorado, while those in Hawaii will see an extra 85 cents. The minimum wage in Washington state will increase to $11.50 an hour, making it the highest of any state.

Voters and liberal politicians in many states have made minimum wage increases a priority in recent years, a response in part to growing income inequality and stagnant wages across much of the income spectrum.

At the federal level, the minimum wage hasn't been raised since 2009, when it was set to $7.25. In inflation-adjusted terms, the federal minimum wage was highest in 1968, when it was equal to $11.18 in today's dollars.

But Congress hasn't automatically indexed the minimum wage to inflation, nor has it raised the minimum frequently enough to keep pace. As a result it's steadily lost value since the late 1960s. It's already lost close to a dollar, in real terms, since 2009. It does, however, remain higher in real terms than it was for much of the 1990s and early 2000s.

Legislators and voters in many states have moved to pick up Congress's slack on the minimum wage. As recently as 1992 just six states had minimum wages that were higher than the federal minimum wage that year. By 2017, 29 states, plus the District of Columbia, had set minimum wages above the federal level.

Among the world's wealthy nations, the United States is an outlier on this issue: Americans have the lowest national minimum wage, relative to the median wage, of any of the wealthy nations represented in the Organization for Economic Cooperation and Development.

In France, for instance, the national minimum wage ( close to 1,500 euros per month) is equal to about 61 percent of the medium national median wage. In Australia it's 54 percent. In Canada it's 46 percent.

In the United States, by contrast, the federal minimum wage works out to just 35 percent of the national median wage, the lowest in the OECD.

The Economic Policy Institute's David Cooper has argued that the international comparison above demonstrates there's plenty of room for Congress to raise the U.S. minimum wage. Raising the minimum wage to $12 by 2020, for instance, would put the U.S. minimum wage at 54 percent of the median income and closer to the middle of the chart, near Australia. It would also set the real purchasing power of the minimum wage to just a hair higher than its level in 1968.

Many conservative economists, like the American Enterprise Institute's Mark Perry, are skeptical of the value of minimum wage hikes. They argue that the costs of increased minimum wages are borne by employers, who may be forced to respond by either increasing prices for consumers or hiring fewer workers overall. The money has to come from somewhere.

Studies have generally found that modest minimum wage hikes lead to increases in consumer costs, but not reductions in employment. A massive 2014 review of over 200 minimum wage studies concluded that "moderate increases in the minimum wage are a useful means of raising wages in the lower part of the wage distribution that has little or no effect on employment and hours."

It cautioned, however, that large minimum wage hikes could have different impacts, but we don't know for sure: "Evidence for the United States is lacking because there have not been large increases in the last generation."

A 2016 YouGov survey found that 66 percent of Americans, including 55 percent of Republicans, supported raising the minimum wage to $10.10 an hour.

# data[].attributes.attachment_link.title
Analysis | The U.S. has one of the stingiest minimum wage policies of any wealthy nation

# data[].attributes.attachment_link.description
Minimum wage workers in 18 states will see larger paychecks starting Jan. 1, according to the Economic Policy Institute, thanks primarily to minimum wage increases approved by either voters or state legislatures. Maine's minimum wage workers will get the biggest pay raise, an 11 percent increase from $9 an hour to $10 an hour, as part of a ballot measure approved by the state's voters in 2016.

# data[].attributes.body
If Walmart sets its minimum wage at $5 an hour and no one applies, Walmart will raise its hourly wage. With a forced minimum wage of $15 for example, Walmart may only hire one person instead of two at $7.50. This can lead to less jobs and higher prices at Walmart. Raising minimum wage at some point will lead to inflation and slower job creation. The United States does not benefit from having poor workers, but raising the minimum wage is not going to fix that problem. The purpose of minimum wages are to increase business profit, increase employee wages, increase business efficiency, and to make workers more inclined to do legal work. Business profit is increased because what would be very low waged frivolous jobs are outsourced. Employee wages are increased because corporations cannot save as much money and are instead forced to pay employees more. Business become more efficient because of higher labor costs. Finally workers are more inclined to legal work when it pays more. That's the purpose of minimum wage, not to decrease poverty levels. Therefore unnecessarily raising minimum wage will lead to lost jobs, higher prices, and fewer hours of work for employees.

# data[].attributes.body
China’s largest trading partner. China owns more than $1 trillion of U.S. government bonds. Which some worry gives Beijing influence over the U.S, economy. The overall trade deficit reflects the fact that the U.S. spends more than its produces, requiring U.S, to obtain the difference through net imports. But if China sold U.S. bonds in bulk, it would hurt China, because that would reduce the value of an asset China holds a lot of, and it would have to switch to other less liquid foreign bonds markets. Lowering the value of the yuan would help exports by making Chinese goods cheaper for other countries to import. Consumer spending drives 70 percent of the economy of U.S. corporate experience in the domestic market create a competitive advantage in the global market.

# data[].attributes.attachment_link.readable_text
Image

A carbon fiber production line at a factory in Lianyungang in China's eastern Jiangsu province. President Trump has ordered a new round of tariffs on Chinese goods, meaning nearly half of all Chinese imports into the United States will face tariffs. Credit Credit Agence France-Presse - Getty Images

President Trump, emboldened by America's economic strength and China's economic slowdown, escalated his trade war with Beijing on Monday, saying the United States would impose tariffs on $200 billion worth of goods and was prepared to tax all imports.

Mr. Trump, in a statement released late Monday, showed no sign of backing down from the type of full-blown trade war between the world's two largest economies that has rattled financial markets, saying he was prepared to "immediately" place tariffs on another $267 billion worth of imports "if China takes retaliatory action against our farmers or other industries."

The tariffs on $200 billion worth of products comes on top of the $50 billion worth already taxed earlier this year, meaning nearly half of all Chinese imports into the United States will soon face levies. The next wave of tariffs, which are scheduled to go into effect on Sept. 24, will start at 10 percent before climbing to 25 percent on Jan. 1. The timing of the staggered increase will partially reduce the toll of price increases for holiday shoppers buying Chinese imports in the coming months.

"For months, we have urged China to change these unfair practices, and give fair and reciprocal treatment to American companies," Mr. Trump said. "We have been very clear about the type of changes that need to be made, and we have given China every opportunity to treat us more fairly. But, so far, China has been unwilling to change its practices."

The tariffs are aimed at pressuring China to change longstanding trade practices that Mr. Trump says are hurting American businesses at a moment when the administration believes it has an advantage in the trade dispute. China's economy is slowing, with consumers holding back and infrastructure spending slowing sharply. The Chinese slowdown is expected to worsen as America's tariffs ramp up. The United States, by contrast, has continued to experience robust economic growth, including the lowest unemployment rate since 2000.

White House officials said on Monday that China could win relief from the tariffs by acceding to the administration's trade demands, including allowing American companies greater access to the China market and dropping its requirement that American companies hand over valuable technology to Chinese partners. Officials said the United States would only continue trade negotiations if the Chinese were "serious" about giving ground on those issues.

The tariffs are aimed at hurting China, but they could hamper the American economy and bring pain for consumers. Unlike the first round of tariffs, which were intended to minimize the impact on American consumers, this wave could raise prices on everyday products including electronics, food, tools and housewares.

Retailers, manufacturers and a wide swath of other American businesses have warned that the new tariffs could hurt their profits, hiring and growth. The administration held six days of public hearings on the proposed $200 billion round of tariffs last month, which were dominated by companies warning that the United States no longer had the capacity to produce replacement products for the Chinese imports that would be hit by tariffs.

Economists warn the tariffs could chip away at economic growth in the United States. Morgan Stanley researchers estimate that the latest round could reduce economic growth in the United States this year by 0.1 percentage points, adding to another 0.1 percentage-point drag from tariffs currently in place. And the effects are likely to grow if China retaliates again, as it has threatened to do.

China's explosive rise was a shock to the global trading system. For decades, Western economies like the United States have struggled with the growth of this economic powerhouse. Published On Credit Credit Johannes Eisele/Agence France-Presse - Getty Images

The administration did remove roughly 300 product lines - and some individual products - from the list after companies objected. Among the items dropped are smart watches, Bluetooth devices, bike helmets, plastic gloves, high chairs, play pens and certain chemicals. But, in some cases, partial product lines will be taxed while other parts are not. For example, high tech network routers and smart watches share a product line, but under the United States trade representative plan, the routers would be subject to tariffs while watches are not.

"It will be a lot of money coming into the coffers of the United States of America. A lot of money coming in," Mr. Trump said during remarks at the White House on Monday. He added that the United States cannot tolerate the trade gap between what it exports to China and what it imports from that country.

"We can't do that anymore," he said.

Mr. Trump's decision is a significant escalation of an already serious trade dispute - one with seemingly no end in sight. After months of failed trade talks, top officials from China and the United States were tentatively scheduled to talk later this month in Washington. But it is unclear whether Beijing will agree to come to Washington with the new tariffs set to go into effect.

"We are open to talk if there are serious talks," Larry Kudlow, the director of the National Economic Council, said in an interview on Monday.

Mr. Trump also indicated he was willing to end the trade war - if China agreed to his demands. "China has had many opportunities to fully address our concerns," Mr. Trump said. "Hopefully, this trade situation will be resolved, in the end, by myself and President Xi of China, for whom I have great respect and affection."

"The Chinese are livid and drafting their own battle plan - they won't take this sitting down," said James Zimmerman, a longtime lawyer in Beijing and the former four-time chairman of the American Chamber of Commerce there.

Trade analysts said Mr. Trump's approach risked further confrontation with the Chinese.

"Washington's view seems to be that tariffs and threats of more tariffs will soften up the Chinese and make them more amenable to negotiations," said Eswar Prasad, a Cornell economist who specializes in trade issues. "The evidence that, in response to U.S. bullying tactics, China just stiffens its spine and strikes back with proportionate tariffs against U.S. imports has had no discernible effect on the Trump administration's take-no-prisoners approach to this rapidly escalating trade war."

China is expected to further retaliate against the United States, and top officials have warned that could include penalizing American companies that rely on Chinese components for phones, cars, televisions and other products. China's commerce ministry has said that it is ready to put similar tariffs on $60 billion a year of American goods in response to the threat from the United States. China has matched previous tariff moves dollar for dollar, but the number of American goods to tax is dwindling because, for many years, it has only imported about a quarter as much as it exports to the United States.

Lou Jiwei, China's finance minister until his recent retirement and now a senior Communist Party adviser, delivered an unexpectedly strong threat to the United States in a lunch speech at the forum, which is organized by a government agency reporting directly to the cabinet. Mr. Lou said that, if necessary in the trade war, China could halt exports to the United States of components that are crucial to American companies' supply chains.

Mr. Lou said that it would take years for American companies to find alternatives to China. "To take a step back, the United States can establish an alternative supply chain in a third country, but it takes time - what about the pain of three to five years? This is enough to cross a political cycle," he said.

American businesses - which have warned that tariffs could hurt profits, force job cuts and, in some cases, destroy companies, said the taxes were going to hurt the United States more than the administration realized. The National Association of Chemical Distributors released a study this month that predicted nearly 28,000 chemical distributor and supplier jobs would be eliminated because of higher prices from the $200 billion round of tariffs.

"These tariffs are going to be paid for by the working families who drive our economy," said Jonathan Gold, a spokesman for a business group formed to fight tariffs called Tariffs Hurt the Heartland. "Tariffs are taxes, plain and simple. By choosing to unilaterally raise taxes on Americans, the cost of running a farm, factory or business will grow. In many cases, these costs will be passed on to American families."

The tech industry, while spared on certain products, called the administration's approach "misguided" and said it would hurt American consumers while doing little to change China's trade practices.

"Today's retaliatory tariffs are not an effective trade policy and may violate U.S. law," Gary Shapiro, chief executive of the Consumer Technology Association, said in a statement. "We urge the administration to reconsider its misguided approach of increasing tariffs, as they are directly paid for by American companies and consumers."

The total wave of tariffs thus far has not been large enough to meaningfully affect consumer prices broadly across the economy - only narrowly, for certain products. Economists warn that the effects could grow noticeably larger if Mr. Trump follows through with his threat to subject nearly all Chinese imports to tariffs.

Asked about Mr. Trump's tweets in the morning, regarding the lack of an impact on prices across the economy from tariffs, Mr. Kudlow stuck with the president. "With respect to the impact of tariffs, we'll see," he said. "We're following it. We don't see any problems so far."

"I don't see any reason to believe at the present time that the president's trade reforms are going to damage the economy."

The Trump administration has demanded steep cuts in Chinese tariffs and investment restrictions but has particularly focused on stopping the Chinese industrial policy initiative known as Made in China 2025.

Chinese policymakers have long said that they are willing to cut tariffs in particular, but want concessions from the United States, such as curbs on the Commerce Department's ability to impose steep tariffs on imported goods that are government subsidized or are dumped below the cost of producing them. The United States has long refused, under the Obama administration and now under the Trump administration, contending that the American market is already so open that further concessions are not needed.

As for Made in China 2025, Chinese officials dismiss its importance. "We do not think this is such an important strategy for us or our industries," said Wang Yiming, a vice president of the Chinese cabinet's Development Research Center.

Chinese officials have expressed a willingness to get rid of the Made in China 2025 name, but they have been much more cautious about accepting limits on some of the key features of Chinese industrial policy, like enormous loans from state-owned banks at very low interest rates to favored industries.

# data[].attributes.attachment_link.title
Trump Hits China With Tariffs on $200 Billion in Goods, Escalating Trade War

# data[].attributes.attachment_link.description
President Trump, emboldened by America's economic strength and China's economic slowdown, escalated his trade war with Beijing on Monday, saying the United States would impose tariffs on $200 billion worth of goods and was prepared to tax all imports.

# data[].attributes.attachment_link.readable_text
Donald Trump campaigned for election on a promise to make trade fairer for the US, and his push to do so has him fighting with some of America's oldest trading partners.

The US has been embroiled in a tit-for-tat trade battle on several fronts over the past few months.

The one that's creating the most interest is the conflict with China, as the world's two largest economies wrangle for global influence.

China has accused the US of launching the "largest trade war in economic history."

Mr Trump has imposed taxes on imports from China, Mexico, Canada and the EU, to encourage consumers to buy American products. All of these countries have retaliated.

The US president's hard line on trade, which also saw him withdraw from the Trans-Pacific Partnership trade pact (TPP) last year, marks a striking change from the free trade policies that have governed the exchange of goods for decades.

What has happened so far?

The US has imposed three rounds of tariffs on Chinese products this year, totalling $250bn worth of goods.

The first two rounds placed 25% tariffs on $50bn worth of imports from China, and Beijing retaliated in kind.

Washington delivered a sharp escalation in the trade conflict in September with another set of tariffs, this time on Chinese goods worth $200bn.

Those taxes will take effect from 24 September, starting at 10% and increasing to 25% from the start of next year unless the two countries agree a deal.

Mr Trump has warned even more could be on the way. The US president said if China retaliates then Washington would impose fresh tariffs on $267bn worth of Chinese products.

If Trump goes ahead with that round of import taxes, it would mean virtually all of China's exports to the US would be subject to duties.

Why is the US doing this?

Mr Trump says he wants to stop the "unfair transfers of American technology and intellectual property to China" and protect jobs.

Tariffs, in theory, will make US-made products cheaper than imported ones, so encourage consumers to buy American. The idea is they would boost local businesses and support the national economy.

But many US companies and industry groups have testified to the US Trade Representative's Office that their businesses are being harmed.

China: Trade war victim or player?

The early victims of Trump's trade war

Six ways China could retaliate in a trade war

The dispute dates back to January, when the US slapped controversial tariffs on imported washing machines and solar panels. That was considered Mr Trump's most significant trade move since his decision to pull the US out of the TPP and renegotiate the North American Free Trade Agreement (Nafta).

Is the US only in a dispute with China?

No.

Earlier this year, the US started charging levies on the imports of steel and aluminium from the European Union, Mexico and Canada.

US businesses have to pay a 25% tax when they import steel from those places and a 10% levy to buy aluminium from them.

But these tariffs led to retaliation.

The European Union imposed tariffs on €2.8bn worth of US goods in June on products such as bourbon whiskey, motorcycles and orange juice.

In June, Mexico announced new tariffs on US products, including whiskey, cheese, steel, bourbon, and pork.

Canada imposed retaliatory tariffs on 16.6bn Canadian dollars-worth of US products on 1 July.

Reality Check: Is Trump right about trade?

Who has been worst affected so far?

The International Monetary Fund says an escalation of the tit-for-tat tariffs could shave 0.5% off global growth by 2020.

There are signs that the trade dispute is already affecting the Chinese and US economies.

Morgan Stanley has said a full-blown escalation of the trade dispute could knock 0.81 percentage points off global gross domestic product. This scenario would involve the US slapping 25% tariffs on all goods from both China and the EU, and similar measures imposed in response.

Among companies, the car industry seems to have been the most affected so far. Major carmakers recently warned that changes to trade policies were hurting performance.

Ford and General Motors have lowered profit forecasts for 2018, citing higher steel and aluminium prices caused by new US tariffs.

There are also concerns that the trade war could hurt other aspects of US-China relations. Mr Trump recently accused China of manipulating its currency - a sign that the row could be spreading to foreign exchange markets.

Smaller Asian countries further down the supply chain could also suffer. According to the Economist, 30% of the value of the goods China exports to America originates from third-party countries.

Ultimately, China may not have as much firepower as the US to retaliate, given the US buys much more from China than it sells to them. This could mean it would find alternative ways to fight back such as making life difficult for American companies in China by increasing red-tape.

# data[].attributes.attachment_link.title
US-China trade row: What has happened so far?

# data[].attributes.attachment_link.description
Donald Trump campaigned for election on a promise to make trade fairer for the US, and his push to do so has him fighting with some of America's oldest trading partners. The US has been embroiled in a tit-for-tat trade battle on several fronts over the past few months.

# data[].attributes.body
The biggest US economic problem would undoubtedly have to be the national debt. As of now the United States national debt stands at a whopping $20.6 trillion dollars. China owns $1.2 trillion dollars of the U.S. debt with Japan trailing as a close second with $1.1 trillion dollars and Ireland comes in third holding 329 billion. The biggest issue with this debt is that it only seems to be growing and the government is not doing much to pay it back. In 1989 the U.S national debt was at $2.7 trillion. In 2008 it increased to $10 trillion. In 2010 it grew to $16 trillion. Over this thirty year span the numbers keep getting bigger and bigger. There are ways to help reduce the debt such as cutting spending, raising taxes, or driving economic growth at a faster rate

# data[].attributes.attachment_link.readable_text
Key Takeaways

The Social Security Trust Fund owns a significant portion of U.S. national debt, but how does that work and what does it mean? Learn more about actually owns the U.S. national debt and how that impacts you.

Two Types of National Debt

The U.S. national debt reached the debt ceiling of $31.41 trillion in January 2023. The U.S. Treasury manages the U.S. national debt through its Bureau of Public Debt. The bureau classifies that amount into two broad types: intragovernmental holdings and debt held by the public.

Intragovernmental Debt

The Treasury owes this part of the debt to other federal agencies. Intragovernmental holdings totaled more than $6.89 trillion in January 2023. Why would the government owe money to itself? Because some agencies, like the Social Security Trust Fund, take in more revenue from taxes than they need. These agencies then invest in U.S. Treasurys rather than stick this cash under a giant mattress,

This transfers the agencies' excess revenue to the general fund, where it's spent. They redeem their Treasury notes for funds as needed. The federal government then either raises taxes or issues more debt to raise the required cash.

Which agencies own the most Treasury notes, bills, and bonds? Social Security, by a long shot. The U.S. Treasury publishes this information in its monthly Treasury statement.

Social Security trusts, including the Federal Old-Age and Survivors Insurance and Federal Disability Insurance Trust Funds, held $2.71 trillion in Treasurys as of December 2022. The next largest agency was the Military Retirement Fund at $1.36 trillion. Other large holders of debt include the Office of Personnel Management Retirement, Medicare (which includes the Federal Supplementary Medical Insurance Trust Fund), then cash on hand to fund federal government operations.

Public Debt

The public holds over $24.53 trillion of the national debt, as of January 2023. Foreign governments hold a large portion of the public debt, while the rest is owned by U.S. banks and investors, the Federal Reserve, state and local governments, mutual funds, pensions funds, insurance companies, and holders of savings bonds.

The Treasury breaks down who holds how much of the public debt in a quarterly Treasury bulletin. Foreign and international investors held over $7.4 trillion, according to its December 2022 bulletin, which included data through June 2022. State and local governments held $1.55 trillion and mutual funds had $2.84 trillion.

Other holders of the public debt include insurance companies, U.S. savings bonds, private pension funds, and other holders, including individuals, government-sponsored enterprises, brokers and dealers, banks, bank personal trusts and estates, corporate and non-corporate businesses, and other investors.

Note

If you were to add the debt held by Social Security and all the retirement and pension funds, almost half of the U.S. Treasury debt is held in trust for retirement. Current and future retirees would be hurt the most if the U.S. ever defaulted on its debt.

Why the Federal Reserve Owns Treasurys

As the nation's central bank, the Federal Reserve is in charge of the country's credit. It doesn't have a financial reason to own Treasury notes. So why does it?

The Federal Reserve actually tripled its holdings between 2007 and 2014. The Fed had to fight the 2008 financial crisis, so it ramped up open market operations by purchasing bank-owned mortgage-backed securities. The Fed began adding U.S. Treasurys in 2009. It owned $1.6 trillion, by 2011, maxing out at $2.5 trillion in 2014.

This quantitative easing (QE) stimulated the economy by keeping interest rates low and infusing liquidity into the capital markets. It gave businesses continued access to low-cost borrowing for operations and expansion.

The Fed purchased Treasurys from its member banks, using credit that it created out of thin air. It had the same effect as printing money. By keeping interest rates low, the Fed helped the government avoid the high-interest-rate penalty it would incur for excessive debt.

Note

The Federal Open Market Committee (FOMC) said the Fed would begin reducing its Treasury holdings in 2017. But it purchased Treasurys again just a few years later.

On March 15, 2020, the Federal Reserve announced that it would purchase $500 billion in U.S. Treasurys and $200 billion in mortgage-backed securities over the next several months in an effort to stimulate the economy and support financial markets during the pandemic. The FOMC expanded QE purchases to an unlimited amount on March 23, 2020. Its balance sheet peaked at $8.96 trillion in April 2022.

In March 2022, the Fed announced it would start reversing these purchases to remove money from the economy and combat inflation. The balance sheet had shrunk to $8.85 trillion by August 2022.

Current Foreign Ownership of U.S. Debt

Japan owned $1.08 trillion in U.S. Treasurys in November 2022, making it the largest foreign holder of the national debt. The second-largest holder is China, which owned $870 billion of U.S. debt. Both Japan and China want to keep the value of the dollar higher than the value of their own currencies. This helps to keep their exports to the U.S. affordable, which helps their economies grow.

China replaced the U.K. as the second-largest foreign holder in 2006 when it increased its holdings to $699 billion.

The U.K. is the third-largest holder with $645.8 billion. Its holdings have increased in rank as Brexit continues to weaken its economy. Luxembourg is next, holding $332.9 billion.

