The Shift From Low-Wage Worker to Robot Worker

It’s become commonplace for computers to replace American workers — think about those on an assembly line and in toll booths — but two University of Oxford professors have come to a surprising conclusion: Waitresses, fast-food workers and others earning at or near the minimum wage should also be on alert.

President Obama’s proposal to increase the federal minimum wage from $7.25 to $10.10 per hour could make it worthwhile for employers to adopt emerging technologies to do the work of their low-wage workers. But can a robot really do a janitor’s job? Can software fully replace a fast-food worker? Economists have long considered these low-skilled, non-routine jobs as less vulnerable to technological replacement, but until now, quantitative estimates of a job’s vulnerability have been missing from the debate.

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Apple and Google’s wage-fixing cartel involved dozens more companies, over one million employees

Back in January, I wrote about “The Techtopus” — an illegal agreement between seven tech giants, including Apple, Google, and Intel, to suppress wages for tens of thousands of tech employees. The agreement prompted a Department of Justice investigation, resulting in a settlement in which the companies agreed to curb their restricting hiring deals. The same companies were then hit with a civil suit by employees affected by the agreements.

This week, as the final summary judgement for the resulting class action suit looms, and several of the companies mentioned (Intuit, Pixar and Lucasfilm) scramble to settle out of court, Pando has obtained court documents (embedded below) which show shocking evidence of a much larger conspiracy, reaching far beyond Silicon Valley.

Confidential internal Google and Apple memos, buried within piles of court dockets and reviewed by PandoDaily, clearly show that what began as a secret cartel agreement between Apple’s Steve Jobs and Google’s Eric Schmidt to illegally fix the labor market for hi-tech workers, expanded within a few years to include companies ranging from Dell, IBM, eBay and Microsoft, to Comcast, Clear Channel, Dreamworks, and London-based public relations behemoth WPP. All told, the combined workforces of the companies involved totals well over a million employees.

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Tokyo bitcoin exchange files for bankruptcy

The Mt. Gox bitcoin exchange in Tokyo filed for bankruptcy protection Friday and its chief executive said 850,000 bitcoins, worth several hundred million dollars, are unaccounted for.  The exchange’s CEO Mark Karpeles appeared before Japanese TV news cameras, bowing deeply. He said a weakness in the exchange’s systems was behind a massive loss of the virtual currency involving 750,000 bitcoins from users and 100,000 of the company’s own bitcoins. That would amount to about $425 million at recent prices.  The online exchange’s unplugging earlier this week and accusations it had suffered a catastrophic theft have drawn renewed regulatory attention to a currency created in 2009 as a way to make transactions across borders without third parties such as banks.  It remains unclear if the missing bitcoins were stolen, voided by technological flaws or both.

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The effect of today’s technology on tomorrow’s jobs will be immense—and no country is ready for it

INNOVATION, the elixir of progress, has always cost people their jobs. In the Industrial Revolution artisan weavers were swept aside by the mechanical loom. Over the past 30 years the digital revolution has displaced many of the mid-skill jobs that underpinned 20th-century middle-class life. Typists, ticket agents, bank tellers and many production-line jobs have been dispensed with, just as the weavers were.

For those, including this newspaper, who believe that technological progress has made the world a better place, such churn is a natural part of rising prosperity. Although innovation kills some jobs, it creates new and better ones, as a more productive society becomes richer and its wealthier inhabitants demand more goods and services. A hundred years ago one in three American workers was employed on a farm. Today less than 2% of them produce far more food. The millions freed from the land were not consigned to joblessness, but found better-paid work as the economy grew more sophisticated. Today the pool of secretaries has shrunk, but there are ever more computer programmers and web designers.

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Amazon alters strategy to win landmark CIA contract

It was a contract that Amazon.com’s business-technology group wasn’t supposed to get.  The CIA, an organization whose data is among the most protected in the world, asked for bids last year on a contract to provide the agency Web-based tech infrastructure. Longtime government contractors — IBM, among others — seemed likely winners.  So when Amazon Web Services, or AWS, won the $600 million contract in January, IBM cried foul. Big Blue argued that the agency did not properly evaluate IBM’s bid, and the General Accountability Office, which reviewed the contract, agreed in part.  Now, Amazon is bidding again for the contract while also challenging in federal court the CIA’s ability to reopen the bidding.  Both winning the contract and sparking IBM’s ire are coming-of-age moments for AWS. The division, which Amazon launched in 2006, rents data storage and computer-server time to corporations and agencies to run core business processes.

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Jobs, Robots, Capitalism, Inequality, And You

Maybe I’m wrong. Maybe everything will be fine. Maybe the “widening gap between rich and poor” is temporary. Maybe the steady growth in the proportion of jobs that are part-time and/or low-paid will soon reverse.  Or maybe the idea that all the homeless need are old laptops and a few JavaScript textbooks is not unlike the claim that new technologies automatically create new jobs for everyone. Maybe, unless something drastic changes, most people are totally screwed.  This has not been a great decade for the average American. The recession ended in 2009, but median household income remains 6.1% below what it was in December 2007…while the income of the top 10% rose. Meanwhile, productivity growth has been exceedingly sluggish on both sides of the Atlantic. The Economist explains, and theorizes:

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Japan Gets to Know a Quadrillion as Debt Hits New High

The late Senator Everett Dirksen (R-Ill.) is famous for allegedly saying, “A billion here, a billion there, and pretty soon you’re talking real money.”  It might be apocryphal—the Dirksen Congressional Center has found no evidence that the late Illinois Republican ever made the quip—but it certainly resonates as the political parties spar over sequestration and Americans become even more accustomed to thinking somewhat casually about what should be unfathomably big numbers.  In Japan, however, billions are for amateurs. With public debt more than 200 percent of GDP, the Japanese have long measured their red ink in hundreds of trillions of yen, at least until now. The Japanese crossed into uncharted fiscal territory Friday following news that the country’s gigantic national debt has for the first time just exceeded ¥1,000 trillion—in other words, more than one quadrillion.