The Bottom Line

The U.S. national debt is the sum of public debt that is held by other countries, the Federal Reserve, mutual funds, and other entities and individuals, as well as intragovernmental holdings held by Social Security, Military Retirement Fund, Medicare, and other retirement funds.

Many people believe that much of the U.S. national debt is owed to foreign countries like China and Japan, but the truth is that most of it is owed to Social Security and pension funds right here in the U.S. This means that U.S. citizens own most of the national debt.

Frequently Asked Questions (FAQs)

Is the national debt a problem?

How are the deficit and the national debt related?

Which U.S. president paid off the national debt?

# data[].attributes.attachment_link.description
The majority of the U.S. national debt is owned by Social Security, the Federal Reserve, and foreign investors. Learn how that impacts the economy and you.

# data[].attributes.attachment_link.readable_text
It's likely you're very familiar with the standard world map.

It's shown practically everywhere - you'll see it online, on the news, in books, and even as a part of company logos. In fact, the world map is so ubiquitous that we don't even really think about it much at all, really.

The economist Max Roser from Our World in Data argues that this familiarity with the world map may lead to complacency in understanding global matters. After all, the typical world map shows us the basic geography of countries and continents, but it doesn't give any indication of where people actually live!

Introducing: The Cartogram

To get around the challenges of relying on the standard world map, Roser instead has made a population cartogram based on 2018 population figures.
What's a population cartogram?
A cartogram is a visualization in which statistical information is shown in diagrammatic form. In this case, it's a population cartogram, where each square in the map represents 500,000 people in a country's population.

In total there are 15,266 squares, representing all 7.633 billion people on the planet.

Countries like Canada or Russia - which have giant land masses but small relative populations - appear much smaller on this kind of map. Meanwhile, a country like Bangladesh grows much bigger, because it has a large population living within a smaller area.

The Regional View

Let's zoom in on some continental regions to get a sense of what we can learn from a population cartogram done in this fashion.

Asia and Oceania
Where did Australia go? The continent is completely dwarfed by neighboring Indonesia and the Philippines.

Not surprisingly, India and China are the biggest countries on this cartogram, especially looking oversized in comparison to countries in the Middle East like Saudi Arabia, Afghanistan, or the United Arab Emirates.

Europe
Geographically, Russia is a pretty massive country - but when resized based on population, the nation looks closer in size to many other European nations.

The Netherlands and Belgium, two countries with higher population densities than most European nations, also appear more prominent on this style of map.

The Americas
On the map below, Mexico has exploded to almost 4X the size of Canada. That's because although the Great White North is the world's second largest country in size, it only has a fraction of the population of Mexico.

Meanwhile, it's evident that Argentina's population is lower than the country's giant landmass leads on.

Africa
Finally, we'll look at Africa, which is in the middle of a massive population boom.

Countries like Namibia, Botswana, and Chad almost disappear.

Nigeria, which is expected to have the world's largest city by 2100 with over 88 million residents, is the largest country in Africa using this cartogram method.

# data[].attributes.attachment_link.title
This Fascinating World Map was Drawn Based on Country Populations

# data[].attributes.attachment_link.description
It's likely you're very familiar with the standard world map. It's shown practically everywhere - you'll see it online, on the news, in books, and even as a part of company logos. In fact, the world map is so ubiquitous that we don't even really think about it much at all, really.

# data[].attributes.attachment_link.title
Is there a new debt crisis on the horizon?

# data[].attributes.attachment_link.description
With the US Federal Reserve confirming further rate hikes to come, emerging markets like China are the most vulnerable to the ripples this will send through the global economy.

# data[].attributes.headline
Sandra Amezquita                 Will the introduction of kiosks help cut labor costs?

# data[].attributes.subject
Sandra Amezquita                 Will the introduction of kiosks help cut labor costs?

# data[].attributes.body
Hypothesis:
Kiosks may increase unemployment rates while cutting labor costs

# data[].attributes.attachment_link.readable_text
"Would you like fries with that?" may soon be a phrase of the past.

As minimum wage levels approach or surpass $15 nationwide, restaurant customers expecting to be greeted by a smiling face will instead be welcomed by a glowing LED screen.

As of 2020, self-service ordering kiosks will be implemented at all U.S. McDonald's locations. Other chains, including fast-casual brands like Paneraand casual-dining brands like Chili's, have already embraced this trend. Some restaurant concepts have even automated the food-preparation process; earlier this year, NBC News profiled "Flippy,"a robot hamburger flipper. Other upcoming concepts include virtual restaurants which eliminate the need for full-service restaurants (and staff) by only offering home delivery.

While some consumers may appreciate the novelty or added convenience, the conveniences come at the cost of entry-level jobs.

My concern about this is personal. Without my opportunity to start as a grill man, I would have never ended up running one of largest fast food chains in the world. I started working at McDonald's making the minimum wage of 85 cents an hour. I worked hard and earned a promotion to restaurant manager within just one year, then went on to hold almost every position available throughout the company, eventually rising to CEO of McDonalds USA.

The kind of job that allowed me and many others to rise through the ranks is now being threatened by a rising minimum wage that's pricing jobs out of the market. Without sacrificing food quality or taste, or abandoning the much-loved value menu, franchise owners must keep labor costs under control. One way to combat rising labor costs is by reducing the amount of employees needed.

This trend is nothing new. Chains have responded to rising labor costs and technological advancement accordingly and McDonald's has been leading the way as a pioneer in productivity among employees, concepts, and machines. From the invention of the " Speedee Service System" to the famous Multimixer shake machine, these innovations have reduced the labor needed to increase output levels and made employees' jobs easier in the process.

These innovations dating back to McDonald's founding were not intended to reduce the number of employees; rather, they were designed to make employees more efficient at their jobs. The introduction of self-service ordering tablets has been presented in a similar manner. However, with labor costs continuing to skyrocket, it's inevitable that restaurants and other fast food chains will continuously search for ways to reduce labor costs--particularly as customers get comfortable with new technology.

The research supports my concerns. A 2017 studyby economists David Neumark and Grace Lordan finds a minimum-wage related increase in unemployment among employees who previously held jobs susceptible to automation. Younger workers were some of the hardest hit by this outcome, which shouldn't be surprising;according to the Bureau of Labor Statistics, nearly half of minimum wage workers are between the ages of 16 and 24.

Pricing young job seekers out of the market and a weekly paycheck is just one immediate effect of an increasing minimum wage. A study by University of Virginia and Middle Tennessee State University economists found that teenagers who held part-time jobs in school had annual earnings that were 20 percent higher than their counterparts without experience six to nine years after graduation.

These entry level jobs such as flipping burgers or taking customers orders teach teens valuable jobs skills such as customer service and applying basic math skills. Skills that could ultimately lead to the career stepping stones for a working teenager to become an engineer or accountant.

Technological innovation can and has helped employees work more comfortably and efficiently, but when outside intervention forces higher labor costs onto restaurant owners, they will innovate in ways that replace employees instead of empowering them.

# data[].attributes.attachment_link.title
McDonald's Says Goodbye Cashiers, Hello Kiosks

# data[].attributes.attachment_link.description
"Would you like fries with that?" may soon be a phrase of the past. As minimum wage levels approach or surpass $15 nationwide, restaurant customers expecting to be greeted by a smiling face will instead be welcomed by a glowing LED screen. As of 2020, self-service ordering kiosks will be implemented at all U.S.

# data[].attributes.body
The U.S. economy added an estimated 313,000 jobs in February 2018, keeping the unemployment rate at 4.1 percent, where it’s held steady for the past five months

1.     What is the idea of full employment? What is the natural rate of unemployment?

2.     Why are economists wrong about full employment?

3.     What is a good unemployment rate for the US economy?

# data[].attributes.attachment_link.readable_text
The U.S. economy added an estimated 313,000 jobs in February, keeping the unemployment rate at 4.1 percent, where it's held steady for the past five months. And the good news is, experts agree, that it still has room to improve.

But there's even better news if you look closely: The lowest unemployment rate most economists think we can reach is still too high.

Within economics, there's a concept called full employment. There's a debate within the field over what that means in terms of the unemployment rate. In the New York Times, Neil Irwin suggests 3.5 percent may be the most realistic level for which we can hope; Alan Blinder, an economist Irwin quotes, gives a range with 2.5 percent as his low-end estimate. There's good reason to believe, however, that we should strive for the unemployment rate to be well under 2 percent and, potentially, even lower.

The idea behind full employment is that there is some "natural" level of unemployment caused by basic "frictions" in the job market, like temporary layoffs and job searches. Get any lower than this "natural" rate, the theory goes, and workers will have too much bargaining power relative to employers. They'll negotiate higher wages than their productivity warrants, employers will raise prices in response, workers will negotiate higher wages again, prices will rise again, and we'll be caught in a difficult-to-stop cycle of accelerating inflation. Terrible, right!?

If you're not scared, I don't blame you. Nothing remotely close to the dynamic outlined above has surfaced in almost four decades. One might cite the late 1990s as an exception, as unemployment in the 4 percent range did correspond with rising wages, but it didn't produce the kind of inflationary spiral about which economists often worry. More recently, unemployment has been below the Federal Reserve's "natural rate" estimate and inflation hasn't budged.

So why are economists so wrong about full employment?

One reason is that the labor market doesn't work the way the classic models suggest it does, especially since union membership and federal labor standards have been eroded by years of corporate attacks. Wages are not set, as in full employment theory, by some pristine equilibrium between supply and demand; workers are not paid their marginal contribution to their firms' output. In the real world, pay is determined by a negotiation between workers and employers, and employers typically have a lot more negotiating power than their employees do. While there's evidence that lower unemployment rates do give workers some power (by making employers less sure they can replace workers who ask for raises), it's not enough power for workers to secure raises that reflect their work effort. The evidence that higher wages necessarily lead to price hikes isn't exactly rock-solid, either.

The other big problem with theories of full employment is that they're based on historical data. Even in periods of very strong labor demand, there is logically some level of unemployment that is truly unavoidable because people are hired and fired, or change employers or quit, all of which involves transition time between one job and the next. But there's no reason to assume that we've ever been particularly close to that level of unemployment.
[Yes, the robots will steal our jobs. And that's fine.]
Consider, for example, that the black unemployment rate has been about twice as high as the white unemployment rate since the Bureau of Labor Statistics began publishing black unemployment data in 1972, and that even February's 6.9 percent black unemployment rate, which is close to December's record low, was higher than the white unemployment rate in 80 percent of the months since then. Economists seem to take the discrepancy between the black and white unemployment rates as a given, but it's a reflection of institutional racism. Very little of the long-standing 2-to-1 ratio can be attributed to differential rates of educational attainment among black and white populations (which are themselves the product of centuries of discrimination); we know that millions of Americans have historically been denied jobs on the basis of their racial identities alone. It is most certainly not the case that the "natural" rate of unemployment for white workers is in the 3.5 percent range while the "natural" rate of unemployment for black workers is twice as high.

What's needed is a benchmark full-employment rate that accounts for discrimination and is a reasonable proxy for the true level of frictional unemployment in the economy. The unemployment rate of white college graduates - workers unlikely to be discriminated against on the basis of race and possessing the credential many employers use to weed out the workers they want to consider hiring - i.e., a college degree - fits the bill. If you're a white college graduate and you end up unemployed, you're likely to find a new opportunity reasonably soon. (Though even for many white college graduates, of course, finding a good job is hardly easy). Our economy can and should work the same way for other workers, but it currently doesn't.
[The economy on the eve of the tax cut]
One might contend that college graduates are more productive than workers without college degrees and that their unemployment rates should be lower than the rates for their less-educated counterparts. But high levels of educational attainment aren't a prerequisite for many of the jobs in our economy. Employer claims that they can't find workers with the skills they need are much less often true than many people think, so there's not much basis behind the idea that employers can't afford to hire and train non-college-educated workers.

What's a good unemployment rate to aim for, then? The white college graduate unemployment rate was 1.7 percent during the late 1990s, the last time many economists think we were at full employment. So let's stop suggesting arbitrarily high target rates of unemployment and start focusing on making 1.7 percent unemployment or lower the new normal - for everyone.

# data[].attributes.attachment_link.title
Perspective | The unemployment rate is low. It should be even lower.

# data[].attributes.attachment_link.description
The U.S. economy added an estimated 313,000 jobs in February, keeping the unemployment rate at 4.1 percent, where it's held steady for the past five months. And the good news is, experts agree, that it still has room to improve.

# data[].attributes.attachment_link.readable_text
This economic cycle is really setting records. We've had almost 10 years of U.S. economic growth, the unemployment rate is at a 30-year low (it is expected to go lower), and every few days I hear someone in the administration bragging about how well the economy is performing.

I've lived through five major economic cycles in my career and while all this is great news for many people, I just want to explain the dark side of all this, with a particular focus on what HR organizations and employers should do.
There Are A Lot of Jobs, Just Not Enough Skills
Yes, there are a lot of jobs being created: more jobs than there are people in fact. As I discussed in an earlier article, employers are opening up many new positions to compete for this economic growth, and most of these are positions in software, service, sales, engineering, design, and other digitally-enabled roles. LinkedIn's data shows that jobs like analytics, machine learning, cloud computing, and cyber security are 4-10X more scarce than the typical role, but data also shows that healthcare jobs and elder care are also in great demand.

Interestingly, most of these jobs demand softskills not just technical skills. A study just completed by Bloomberg and Workday finds that college graduates are not bringing enough technical or softskills to the job market (only 35% of employers feel grads are sufficiently ready) and four in ten are building remedial programs to try to fill this gap. So while there are a lot of jobs open, we are seeing an increasingly wide gap between the jobs being created and the skills and experiences in the workforce to fill them.

This creates stress among hiring managers, stress among HR teams, and stress among CEOs. The 2018 Conference Board CEO study found that "failure to attract and retain top talent" is now the No. 1 issue on the minds of CEOs, even more important than competition or the disruptive nature of technology. This is why the L&D market is exploding with growth and new L&D tools and solutions are being snatched up by employers.
Automation Is Creating Jobs But Also Stress
Contrary to many articles written a few years ago, AI and robotics are not doing away with jobs, they're creating them. We now have demand for people to build AI and robotics, sell them, train them, and repair them. My daughter works in digital marketing and her job has become one of operating, measuring, and refining data-driven systems to capture leads, segment buyers, and continuously improve sales production. Yes, she is also a gifted designer and writer, but that's only a part of the job now.

More than two-thirds of the companies we interviewed in the 2018 Deloitte Human Capital Trends believe the pace of automation is increasing, and this creates stress in selecting technology, implementing it, and wondering if the tools you're buying are good enough to compete with others. With an economy as hot as the one we have today, you don't have a lot of room for error in buying the wrong tools, delaying your implementation, or selecting the wrong vendor. Expectations are sky-high, which of course makes all our jobs harder than ever.

And despite all the wonderful positive things technology can do, it has gotten away from us. There are now more than 100 different corporate learning vendors, at least 20 different tools for corporate collaboration, hundreds of new tools for recruitment, performance management, and employee engagement, and at least five major ERP vendors competing for payroll and core HR. All these are great companies, but selecting the right one and making sure the vendor doesn't go out of business is a challenge.

Added to all this, we can't trust technology like we did before. These vendors are moving so fast (they see all this growth) they're becoming sloppy in their own ways. Facebook just revealed that it gave away more data than it hard reported to congress, and it "unblocked" confidential information for almost a million people in messenger "by accident." Google just revealed that hundreds of vendors have been reading your Gmail accounts (I use hosted Exchange), and despite their best efforts to "not be evil" I sometimes wonder what's happening to my enormous cache of photos.

A recent study by Edelman found that even Californians, where I live, don't trust tech the way we used to. More than three-fifths of Californians believe tech firms over-focus on profits and drain local resources for their own benefit (more on this below), 58% believe tech companies fail to protect them from security threats, and 67% believe the industry is "secretive." Worst of all, 60% believe tech jobs are good for the state, but only 38% believe tech companies benefit them as individuals. This is because many of these great jobs are unavailable to normal people.
Traffic, Housing Costs, Infrastructure
I have always measured the state of the U.S. economy by simply measuring how much traffic there is on the San Francisco Bay Bridge. Well it has reached an epic level of frustration. I have to leave my house at 5 a.m. to catch an 8 a.m. flight from SFO now, and there seems to be traffic all day everywhere. Uber drivers tell me the same.

The San Francisco BART system, which was an absolutely state of the art system in the 1970s (I actually worked with the IBM team that built the Bart computers in my early career), is heavily overloaded. I talked with a good friend last weekend who told me it takes her 90 minutes to travel from Berkeley to San Francisco because she has to walk to a Bart station far from her house that lets her get on the train. Many of the trains are so full you can barely get on.

Housing costs are clearly going up (the median house now costs $880,000 and it takes four minimum wage jobs to afford one average apartment rent), and in most neighborhoods here (and in many cities) they are far out of reach for new families. The Deloitte 2018 Millennial Study discovered that 51% of respondents believe their financial situation will be worse than their parents and they rate pay as their No. 1 criteria for a job. They see rising healthcare costs, high housing prices, and the high cost of food and transportation (and student debt) as expenses growing faster than their income. In fact 43% are willing to leave their jobs for better pay and 62% plan to work a "side-hustle" to make more cash. (Is that a full-time worker driving that Uber car?)

These are all nice problems to have of course, except for the fact that wages are barely increasing while the cost of living is now going up by 2-2.5% per year. Inflation is here (we just don't notice it) and the gap between wages and costs is not closing.

I also look at productivity data and again it shows a lag. As I've talked about with many companies, global productivity is slowing, which means we're creating jobs, hiring people, but getting a little less done per hour each year. I think this is caused by many factors (commute time, poor infrastructure, and also re-engineering of work practices), but ultimately it shows a "sloppiness" in the way we run our companies. Why? We are in such a rush to "grow" and hire people to meet demand, we don't always have time to really re-engineer what we're doing to become more efficient.

Surprising to me, in my research this year I've found that many of us are not very good financial planners in general. Research now shows that 50% of American households have no savings at all, the median retirement balance is only $3,000, and the average credit card debt is over $10,000. In fact 40% of adults rate themselves a C or worse in financial literacy and even Millennials feel stressed (15% of college graduate salaries now go to student loan debt and 32% of millennials say pay is causing them stress).

I'm not saying business leaders aren't trying hard: everywhere I go companies have a focus on the "employee experience" or some other terminology for making work easier and better. But programs like Wellbeing programs, employee engagement programs, and better benefits are kind of like putting bandaids on a wound, when the real problem is deeper and harder to fix. No amount of wellbeing subsidy makes up for a two-hour commute, a rent that takes a third of your income, or a lack of cash management to make ends meet.
Difficulty To Hire
Of course the biggest challenge employers find in this kind of economy is how hard it is to attract the right people. Recruiters are arming up with lots of new weapons to find people (I'll be talking much more about this at the HR tech conferences coming later this year), but they're also finding a 40% increase in time to hire. This is simply the result of candidates being more picky, and even trends like " job ghosting," where job candidates just "disappear."

I remember interviewing a large telecommunications company that told me they have "walk-aways" all the time - people who accept jobs and then just "walk away" when they don't understand what to do. Now candidates are just "disappearing" in the interview process because they see so many other opportunities available. One company told me they are now paying job candidates to take an interview, even though they may not get an offer!
What Does All This Mean?
Listen I'm not writing this article to be negative, but rather I think it's important for us to realize that in this economic cycle, we have a whole new set of winning strategies as employers. We can't fix what's going on in Washington, we can't necessarily fix the commute or the state of traffic - but we have to realize that our focus has to change.

Here are a few of the massive trends I see in my world of HR, business leadership, and the HR tech market.

Focus on employee productivity and wellbeing. In this kind of job market, everyone feels under stress. Your job as a business leader or HR manager has to focus on what you can do to make work easier.Reduce the clutter, help managers set clear goals, simplify your organizational structure, and make sure you have a rich set of wellbeing programs to offer. I'll be publishing a big report on wellbeing later this year: take my word for it, these programs are badly needed and you will see a huge ROI by investing in this area.

Get your recruitment house in order. The latest Bersin by Deloitte talent acquisition research found that 74% of companies are still doing what we call "transactional recruiting." In other words, they take a job requisition (typically opened by a manager), they post it on the internet, and they start the recruiting process. In today's job market this is insane. If you aren't honing your employment brand, seeking out passive candidates who fit your culture, actively engaging with senior leadership to improve your talent pipeline, and looking seriously at gig work and leveraging talent pools, you're fishing in a pond that is way overfished.

Take your employee engagement problems very seriously. I'm almost tired of writing about the topics of culture and engagement (you can read more about it in theSimply Irresistible Model) but the problem remains. Every day I read a story about some work-related practice (unfair pay, mistreatment of an employee, lack of diversity in leadership), and it hurts your own company. Yes, we all want to hire, grow, and gain market share - but if we don't do it in a meaningful way, we will lose our best people and ultimately when the next recession comes, people simply will not make the sacrifices you need to keep your business growing.

Simplify your technology. Despite all the wonderful newAI tools out there(most are very immature), a lot of these new tools are brand new. Don't buy a bunch of them, buy only a few. Focus on making your core HR systems (Workday, Oracle, SAP, ADP, Ultimate) easy to use and well implemented. Buy alearning experience platformso your employees can easily share information and learn from each other. And stop buying more and more communication tools, all they do is make your employees lives harder. (Theaverage company has more than four different waysto collaborate, including Slack, Microsoft Teams, Google G-Suite, Workplace by Facebook, Slack, Webex, Skype, Zoom, and the list goes on and on.) Do you really need them all? I doubt it.

Bring together HR, IT, and business leadership and talk about these issues. One of the most important things we found from the 2018 Deloitte Human Capital Trends was thatthe C-Suite is not working closely enough togetheron cross-organizational issues. (Seventy-three percent of CXOs "rarely if ever" work together on cross functional issues!) Dealing with low unemployment, a hyper-competitive job market, and increased need for productivity and career growth clearly falls into this category

Don't take me wrong, I'm a big fan of economic growth. But let's do it in a careful and measured way - we all have to live in this economy, so let's plan for the bad times while we enjoy all the growth.

# data[].attributes.attachment_link.title
The Ugly Side To Today's Low Unemployment Rate

# data[].attributes.attachment_link.description
This economic cycle is really setting records. We've had almost 10 years of U.S. economic growth, the unemployment rate is at a 30-year low (it is expected to go lower), and every few days I hear someone in the administration bragging about how well the economy is performing.

# data[].attributes.attachment_link.readable_text
The U.S. economy added an estimated 313,000 jobs in February, keeping the unemployment rate at 4.1 percent, where it's held steady for the past five months. And the good news is, experts agree, that it still has room to improve.

But there's even better news if you look closely: The lowest unemployment rate most economists think we can reach is still too high.

Within economics, there's a concept called full employment. There's a debate within the field over what that means in terms of the unemployment rate. In the New York Times, Neil Irwin suggests 3.5 percent may be the most realistic level for which we can hope; Alan Blinder, an economist Irwin quotes, gives a range with 2.5 percent as his low-end estimate. There's good reason to believe, however, that we should strive for the unemployment rate to be well under 2 percent and, potentially, even lower.

The idea behind full employment is that there is some "natural" level of unemployment caused by basic "frictions" in the job market, like temporary layoffs and job searches. Get any lower than this "natural" rate, the theory goes, and workers will have too much bargaining power relative to employers. They'll negotiate higher wages than their productivity warrants, employers will raise prices in response, workers will negotiate higher wages again, prices will rise again, and we'll be caught in a difficult-to-stop cycle of accelerating inflation. Terrible, right!?

If you're not scared, I don't blame you. Nothing remotely close to the dynamic outlined above has surfaced in almost four decades. One might cite the late 1990s as an exception, as unemployment in the 4 percent range did correspond with rising wages, but it didn't produce the kind of inflationary spiral about which economists often worry. More recently, unemployment has been below the Federal Reserve's "natural rate" estimate and inflation hasn't budged.

So why are economists so wrong about full employment?

One reason is that the labor market doesn't work the way the classic models suggest it does, especially since union membership and federal labor standards have been eroded by years of corporate attacks. Wages are not set, as in full employment theory, by some pristine equilibrium between supply and demand; workers are not paid their marginal contribution to their firms' output. In the real world, pay is determined by a negotiation between workers and employers, and employers typically have a lot more negotiating power than their employees do. While there's evidence that lower unemployment rates do give workers some power (by making employers less sure they can replace workers who ask for raises), it's not enough power for workers to secure raises that reflect their work effort. The evidence that higher wages necessarily lead to price hikes isn't exactly rock-solid, either.

The other big problem with theories of full employment is that they're based on historical data. Even in periods of very strong labor demand, there is logically some level of unemployment that is truly unavoidable because people are hired and fired, or change employers or quit, all of which involves transition time between one job and the next. But there's no reason to assume that we've ever been particularly close to that level of unemployment.
[Yes, the robots will steal our jobs. And that's fine.]
Consider, for example, that the black unemployment rate has been about twice as high as the white unemployment rate since the Bureau of Labor Statistics began publishing black unemployment data in 1972, and that even February's 6.9 percent black unemployment rate, which is close to December's record low, was higher than the white unemployment rate in 80 percent of the months since then. Economists seem to take the discrepancy between the black and white unemployment rates as a given, but it's a reflection of institutional racism. Very little of the long-standing 2-to-1 ratio can be attributed to differential rates of educational attainment among black and white populations (which are themselves the product of centuries of discrimination); we know that millions of Americans have historically been denied jobs on the basis of their racial identities alone. It is most certainly not the case that the "natural" rate of unemployment for white workers is in the 3.5 percent range while the "natural" rate of unemployment for black workers is twice as high.

What's needed is a benchmark full-employment rate that accounts for discrimination and is a reasonable proxy for the true level of frictional unemployment in the economy. The unemployment rate of white college graduates - workers unlikely to be discriminated against on the basis of race and possessing the credential many employers use to weed out the workers they want to consider hiring - i.e., a college degree - fits the bill. If you're a white college graduate and you end up unemployed, you're likely to find a new opportunity reasonably soon. (Though even for many white college graduates, of course, finding a good job is hardly easy). Our economy can and should work the same way for other workers, but it currently doesn't.
[The economy on the eve of the tax cut]
One might contend that college graduates are more productive than workers without college degrees and that their unemployment rates should be lower than the rates for their less-educated counterparts. But high levels of educational attainment aren't a prerequisite for many of the jobs in our economy. Employer claims that they can't find workers with the skills they need are much less often true than many people think, so there's not much basis behind the idea that employers can't afford to hire and train non-college-educated workers.

What's a good unemployment rate to aim for, then? The white college graduate unemployment rate was 1.7 percent during the late 1990s, the last time many economists think we were at full employment. So let's stop suggesting arbitrarily high target rates of unemployment and start focusing on making 1.7 percent unemployment or lower the new normal - for everyone.

# data[].attributes.attachment_link.title
Perspective | The unemployment rate is low. It should be even lower.

# data[].attributes.attachment_link.description
The U.S. economy added an estimated 313,000 jobs in February, keeping the unemployment rate at 4.1 percent, where it's held steady for the past five months. And the good news is, experts agree, that it still has room to improve.

# data[].attributes.body
If technology within businesses continues to advance, unemployment will rise.
To many, technological advancement is seen as a positive economic factor that can only help the economy and increase production. However, it seems that as technological advance increases, so does the amount of technology replacing humans in the workforce. David Autor, an MIT Economist, claims "we're losing higher-skill, better paying jobs to machines" (Arnold). A few jobs that, according to David Autor, are being taken include "bank tellers, airline check-in agents, [and] accountants..." (Arnold). An example of this human replacement can even be witnessed at the local Target or Walmart. As customers line up at the convenient self-checkout machines, there is less of a need for cashier lines to remain open. In other words, these machines are replacing the jobs of  human cashiers. Therefore, I believe that as technological advancement within businesses increases, unemployment will rise

# data[].attributes.attachment_link.readable_text
The U.S. economy hit an important milestone last week: Gross domestic product, the sum of all goods and services produced in the country, returned to pre-recession levels. But the gains were made with millions fewer workers. Part of the reason is technology, as computers and machines continue to replace humans.

We used to think about machines taking over mundane jobs, like twisting a screw into a toaster on an assembly line over and over again. But more recently, technology is eliminating higher-skill jobs.

To talk about this, some of the nation's top technologists and economists came to Harvard and the Massachusetts Institute of Technology this week for a jobs conference called Race Against the Machine. There was a very impressive machine on hand: Watson, the powerful Jeopardy-playing computer built by IBM that recently beat the all-time human Jeopardy game show champion.

This week Watson took on two teams from MIT and Harvard. The auditorium was packed with students. Although Harvard managed to do well, its team was no match for the powerful computer.

Only tepid applause greeted Watson after it correctly answered questions about things like a truncated icosahedron (soccer ball-shaped). Maybe the reason human beings don't tend to clap for Watson is that we can instinctively sense that it might steal our jobs.

"We see already that the work of legal discovery - in other words, sitting around and reading huge volumes of documents at the early stage of a lawsuit ... is being very quickly and very heavily automated," says Andrew McAfee, an MIT researcher who helped organize the conference and is co-author of Race Against the Machine. "And by one estimate, it lets one lawyer do the work of 500."

The world will still need brilliant human courtroom litigators, but not as many junior lawyers and paralegals. McAfee also says we won't need as many tax preparers. More complex manufacturing is being done by machines, which means even fewer auto workers. So where is all this headed?

"There's been a long-running debate about does technology eliminate jobs," says David Autor, an MIT economist who spoke at the conference.

He says it's not like every job a machine takes over leaves one person permanently out of work.

"Back at the turn of the 20th century, about 38 percent of all American workers were working on farms. At present, it's 2 percent," Autor says.

Machines took over a lot of farm work, but new industries and new jobs were created. Overall, Autor says technology improved people's quality of life, including advantages like better health care and rising incomes over the past 100 years.

But Autor also has his worries. He says machines used to take over work that was physically hard or dangerous or just monotonous. But now, he says, we're losing higher-skill, better-paying jobs to machines - like bank tellers, airline check-in agents, accountants and whole floors of actuaries in insurance companies.

Meanwhile, computers still aren't very good at many menial labor jobs like cleaning bathrooms and other janitorial work; we still need humans for that. So it turns out that for many very low-skill jobs, there's still demand. For high-skill and high-touch jobs like being a good manager at a company, a doctor or a nurse, we need humans. But many middle-skill, middle-class jobs are where we're seeing the squeeze.

"That's the irony, right?" Autor says. "That basically the things that proved easier to automate are not the lowest-skill activities. It's easier to have a computer play chess than it is to have a computer wash dishes."

So going forward, the worry is there's going to be a greater need for people to do minimum-wage restaurant busboy-type work and less need for $30-an-hour office workers.

Other economists say innovation will save the day: New industries and new technologies will spring up with new kinds of jobs for people that we can't yet anticipate.

# data[].attributes.attachment_link.title
How Technology Is Eliminating Higher-Skill Jobs

# data[].attributes.attachment_link.description
Machines used to take over work that was physically hard or dangerous or just monotonous. But one expert says that now the things that are easiest to automate are not the lowest-skill activities. Instead, higher-skill, better-paying jobs are being lost.

# data[].attributes.attachment_link.title
Most of America’s Fruit Is Now Imported. Is That a Bad Thing? (Published 2018)

# data[].attributes.attachment_link.description
As the country imports ever more of its fruits and vegetables, it’s time to examine the positive and negative effects on consumers and farmers.

# data[].attributes.attachment_link.readable_text
Following the Office of Management and Budget's (OMB) Statistical Policy Directive 14, the Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. If a family's total income is less than the family's threshold, then that family and every individual in it is considered in poverty. The official poverty thresholds do not vary geographically, but they are updated for inflation using the Consumer Price Index (CPI-U). The official poverty definition uses money income before taxes and does not include capital gains or noncash benefits (such as public housing, Medicaid, and food stamps).

For historical information, see the History of the Poverty Measure page in the About section of the Poverty subtopic site.

Money Income: Income Used to Compute Poverty Status

The income used to compute poverty status includes (before taxes):

Money income does not include:

Capital gains or losses

Noncash benefits (e.g. food stamps and housing subsidies)

Tax credits

Poverty Thresholds: Measure of Need

Poverty thresholds are the dollar amounts used to determine poverty status.

The Census Bureau assigns each person or family one out of 48 possible poverty thresholds.

Thresholds vary by the size of the family and age of the members.

The same thresholds are used throughout the United States (they do not vary geographically).

Thresholds are updated annually for inflation using the Consumer Price Index for All Urban Consumers (CPI-U).

Although the thresholds in some sense reflect a family's needs, they are intended for use as a statistical yardstick, not as a complete description of what people and families need to live.

Computation

To calculate total family income, the incomes of all related family members that live together are added up to determine poverty status. If an individual or group of individuals (such as housemates) are not living with family members, their own individual income is compared with their individual poverty threshold.

Thus, all family members have the same poverty status, and some families may be composed of single unrelated individuals.

If total family income:

Is less than the poverty threshold for that family - that family and everyone in it is considered to be in poverty.

Equals or is greater than the poverty threshold - the family is not considered to be in poverty.

Situation

Family A has 5 members: 2 children, 1 mother, 1 father, and 1 great-aunt.

Step 1: Determine the family's poverty threshold for that year

The family's 2017 poverty threshold (below) was $29,986.

Step 2: Calculate the total family income for the same year

Suppose the members' incomes in 2017 were:

Thus, Family A's total income for 2017 was $31,000.

Step 3: Compare the family's total income with the poverty threshold

The total family income divided by the poverty threshold is called the Ratio of Income to Poverty.

Income / Threshold = $31,000 / $29,986 = 1.03

The difference in dollars between family income and the family's poverty threshold is called the Income Deficit (for families in poverty) or Income Surplus (for families above poverty).

Income - Threshold = $31,000 - $29,986 = $1,014

Conclusion

Since Family A's total income was greater than their poverty threshold, they are considered not "in poverty" according to the official definition.

People Whose Poverty Status Cannot Be Determined

Poverty status cannot be determined for people in:

Institutional group quarters (such as prisons or nursing homes)

College dormitories

Military barracks

Living situations without conventional housing (and who are not in shelters)

Additionally, poverty status cannot be determine for unrelated individuals under age 15 (such as foster children) because income questions are asked of people age 15 and older and, if someone is under age 15 and not living with a family member, we do not know their income. Since we cannot determine their poverty status, they are excluded from the "poverty universe" (table totals).

# data[].attributes.attachment_link.description
Following the Office of Management and Budget's (OMB) Statistical Policy Directive 14, the Census Bureau uses a set of money income thresholds that vary by family size and composition to determine who is in poverty. If a family's total income is less than the family's threshold, then that family and every individual in it is considered in poverty.

# data[].attributes.body
Hypothesis: With the rise of artificial intelligence and autonomation, GDP will increase exponentially, but quality of life will not keep up with increase in GDP.

# data[].attributes.attachment_link.readable_text
Testing a manned, walking robot, Method-2, in Gunpo, South Korea, last month. Credit Credit Chung Sung-Jun/Getty Images

The robots are coming, but the march of automation will displace jobs more gradually than some alarming forecasts suggest.

A measured pace is likely because what is technically possible is only one factor in determining how quickly new technology is adopted, according to a new study by the McKinsey Global Institute. Other crucial ingredients include economics, labor markets, regulations and social attitudes.

The report, which was released Thursday, breaks jobs down by work tasks - more than 2,000 activities across 800 occupations, from stock clerk to company boss. The institute, the research arm of the consulting firm McKinsey & Company, concludes that many tasks can be automated and that most jobs have activities ripe for automation. But the near-term impact, the report says, will be to transform work more than to eliminate jobs.

Globally, the McKinsey researchers calculated that 49 percent of time spent on work activities could be automated with "currently demonstrated technology" either already in the marketplace or being developed in labs. That, the report says, translates into $15.8 trillion in wages and the equivalent of 1.1 billion workers worldwide. But only 5 percent of jobs can be entirely automated.

"This is going to take decades," said James Manyika, a director of the institute and an author of the report. "How automation affects employment will not be decided simply by what is technically feasible, which is what technologists tend to focus on."

The report, a product of years of research by the McKinsey group, adds to the growing body of research on automation and jobs.

Conclusions about the relationship between the two vary widely. Examining trends in artificial intelligence, Carl Benedikt Frey and Michael A. Osborne, researchers at Oxford University, estimated in a widely cited paper published in 2013 that 47 percent of jobs in the United States were at risk from automation.

By contrast, a report published last year by the Organization for Economic Cooperation and Development concluded that across its 21-member countries, 9 percent of jobs could be automated on average.

Differing assumptions, and sheer uncertainty about the future, explain the conflicting outlooks.

Throughout history, times of rapid technological progress have stoked fears of jobs losses. More than 80 years ago, the renowned English economist John Maynard Keynes warned of a "new disease" of "technological unemployment."

Today, it is the rise of artificial intelligence in increasingly clever software and machines that is stirring concern. The standard view is that routine work in factories and offices, like bookkeeping or operating basic machinery, is most vulnerable to automation.

But A.I. software that can read and analyze text or speech - so-called natural language processing - is encroaching on the work of professionals. For example, there is a lot of legal work that is routine, said Frank Levy, a labor economist at the Massachusetts Institute of Technology. But that routine work, sifting through documents for relevant information, is wrapped in language, which had protected lawyers from the effects of automation. But no longer.

"Natural language processing opens the door to doing more and more work that was beyond automation until recently," Mr. Levy said.

The McKinsey report cites natural language processing as a key technology: The faster it develops, the more that tasks can be automated; a slower pace means less automation.

The economic cost of automation is another concern. People see advances in self-driving vehicles, and think that the jobs of America's 1.7 million truck drivers are in imminent peril, said Michael Chui, a partner at the McKinsey institute and an author of the report.

Yet replacing America's truck fleet would require a trillion-dollar investment, Mr. Chui said, adding "if you could buy a self-driving truck, which you can't."

Such uncertainties led the McKinsey researchers to calculate the pace of automation as ranges rather than precise predictions. The report's multifactor scenarios suggest that half of today's work activities could be automated by 2055. That threshold could be reached 20 years earlier or 20 years later, the report adds, depending on economic trends, labor market dynamics, regulations and social attitudes.

So while further automation is inevitable, McKinsey's research suggests that it will be a relentless advance rather than an economic tidal wave.

"We have more time than we think to adjust to the world that technology makes possible," said Matthew J. Slaughter, an economist and dean of the Tuck School of Business at Dartmouth College.

The McKinsey report also considered the other side of automation - as an engine of productivity and economic growth.

In that context, the report points to the demographic challenges ahead, as most nations age, and the need for automation-powered growth. Today, there are 46 million Americans over 65, or 15 percent of the population. By 2060, the size of the over-65 group is projected to reach 98 million people, or 24 percent of the population.

The American economy may need all the A.I.-assisted automation it can muster.

"If productivity growth continues to be anemic, we're in trouble," said Hal Varian, Google's chief economist and an emeritus professor at the University of California, Berkeley.

A version of this article appears in print on , on Page B2 of the New York edition with the headline: Robots Will Take Jobs, but Not as Fast as Some Fear, New Report Says. Order Reprints | Today's Paper | Subscribe

# data[].attributes.attachment_link.title
Robots Will Take Jobs, but Not as Fast as Some Fear, New Report Says

# data[].attributes.attachment_link.description
The robots are coming, but the march of automation will displace jobs more gradually than some alarming forecasts suggest. A measured pace is likely because what is technically possible is only one factor in determining how quickly new technology is adopted, according to a new study by the McKinsey Global Institute.

# data[].attributes.attachment_link.readable_text
"Would you like fries with that?" may soon be a phrase of the past.

As minimum wage levels approach or surpass $15 nationwide, restaurant customers expecting to be greeted by a smiling face will instead be welcomed by a glowing LED screen.

As of 2020, self-service ordering kiosks will be implemented at all U.S. McDonald's locations. Other chains, including fast-casual brands like Paneraand casual-dining brands like Chili's, have already embraced this trend. Some restaurant concepts have even automated the food-preparation process; earlier this year, NBC News profiled "Flippy,"a robot hamburger flipper. Other upcoming concepts include virtual restaurants which eliminate the need for full-service restaurants (and staff) by only offering home delivery.

While some consumers may appreciate the novelty or added convenience, the conveniences come at the cost of entry-level jobs.

My concern about this is personal. Without my opportunity to start as a grill man, I would have never ended up running one of largest fast food chains in the world. I started working at McDonald's making the minimum wage of 85 cents an hour. I worked hard and earned a promotion to restaurant manager within just one year, then went on to hold almost every position available throughout the company, eventually rising to CEO of McDonalds USA.

The kind of job that allowed me and many others to rise through the ranks is now being threatened by a rising minimum wage that's pricing jobs out of the market. Without sacrificing food quality or taste, or abandoning the much-loved value menu, franchise owners must keep labor costs under control. One way to combat rising labor costs is by reducing the amount of employees needed.

This trend is nothing new. Chains have responded to rising labor costs and technological advancement accordingly and McDonald's has been leading the way as a pioneer in productivity among employees, concepts, and machines. From the invention of the " Speedee Service System" to the famous Multimixer shake machine, these innovations have reduced the labor needed to increase output levels and made employees' jobs easier in the process.

These innovations dating back to McDonald's founding were not intended to reduce the number of employees; rather, they were designed to make employees more efficient at their jobs. The introduction of self-service ordering tablets has been presented in a similar manner. However, with labor costs continuing to skyrocket, it's inevitable that restaurants and other fast food chains will continuously search for ways to reduce labor costs--particularly as customers get comfortable with new technology.

The research supports my concerns. A 2017 studyby economists David Neumark and Grace Lordan finds a minimum-wage related increase in unemployment among employees who previously held jobs susceptible to automation. Younger workers were some of the hardest hit by this outcome, which shouldn't be surprising;according to the Bureau of Labor Statistics, nearly half of minimum wage workers are between the ages of 16 and 24.

Pricing young job seekers out of the market and a weekly paycheck is just one immediate effect of an increasing minimum wage. A study by University of Virginia and Middle Tennessee State University economists found that teenagers who held part-time jobs in school had annual earnings that were 20 percent higher than their counterparts without experience six to nine years after graduation.

These entry level jobs such as flipping burgers or taking customers orders teach teens valuable jobs skills such as customer service and applying basic math skills. Skills that could ultimately lead to the career stepping stones for a working teenager to become an engineer or accountant.

Technological innovation can and has helped employees work more comfortably and efficiently, but when outside intervention forces higher labor costs onto restaurant owners, they will innovate in ways that replace employees instead of empowering them.

# data[].attributes.attachment_link.title
McDonald's Says Goodbye Cashiers, Hello Kiosks

# data[].attributes.attachment_link.description
"Would you like fries with that?" may soon be a phrase of the past. As minimum wage levels approach or surpass $15 nationwide, restaurant customers expecting to be greeted by a smiling face will instead be welcomed by a glowing LED screen. As of 2020, self-service ordering kiosks will be implemented at all U.S.

# data[].attributes.attachment_link.readable_text
Research

Most people are not very familiar with the concept of artificial intelligence (AI). As an illustration, when 1,500 senior business leaders in the United States in 2017 were asked about AI, only 17 percent said they were familiar with it. ¹ A number of them were not sure what it was or how it would affect their particular companies. They understood there was considerable potential for altering business processes, but were not clear how AI could be deployed within their own organizations.

Despite its widespread lack of familiarity, AI is a technology that is transforming every walk of life. It is a wide-ranging tool that enables people to rethink how we integrate information, analyze data, and use the resulting insights to improve decisionmaking. Our hope through this comprehensive overview is to explain AI to an audience of policymakers, opinion leaders, and interested observers, and demonstrate how AI already is altering the world and raising important questions for society, the economy, and governance.

In this paper, we discuss novel applications in finance, national security, health care, criminal justice, transportation, and smart cities, and address issues such as data access problems, algorithmic bias, AI ethics and transparency, and legal liability for AI decisions. We contrast the regulatory approaches of the U.S. and European Union, and close by making a number of recommendations for getting the most out of AI while still protecting important human values. ²

In order to maximize AI benefits, we recommend nine steps for going forward:

Encourage greater data access for researchers without compromising users' personal privacy,

invest more government funding in unclassified AI research,

promote new models of digital education and AI workforce development so employees have the skills needed in the 21st-century economy,

create a federal AI advisory committee to make policy recommendations,

engage with state and local officials so they enact effective policies,

regulate broad AI principles rather than specific algorithms,

take bias complaints seriously so AI does not replicate historic injustice, unfairness, or discrimination in data or algorithms,

maintain mechanisms for human oversight and control, and

penalize malicious AI behavior and promote cybersecurity.

Intentionality

Artificial intelligence algorithms are designed to make decisions, often using real-time data. They are unlike passive machines that are capable only of mechanical or predetermined responses. Using sensors, digital data, or remote inputs, they combine information from a variety of different sources, analyze the material instantly, and act on the insights derived from those data. With massive improvements in storage systems, processing speeds, and analytic techniques, they are capable of tremendous sophistication in analysis and decisionmaking.

Artificial intelligence is already altering the world and raising important questions for society, the economy, and governance.

Intelligence

AI generally is undertaken in conjunction with machine learning and data analytics. ⁵ Machine learning takes data and looks for underlying trends. If it spots something that is relevant for a practical problem, software designers can take that knowledge and use it to analyze specific issues. All that is required are data that are sufficiently robust that algorithms can discern useful patterns. Data can come in the form of digital information, satellite imagery, visual information, text, or unstructured data.

Adaptability

AI systems have the ability to learn and adapt as they make decisions. In the transportation area, for example, semi-autonomous vehicles have tools that let drivers and vehicles know about upcoming congestion, potholes, highway construction, or other possible traffic impediments. Vehicles can take advantage of the experience of other vehicles on the road, without human involvement, and the entire corpus of their achieved "experience" is immediately and fully transferable to other similarly configured vehicles. Their advanced algorithms, sensors, and cameras incorporate experience in current operations, and use dashboards and visual displays to present information in real time so human drivers are able to make sense of ongoing traffic and vehicular conditions. And in the case of fully autonomous vehicles, advanced systems can completely control the car or truck, and make all the navigational decisions.

AI is not a futuristic vision, but rather something that is here today and being integrated with and deployed into a variety of sectors. This includes fields such as finance, national security, health care, criminal justice, transportation, and smart cities. There are numerous examples where AI already is making an impact on the world and augmenting human capabilities in significant ways. ⁶

One of the reasons for the growing role of AI is the tremendous opportunities for economic development that it presents. A project undertaken by PriceWaterhouseCoopers estimated that "artificial intelligence technologies could increase global GDP by $15.7 trillion, a full 14%, by 2030." ⁷ That includes advances of $7 trillion in China, $3.7 trillion in North America, $1.8 trillion in Northern Europe, $1.2 trillion for Africa and Oceania, $0.9 trillion in the rest of Asia outside of China, $0.7 trillion in Southern Europe, and $0.5 trillion in Latin America. China is making rapid strides because it has set a national goal of investing $150 billion in AI and becoming the global leader in this area by 2030.

Meanwhile, a McKinsey Global Institute study of China found that "AI-led automation can give the Chinese economy a productivity injection that would add 0.8 to 1.4 percentage points to GDP growth annually, depending on the speed of adoption." ⁸ Although its authors found that China currently lags the United States and the United Kingdom in AI deployment, the sheer size of its AI market gives that country tremendous opportunities for pilot testing and future development.

Finance

Investments in financial AI in the United States tripled between 2013 and 2014 to a total of $12.2 billion.⁹ According to observers in that sector, "Decisions about loans are now being made by software that can take into account a variety of finely parsed data about a borrower, rather than just a credit score and a background check."¹⁰ In addition, there are so-called robo-advisers that "create personalized investment portfolios, obviating the need for stockbrokers and financial advisers."¹¹ These advances are designed to take the emotion out of investing and undertake decisions based on analytical considerations, and make these choices in a matter of minutes.

Fraud detection represents another way AI is helpful in financial systems. It sometimes is difficult to discern fraudulent activities in large organizations, but AI can identify abnormalities, outliers, or deviant cases requiring additional investigation. That helps managers find problems early in the cycle, before they reach dangerous levels. ¹⁴

National security

Artificial intelligence will accelerate the traditional process of warfare so rapidly that a new term has been coined: hyperwar.

The big data analytics associated with AI will profoundly affect intelligence analysis, as massive amounts of data are sifted in near real time-if not eventually in real time-thereby providing commanders and their staffs a level of intelligence analysis and productivity heretofore unseen. Command and control will similarly be affected as human commanders delegate certain routine, and in special circumstances, key decisions to AI platforms, reducing dramatically the time associated with the decision and subsequent action. In the end, warfare is a time competitive process, where the side able to decide the fastest and move most quickly to execution will generally prevail. Indeed, artificially intelligent intelligence systems, tied to AI-assisted command and control systems, can move decision support and decisionmaking to a speed vastly superior to the speeds of the traditional means of waging war. So fast will be this process, especially if coupled to automatic decisions to launch artificially intelligent autonomous weapons systems capable of lethal outcomes, that a new term has been coined specifically to embrace the speed at which war will be waged: hyperwar.

While the ethical and legal debate is raging over whether America will ever wage war with artificially intelligent autonomous lethal systems, the Chinese and Russians are not nearly so mired in this debate, and we should anticipate our need to defend against these systems operating at hyperwar speeds. The challenge in the West of where to position "humans in the loop" in a hyperwar scenario will ultimately dictate the West's capacity to be competitive in this new form of conflict. ¹⁷

Just as AI will profoundly affect the speed of warfare, the proliferation of zero day or zero second cyber threats as well as polymorphic malware will challenge even the most sophisticated signature-based cyber protection. This forces significant improvement to existing cyber defenses. Increasingly, vulnerable systems are migrating, and will need to shift to a layered approach to cybersecurity with cloud-based, cognitive AI platforms. This approach moves the community toward a "thinking" defensive capability that can defend networks through constant training on known threats. This capability includes DNA-level analysis of heretofore unknown code, with the possibility of recognizing and stopping inbound malicious code by recognizing a string component of the file. This is how certain key U.S.-based systems stopped the debilitating "WannaCry" and "Petya" viruses.

Preparing for hyperwar and defending critical cyber networks must become a high priority because China, Russia, North Korea, and other countries are putting substantial resources into AI. In 2017, China's State Council issued a plan for the country to "build a domestic industry worth almost $150 billion" by 2030.¹⁸ As an example of the possibilities, the Chinese search firm Baidu has pioneered a facial recognition application that finds missing people. In addition, cities such as Shenzhen are providing up to $1 million to support AI labs. That country hopes AI will provide security, combat terrorism, and improve speech recognition programs.¹⁹ The dual-use nature of many AI algorithms will mean AI research focused on one sector of society can be rapidly modified for use in the security sector as well.²⁰

Health care

AI tools are helping designers improve computational sophistication in health care. For example, Merantix is a German company that applies deep learning to medical issues. It has an application in medical imaging that "detects lymph nodes in the human body in Computer Tomography (CT) images." ²¹ According to its developers, the key is labeling the nodes and identifying small lesions or growths that could be problematic. Humans can do this, but radiologists charge $100 per hour and may be able to carefully read only four images an hour. If there were 10,000 images, the cost of this process would be $250,000, which is prohibitively expensive if done by humans.

What deep learning can do in this situation is train computers on data sets to learn what a normal-looking versus an irregular-appearing lymph node is. After doing that through imaging exercises and honing the accuracy of the labeling, radiological imaging specialists can apply this knowledge to actual patients and determine the extent to which someone is at risk of cancerous lymph nodes. Since only a few are likely to test positive, it is a matter of identifying the unhealthy versus healthy node.

AI has been applied to congestive heart failure as well, an illness that afflicts 10 percent of senior citizens and costs $35 billion each year in the United States. AI tools are helpful because they "predict in advance potential challenges ahead and allocate resources to patient education, sensing, and proactive interventions that keep patients out of the hospital." ²²

Criminal justice

AI is being deployed in the criminal justice area. The city of Chicago has developed an AI-driven "Strategic Subject List" that analyzes people who have been arrested for their risk of becoming future perpetrators. It ranks 400,000 people on a scale of 0 to 500, using items such as age, criminal activity, victimization, drug arrest records, and gang affiliation. In looking at the data, analysts found that youth is a strong predictor of violence, being a shooting victim is associated with becoming a future perpetrator, gang affiliation has little predictive value, and drug arrests are not significantly associated with future criminal activity. ²³

Judicial experts claim AI programs reduce human bias in law enforcement and leads to a fairer sentencing system. R Street Institute Associate Caleb Watney writes:

Empirically grounded questions of predictive risk analysis play to the strengths of machine learning, automated reasoning and other forms of AI. One machine-learning policy simulation concluded that such programs could be used to cut crime up to 24.8 percent with no change in jailing rates, or reduce jail populations by up to 42 percent with no increase in crime rates. ²⁴

However, critics worry that AI algorithms represent "a secret system to punish citizens for crimes they haven't yet committed. The risk scores have been used numerous times to guide large-scale roundups." ²⁵ The fear is that such tools target people of color unfairly and have not helped Chicago reduce the murder wave that has plagued it in recent years.

Transportation

Transportation represents an area where AI and machine learning are producing major innovations. Research by Cameron Kerry and Jack Karsten of the Brookings Institution has found that over $80 billion was invested in autonomous vehicle technology between August 2014 and June 2017. Those investments include applications both for autonomous driving and the core technologies vital to that sector. ²⁸

Autonomous vehicles-cars, trucks, buses, and drone delivery systems-use advanced technological capabilities. Those features include automated vehicle guidance and braking, lane-changing systems, the use of cameras and sensors for collision avoidance, the use of AI to analyze information in real time, and the use of high-performance computing and deep learning systems to adapt to new circumstances through detailed maps. ²⁹

Light detection and ranging systems (LIDARs) and AI are key to navigation and collision avoidance. LIDAR systems combine light and radar instruments. They are mounted on the top of vehicles that use imaging in a 360-degree environment from a radar and light beams to measure the speed and distance of surrounding objects. Along with sensors placed on the front, sides, and back of the vehicle, these instruments provide information that keeps fast-moving cars and trucks in their own lane, helps them avoid other vehicles, applies brakes and steering when needed, and does so instantly so as to avoid accidents.

Advanced software enables cars to learn from the experiences of other vehicles on the road and adjust their guidance systems as weather, driving, or road conditions change. This means that software is the key-not the physical car or truck itself.

Ride-sharing companies are very interested in autonomous vehicles. They see advantages in terms of customer service and labor productivity. All of the major ride-sharing companies are exploring driverless cars. The surge of car-sharing and taxi services-such as Uber and Lyft in the United States, Daimler's Mytaxi and Hailo service in Great Britain, and Didi Chuxing in China-demonstrate the opportunities of this transportation option. Uber recently signed an agreement to purchase 24,000 autonomous cars from Volvo for its ride-sharing service. ³²

However, the ride-sharing firm suffered a setback in March 2018 when one of its autonomous vehicles in Arizona hit and killed a pedestrian. Uber and several auto manufacturers immediately suspended testing and launched investigations into what went wrong and how the fatality could have occurred. ³³ Both industry and consumers want reassurance that the technology is safe and able to deliver on its stated promises. Unless there are persuasive answers, this accident could slow AI advancements in the transportation sector.

Smart cities

Metropolitan governments are using AI to improve urban service delivery. For example, according to Kevin Desouza, Rashmi Krishnamurthy, and Gregory Dawson:

The Cincinnati Fire Department is using data analytics to optimize medical emergency responses. The new analytics system recommends to the dispatcher an appropriate response to a medical emergency call-whether a patient can be treated on-site or needs to be taken to the hospital-by taking into account several factors, such as the type of call, location, weather, and similar calls. ³⁴

Since it fields 80,000 requests each year, Cincinnati officials are deploying this technology to prioritize responses and determine the best ways to handle emergencies. They see AI as a way to deal with large volumes of data and figure out efficient ways of responding to public requests. Rather than address service issues in an ad hoc manner, authorities are trying to be proactive in how they provide urban services.

Cincinnati is not alone. A number of metropolitan areas are adopting smart city applications that use AI to improve service delivery, environmental planning, resource management, energy utilization, and crime prevention, among other things. For its smart cities index, the magazine Fast Company ranked American locales and found Seattle, Boston, San Francisco, Washington, D.C., and New York City as the top adopters. Seattle, for example, has embraced sustainability and is using AI to manage energy usage and resource management. Boston has launched a "City Hall To Go" that makes sure underserved communities receive needed public services. It also has deployed "cameras and inductive loops to manage traffic and acoustic sensors to identify gun shots." San Francisco has certified 203 buildings as meeting LEED sustainability standards. ³⁵

Through these and other means, metropolitan areas are leading the country in the deployment of AI solutions. Indeed, according to a National League of Cities report, 66 percent of American cities are investing in smart city technology. Among the top applications noted in the report are "smart meters for utilities, intelligent traffic signals, e-governance applications, Wi-Fi kiosks, and radio frequency identification sensors in pavement." ³⁶

These examples from a variety of sectors demonstrate how AI is transforming many walks of human existence. The increasing penetration of AI and autonomous devices into many aspects of life is altering basic operations and decisionmaking within organizations, and improving efficiency and response times.

At the same time, though, these developments raise important policy, regulatory, and ethical issues. For example, how should we promote data access? How do we guard against biased or unfair data used in algorithms? What types of ethical principles are introduced through software programming, and how transparent should designers be about their choices? What about questions of legal liability in cases where algorithms cause harm? ³⁷

The increasing penetration of AI into many aspects of life is altering decisionmaking within organizations and improving efficiency. At the same time, though, these developments raise important policy, regulatory, and ethical issues.

Data access problems

The key to getting the most out of AI is having a "data-friendly ecosystem with unified standards and cross-platform sharing." AI depends on data that can be analyzed in real time and brought to bear on concrete problems. Having data that are "accessible for exploration" in the research community is a prerequisite for successful AI development. ³⁸

According to a McKinsey Global Institute study, nations that promote open data sources and data sharing are the ones most likely to see AI advances. In this regard, the United States has a substantial advantage over China. Global ratings on data openness show that U.S. ranks eighth overall in the world, compared to 93 for China. ³⁹

But right now, the United States does not have a coherent national data strategy. There are few protocols for promoting research access or platforms that make it possible to gain new insights from proprietary data. It is not always clear who owns data or how much belongs in the public sphere. These uncertainties limit the innovation economy and act as a drag on academic research. In the following section, we outline ways to improve data access for researchers.

Biases in data and algorithms

Racial issues also come up with facial recognition software. Most such systems operate by comparing a person's face to a range of faces in a large database. As pointed out by Joy Buolamwini of the Algorithmic Justice League, "If your facial recognition data contains mostly Caucasian faces, that's what your program will learn to recognize." ⁴² Unless the databases have access to diverse data, these programs perform poorly when attempting to recognize African-American or Asian-American features.

Many historical data sets reflect traditional values, which may or may not represent the preferences wanted in a current system. As Buolamwini notes, such an approach risks repeating inequities of the past:

The rise of automation and the increased reliance on algorithms for high-stakes decisions such as whether someone get insurance or not, your likelihood to default on a loan or somebody's risk of recidivism means this is something that needs to be addressed. Even admissions decisions are increasingly automated-what school our children go to and what opportunities they have. We don't have to bring the structural inequalities of the past into the future we create. ⁴³

AI ethics and transparency

Algorithms embed ethical considerations and value choices into program decisions. As such, these systems raise questions concerning the criteria used in automated decisionmaking. Some people want to have a better understanding of how algorithms function and what choices are being made. ⁴⁴

In the United States, many urban schools use algorithms for enrollment decisions based on a variety of considerations, such as parent preferences, neighborhood qualities, income level, and demographic background. According to Brookings researcher Jon Valant, the New Orleans-based Bricolage Academy "gives priority to economically disadvantaged applicants for up to 33 percent of available seats. In practice, though, most cities have opted for categories that prioritize siblings of current students, children of school employees, and families that live in school's broad geographic area." ⁴⁵ Enrollment choices can be expected to be very different when considerations of this sort come into play.

Depending on how AI systems are set up, they can facilitate the redlining of mortgage applications, help people discriminate against individuals they don't like, or help screen or build rosters of individuals based on unfair criteria. The types of considerations that go into programming decisions matter a lot in terms of how the systems operate and how they affect customers. ⁴⁶

For these reasons, the EU is implementing the General Data Protection Regulation (GDPR) in May 2018. The rules specify that people have "the right to opt out of personally tailored ads" and "can contest 'legal or similarly significant' decisions made by algorithms and appeal for human intervention" in the form of an explanation of how the algorithm generated a particular outcome. Each guideline is designed to ensure the protection of personal data and provide individuals with information on how the "black box" operates. ⁴⁷

Legal liability

There are questions concerning the legal liability of AI systems. If there are harms or infractions (or fatalities in the case of driverless cars), the operators of the algorithm likely will fall under product liability rules. A body of case law has shown that the situation's facts and circumstances determine liability and influence the kind of penalties that are imposed. Those can range from civil fines to imprisonment for major harms. ⁴⁸ The Uber-related fatality in Arizona will be an important test case for legal liability. The state actively recruited Uber to test its autonomous vehicles and gave the company considerable latitude in terms of road testing. It remains to be seen if there will be lawsuits in this case and who is sued: the human backup driver, the state of Arizona, the Phoenix suburb where the accident took place, Uber, software developers, or the auto manufacturer. Given the multiple people and organizations involved in the road testing, there are many legal questions to be resolved.

In non-transportation areas, digital platforms often have limited liability for what happens on their sites. For example, in the case of Airbnb, the firm "requires that people agree to waive their right to sue, or to join in any class-action lawsuit or class-action arbitration, to use the service." By demanding that its users sacrifice basic rights, the company limits consumer protections and therefore curtails the ability of people to fight discrimination arising from unfair algorithms. ⁴⁹ But whether the principle of neutral networks holds up in many sectors is yet to be determined on a widespread basis.

In order to balance innovation with basic human values, we propose a number of recommendations for moving forward with AI. This includes improving data access, increasing government investment in AI, promoting AI workforce development, creating a federal advisory committee, engaging with state and local officials to ensure they enact effective policies, regulating broad objectives as opposed to specific algorithms, taking bias seriously as an AI issue, maintaining mechanisms for human control and oversight, and penalizing malicious behavior and promoting cybersecurity.

Improving data access

The United States should develop a data strategy that promotes innovation and consumer protection. Right now, there are no uniform standards in terms of data access, data sharing, or data protection. Almost all the data are proprietary in nature and not shared very broadly with the research community, and this limits innovation and system design. AI requires data to test and improve its learning capacity. ⁵⁰ Without structured and unstructured data sets, it will be nearly impossible to gain the full benefits of artificial intelligence.

In general, the research community needs better access to government and business data, although with appropriate safeguards to make sure researchers do not misuse data in the way Cambridge Analytica did with Facebook information. There is a variety of ways researchers could gain data access. One is through voluntary agreements with companies holding proprietary data. Facebook, for example, recently announced a partnership with Stanford economist Raj Chetty to use its social media data to explore inequality. ⁵¹ As part of the arrangement, researchers were required to undergo background checks and could only access data from secured sites in order to protect user privacy and security.

In the U.S., there are no uniform standards in terms of data access, data sharing, or data protection. Almost all the data are proprietary in nature and not shared very broadly with the research community, and this limits innovation and system design.

Google long has made available search results in aggregated form for researchers and the general public. Through its "Trends" site, scholars can analyze topics such as interest in Trump, views about democracy, and perspectives on the overall economy. ⁵² That helps people track movements in public interest and identify topics that galvanize the general public.

Twitter makes much of its tweets available to researchers through application programming interfaces, commonly referred to as APIs. These tools help people outside the company build application software and make use of data from its social media platform. They can study patterns of social media communications and see how people are commenting on or reacting to current events.

In some sectors where there is a discernible public benefit, governments can facilitate collaboration by building infrastructure that shares data. For example, the National Cancer Institute has pioneered a data-sharing protocol where certified researchers can query health data it has using de-identified information drawn from clinical data, claims information, and drug therapies. That enables researchers to evaluate efficacy and effectiveness, and make recommendations regarding the best medical approaches, without compromising the privacy of individual patients.

There could be public-private data partnerships that combine government and business data sets to improve system performance. For example, cities could integrate information from ride-sharing services with its own material on social service locations, bus lines, mass transit, and highway congestion to improve transportation. That would help metropolitan areas deal with traffic tie-ups and assist in highway and mass transit planning.

Increase government investment in AI

Promote digital education and workforce development

As AI applications accelerate across many sectors, it is vital that we reimagine our educational institutions for a world where AI will be ubiquitous and students need a different kind of training than they currently receive. Right now, many students do not receive instruction in the kinds of skills that will be needed in an AI-dominated landscape. For example, there currently are shortages of data scientists, computer scientists, engineers, coders, and platform developers. These are skills that are in short supply; unless our educational system generates more people with these capabilities, it will limit AI development.

For these reasons, both state and federal governments have been investing in AI human capital. For example, in 2017, the National Science Foundation funded over 6,500 graduate students in computer-related fields and has launched several new initiatives designed to encourage data and computer science at all levels from pre-K to higher and continuing education. ⁵⁷ The goal is to build a larger pipeline of AI and data analytic personnel so that the United States can reap the full advantages of the knowledge revolution.

But there also needs to be substantial changes in the process of learning itself. It is not just technical skills that are needed in an AI world but skills of critical reasoning, collaboration, design, visual display of information, and independent thinking, among others. AI will reconfigure how society and the economy operate, and there needs to be "big picture" thinking on what this will mean for ethics, governance, and societal impact. People will need the ability to think broadly about many questions and integrate knowledge from a number of different areas.

One example of new ways to prepare students for a digital future is IBM's Teacher Advisor program, utilizing Watson's free online tools to help teachers bring the latest knowledge into the classroom. They enable instructors to develop new lesson plans in STEM and non-STEM fields, find relevant instructional videos, and help students get the most out of the classroom. ⁵⁸ As such, they are precursors of new educational environments that need to be created.

Create a federal AI advisory committee

Federal officials need to think about how they deal with artificial intelligence. As noted previously, there are many issues ranging from the need for improved data access to addressing issues of bias and discrimination. It is vital that these and other concerns be considered so we gain the full benefits of this emerging technology.

In order to move forward in this area, several members of Congress have introduced the "Future of Artificial Intelligence Act," a bill designed to establish broad policy and legal principles for AI. It proposes the secretary of commerce create a federal advisory committee on the development and implementation of artificial intelligence. The legislation provides a mechanism for the federal government to get advice on ways to promote a "climate of investment and innovation to ensure the global competitiveness of the United States," "optimize the development of artificial intelligence to address the potential growth, restructuring, or other changes in the United States workforce," "support the unbiased development and application of artificial intelligence," and "protect the privacy rights of individuals." ⁵⁹

Among the specific questions the committee is asked to address include the following: competitiveness, workforce impact, education, ethics training, data sharing, international cooperation, accountability, machine learning bias, rural impact, government efficiency, investment climate, job impact, bias, and consumer impact. The committee is directed to submit a report to Congress and the administration 540 days after enactment regarding any legislative or administrative action needed on AI.

This legislation is a step in the right direction, although the field is moving so rapidly that we would recommend shortening the reporting timeline from 540 days to 180 days. Waiting nearly two years for a committee report will certainly result in missed opportunities and a lack of action on important issues. Given rapid advances in the field, having a much quicker turnaround time on the committee analysis would be quite beneficial.

Engage with state and local officials

According to the legislation's developers, city officials want to know how these algorithms work and make sure there is sufficient AI transparency and accountability. In addition, there is concern regarding the fairness and biases of AI algorithms, so the taskforce has been directed to analyze these issues and make recommendations regarding future usage. It is scheduled to report back to the mayor on a range of AI policy, legal, and regulatory issues by late 2019.

Some observers already are worrying that the taskforce won't go far enough in holding algorithms accountable. For example, Julia Powles of Cornell Tech and New York University argues that the bill originally required companies to make the AI source code available to the public for inspection, and that there be simulations of its decisionmaking using actual data. After criticism of those provisions, however, former Councilman James Vacca dropped the requirements in favor of a task force studying these issues. He and other city officials were concerned that publication of proprietary information on algorithms would slow innovation and make it difficult to find AI vendors who would work with the city. ⁶² It remains to be seen how this local task force will balance issues of innovation, privacy, and transparency.

Regulate broad objectives more than specific algorithms

The GDPR being implemented in Europe place severe restrictions on the use of artificial intelligence and machine learning. According to published guidelines, "Regulations prohibit any automated decision that 'significantly affects' EU citizens. This includes techniques that evaluates a person's 'performance at work, economic situation, health, personal preferences, interests, reliability, behavior, location, or movements.'" ⁶⁵ In addition, these new rules give citizens the right to review how digital services made specific algorithmic choices affecting people.

By taking a restrictive stance on issues of data collection and analysis, the European Union is putting its manufacturers and software designers at a significant disadvantage to the rest of the world.

If interpreted stringently, these rules will make it difficult for European software designers (and American designers who work with European counterparts) to incorporate artificial intelligence and high-definition mapping in autonomous vehicles. Central to navigation in these cars and trucks is tracking location and movements. Without high-definition maps containing geo-coded data and the deep learning that makes use of this information, fully autonomous driving will stagnate in Europe. Through this and other data protection actions, the European Union is putting its manufacturers and software designers at a significant disadvantage to the rest of the world.

It makes more sense to think about the broad objectives desired in AI and enact policies that advance them, as opposed to governments trying to crack open the "black boxes" and see exactly how specific algorithms operate. Regulating individual algorithms will limit innovation and make it difficult for companies to make use of artificial intelligence.

Take biases seriously

Bias and discrimination are serious issues for AI. There already have been a number of cases of unfair treatment linked to historic data, and steps need to be undertaken to make sure that does not become prevalent in artificial intelligence. Existing statutes governing discrimination in the physical economy need to be extended to digital platforms. That will help protect consumers and build confidence in these systems as a whole.

For these advances to be widely adopted, more transparency is needed in how AI systems operate. Andrew Burt of Immuta argues, "The key problem confronting predictive analytics is really transparency. We're in a world where data science operations are taking on increasingly important tasks, and the only thing holding them back is going to be how well the data scientists who train the models can explain what it is their models are doing." ⁶⁶

Maintaining mechanisms for human oversight and control

Some individuals have argued that there needs to be avenues for humans to exercise oversight and control of AI systems. For example, Allen Institute for Artificial Intelligence CEO Oren Etzioni argues there should be rules for regulating these systems. First, he says, AI must be governed by all the laws that already have been developed for human behavior, including regulations concerning "cyberbullying, stock manipulation or terrorist threats," as well as "entrap[ping] people into committing crimes." Second, he believes that these systems should disclose they are automated systems and not human beings. Third, he states, "An A.I. system cannot retain or disclose confidential information without explicit approval from the source of that information." ⁶⁷ His rationale is that these tools store so much data that people have to be cognizant of the privacy risks posed by AI.

In the same vein, the IEEE Global Initiative has ethical guidelines for AI and autonomous systems. Its experts suggest that these models be programmed with consideration for widely accepted human norms and rules for behavior. AI algorithms need to take into effect the importance of these norms, how norm conflict can be resolved, and ways these systems can be transparent about norm resolution. Software designs should be programmed for "nondeception" and "honesty," according to ethics experts. When failures occur, there must be mitigation mechanisms to deal with the consequences. In particular, AI must be sensitive to problems such as bias, discrimination, and fairness. ⁶⁸

A group of machine learning experts claim it is possible to automate ethical decisionmaking. Using the trolley problem as a moral dilemma, they ask the following question: If an autonomous car goes out of control, should it be programmed to kill its own passengers or the pedestrians who are crossing the street? They devised a "voting-based system" that asked 1.3 million people to assess alternative scenarios, summarized the overall choices, and applied the overall perspective of these individuals to a range of vehicular possibilities. That allowed them to automate ethical decisionmaking in AI algorithms, taking public preferences into account. ⁶⁹ This procedure, of course, does not reduce the tragedy involved in any kind of fatality, such as seen in the Uber case, but it provides a mechanism to help AI developers incorporate ethical considerations in their planning.

Penalize malicious behavior and promote cybersecurity

To summarize, the world is on the cusp of revolutionizing many sectors through artificial intelligence and data analytics. There already are significant deployments in finance, national security, health care, criminal justice, transportation, and smart cities that have altered decisionmaking, business models, risk mitigation, and system performance. These developments are generating substantial economic and social benefits.

The world is on the cusp of revolutionizing many sectors through artificial intelligence, but the way AI systems are developed need to be better understood due to the major implications these technologies will have for society as a whole.

Yet the manner in which AI systems unfold has major implications for society as a whole. It matters how policy issues are addressed, ethical conflicts are reconciled, legal realities are resolved, and how much transparency is required in AI and data analytic solutions. ⁷⁴ Human choices about software development affect the way in which decisions are made and the manner in which they are integrated into organizational routines. Exactly how these processes are executed need to be better understood because they will have substantial impact on the general public soon, and for the foreseeable future. AI may well be a revolution in human affairs, and become the single most influential human innovation in history.
Note: We appreciate the research assistance of Grace Gilberg, Jack Karsten, Hillary Schaub, and Kristjan Tomasson on this project. The Brookings Institution is a nonprofit organization devoted to independent research and policy solutions. Its mission is to conduct high-quality, independent research and, based on that research, to provide innovative, practical recommendations for policymakers and the public. The conclusions and recommendations of any Brookings publication are solely those of its author(s), and do not reflect the views of the Institution, its management, or its other scholars. Support for this publication was generously provided by Amazon. Brookings recognizes that the value it provides is in its absolute commitment to quality, independence, and impact. Activities supported by its donors reflect this commitment. John R. Allen is a member of the Board of Advisors of Amida Technology and on the Board of Directors of Spark Cognition. Both companies work in fields discussed in this piece.

# data[].attributes.attachment_link.title
How artificial intelligence is transforming the world | Brookings

# data[].attributes.attachment_link.description
Darrell West and John Allen examine the societal and political aspects of developing artificial intelligence technologies.

# data[].attributes.attachment_link.readable_text
Commerce Secretary Wilbur Ross said the new tariffs are aimed at modifying China's behavior and leveling the playing field for U.S. companies there. China is "out of bullets" to retaliate, Ross told CNBC's " Squawk Box."

The tariffs from both countries come after multiple news outlets reported U.S. officials were trying to restart U.S.-China trade talks.

"At least for now, instead of getting us closer to the bargaining table with China, we've only pushed them further away as they are likely canceling their trip to the US," said said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

President Donald Trump tweeted there will be "fast economic retaliation against China" if U.S. farmers, ranchers or industrial workers are targeted.

The announcements also come after National Economic Council Director Larry Kudlow told CNBC's Becky Quick that Trump has "not been satisfied" with the trade talks with Beijing.

Caterpillar and Boeing - considered trade bellwethers for their large overseas exposure - rose 1.95 percent and 2.1 percent, respectively.

Fears of escalating trade tensions between the U.S. and China knocked equities off of record highs set last month. The S&P 500 and Nasdaq set all-time highs to end August. This month, however, both indexes are down 0.4 percent and 2.6 percent, respectively, through Monday's close.

Tech shares bounced back after steep losses in the previous session. Amazon rose 1.7 percent after posting its worst day since April on Monday. Netflix and Apple, meanwhile, rose nearly 5 percent and 0.2 percent, respectively. The overall tech sector rose 0.6 percent after dropping 1.4 percent on Monday.

# data[].attributes.attachment_link.title
Dow surges about 185 points as latest US-China trade barbs are not as bad as feared

# data[].attributes.attachment_link.description
Commerce Secretary Wilbur Ross said the new tariffs are aimed at modifying China's behavior and leveling the playing field for U.S. companies there. China is "out of bullets" to retaliate, Ross told CNBC's " Squawk Box." The tariffs from both countries come after multiple news outlets reported U.S.

# data[].attributes.attachment_link.readable_text
President Trump announced Monday that he is ordering 10 percent tariffs on $200 billion worth of imports from China.

Trump also threatened to add tariffs on about $267 billion of additional imports if China retaliates against U.S. farmers or other industries.

It's the latest round of an escalating trade dispute between the two countries.

The tariffs follow duties on $50 billion in goods imposed earlier this year. The latest levies are set to go into effect Sept. 24 and remain at 10 percent until the end of the year. If China doesn't make concessions, the new tariffs will then jump to 25 percent, a senior administration official said.

The new tariffs will apply to hundreds of items - ranging from seafood to handbags to toilet paper - that were on a list released July 10. But, the official said, they will exclude some consumer electronics such as smartwatches and Bluetooth devices as well as health and safety products such as high chairs, bicycle helmets, child car seats and playpens.

The U.S. has complained that Beijing forces American companies doing business in China to transfer technology and intellectual property.

"These practices plainly constitute a grave threat to the long-term health and prosperity of the United States economy," Trump said in a White House statement. Trump urged Chinese leaders to "take swift action to end their country's unfair trade practices."

Earlier Monday, White House chief economic adviser Larry Kudlow said at the Economic Club of New York, "We are ready to negotiate and talk with China any time that they are ready for serious and substantive negotiations" to reduce trade barriers.

In remarks earlier in the day, Trump predicted an eventual deal with Beijing. "I think it's going to work out very well with China," he said. "They want to make a deal. But from our standpoint, it has to be fair. It has to take care of our workers."

Chinese officials have previously said they were prepared to retaliate with higher tariffs of their own.

# data[].attributes.attachment_link.title
Trump Sets Tariffs On $200 Billion In Imports From China

# data[].attributes.attachment_link.description
President Trump announced Monday that he is ordering 10 percent tariffs on $200 billion worth of imports from China. Trump also threatened to add tariffs on about $267 billion of additional imports if China retaliates against U.S. farmers or other industries. It's the latest round of an escalating trade dispute between the two countries.

# data[].attributes.attachment_link.readable_text
This economic cycle is really setting records. We've had almost 10 years of U.S. economic growth, the unemployment rate is at a 30-year low (it is expected to go lower), and every few days I hear someone in the administration bragging about how well the economy is performing.

I've lived through five major economic cycles in my career and while all this is great news for many people, I just want to explain the dark side of all this, with a particular focus on what HR organizations and employers should do.
There Are A Lot of Jobs, Just Not Enough Skills
Yes, there are a lot of jobs being created: more jobs than there are people in fact. As I discussed in an earlier article, employers are opening up many new positions to compete for this economic growth, and most of these are positions in software, service, sales, engineering, design, and other digitally-enabled roles. LinkedIn's data shows that jobs like analytics, machine learning, cloud computing, and cyber security are 4-10X more scarce than the typical role, but data also shows that healthcare jobs and elder care are also in great demand.

Interestingly, most of these jobs demand softskills not just technical skills. A study just completed by Bloomberg and Workday finds that college graduates are not bringing enough technical or softskills to the job market (only 35% of employers feel grads are sufficiently ready) and four in ten are building remedial programs to try to fill this gap. So while there are a lot of jobs open, we are seeing an increasingly wide gap between the jobs being created and the skills and experiences in the workforce to fill them.

This creates stress among hiring managers, stress among HR teams, and stress among CEOs. The 2018 Conference Board CEO study found that "failure to attract and retain top talent" is now the No. 1 issue on the minds of CEOs, even more important than competition or the disruptive nature of technology. This is why the L&D market is exploding with growth and new L&D tools and solutions are being snatched up by employers.
Automation Is Creating Jobs But Also Stress
Contrary to many articles written a few years ago, AI and robotics are not doing away with jobs, they're creating them. We now have demand for people to build AI and robotics, sell them, train them, and repair them. My daughter works in digital marketing and her job has become one of operating, measuring, and refining data-driven systems to capture leads, segment buyers, and continuously improve sales production. Yes, she is also a gifted designer and writer, but that's only a part of the job now.

More than two-thirds of the companies we interviewed in the 2018 Deloitte Human Capital Trends believe the pace of automation is increasing, and this creates stress in selecting technology, implementing it, and wondering if the tools you're buying are good enough to compete with others. With an economy as hot as the one we have today, you don't have a lot of room for error in buying the wrong tools, delaying your implementation, or selecting the wrong vendor. Expectations are sky-high, which of course makes all our jobs harder than ever.

And despite all the wonderful positive things technology can do, it has gotten away from us. There are now more than 100 different corporate learning vendors, at least 20 different tools for corporate collaboration, hundreds of new tools for recruitment, performance management, and employee engagement, and at least five major ERP vendors competing for payroll and core HR. All these are great companies, but selecting the right one and making sure the vendor doesn't go out of business is a challenge.

Added to all this, we can't trust technology like we did before. These vendors are moving so fast (they see all this growth) they're becoming sloppy in their own ways. Facebook just revealed that it gave away more data than it hard reported to congress, and it "unblocked" confidential information for almost a million people in messenger "by accident." Google just revealed that hundreds of vendors have been reading your Gmail accounts (I use hosted Exchange), and despite their best efforts to "not be evil" I sometimes wonder what's happening to my enormous cache of photos.

A recent study by Edelman found that even Californians, where I live, don't trust tech the way we used to. More than three-fifths of Californians believe tech firms over-focus on profits and drain local resources for their own benefit (more on this below), 58% believe tech companies fail to protect them from security threats, and 67% believe the industry is "secretive." Worst of all, 60% believe tech jobs are good for the state, but only 38% believe tech companies benefit them as individuals. This is because many of these great jobs are unavailable to normal people.
Traffic, Housing Costs, Infrastructure
I have always measured the state of the U.S. economy by simply measuring how much traffic there is on the San Francisco Bay Bridge. Well it has reached an epic level of frustration. I have to leave my house at 5 a.m. to catch an 8 a.m. flight from SFO now, and there seems to be traffic all day everywhere. Uber drivers tell me the same.

The San Francisco BART system, which was an absolutely state of the art system in the 1970s (I actually worked with the IBM team that built the Bart computers in my early career), is heavily overloaded. I talked with a good friend last weekend who told me it takes her 90 minutes to travel from Berkeley to San Francisco because she has to walk to a Bart station far from her house that lets her get on the train. Many of the trains are so full you can barely get on.

Housing costs are clearly going up (the median house now costs $880,000 and it takes four minimum wage jobs to afford one average apartment rent), and in most neighborhoods here (and in many cities) they are far out of reach for new families. The Deloitte 2018 Millennial Study discovered that 51% of respondents believe their financial situation will be worse than their parents and they rate pay as their No. 1 criteria for a job. They see rising healthcare costs, high housing prices, and the high cost of food and transportation (and student debt) as expenses growing faster than their income. In fact 43% are willing to leave their jobs for better pay and 62% plan to work a "side-hustle" to make more cash. (Is that a full-time worker driving that Uber car?)

These are all nice problems to have of course, except for the fact that wages are barely increasing while the cost of living is now going up by 2-2.5% per year. Inflation is here (we just don't notice it) and the gap between wages and costs is not closing.

I also look at productivity data and again it shows a lag. As I've talked about with many companies, global productivity is slowing, which means we're creating jobs, hiring people, but getting a little less done per hour each year. I think this is caused by many factors (commute time, poor infrastructure, and also re-engineering of work practices), but ultimately it shows a "sloppiness" in the way we run our companies. Why? We are in such a rush to "grow" and hire people to meet demand, we don't always have time to really re-engineer what we're doing to become more efficient.

Surprising to me, in my research this year I've found that many of us are not very good financial planners in general. Research now shows that 50% of American households have no savings at all, the median retirement balance is only $3,000, and the average credit card debt is over $10,000. In fact 40% of adults rate themselves a C or worse in financial literacy and even Millennials feel stressed (15% of college graduate salaries now go to student loan debt and 32% of millennials say pay is causing them stress).

I'm not saying business leaders aren't trying hard: everywhere I go companies have a focus on the "employee experience" or some other terminology for making work easier and better. But programs like Wellbeing programs, employee engagement programs, and better benefits are kind of like putting bandaids on a wound, when the real problem is deeper and harder to fix. No amount of wellbeing subsidy makes up for a two-hour commute, a rent that takes a third of your income, or a lack of cash management to make ends meet.
Difficulty To Hire
Of course the biggest challenge employers find in this kind of economy is how hard it is to attract the right people. Recruiters are arming up with lots of new weapons to find people (I'll be talking much more about this at the HR tech conferences coming later this year), but they're also finding a 40% increase in time to hire. This is simply the result of candidates being more picky, and even trends like " job ghosting," where job candidates just "disappear."

I remember interviewing a large telecommunications company that told me they have "walk-aways" all the time - people who accept jobs and then just "walk away" when they don't understand what to do. Now candidates are just "disappearing" in the interview process because they see so many other opportunities available. One company told me they are now paying job candidates to take an interview, even though they may not get an offer!
What Does All This Mean?
Listen I'm not writing this article to be negative, but rather I think it's important for us to realize that in this economic cycle, we have a whole new set of winning strategies as employers. We can't fix what's going on in Washington, we can't necessarily fix the commute or the state of traffic - but we have to realize that our focus has to change.

Here are a few of the massive trends I see in my world of HR, business leadership, and the HR tech market.

Focus on employee productivity and wellbeing. In this kind of job market, everyone feels under stress. Your job as a business leader or HR manager has to focus on what you can do to make work easier.Reduce the clutter, help managers set clear goals, simplify your organizational structure, and make sure you have a rich set of wellbeing programs to offer. I'll be publishing a big report on wellbeing later this year: take my word for it, these programs are badly needed and you will see a huge ROI by investing in this area.

Get your recruitment house in order. The latest Bersin by Deloitte talent acquisition research found that 74% of companies are still doing what we call "transactional recruiting." In other words, they take a job requisition (typically opened by a manager), they post it on the internet, and they start the recruiting process. In today's job market this is insane. If you aren't honing your employment brand, seeking out passive candidates who fit your culture, actively engaging with senior leadership to improve your talent pipeline, and looking seriously at gig work and leveraging talent pools, you're fishing in a pond that is way overfished.

Take your employee engagement problems very seriously. I'm almost tired of writing about the topics of culture and engagement (you can read more about it in theSimply Irresistible Model) but the problem remains. Every day I read a story about some work-related practice (unfair pay, mistreatment of an employee, lack of diversity in leadership), and it hurts your own company. Yes, we all want to hire, grow, and gain market share - but if we don't do it in a meaningful way, we will lose our best people and ultimately when the next recession comes, people simply will not make the sacrifices you need to keep your business growing.

Simplify your technology. Despite all the wonderful newAI tools out there(most are very immature), a lot of these new tools are brand new. Don't buy a bunch of them, buy only a few. Focus on making your core HR systems (Workday, Oracle, SAP, ADP, Ultimate) easy to use and well implemented. Buy alearning experience platformso your employees can easily share information and learn from each other. And stop buying more and more communication tools, all they do is make your employees lives harder. (Theaverage company has more than four different waysto collaborate, including Slack, Microsoft Teams, Google G-Suite, Workplace by Facebook, Slack, Webex, Skype, Zoom, and the list goes on and on.) Do you really need them all? I doubt it.

Bring together HR, IT, and business leadership and talk about these issues. One of the most important things we found from the 2018 Deloitte Human Capital Trends was thatthe C-Suite is not working closely enough togetheron cross-organizational issues. (Seventy-three percent of CXOs "rarely if ever" work together on cross functional issues!) Dealing with low unemployment, a hyper-competitive job market, and increased need for productivity and career growth clearly falls into this category

Don't take me wrong, I'm a big fan of economic growth. But let's do it in a careful and measured way - we all have to live in this economy, so let's plan for the bad times while we enjoy all the growth.

# data[].attributes.attachment_link.title
The Ugly Side To Today's Low Unemployment Rate

# data[].attributes.attachment_link.description
This economic cycle is really setting records. We've had almost 10 years of U.S. economic growth, the unemployment rate is at a 30-year low (it is expected to go lower), and every few days I hear someone in the administration bragging about how well the economy is performing.

# data[].attributes.attachment_link.readable_text
Russia's economy is $4 trillion as measured by its 2017 gross domestic product. It was the seventh largest in the world. It grew 1.8 percent.

Russia's GDP per capita was $27,900, making its standard of living, 72nd in the world. It's better than Greece but worse than Hungary or Poland.

Today, the government only owns the oil and gas industries. Gazprom is Russia's state-owned gas company and owns the world's largest gas reserves. But the reserves are declining and prices have fallen. The state owns 69 percent of Rosneft. British Petroleum owns 20 percent and the rest is publicly-traded. But Rosneft has severe financial problems. The other former state industries have been privatized.

Russia supplies 30 percent of Europe 's oil and 24 percent of its natural gas. It aggressively uses pipeline politics to get its way. Putin knows that the European Union hesitates to defend Ukraine because it can't afford to lose Russia's energy supply.

Would Putin actually do that? Absolutely. In 2006, he cut off gas supplies to the Ukraine. Europe's gas must flow through Ukraine. He held the gas hostage in a successful bid to charge higher prices.

Putin used energy revenues to diversify into other European businesses. So any sanctions on Russia's economy will hurt these companies too.

He's also put pressure on foreign energy contractors to increase Russia's share of their profits. In the past, Russia had:

Arbitrarily changed its agreements with Royal Dutch Shell and ExxonMobil.

Granted a license to the Russian-owned oil company, Rosneft, to operate in ExxonMobil's area.

Revoked Shell's license for a $20 billion Liquefied Natural Gas project at the Sakhalin-2 island.

On the other hand, the EU is concerned that Russia doesn't have the infrastructure to meet its future energy needs. To do that, Russia needs $738 billion in investments by 2020.

In 2014, Russia invaded Crimea to maintain access to the warm-water port when Ukraine attempted to join the European Union. Putin supported rebels who wanted to secede from the EU-friendly leadership. Rebels used Russian military equipment to shoot down a Malaysian Airlines commercial jet in July 2014.

As a result, the United States and the EU imposed trade sanctions on Russia. It targeted the pocketbooks of the country's oligarchs. As a result, they sent $75 billion out of the country. That's 4 percent of the country's entire economic output.

In 2008, Russia used its peace-keeping troops inside Georgia to capture the city of Gori and the state of Abkhazia. This was in response to Georgia's invasion of South Ossetia. It's another semi-autonomous state along Georgia's border with Russia. Abkhazia and South Ossetia wanted independence from Georgia.

Georgia is in a strategic location between Europe and Asia. It's an important transit point for gas, oil, and other goods. Russia attacked the area with a strategic oil pipeline owned by British Petroleum.

In 2006, Russia and the United States signed a landmark trade agreement that helped its membership process. The agreement reduced tariffs on cars. It also increased foreign ownership of financial businesses. To do that, it protected intellectual property rights. Russia relaxed its insistence on inspection of all meat products.

Russia became a member of the WTO on August 22, 2012. It allowed Russian businesses greater access to foreign markets. It provided Russia the opportunity expand beyond energy. Foreign companies such as Shell, Boeing, and Ford could now profit from joint ventures. The most critical was exploration of Russia's natural gas resources.

On December 4, 2012, President Obama approved Permanent Normal Trade Relations with Russia. That meant removing a Cold War-era trade restriction known as the Jackson-Vanik amendment. It linked U.S. trade benefits to the emigration policies of communist countries. Congress had already approved PNTR for Ukraine, which became a WTO member in 2008.

# data[].attributes.attachment_link.title
How Russia's Pipeline Politics Holds the EU Hostage

# data[].attributes.attachment_link.description
Russia's economy is $4 trillion as measured by its 2017 gross domestic product. It was the seventh largest in the world. It grew 1.8 percent. Russia's GDP per capita was $27,900, making its standard of living, 72nd in the world. It's better than Greece but worse than Hungary or Poland.

# data[].attributes.attachment_link.readable_text
The U.S. debt is the sum of all outstanding debt owed by the federal government. On March 1, 2021, it surpassed $28 trillion for the first time. The U.S. Treasury Department tracks the current total public debt outstanding and this figure changes daily. The debt clock in New York also tracks it.

The majority of the national debt is debt held by the public. The government owes this to buyers of U.S. Treasury notes including individuals, companies, and foreign governments.

The remaining portion is intragovernmental debt. The Treasury owes this debt to its various departments that hold Government Account Series securities. The biggest owner is the Social Security Trust Fund.

These Government Account Series securities have been running surpluses for years, and the federal government uses these surpluses to pay for other departments. They will come due as people born from 1946 to 1964 retire over the next two decades.

The U.S. National Debt Over Time

The chart below tracks U.S. debt milestones from 1989 to 2021. It has increased by more than 800% during that time. In March 2021, the national debt exceeded $28 trillion. This figure includes both debt held by the public as well as intragovernmental debt.

Why Does the U.S. Have So Much Debt?

There are a few significant reasons as to why the size of the national debt is so big.

Federal Budget Deficits

The national debt is an accumulation of federal budget deficits. Each new spending program and tax cut adds to the debt.

The largest deficit thus far goes to President Barack Obama. He added $8.3 trillion to the debt, a 70% increase. That's due to the ​American Recovery and Reinvestment Act (ARRA) stimulus package, which helped resolve the 2008 financial crisis. He also cut taxes and increased military spending.

Although the national debt under Obama grew the most dollar-wise, it wasn't the biggest percentage increase. That honor goes to President Franklin D. Roosevelt. He only added about $236.1 billion between 1933 and 1945, but that was an increase of about 1,048%. He did this to fight the Great Depression and prepare the U.S. to enter World War II at the start of the 1940s.

President Donald Trump is the second-largest contributor to the debt dollar-wise. He added $7.8 trillion to the debt. This was a 39% increase.

Social Security Trust Fund

Every president borrows from the Social Security Trust Fund. Over the years, the Fund has taken in more revenue than it needed through payroll taxes leveraged on the baby boomer generation.

Ideally, this money should have been invested to be available when members of that generation retire. Instead, the Fund was "loaned" to the government to finance increased spending. This interest-free loan helps keep Treasury bond interest rates low, allowing more debt financing. But, it must be repaid by increased taxes as more individuals retire.

Investment From Other Countries

Foreign countries like China and Japan buy Treasurys to invest their export proceeds that are denominated in U.S. dollars. They are happy to lend to America-their largest customer-so that it will keep buying their exports.

Low Interest Rates

The U.S. government has benefited from low interest rates. It couldn't keep running budget deficits if interest rates skyrocketed. Why have interest rates remained low? Purchasers of Treasury bills are confident that the U.S. has the economic power to pay them back. During recessions, foreign countries increase their holdings of Treasury bonds as a safe-haven investment.

The Debt Ceiling

Congress sets a ceiling on the debt but raises it frequently. Since 1960, Congress has modified the U.S. debt limit 78 times, with more sure to come. President Trump signed the Bipartisan Budget Act of 2019 that suspended the public debt limit through July 31, 2021. On Aug. 1, 2021, the debt ceiling became $28.4 trillion-equal to the amount of the national debt. Congress will need to decide what to do once again-raise the debt ceiling, suspend it, or require the government to make changes in order to reduce the debt.

How the Large U.S. Debt Affects the Economy

In the short run, the economy and voters benefit from deficit spending because it drives economic growth and stability. The federal government pays for defense equipment, health care, building construction, and contracts with private businesses. New employees are then hired and they spend their salaries on necessities and wants, like gas, groceries, new clothes, and more. This consumer spending boosts the economy. As part of the components of GDP, federal government spending contributes around 7%.

Over the long term, debt holders could demand larger interest payments. This is because the debt-to-GDP ratio increases and this high ratio of debt to gross domestic product (GDP) tells investors that the country might have problems repaying them. That's a newer-and worrying-occurrence for the U.S. Back in 1988, the national debt was only half of what the U.S. produced that year.

Lower demand for Treasurys also puts downward pressure on the dollar because its value is tied to the value of Treasury securities. As the dollar value declines, foreign holders get paid back in a currency that is worth less than when they invested. That further decreases demand. Many of these foreign holders would become more likely to invest in their own countries. At that point, the U.S. would have to pay higher interest payments.

Congress knows a debt crisis isn't far away. In less than 20 years, the Social Security Trust Fund won't have enough to cover the retirement benefits promised to people born from 1946 to 1964. That could mean higher taxes once the high U.S. debt rules out further loans from other countries.

# data[].attributes.attachment_link.title
How Did the US National Debt Get So Big?

# data[].attributes.attachment_link.description
The U.S. debt is the sum of all outstanding debt owed by the federal government. On March 1, 2021, it surpassed $28 trillion for the first time. The U.S. Treasury Department tracks the current total public debt outstanding and this figure changes daily. The debt clock in New York also tracks it.

# data[].attributes.headline
Ireida Amezquita                 Does not having a higher education affect your pay?

# data[].attributes.subject
Ireida Amezquita                 Does not having a higher education affect your pay?

# data[].attributes.body
Almost anyone can find a job, but the question is, will it pay enough to live off of?
Hypothesis: If higher education decreases , then poverty levels may increase.

# data[].attributes.attachment_link.provider_name
Center for Poverty and Inequality Research

# data[].attributes.attachment_link.title
How does level of education relate to poverty? - Center for Poverty and Inequality Research

# data[].attributes.body
What does an economy run under socialism look like?

Whether or not an economy can thrive or not under a socialist government. Also, what does economy run under socialism look like from all aspects such as utility, scarcity, production and consumption.

# data[].attributes.attachment_link.readable_text
Minimal government doesn't remove power from our lives

There are two articles currently on the Times home page - an opinion piece by Corey Robin, and a news analysis by Neil Irwin - that I think should be read together. Taken as a pair, they get at a lot of what's wrong with the neoliberal ideology (and yes, I do think that's the right term here) that has dominated so much public discourse since the 1970s.

What, after all, were and are the selling points for low taxes and minimal regulation? Partly, of course, the claim that small government is the key to great economic performance, a rising tide that raises all boats. This claim persists - because there are powerful interests that want it to persist - even though the era of neoliberal dominance has in fact been marked by so-so economic growth that hasn't been shared with ordinary workers:

Image

The other claim, however, has been that free markets translate into personal freedom: that an unregulated market economy liberates ordinary people from the tyranny of bureaucracies. In a free market, the story goes, you don't need to flatter your boss or the company selling you stuff, because they know you can always go to someone else.

What Robin points out is that the reality of a market economy is nothing like that. In fact, the daily experience of tens of millions of Americans - especially but not only those who don't make a lot of money - is one of constant dependence on the good will of employers and other more powerful economic players.

It's true that, as Brad DeLong says, many of Robin's examples would actually apply in any complex economic system: I've wasted time dealing with both Verizon and the Social Security Administration, and in both cases my socioeconomic status surely made it a lot easier than it would have been for a minimum-wage worker. (I have, on the other hand, had consistently good experiences at the much-maligned DMV.) But the idea that free markets remove power relations from the equation is just naïve.

And it's even more naïve now than it was a few decades ago, because, as Irwin points out, large economic players are dominating more and more of the economy. It's increasingly clear, for example, that monopsony power is depressing wages; but that's not all it does. Concentration of hiring among a few firms, plus things like noncompete clauses and tacit collusion that reinforce their market power, don't just reduce your wage if you're hired. They also reduce or eliminate your options if you're mistreated: quit because you have an abusive boss or have problems with company policy, and you may have real trouble getting a new job.

But what can be done about it? Corey Robin says "socialism" - but as far as I can tell he really means social democracy: Denmark, not Venezuela. Government-mandated employee protections may restrict the ability of corporations to hire and fire, but they also shield workers from some very real forms of abuse. Unions do somewhat limit workers' options, but they also offer an important counterweight against corporate monopsony power.

Oh, and social safety net programs can do more than limit misery: they can be liberating. I've known many people who stuck with jobs they disliked for fear of losing health coverage; Obamacare, flawed as it is, has noticeably reduced that kind of "lock in", and a full guarantee of health coverage would make our society visibly freer.

The other day I had some fun with the Cato Institute index of economic freedom across states, which finds Florida the freest and New York the least free. (Is it OK for me to write this, comrade commissar?) As I pointed out, freedom Cato-style seems to be associated with, among other things, high infant mortality. Live free and die! (New Hampshire is just behind Florida.)

But seriously, do the real differences between New York and Florida make New Yorkers less free? New York is a highly unionized state - 25.3 percent of the work force - while only 6.6 percent of Florida workers are represented by unions. Does this make NY workers less free, or does it empower them in the face of corporate power?

Also, New York has expanded Medicaid and tried to make the ACA exchanges work, so that only 8 percent of nonelderly adults are uninsured, compared with 18 percent in Florida. Are New Yorkers chafing under the heavy hand of health law, or do they feel freer knowing that they're at much less risk of being ruined by medical emergency - or cast into the abyss if they lose their job?

If you're a highly paid professional, it probably doesn't make much difference. But my guess is that most workers feel at least somewhat freer in New York than they do in FL.

Now, there are no perfect answers to the inevitable sacrifice of some freedom that comes with living in a complex society; utopia is not on the menu. But the advocates of unrestricted corporate power and minimal worker protection have been getting away for far too long with pretending that they're the defenders of freedom - which is not, in fact, just another word for nothing left to lose.
Follow The New York Times Opinion section on Facebook and Twitter (@NYTopinion), and sign up for the Opinion Today newsletter.

Paul Krugman has been an Opinion columnist since 2000 and is also a Distinguished Professor at the City University of New York Graduate Center. He won the 2008 Nobel Memorial Prize in Economic Sciences for his work on international trade and economic geography. @PaulKrugman

# data[].attributes.attachment_link.title
Opinion | Capitalism, Socialism, and Unfreedom

# data[].attributes.attachment_link.description
Minimal government doesn't remove power from our lives There are two articles currently on the Times home page - an opinion piece by Corey Robin, and a news analysis by Neil Irwin - that I think should be read together.

# data[].attributes.attachment_link.readable_text
letters
To the Editor:
With many people feeling that capitalism is failing them, we are seeing what Michael Tomasky terms a socialism "boomlet." Is that a good thing?

Image

Soviet poster commemorating the October Revolution of 1917. Credit Credit Michael Nicholson/Corbis, via Getty Images

Re " What Are Capitalists Thinking?," by Michael Tomasky (Op-Ed, Aug. 6):

Thank you for highlighting the fact that capitalism itself "has made socialism look far more appealing, especially to young people." And, as Mr. Tomasky notes, "The kind of capitalism this country has been practicing for all these years has failed most people."
To the Editor:
The only kind of capitalism I have seen across my 75 years presents a continuous assault on human health and quality of life, community welfare, political integrity and environmental safekeeping. Mr. Tomasky may have "mixed feelings about this socialist boomlet." I, for one, am hoping for an avalanche!

Michael Katz
Washington

"What Are Capitalists Thinking?" Why don't you ask people from the former Soviet Union who have immigrated to the United States? There are tens of thousands of us. The majority are grateful to have had this opportunity and are appalled to see that socialism, which failed so spectacularly in our native land, is gaining popularity among the younger generation.

Yes, the ideas of equality and liberation espoused during the revolutionary days of 1917 were powerful and enticing, but the next seven decades showed the glaring weaknesses of the socialist economy. While we can debate the various policies and their effect on economic growth and opportunity, we must also teach our next generation about the spectacular failures of socialism.

Serge Troyanovsky
New York

To the Editor:

I was raised to believe in free enterprise and the American dream, and that includes the belief that everyone has the right to economic opportunity. As a result, I am disturbed by the unequal distribution of wealth that has resulted from our capitalistic system. However, that makes me somewhat of a centrist democrat who believes in social programs, but is concerned about the emergence of politicians who call themselves democratic socialists.

By confusing their brand of socialism with the traditional meaning of government ownership of the means of production, we stand to lose millions of voters. If only they would drop the label and call themselves social or liberal democrats, they would be more likely to appeal to older New Deal Democrats who feel unrepresented in the current political domain.
To the Editor:
There has to be someone in this great country of ours who could help us all by speaking up and making that distinction clear. Michael Tomasky explains the issue perfectly, and now we need someone to lead us down the right path to victory in November.

Elaine Miller
Purchase, N.Y.

Michael Tomasky's litany of complaints about capitalism reminds me of Winston Churchill's observation about democracy: It's the worst system out there - except for all the others. The yearning for socialism among today's millennials reflects an unfortunate ignorance of the alternatives.

Ari Weitzner
New York

A version of this article appears in print on , on Page A18 of the New York edition with the headline: The Growing Popularity of Socialism. Order Reprints | Today's Paper | Subscribe

# data[].attributes.attachment_link.title
Opinion | The Growing Popularity of Socialism

# data[].attributes.attachment_link.description
letters To the Editor: With many people feeling that capitalism is failing them, we are seeing what Michael Tomasky terms a socialism "boomlet." Is that a good thing? Re " What Are Capitalists Thinking?," by Michael Tomasky (Op-Ed, Aug. 6): Thank you for highlighting the fact that capitalism itself "has made socialism look far more appealing, especially to young people."

# data[].attributes.body
Hypothesis: Reasons why there is still a rising  level of poverty in America regardless of the acclaimed economic growth.

# data[].attributes.attachment_link.readable_text
Median household income, an important measure of the distribution of economic gains, increased 1.8 percent last year to $61,372, the Census Bureau said on Wednesday. Credit Credit Ross Mantle for The New York Times

WASHINGTON - The income of the median American household has finally rebounded from the damage caused by the 2008 financial crisis, a significant milestone in the nation's painfully slow economic recovery.

Median household income reached $61,372 in 2017, the Census Bureau reported on Wednesday, a number that it said was statistically indistinguishable from the median on the cusp of the crisis, in 2007.

The Trump administration, in a statement released by the White House Council of Economic Advisers, hailed the report as an indication of a strengthening American economy. "The effects of the strong economy are reaching Americans throughout the United States," the statement said, adding, "The news is actually better than these numbers suggest."

But the details of the report raised questions about whether middle-class households - which have experienced an economic "lost decade" - are now likely to see actual income gains or if they will simply tread water. One reason for concern is that income growth slowed in 2017, to 1.8 percent. Median income had grown more rapidly in previous years, by 5.2 percent in 2015 and 3.2 percent in 2016.

The gains in income were also driven by increased employment, rather than increased pay. The average annual earnings of both male and female full-time workers actually declined last year, but that drop was offset in the national data by the increase in the number of people with jobs.

"We have tight labor markets but not tight enough to generate a break from the trend - to spur meaningful wage growth," said Heidi Shierholz, an economist at the liberal Economic Policy Institute.

The report provides ample fodder for both political parties in the run-up to the midterm elections in November. Congressional Republicans, saddled with an unpopular president, are eager to take credit for economic gains, rallying behind the slogan that Americans are "better off now." Representative Ted Budd, Republican of North Carolina, described the report as "huge news for the middle class."

But Democrats argue that the benefits of growth are mostly being pocketed by the wealthy. Economic output, adjusted for inflation, increased by 16 percent between 2007 and 2017, while median income remained unchanged. The median is the midpoint of the income distribution, meaning that an equal number of households made more and less than that figure.

Jared Bernstein, an economist at the liberal-leaning Center on Budget and Policy Priorities who served as the chief economist to Vice President Joseph R. Biden Jr., said the numbers showed "a structural gap between overall economic growth and the prosperity of many families."

While middle-class incomes are treading water, the rich have prospered and the poor have fallen behind. Between 2007 and 2017, household income at the 90th percentile rose by 7.5 percent, according to the Census Bureau, while at the 10th percentile it fell by 4.5 percent.

The Trump administration declared in July that the federal government's long-running effort to reduce poverty "is largely over and a success." The Census Bureau, by contrast, reported that 12.3 percent of Americans lived in poverty in 2017 - about 39.7 million people.

That was an improvement over 2016, when the poverty rate stood at 12.7 percent.

There are also large differences by race. The median income of African-American households in 2017 remained 2.9 percent lower than in 2007, according to the Economic Policy Institute, while the median for white households rose by 1.5 percent over the same period. For Hispanics, the median rose by 6.7 percent.

The Census Bureau made significant changes in its methodology in 2013, complicating comparisons with earlier years. The reported level of median household income in 2017 was the highest on record, but officials said the changes in methodology tended to increase reported income. Adjusting for those changes, median household income was comparable to the level in 2007, and slightly below 1999.

The government publishes more than one measure of household income, each with its own strengths and weaknesses. The Congressional Budget Office, for example, publishes a measure including the value of the earned-income tax credit and noncash benefits like food stamps. By that measure, median household income surpassed the 2007 level in 2014 - and was significantly higher than in 1999.

The Census Bureau also reported on Wednesday that the share of Americans with health insurance did not increase in 2017, breaking a trend of steady increases dating back to 2010.

The report said that 28.5 million people, or 8.8 percent of the population, lacked health insurance for all of 2017. The change from 2016 was not statistically significant for either number.

The stagnation was striking because of the increase in the share of Americans with full-time jobs. Such an increase would ordinarily be expected to produce a rise in health insurance coverage rates. Robert Greenstein, the president of the Center on Budget and Policy Priorities, said the likely explanation was the Trump administration's efforts to undermine the Affordable Care Act. Otherwise, he said, "we probably would have seen further progress in 2017."

Turmoil in health insurance markets as Congress considered proposals to repeal the Affordable Care Act may have also created uncertainty. "Between 2016 and 2017, we saw that the uninsured rate decreased in three states, and it increased in 14 states," said Edward Berchick, a demographer at the Census Bureau. "This was the first time since 2013 that we saw an increase in any state."

The effect of opposition to the Affordable Care Act, passed by Democrats during the Obama administration, is most clearly visible in states that declined to expand Medicaid.

In states that did not expand Medicaid, 16.7 percent of the population had no health insurance coverage at any time during 2017, up from 16.1 percent in 2016. By contrast, in states that chose to expand Medicaid, there was no significant decrease in coverage. The Census Bureau said 9.4 percent of people age 19 to 64 had no health insurance coverage, roughly the same as last year.

The states with the highest proportion of uninsured residents were Texas (17.3 percent) and Oklahoma (14.2 percent), followed by Alaska, Georgia, Florida and Wyoming, all with more than 12 percent of their residents lacking coverage. Massachusetts, which has been working systematically to expand coverage for more than a decade, had the lowest uninsured rate last year, with 2.8 percent of residents uninsured. Five other states - Hawaii, Iowa, Minnesota, Rhode Island and Vermont - as well as the District of Columbia had uninsured rates of less than 5 percent.

In both expansion states and non-expansion states, the uninsured rate for working-age adults has declined significantly over the last decade. Most of the decline has taken place since 2013, as provisions of the Affordable Care Act expanding coverage took effect in 2014.

Larry Levitt, a senior vice president of the Kaiser Family Foundation, said the new census data suggested that "the historic progress in reducing the number of people uninsured has stalled."

A version of this article appears in print on , on Page B2 of the New York edition with the headline: Median Household Income Grew Again, but Slower, Last Year. Order Reprints | Today's Paper | Subscribe

# data[].attributes.attachment_link.title
U.S. Household Income Rises to Pre-Recession Levels, Prompting Cheers and Questions

# data[].attributes.attachment_link.description
WASHINGTON - The income of the median American household has finally rebounded from the damage caused by the 2008 financial crisis, a significant milestone in the nation's painfully slow economic recovery. Median household income reached $61,372 in 2017, the Census Bureau reported on Wednesday, a number that it said was statistically indistinguishable from the median on the cusp of the crisis, in 2007.

# data[].attributes.attachment_link.readable_text
A soup kitchen in Williamsport, Pa. Economists and advocates for poor people say the relatively modest gains over the last few years are fragile. Credit Credit Spencer Platt/Getty Images

WASHINGTON - In July, President Trump's Council of Economic Advisers declared that the country's five-decade war on poverty was largely over and called it a success.

On Wednesday, the Census Bureau released its 2017 annual report on the poor that offered a stark counterpoint, suggesting that the national recovery has bypassed many of the 40 million to 45 million Americans estimated to be living below the federal poverty level.

While median household income rose 1.8 percent last year, the national poverty rate remained stubbornly high at 12.3 percent. That was just a slight decrease from the previous year's level of 12.7 percent, according to the federal government's most comprehensive annual gauge of economic hardship.

The supplemental poverty measure for 2017, widely regarded by economists as more accurate, was even higher, 13.9 percent in 2017, essentially unchanged from the year before. That is an improvement from the recent high of 16 percent recorded in 2013. But economists and advocates for poor people say the relatively modest gains over the last few years are fragile, endangered by the Trump administration's policies and vulnerable to a long-overdue economic downturn.

"If this is the best we can do, it isn't good," said Timothy Smeeding, a professor at the University of Wisconsin-Madison who studies poverty and economic mobility.

"Things really tapered off this year, after a serious drop in previous years," he said. "In terms of the boom, the party has lasted a long time, a lot longer than we thought, but not everybody is getting invited - people who are working several jobs, taking jobs without benefits, kids who are growing up in poverty. The fruits of the recovery are not being spread around evenly."

The report comes as the Trump administration seeks to curtail safety net programs, in part by playing down the severity of poverty in the country. The White House, bolstering its case for program cuts and new work requirements for recipients of federal aid, has gone so far as to question the validity of the government's traditional calculations for poverty.

Mr. Trump has pressed Congress and his cabinet to impose strict new work requirements on recipients of Medicaid and the Supplemental Nutrition Assistance Program, moves that could strip some beneficiaries of their benefits, and has supported new work rules in Republican-controlled states, like Arkansas and Kentucky.

In both of his budget blueprints, Mr. Trump has trimmed domestic spending on housing, education and food assistance. Such cuts have been restored by the Senate, but advocates say there is an overall bias in Washington against helping those in need that is hampering the recovery among low-income Americans.

"There's a precariousness to the recovery and a fragility in the lives of poor people right now," said Olivia Golden, the executive director of the Center for Law and Social Policy, an advocacy organization based in Washington that opposed budget cuts.

While Wednesday's report showed no statistically significant reduction in poverty during Mr. Trump's first year in office, the strengthening economy could usher in bigger improvements next year. The economy grew at an annual rate of 4.2 percent in the second quarter of 2018, according to the Commerce Department, and average hourly wages in August increased 2.9 percent.

Unemployment, now at 3.9 percent, has decreased significantly for all age, gender, racial and ethnic groups, and 1.7 million workers saw wage increases last year, according to the Census Bureau.

But warning signs persist. Poverty rates among African-Americans and Hispanics have declined in recent years, but both remain above 20 percent, far outpacing the poverty rate of 9.8 percent for the white, non-Hispanic population.

And the poor are getting poorer. The poverty threshold in 2017 was $24,858 for a family of four. The percentage of families of living on half that income, in constant dollars, has nearly doubled since 1975, to 5.7 percent from 3.5 percent, the report showed.

"The level of poverty for people with the lowest incomes seems to be on the uptick," said Jennifer Jones Austin, the chief executive of the Federation of Protestant Welfare Agencies, an anti-poverty advocacy group that represents 170 agencies operating in New York City. "The Trump administration says the war on poverty is over. That's not reality."

The Census Bureau's official poverty measure, calculated at 12.3 percent last year, is widely viewed as an outdated formula.

Most economists consider the poverty number published concurrently in the supplemental report, which is 1.6 percentage points higher, to be a more precise measure because it factors in the cost of expenses like housing, child care and transportation, while estimating the positive effect of government benefits like Social Security, Medicaid and the earned-income tax credit.

But Mr. Trump's economic team, led by Kevin Hassett, the chairman of the Council of Economic Advisers, has questioned both of the Census Bureau's poverty calculations. The real poverty rate is much lower, the team has argued, citing a 2017 paper by two economists that used a statistical analysis based on spending patterns by the poor that pegged the rate at closer to 3 percent.

"There are problems, especially in the supplemental report, where a lot of income is underreported," said Bruce D. Meyer, a public policy professor at the University of Chicago who wrote the alternative study with James X. Sullivan, an economics professor at the University of Notre Dame.

"It misses a lot of income," he said, including food stamps and tax credits, "and doesn't capture things like the improvement in the quality of housing."

"We've made a lot of progress and it's not reflected in those numbers," he added.

In July, Mr. Hassett's team, using those alternative calculations, claimed that between 1960 and 2016, the real poverty rate had declined to 3 percent from 30 percent. "Based on historical standards of material well-being and the terms of engagement, our war on poverty is largely over and a success," members of the economic council wrote in a report intended to bolster the case for stiffening work requirements.

David Brady, who runs a poverty research center at the University of California, Riverside, said the report on Wednesday undermined a chief contention of conservatives: that the wide availability of work would, by itself, eradicate poverty.

Wages for low-income workers have not kept pace with the cost of living in high-expense states, including California, where rising housing costs have contributed to a 20 percent poverty rate that ranks the highest in the nation, Mr. Brody said. That has increased the need for safety net programs, especially housing assistance.

The report illustrated the role of government support in keeping the rate from rising higher, citing income data showing that 27 million people "were taken out of poverty" by Social Security benefits, with another 3.4 million Americans pushed above the threshold by federal food aid.

"The stagnation in the poverty rate is bad news," Mr. Brady said. "It means that a low unemployment rate alone hasn't solved the problem."

A version of this article appears in print on , on Page B7 of the New York edition with the headline: America's Poor Miss Out On Boom, Census Shows. Order Reprints | Today's Paper | Subscribe

# data[].attributes.attachment_link.title
U.S. Recovery Eludes Many Living Below Poverty Level, Census Suggests

# data[].attributes.attachment_link.description
WASHINGTON - In July, President Trump's Council of Economic Advisers declared that the country's five-decade war on poverty was largely over and called it a success. On Wednesday, the Census Bureau released its 2017 annual report on the poor that offered a stark counterpoint, suggesting that the national recovery has bypassed many of the 40 million to 45 million Americans estimated to be living below the federal poverty level.

# data[].attributes.headline
Will the introduction of self driving cars increase overpopulation? 

# data[].attributes.subject
Will the introduction of self driving cars increase overpopulation? 

# data[].attributes.body
The economic problem: Overpopulation is one of main economic problems. Overpopulation is caused by number of factors. Reduced mortality rate because of the introduction of self driving cars could increase overpopulation.

The hypothesis:

Self-driving vehicles may increase overpopulation problem if there are fewer accidents and fewer fatalities.

# data[].attributes.headline
North Korea: Will The Country’s Reintegration Into The International Economy Benefit World Economy?

# data[].attributes.subject
North Korea: Will The Country’s Reintegration Into The International Economy Benefit World Economy?

# data[].attributes.body
The hypothesis:
If allow private farming and the private ownership, then North Korea's agricultural sector will become more productive, North Korea's GDP will increase, and world economy will be benefited.

# data[].attributes.attachment_link.readable_text
This paper reflects the views only of its author. It is intended to inform NCNK membership and the broader public about economic issues in North Korea, and does not necessarily represent the viewpoints of NCNK or its members, of which, no doubt, there are many.
Executive Summary

The North Korean economy remains weak and vulnerable, but its structure is changing as it confronts major internally- and externally-generated pressures. Ironically, as UN sanctions have tightened in recent years, the economy has become more decentralized and productive, as weakening state controls have allowed the spread of market activities, providing incentives for individuals and families to work in their own self-interest. Central planning is weakening as money replaces the once ubiquitous ration coupon, and self-reliance on both a national and localized level is increasing as foreign trade and foreign aid dwindle. However, the state-run economy has not withered away, and Pyongyang dictates perhaps half of all economic transactions, a far larger share than does the central government in any other country. The state and its enterprises and the huge farmers' collectives still own most capital and property, and through their extensive regulations and police powers extract large rents from individuals and families.

The people of North Korea are very poor. The country's GDP per capita - estimated at anywhere between $700 and $2,000 - places North Korea near the bottom of world rankings, and even these figures give an exaggerated notion of living standards. A large share of GDP is spent by the government for itself and its military, and relatively little goes to people's consumption. People continue to suffer from shortages of food, fuel, electricity, running water, and other necessities, although there is little evidence of an ongoing famine as experienced in the 1990s. Malnutrition and food insecurity remain widespread, especially outside of Pyongyang, although UN nutrition surveys have shown a gradual decline in malnutrition rates since 2000. 1 Unusually for a command economy system, few state resources appear to be devoted to investment. The country runs a persistent and large merchandise trade deficit, financed by small amounts of foreign aid, net service sector earnings, illicit activities, and remittances from tens of thousands of overseas workers and compatriots.

Never the "hermit kingdom" suggested by outsiders, or the self-reliant economy as promoted by the ruling Kim family, North Korea is now being forced into a shell as its nuclear activities create barriers for economic interaction with the rest of the world. The various UN sanctions resolutions adopted in the past two years prohibit nearly all of the country's exports and other income-earning activities, and have also banned or restricted many categories of North Korean imports, including fuel. With the adoption of these sanctions, even China - mostly a steadfast partner for sixty-five years - is sharply cutting its purchases from North Korea, and other countries have essentially stopped trade. But sanctions have been just part of the problem. North Korea's lack of membership in the world's market trading system, the WTO, has meant that major trading nations automatically place high tariffs on North Korean exports, making them uncompetitive internationally. Pyongyang's decades-long sovereign debt default, meanwhile, adds to its inability to access foreign credit or direct investment.

Ironically, these economic and political troubles provide a narrow pathway for reforms that could unshackle the economy, creating growth even greater than its stellar neighbors, South Korea, China, and Japan, at equivalent periods in their development. As with those countries, major policy corrections must be made internally, but overseas aid agencies and the UN, given their own poor record of success, also should reconsider their programs and condition future work on market and productivity enhancing reforms. These could begin with:

Transferring ownership of property from the state to the private sector wherever possible, liquidating real assets to generate funds for public investment while allowing private interests to use this property more productively. This is the China model.

Unifying the bifurcated monetary system, possibly under a U.S. dollar or RMB currency board. The current system, with domestic and foreign currencies used side-by-side for domestic transactions, entails great vulnerability should the North Korean won begin to slip in value.

Unifying the wage system by bringing state salaries in line with market wages, and paying workers directly with real money, rather than ration coupons that stifle productivity and prevent financial savings.

Allowing private farming and the private ownership and transfer of farm assets, allowing the agricultural sector to become more productive and thereby increasing the size of the urban workforce.

An end to international sanctions, which would presumably require the dismantlement of North Korea's nuclear program, would be necessary for the country's reintegration into the international economy, but would by itself be insufficient to revitalize the country's economy. To fully unshackle the potential of the North Korean economy, the U.S. and others could couple the prospect of sanctions relief with an offer to sponsor North Korea into a WTO accession process, as it did with China seventeen years ago. WTO accession would be a win for all sides, given it would require most of the above reforms and would open the world's markets to what would no doubt become highly competitive North Korean industries.

North Korea's Macroeconomic Confusion

North Korea publishes little economic data, hence many measures of aggregate production and consumption are little better than guesswork on the part of outsiders. The country's only officially released macroeconomic data is that given to the UN Statistics Division responsible for systematic national income accounting (GDP) of all UN members, but the GDP figures Pyongyang provides are extremely small - only $16.8 billion in 2016, or just $665 per capita - and appear unreliable. 2 Finally, North Korea's data also show the total population as 25.3 million in 2016, growing at a slow 0.5 percent per year, and an age dependency ratio - the proportion of the population supported by those of working age (15-65 years) - of a modest 44%. 3

Two foreign agencies, South Korea's Bank of Korea and the CIA, attempt to fill in the gaps by making annual proxy estimates of GDP using, presumably, extensive intelligence collection on North Korea. The Bank of Korea estimates that North Korean GDP grew by four percent in 2016, rising to about $32 billion, or about $1,500 per capita, as electric power, coal, metals, and manufacturing each are thought to have rebounded from declines the year before. Agriculture improved slightly, and services, both government and private, are figured to have declined. 4 This was the fastest estimated growth since 1999, although most if not all the improvement is likely to have evaporated in 2017 due to plunging exports and a weak harvest. The Bank of Korea's estimate of North Korean GDP, which uses South Korean prices and value-added weights to calculate the value of North Korean economic activities, would put it at about one-fortieth of South Korean production, or one-twentieth South Korea's GDP per capita. The CIA, in its World Factbook, makes a parallel effort to gauge North Korea's economy, coming up with GDP in a wide range of $30-$50 billion and with a slight decline in 2015, its latest estimate. 5 It says its methodology is rough and its goal seems to be to fill in a gap in its worldwide GDP presentation. It ranks North Korean per-capita income as 215 th out of 230, in league with South Sudan and The Gambia. 6

Regardless of the roughness of these numbers, each paint a broadly accurate picture of a partly industrialized country with a large though outdated capital stock, a literate and well-trained workforce, extensive but poorly used natural resources, modest and dilapidated infrastructure except in its capital city, and a socialist control system that in theory and in law denies private ownership of the means of production, including virtually all capital stock and land. 7 The Korean Workers' Party, through its planning commission and price control bureau, has tried since the 1950s to implement a centrally planned or "command" economy, in which most normal economic decisions are made by central authorities and markets - even money - play minor roles. Nominal prices, wages, and interest are supposed to be fixed according to social desirability, not private demand. Economic growth is desired, so production is geared to investment goods, not goods for consumption or for export.

The system never worked well, and key parts broke down amidst a massive famine in the 1990s. The result in 2018 is a hybrid system with unregulated and often unruly markets, and with market prices and profit-driven allocations competing with the state's fixed prices and planned allocations. It is thus a land of many prices for the same good, service, or hour worked. Trade with the rest of the world is severely constrained by the need to protect this fixed price system. (Otherwise, for example, with domestic prices of coal cheap and external prices expensive, all the coal would be exported with none left for electricity production. If domestic prices were increased, coal-intensive heavy industry would be bankrupted.) Even before the adoption of UN sanctions, the result of this system was extremely poor efficiency in the use of labor and capital and thus a poverty-stricken population. But while malnutrition remains widespread, pockets of relative wealth are emerging as market activity takes hold in some areas and among some population groups.

The resiliency of this bifurcated economic system - one money and profit driven, the other commanded by the central state through rations and coercion - is often seen as remarkable given the torturous path the economy has undergone. North Korea has consistently defied predictions of collapse or systemic reform, which were especially prevalent during the 1990s after the Soviet Union and its Eastern Bloc satellites collapsed, as China shifted from plan to market, and as North Korea itself underwent famine and the death of its founder, Kim Il Sung. One explanation for this resiliency may be that foreign aid, which has historically been quite high relative to North Korean GDP, has provided the central state with just enough resources needed to prevail in its epochal fight with private markets, but never enough to buy back the economy and fully reinstate the command system.

As shown in the sections below, the country, and its economy, is not without strengths, often overlooked in the morass of poor policy decisions that have nearly extinguished the productivity of the hard-working and long-suffering people. These offer hope for the people should economic reforms ever be given a chance.

Infrastructure-Opportunities in Rust

North Korea's physical infrastructure is in poor shape after three decades of neglect as the government has focused its limited resources on nuclear, missile, and other military programs, and on building a modern city in Pyongyang. This neglect extends through the rail and road systems, electric power supply, water and sewer systems, heating systems, public health infrastructure, and many other areas. Communication systems are a bit better off but only because modern technology has advanced so rapidly, in terms of both performance and in lower costs, that even in North Korea communication has improved dramatically. Investment by an Egyptian company, Orascom, brought a 3G cellular network to the country, though data services remain limited and mobile phone users cannot connect to the internet. (North Koreans are restricted to a domestic intranet, though foreigners in North Korea are able to access the internet through the country's 3G service.) Costs associated with rebuilding the country's infrastructure to a level adequate to promote economic modernization are likely in the hundreds of billions of dollars, and are often assumed to require massive South Korean or foreign assistance. 8

The necessity of foreign aid can be debated, however, as infrastructure redevelopment may be the quickest avenue to increased productivity and growth in the economy and may easily be self-supporting. Like China in about 1980, the real property that underlies all infrastructure is owned by the state and is used very inefficiently. Privatization of even a small portion of these assets could provide enormous funds needed to build both public and private infrastructure. Extraordinary real returns are likely given the footprints of former structures are already there (for example in rail transportation and power distribution), and immediate productivity boosts could be expected in all lines of work. Foreign investment would help, and a forward-looking, post-sanctions North Korean government easily could elicit competitive bids from the huge construction and engineering companies of South Korea, Japan, and China eager for such work, with North Koreans providing the labor. But even absent significant foreign investment, North Korea might be able to do most of the work itself, and build private companies up in the process if it allowed a banking or private capital system to channel domestic savings into productive investment.

The footprint - that is, the existing framework for infrastructure development - is already there, making potential development relatively easy and fast. An ancient civilization with well-developed villages and towns, northern Korea received a large amount of Japanese investment during the colonial occupation (1910-45), including a modern rail system, ports on both its east and west coasts, hydro-electricity, and telephone and telegraph services. This infrastructure avoided damage during World War II but was devastated during the Korean War and then rebuilt in its aftermath. Between 1953 and the mid-1980s, Pyongyang, with substantial assistance from the Soviet Union, Eastern Europe, and later China, added significant thermal electric power, a limited express road system, and petroleum-related energy infrastructure. These have been very poorly maintained, however. Transportation routes are hindered by a mountainous interior that divides the country east and west, with reliance on an aging and nearly decrepit electrified and coal-powered steam rail system. Extraordinary delays are met even in travel between Pyongyang and Wonsan, only 90 miles apart across the middle of the peninsula. Travel between Pyongyang and the country's second largest city, Chongjin in the northeast corner, can takes days by train. In contrast, north to south travel on the west coast (less so on the east) can be accomplished relatively quickly by road or rail.

Ports, and the rail system that links them to the interior, were originally developed to service trade with Japan and remain adequate for the small amount of international trade currently undertaken by North Korea. The major Yellow Sea port is Nampo, downriver from Pyongyang and accessible through a large "lock gate" system to deal with tides. Others include Haeju, bottled up by the Northern Limit Line (the de facto inter-Korean maritime border); and Sinuiju, also limited to minor coastal trade, on the Yalu river. Generally, the west coast is encumbered by the extreme tidal variations of the Yellow Sea and by extensive marshes. East coast ports are much deeper and include Wonsan, Sinpo, Chongjin, and Rajin, which all enjoy reasonable access to the country's mineral and metal resources, but lack easy access to the important Pyongyang and west coast industrial areas.

Various schemes have been floated to take advantage of the country's geography, sitting as it is near or even between rich economies in South Korea and Japan, and the vast potential of China and Russia. Nothing but disappointments have come of these, however. As part of its "Sunshine Policy" of engagement with the North, South Korea rebuilt a rail line into the DMZ, with the idea of connecting it to the trunk line extending through Pyongyang and on into China, but after a brief period of limited service in 2007 and 2008, it has awaited passengers for more than a decade. A similar east coast rail line also has come to naught. China recently built a modern highway bridge across the Yalu River near Sinuiju in hopes of replacing a well-worn 1940s-era railroad and vehicle bridge linking Sinuiju and Dandong, but North Korea has failed to build the connecting road to what is otherwise an apparently completed project. Russia and South Korea have periodically discussed building rail links and an energy pipeline connecting South Korea with Russia's Far East via North Korea, but the project remains on ice. Russia has, however, enjoyed modest success in rebuilding the short rail line between its border and the North Korean port of Rajin, primarily to use the port as a transshipment point for Russian coal exports. UN sanctions include an exception that allows Russian coal to be transshipped out of Rajin, and Russia has reportedly used this route to ship 3.2 million tons of coal to China from August 2016 through August 2017. 9

Electric power, a relative strength of the North Korean economy in its early decades, is currently one of its weakest links, and perhaps the most visible indicator of the centrally planned system's gradual collapse. Under that system, electricity is allocated by the central plan and is nearly free, as is the coal, equipment, and labor needed to provide it. In the absence of a pricing mechanism, scarce electricity is allocated on the basis of political priorities. This proved workable enough when central planning dominated the North Korean economy, even if the lack of price signals led to the inefficient use of energy. In the mixed system, however, power plants are at a loss to purchase needed inputs and then give away the power. Installed capacity has stayed even at about 7,000 MW, with constantly degrading equipment, for three decades, evenly split between hydropower and coal fired thermal plants, and an antiquated high-voltage grid connects most parts of the country.

Two power plants dominate North Korea's electricity production: Supung hydro plant on the Yalu, which began operations in 1943 as the largest in Asia, with seven 100-MW turbine generators split between China and Korea; and the even more important Pukchang coal-fired plant, with sixteen 100-MW generators, furnished by the Soviet Union in the 1960s. Responsible for about a third of the country's power output, Pukchang sits next to underground anthracite coal mines worked at least in part by political prisoners, or what might be called slave labor. A handful of petroleum-fired power plants, dozens of smaller coal-fired plants, and hundreds of small hydro plants fill out the system. One petroleum-fired plant at Rajin in the northeast is being retrofitted to burn coal, although even that will not purge the entire system of the need for oil, since the difficult of burning anthracite means that coal plants need some fuel oil to start.

Anthracite coal resources in North Korea are plentiful, but the collapse of the centrally planned management system has left coal mines flooded for lack of power to run their pumps-some of the largest mines are under sea level-even as power plants lack coal to supply the electricity to the pumps, a chicken and egg problem only possible in a command economy. In recent years a large expansion of coal exports to China may have hurt the power industry as well, although UN sanctions now may be forcing the coal back into domestic use. 10

Since at least the early 1980s, the North Korean energy industry has planned for nuclear power to play a large role but, subordinated to the nuclear weapons program, huge funds have been expended and no capacity has been created. A large setback occurred in 2002, when revelations of Pyongyang's covert pursuit of uranium enrichment capabilities led to the breakdown of the Agreed Framework with the U.S., North Korean withdrawal from the Nonproliferation Treaty, and the abandonment of two 1,000 MW light water reactors (LWR) that were being built and funded by the U.S.-managed KEDO consortium. These reactors would have expanded the country's total usable capacity by about a third to a half. The KEDO plants thus joined at least two other nuclear projects Pyongyang had initiated on its own and had abandoned at the outset of the Agreed Framework. In 2012, Kim Jong-un announced yet another new (but only pilot scale) 25-30 MWe experimental LWR project to great fanfare, where preliminary testing appears to have recently begun after several years of apparently stalled construction. 11

With little new capacity coming on line in decades, deteriorating distribution equipment across the board, and inefficient allocations and use of electricity, the North Korean economy is plagued by shortages of power. Industrial equipment, lights, trains, and even elevators are often shut down due to power outages. However, as market activities expand elsewhere in the economy, off-grid energy systems are becoming increasingly common, as households and enterprises turn to markets to buy solar panels imported from China, diesel generators, and imported fuel. Output from the devices is then sold at very high prices to people desperate for power, generating stiff profits. Some wealthy households have also reportedly bribed officials to siphon off electricity from politically-prioritized institutions, such as military bases or local Party headquarters. 12

Pressures may be building for a similar solution to the national grid. The Daily NK reports that apartment units in Pyongyang are being required to purchase electric meters and that power will be sold by the actual amount used, not by the number of appliances, as is the current rule. 13 If so, it would be relatively easy for Pyongyang to gradually raise the price and allocate more funds to the power plants to buy coal and improve or repair equipment. A big casualty of market pricing, however, would be heavy industry, which uses cheap power very inefficiently. As has occurred in China and the former Soviet Union, huge sunk investments in outdated equipment-equipment optimized for cheap energy and expensive capital-would instantly be made worthless by market priced energy and cheaper (or at least available) capital.

Mining and Manufacturing-Look to Comparative Advantages for Growth

Under North Korea's Juche or self-reliance philosophy, the country tries to produce a little of everything that it needs, and to encourage autarkic practices at the local scale. The result is an impressive array of factories and farms that do a little bit of everything, but nothing very efficiently. Inevitably, the quality of goods is suspect and the quantity is insufficient - casualties of a broken planned system, a chaotic market that overlays it, and the huge obstacles to foreign trade imposed by both domestic imperatives and (more recently) by a world seeking to sanction North Korea for its nuclear weapons program. However, if these barriers were replaced with solid incentive structures and access to global markets, the mining and manufacturing industries could drive rapid economic growth.

While impressive in some aspects, the ultimate result of this system is hungry people: a country that can't export enough products to afford to import enough food even to keep them alive. The output of a few large zinc mines - of which North Korea has many - probably could have been traded in world markets for enough grain to stave off the famine that killed hundreds of thousands of citizens in the 1990s. Or, in today's world, zinc exports could be used to service the country's debt and restore its creditworthiness. Those mines are nearly shut, due to lack of electricity, fuel, equipment and (most importantly) entrepreneurial, profit-driven management that could compensate for the breakdown in the plan mechanism.

A rational division of labor would likely focus on building up several key industries while shutting down others. A look at the structure of the country's trade with China is instructive though not complete, given the irrational nature of prices in North Korea. Comparative advantages can likely be found in many high-valued mineral and metals products, including zinc, lead, iron, anthracite coal, gold, and rare earths. North Korea's work force is well-skilled and literate, which is conducive to construction, many types of manufacturing, and textile production - providing the basis for both a solid export base and for the reconstruction of domestic infrastructure. Some large chemical or iron and steel plants, such as the Kim Chaek Iron and Steel Complex in Chongjin - North Korea's largest industrial establishment with tens of thousands of skilled workers 14 - might be rebuilt from the ground up, and then could likely compete effectively with equivalent Japanese, South Korean, and Chinese industries, given North Korea's excellent resource base and highly competitive skilled labor. Comparative disadvantages are likely found in hundreds of smaller factories that waste energy and labor inputs; production of relatively scarce minerals such as aluminum and copper; certain electronics and consumer goods; and most importantly, the low-productivity agriculture, which engages one-third of the work force.

In developing its service sector, North Korea likely would have a large comparative advantage in tourism, an area that Kim is currently trying against all odds to develop. Relatively rich populations in China, Japan, and South Korea would likely flood to North Korea given the right political and security conditions, given the country's location, scenery, and historic context. Facilities easily could be self-supporting and would generate hard currency. However, North Korea would first have to make significant changes in policies that address the needs of tourists, assuring potential visitors that the country is safe to visit and convincing the U.S., South Korea, and Japan to remove travel-related sanctions. In other services areas such as education and healthcare, North Korean providers would likely be at large comparative disadvantages and require imported material and expertise.

Agriculture - Comparatively Disadvantaged, But Necessary in Transition

As was the case in Deng Xiaoping's China, agriculture may hold the key to economic reform given the potential for unleashing productivity gains among North Korea's many farmers. 15 Unfortunately, it is also the sector most frustrated by the country's dogged adherence to collectivist policies. Perhaps not coincidentally, agriculture has experienced much foreign intervention, including many billion dollars of food aid over the past two decades, amid efforts by UN and foreign aid agencies to improve farming practices, which continues. 16 Even as UN sanctions mounted in the summer of 2017, the World Food Program issued new calls for food aid due to what it thought might be the worst drought since the famine. 17

Two major crops, rice and corn, provide the bulk of the nation's food supply, although potatoes have risen in importance in recent years, grown in marginal fields and on hillsides. Rice is grown in irrigated paddies, especially in the large southwestern plain, between Pyongyang and the DMZ. Corn is grown in the colder and drier regions of the north and east. Both are susceptible to the country's highly variable climate, with droughts and floods often impacting production across different regions in any given year. Pyongyang, and foreign aid agencies, often cite bad weather and the rugged geography as cause for shortfalls and hunger, but agricultural self-sufficiency has long been a poorly-conceived national goal. Southern Korea always was the national granary, and North Korea is rich in many other resources, easily traded for food.

North Korea's labor productivity in agriculture is even weaker than its other industries, having declined from its heyday in the 1960s and 1970s when, copying Soviet practices, farms were mechanized and utilized great amounts of chemical fertilizer to overcome poor soil conditions. After reaching this peak, however, agricultural mechanization gradually decreased due to shortages of equipment and diesel fuel, and the heavy use of chemical fertilizers led to badly depleted soils. After subsidized fuel imports and fertilizer production bottomed out in the early 1990s, farmers were left with degraded and unproductive land, tilled by hand or oxen and often fertilized with night soil -- leading to famine and associated public health challenges. 18

The famine opened an era of foreign food aid that brought in millions of tons of grain from all over the world, including large amounts from the country's putative enemies in South Korea, Japan, and the United States. Importantly, the famine ended the universal food rationing system, since the state was unable to acquire enough grain to meet urban rations, and it let citizens forage on their own, especially in rural areas. This led to grain markets that now provide the bulk of the nation's food, even in cities.

The emergence of these markets, along with some modest changes in agricultural practices and policy, has led to increased agricultural output since food production bottomed out two decades ago. Prices for rice and corn are somewhat regulated but generally rise and fall with supply and demand conditions, and no major famine has been observed since markets took on the job of distribution, despite declining imports and a near cessation of foreign food aid. However, the agricultural sector remains highly inefficient. The North Korean data provided to the UN shows agriculture provides 22 percent of GDP, and that the rural population accounts for about a third of the total. 19 CIA estimates are similar, with agriculture put at 25 percent of GDP and the agricultural workforce at 37 percent of the total. This implies output per worker of only around $1,000 per year; South Korea's aged farmers each produce 15 to 20 times more output. 20

The largest problem is that North Korea's farms continue to be organized along strict collectivist lines - most are large cooperative farms encompassing dozens of villages and thousands of farmers, where the most productive land is used to grow grain in fulfillment of state-imposed quotas. (There is also a smaller number of state-run farms that produce more specialized products.) Private ownership of land, and most residences, is not allowed. Work teams of about ten families are the core production units and are allowed some rights to produce after annual quotas are fulfilled - this production can be sold externally at prices higher than the rationed rate but below full market value. Since the famine, individuals have been allowed to farm peripheral land, including on hill sides, with the output privately consumed or sold in markets. More recently, farmers have been allowed to cultivate and sell fruits, vegetables, and other non-grain crops grown in privately-built greenhouses. Naturally, more attention is given to this private farming, a misuse of labor since the better-quality collectively owned land is underworked. 21

Market prices for food in North Korea have fluctuated, both seasonally and in conjunction with overall production and monetary policy. From the famine to 2012, the price of rice and corn increased exponentially, requiring several episodes of massive currency devaluations that shook the faith in the North Korea won. Kim Jong Un, to his credit, has gotten inflation under control, and grain prices have flattened since he came to power in 2012 and are now stable. However, this has come at the cost of allowing U.S. dollars and Chinese RMB to saturate the economy, the long-term consequences of which remain to be seen. The relative price of corn, considered by North Koreans to be an inferior substitute to rice, has also fallen from its long-term average and is far below the famine era, suggesting less deprivation in food supplies.

Source: Daily NK

Foreign Trade: The Sanctions Crush Begins

The "Hermit Kingdom" has been a misleading moniker for North Korea for better than half a century but, if the latest UN Security Council sanctions are enforced, it may soon be all too accurate. North Korea's foreign trade was once far more varied than its current reliance almost entirely on trade with China would suggest. When UN sanctions were first adopted in 2006, just after its first nuclear test, Pyongyang's foreign trade was small but relatively diversified, with China holding about 38 percent of trade; South Korea 30 percent; Japan and Russia about 5 percent each and the rest of the world 22 percent. 22 And before that, the Soviet Bloc, Western Europe and Japan were large partners, as well. 23 (The US is alone among major countries in never having traded significantly with North Korea.) Debt defaults, the collapse of the Eastern Bloc's fixed price trading agreements, and angry episodes with Japan and South Korea progressively cut into Pyongyang's trade from the 1980s through the early 2000s.

Source: Global Trade Atlas

Source: Global Trade Atlas, February 2018
Beginning around 2010, however, North Korean trade with China began to rise dramatically, more than compensating for North Korea's trade losses elsewhere and making Beijing the only consequential trade partner for Pyongyang, accounting for 91 percent of North Korea's exports and imports in 2016 as tallied by mirror data. 24 Rising trade with China has had a significant impact on North Korea's evolving markets, with Chinese-made consumer goods and electronics in high demand by North Koreans with newfound cash to spend. But with the adoption of increasingly comprehensive (rather than simply arms, luxury goods, and WMD-focused) UN sanctions in 2016 and 2017, and an apparent newfound willingness in Beijing to enforce these sanctions, it appears that North Korea's trade with China may soon begin to plummet. Though China's long-term willingness to enforce sanctions remains to be seen, its trade with North Korea declined rapidly in the fourth quarter of 2017, down 42 percent from the same period a year earlier.

The latest UN sanctions have hit North Korea's major exports - anthracite coal, non-ferrous and ferrous metals, fish products, and textiles - especially hard. China's exports to North Korea have been relatively less impacted, causing a big and likely temporary increase in China's trade surplus - now running about $200 million a month - which likely is draining North Korea's hard currency reserves and reducing its ability to import needed products. Restrictions or bans on the export of refined petroleum, industrial equipment, and metals to North Korea will, if enforced, have a ripple effect throughout the North Korean economy, and as North Korea's currency reserves dry up the country will likely face difficulties funding the imports of other products, as well. North Korea will likely try to increase sales of non-sanctioned goods such as fruits and vegetables, which are already on the upswing, but it is doubtful that these can compensate for the loss of its big earners.

Monetary Impact of Sanctions - Key to "Maximum" Pressure - Not Yet Evident

Source: Daily NK, data through February 21, 2018
Curiously, the tripling in North Korea's merchandise trade deficit with China to $1.68 billion in 2017 has not hurt the value of the North Korean won in informal North Korean marketplaces, where it appears to be traded freely for U.S. dollars and RMB. 25 (The official North Korean exchange rate, at around 100 to the dollar, is grossly out of proportion with the informal rate of 8,000 to the dollar, but this rate has become increasingly irrelevant and now exists mostly to create a two-tiered pricing system for foreign visitors.) North Korea probably runs a surplus on the rest of its current account - net services income, remittances from overseas Korean workers and relatives, unreported sales of arms or other illicit goods, and some aid from UN agencies and others. Since the country is effectively bankrupt, new borrowings or inward investments are virtually impossible, so net capital account income is zero and the current account must be self-financing except for use of reserves. It is difficult to see, however, how the non-goods component of the current account could be rising to cover this rising goods deficit, especially since new sanctions target overseas workers and their remittances as well. Spending of foreign exchange reserves could pay for some of the imbalance, but these are not likely large enough to go on for long, and much of these funds presumably are controlled by Kim Jong Un himself, so he would feel like he is spending his own money.

Transferring ownership of property from the state to the private sector. Pyongyang, in effect, owns the country. By liquidating real assets, the state can generate funds needed to build infrastructure and fulfill its social obligations, while allowing private interests to raise productivity of the country's not-small quantity of industrial and real assets.

Unifying the monetary system, possibly under a U.S. dollar or RMB currency board system (as did Hong Kong in 1982 in a successful step toward integrating with China). The recent dollarization of the economy has achieved monetary stability, a considerable achievement of the Kim Jong Un government and the starting point for market development. But the two-currency system, with won and hard currencies used side-by-side, creates great vulnerability should the won begin to slip in value. The chance of financial panic in these circumstances is very high.

Unifying the wage system by bringing state salaries in line with market wages, and by paying workers directly with real money, not in ration coupons that stifle productivity, prevent financial savings, and are rife for abuse. A ration-based economy can't take advantage of the multiplying impacts of money circulation-where activities in one area breed further activities in another. (The payment of wages is required by the International Labor Organization; North Korea is about the only UN country that does not subscribe to ILO rules.)

Allowing private farming and private ownership and transfer of farm assets. As has occurred in China over the past three decades, the one-third of the North Korean population engaged in farming could double or triple their productivity, creating surplus income and a workforce capable of generating lucrative export-driven growth. (Beginning in 1978, and lasting for two decades, Chinese provinces near North Korea experienced 8 percent per year productivity growth in agriculture following such reforms.) 28

Large questions thus arise as to how long the regime can maintain this monetary stability, especially an exchange rate that is nearly fixed to the dollar, and what will happen if its citizens suddenly lose confidence - as they have on several occasions in the past, most recently and most disruptively in 2009 - when the won was forced to devalue by orders of magnitude and inflation soared. Money, either won or dollars, was much less important than it is now, and in today's money-driven North Korea, panic easily could erupt, at least among the monied elites and the merchants. Short of that, one can expect declines in imports with consequential impacts on prices and availability of consumer and investment goods.

Understanding these dangers, Pyongyang's monetary authorities no doubt are keeping a close eye on the informal exchange rate and may even be intervening (spending reserve dollars and RMB) to keep won fixed at the 8,000 per dollar rate. The informal exchange rate for the won has been remarkably stable since 2013, following a period of hyperinflation in the aftermath of the 2009 currency revaluation. Monetary interventions aiming to stabilize the exchange rate can be painless if the public accepts the power of the state to enforce the rate, but a significant price movement in favor of the dollar - for instance caused by a missile or nuclear test and calls for new sanctions - could lead to panic selling of won, subsequent hyperinflation, and turmoil for the growing class of money lenders. Meanwhile, monetary authorities, seeking to defend the value of won, are not likely providing much credit for state enterprises and government agencies, forcing the state to try to raise funds wherever it can and crimping the already extremely low state wages.

So far though, there has not been much market reaction to the visible trouble in the trade sector. The biggest exception is the doubling in the market prices of gasoline, diesel, and kerosene fuels last summer; prices declined somewhat after rumors that China would cut crude oil supplies dissipated, but have remained much higher than international prices. Fuel prices will likely stay high and may climb higher now that sanctions on imports of refined products have set in. Also evident are new campaigns to raise government income by charging tolls and, possibly, raising the price of electricity. 26 With strong sanctions only a few months old, it may be a nervous time for North Korea's growing class of money lenders and foreign exchange traders, and certainly for anyone in charge of Kim Jong Un's money reserves.

Sanctions May Provide Leverage for Lasting Reform

A South Korean legislator, presumably using information from his government's intelligence services, said in February that North Korea has about $3 billion in cash reserves that it is quickly running down. He said the reserve would last until October, thus assuming about a $250 million per month net outflow, consistent with Chinese trade data, and suggested panic will set in before then. 27 Whether or not this is accurate, it illustrates what has become a three-way race of sorts between Pyongyang's ability to withstand a large net outflow on its current account; its continuing nuclear program; and foreign tolerances for maintaining the stiff sanctions, especially by China and South Korea. Regardless of these strategic considerations, these sanctions ironically are creating a potential pathway for overseas aid organizations, and the UN, to press the case for radical reforms in North Korea - reforms that could save the country from the debilitating crush of its classic long-term poverty trap, where there is no savings surplus available to invest and all production is needed just to sustain the lives of the people and the activities of the government.

Pyongyang, at this point, may be more interested in systemic reform than it has previously been, given its need for hard currency and the dangers it must understand are coming from the increasingly dollarized economy. Drawing on the examples of post-war Japan, Park Chung-hee's South Korea, and Deng's China, such reforms could include:

A start to this process could begin with the US offering to sponsor North Korea into a WTO accession process, as it did with China seventeen years ago, and an end to sanctions, in return for an end to Pyongyang's nuclear development program. WTO accession would be a win for all sides, given it would require most of the above reforms and would open the world's markets to what would no doubt become highly competitive North Korean industries. More importantly to the Kim family, it might prevent hyperinflation and people in the streets.

William Brown is an adjunct professor at Georgetown University School of Foreign Service where he teaches courses on the Chinese, Japanese, and Korean economies, and he continues to do contracting work for the federal government from which he is retired. His most recent service was as Senior Advisor to the National Intelligence Manager for East Asia in the Office of the Director of National Intelligence. Prior to that his career as an economist and East Asia specialist has included extensive work in CIA, Commerce Department and the National Intelligence Council where he served as Senior Research Fellow for East Asia and as Deputy National Intelligence Officer for Economics. Brown was a founding member of the National Committee on North Korea, and currently serves as a non-resident fellow at the Korea Economic Institute of America. He received an MA in Economics and Chinese studies, and most coursework for the PhD, from Washington University in St. Louis and his BA in International Studies from Rhodes College in Memphis. Brown was raised in Kwangju, Korea by Presbyterian missionary parents who themselves were born and raised in China and Korea, respectively. He and his wife live in Herndon, Virginia and have four grown children.

# data[].attributes.attachment_link.title
Special Report: North Korea's Shackled Economy (2018)

# data[].attributes.attachment_link.description
This paper reflects the views only of its author. It is intended to inform NCNK membership and the broader public about economic issues in North Korea, and does not necessarily represent the viewpoints of NCNK or its members, of which, no doubt, there are many.

# data[].attributes.headline
Correlation between Government Spending on Education and Increased Economic Growth:How Would this be Accomplished?

# data[].attributes.subject
Correlation between Government Spending on Education and Increased Economic Growth:How Would this be Accomplished?

# data[].attributes.body
Hypothesis:
If government spending on education increases, then the economy will be able to grow and increase GDP.

# data[].attributes.attachment_link.readable_text
Saif has written about inflation, deflation, laws of supply and demand, and other important economics-related topics for over eight years.

Modern economists are of the view that natural resources (i.e. forest minerals, climate, accessibility to water, energy sources, etc.) play an important role in the economic development of a country. A country which has abundant natural resources is in a position to develop more rapidly than a country that is deficient in such resources. However, the presence of abundant resources is not a sufficient enough condition to explain all aspects of economic growth. Economies are created and managed by people. These people must be capable of performing the duties required to create such an economy. Matters of economic growth and decline hinge on the population. This is called human capital, and to truly understand the world, we must understand the role that populations play in an economy's growth or decline.

What You Need to Know About Human Capital

What is the role of human capital in economic development?

What are physical factors/passive factors of an economy?

How is human capital formed?

What are the problems with human capital formation in the least developed countries?

Finding the answers to these questions will give you a broader understanding of the world at large. How are countries' economies connected? Why are some countries growing faster than others? To answer these questions, we must broaden our understanding of human capital.

What Is the Role of Human Capital in Economic Development?

Human capital is the fundamental source of economic growth. It is a source of both increased productivity and technological advancement. In fact, the major difference between the developed and developing countries is the rate of progress in human capital. The underdeveloped countries need human capital to staff new and expanding government services to introduce new systems of land use and new methods of agriculture, to develop new means of communication to carry forward industrialization and to build the education system. Prof. Galbraith is right in saying that ''we now get a larger part of economic growth from investment in men and improvements brought about by improved men.''

Definition of human capital: Human capital is described as the skills, training, and health acquired through on the job training and education. Michael Pakistan Park defines it as, ''The skill and knowledge of human beings.'' It is also defined as the "endowment of abilities to produce that exists in each human being."
How Can a Country Increase Human Capital?

It can be increased through formal education

On-the-job training

Improved health and psychological well being.

To be more precise, if the people of a country are well educated, well nourished, skilled, and healthy, they are said to have more human capital.

As underdeveloped countries around the world make investments in human persons, they aim to increase their programming skills, social abilities, ideals, and health. These investments aim to increase productivity. The success of their economies depends upon increasing human capabilities. However, human capital does not exist in a vacuum. To better understand this complex topic, we must consider the physical/ passive factors that connect to a country's ability to make these investments.

What Are Physical/Passive Factors of an Economy?

Physical factors are considered "passive factors" of economic growth. They are not separate from each other, but hinge upon each other. These human resources are considered "active factors" of economic development.

While the active factors of a country include such important measurements as the size of a population's rate of growth in both urban and rural areas, passive factors include the availability of land in each of those areas. While the quality of a population, as measured by health standards, educational levels, and technology, is vitally important in influencing a nation's cultural and economic progress, the capital and land requirements for attempting these lofty improvements are inseparable from the equation.

A country which has developed the skills and knowledge of its people can exploit natural resources, build social economic and political organizations, and carry forward national development. That said, a country which does not pay attention to the passive factors that influence these goals will struggle to see the rapid growth in human capital that they desire.

How Is Human Capital Formed?

Definition of human capital formation: Human capital formation is the act of increasing the productive qualities of the labor force by providing more education and increasing the skills, health, and notarization level of the working population.
According to T.W. Schultz, there are five ways of developing human capital:

1. Provision of health facilities which affect the life expectancy, strength, vigor, and vitality of the people

2. Provision of on the job training, which enhances the skill of the labor force

3. Arranging education at the primary, secondary, and higher levels

4. Study and extension programs for adults

5. Provision of adequate migration facilities for families to adjust to changing job opportunities

What Are the Problems of Human Capital Formation in LDCs?

While there are many benefits to investing in the formation of human capital in LDCs (less developed countries), it is not an easy process. Large populations deal with large issues.
Problems of human capital formation in LDCs include:
1. Faster increase in population: The population of almost all developing countries in the world (including Pakistan) is increasing faster than the rate of accumulation of human capital. As a result, these countries are not making satisfactory use of sector expenditure on education (which has accounted for 2.5% of LDC GDP over the last five years).

2. Defective patterns of investment in education: In the developing countries of the world, the governments are giving priority to primary education for increasing their literacy rates. Secondary education, which provides critical skills needed for economic development, remains neglected. Another problem related to investment in education is that in the public and private sectors there is a mushroom growth of universities. These universities are a major cost to these countries. There are also mass failures at primary, secondary, and higher levels of education that result in the wasting of scarce resources that the country needs for other kinds of development.

3. More stress on the provision of buildings and equipments: Another major problem countries run into when investing in human capital in developing countries is that politicians and administrators lay more stress on the construction of buildings and the provision of equipments than on the provision of qualified staff. It has been observed that foreign qualified teachers and doctors are appointed in rural areas, where there is little use for them. This misallocation of educational resources can negatively affect economic growth.

4. Shortage of health and nutrition facilities: In less developed countries there is a shortage of trained nurses, qualified doctors, medical equipment, medicines, etc. Having less availability to health facilities poses a threat to millions of the people. The people are faced with unsatisfactory sanitary conditions, polluted water, high fertility and death rates, urban slums, illiteracy, etc. All of these deficiencies affect the health of the people and reduce their life expectancy. This reduces the growth of human capital.

5. No facilities for on the job training: On the job training (in service training) is essential for improving or acquiring new skills. The result is that the efficiency of the workers and the knowledge held by the workers causes a growth in human capital. The competence of the workers is of the utmost importance for the efficient use of human resources.

6. Study programs for adults: Study programs for adults can also be introduced in order to improve a country's literacy rate. Study programs for adults have been introduced in many under developed countries around the world (including Pakistan). They provide basic education, which increases the skills of farmers and small industrialists. Unfortunately, this scheme failed miserably, as the adults showed no interest in getting such training.

7. Halfhearted measures for promotion of employment: Throughout most of the world, the ratio of unemployed or underemployed persons is very large. To increase employment and reduce under employment, proper investment in human capital is required. This is visibly lacking in LDCs.

A positive example is that the government of Pakistan has taken a number of steps to increase employment opportunities in the country, such as the establishment of the SME Bank for the promotion of self-employment at the grass roots level. This encourages domestic and foreign investment, which increases employment opportunities. It also increases the number of technical and vocational training centers.

8. Failure to plan for the best use of manpower: Due to the nonavailability of reliable data, there is little manpower planning in less developed countries. As a result, the demand for certain skills and the supply of those skills do not match. The result is that large numbers of skilled and highly qualified workers remain underemployed. The frustration and discontent among the unemployed and underemployed graduate and post graduates results in "brain drain." This is when skilled workers leave the country for better opportunities abroad. It is a huge loss in human resources for these developing countries.

9. Neglect of agriculture education: In LDCs where agriculture is the main sector of the economy, very little attention is paid to educating the farmers on how to use modern agricultural practices. Unless the farmers are provided agricultural education and training, they will not be able to raise the agricultural output and balance supply and demand.

# data[].attributes.attachment_link.title
What Is the Role of Human Capital in Economic Development?

# data[].attributes.attachment_link.description
Matters of economic of growth and decline hinge on the population. This is called human capital, and to truly understand the world, we must understand the role that populations play in an economy's growth or decline. This article will help you understand how human capital reshapes an economy.

# data[].attributes.body
A banner economic report on Friday showed the strongest quarterly growth in the U.S. since 2014. The U.S. gross domestic product grew by 4.1 percent in the second quarter this year, according to the Commerce Department's initial estimates.
1. Watch the video: What the strong economic growth means..
2. Draw the graph to illustrate an economic growth in the US economy.
3. Formulate an economic prediction: "If real GDP growth rate is____, then the next phase of a business cycle will be _____".
4. Make a post in Padlet.

# data[].attributes.attachment_link.title
What the strong economic growth means for average Americans