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A City That Turns Garbage Into Energy Copes With a Shortage

OSLO — This is a city that imports garbage. Some comes from England, some from Ireland. Some is from neighboring Sweden. It even has designs on the American market.
“I’d like to take some from the United States,” said Pal Mikkelsen, in his office at a huge plant on the edge of town that turns garbage into heat and electricity. “Sea transport is cheap.”  Oslo, a recycling-friendly place where roughly half the city and most of its schools are heated by burning garbage — household trash, industrial waste, even toxic and dangerous waste from hospitals and drug arrests — has a problem: it has literally run out of garbage to burn.

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JPMorgan Looks to Pay to Settle U.S. Inquiries

JPMorgan Chase is pulling out its checkbook to help mend frayed relationships with the government.  But its new and conciliatory approach — a departure for the bank and its leader, Jamie Dimon, who generally has taken a hard line with the authorities — is yielding mixed results. Government officials, stung by the bank’s past displays of hubris, may drive up the price of settlements or resist the overtures altogether.

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Latvia and the Euro: Meet the EU’s Newest Tax Haven

Rietumu Bank isn’t in Riga’s best neighborhood. The streets are dusty, and graffiti on one building reads: “If Jesus comes back, we’ll kill him again.” The city’s biggest soccer stadium which opens onto a meadow on one side, is right next door.  This is the scene that bank manager Ilya Suharenko surveys from his top-floor office in the Rietumu Capital Centre. But Suharenko, 30, is optimistic about Latvia’s future nonetheless. European finance ministers on Tuesday gave the Baltic country the go-ahead to join the common currency union on January 1 next year. Furthermore, new tax laws are set to go into effect at the same time. These laws, says Suharenko, will put his country “on a level with Ireland, Malta and Cyprus.”

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40 Statistics About The Fall Of The U.S. Economy That Are Almost Too Crazy To Believe

f you know someone that actually believes that the U.S. economy is in good shape, just show them the statistics in this article.  When you step back and look at the long-term trends, it is undeniable what is happening to us.  We are in the midst of a horrifying economic decline that is the result of decades of very bad decisions.  30 years ago, the U.S. national debt was about one trillion dollars.  Today, it is almost 17 trillion dollars.  40 years ago, the total amount of debt in the United States was about 2 trillion dollars.  Today, it is more than 56 trillion dollars.  At the same time that we have been running up all of this debt, our economic infrastructure and our ability to produce wealth has been absolutely gutted.  Since 2001, the United States has lost more than 56,000 manufacturing facilities and millions of good jobs have been shipped overseas.  Our share of global GDP declined from 31.8 percent in 2001 to 21.6 percent in 2011.

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Greece’s youth unemployment hits 60% as recession continues to cripple the country

Greek youth unemployment rose above 60 per cent for the first time in February, reflecting the pain caused by the country’s crippling recession after years of austerity under its international bailout.  Greece’s jobless rate has almost tripled since the country’s debt crisis emerged in 2009 and was more than twice the euro zone’s average unemployment reading of 12.1 percent in March.  While the overall unemployment rate rose to 27 per cent, according to statistics service data released on Thursday, joblessness among those aged between 15 and 24 jumped to 64.2 percent in February from 59.3 percent in January.

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A gold bull’s broken confidence? Not just yet.

BullionVault’s CEO, Paul Tustain, reflects on the week.

My personal gold valuation has lost about 14% since 2nd April. Gold is by far my largest investment holding, so I am taking a hit.

Markets overshoot, and they correct … both ways. I don’t forget that the dizzy top of 6th September 2011 was followed by a $400 per ounce reverse in 3 weeks.

Neither do I forget that currencies with large debt overhangs, run by governments which have extreme fiscal problems, will tumble into unpredictable and spectacular failure sooner or later.

That’s neither a unique nor brilliant insight and very large numbers of people agree with me. We shouldn’t be too surprised when a few of them sell during counter-trend phases of a complicated journey.

Here’s a thought which reminds me to keep my cool:- The significant majority of the tiny number who eventually succeed in holding onto their wealth through a failure of their currency will be those who acted as the storm gathered and bought gold. By the end they will have been through the mill, having endured countless hours of anguished doubt. But when the market tests them, with temporary movements against them, they will be resolute, provided of course they have the fundamental confidence in their own judgement of the process of their national economic unravelling. This is what it takes to be a successful investor through the failure of a money system.

I believe I am still on the right side of the long term decline of Sterling, even if I also believe that market commentators will, for a while, be right as gold bears. In time I expect the upturn to be as sharp as this setback. Were I to sell before that upturn I don’t trust myself to switch fast depreciating Sterling back into gold at suddenly much higher prices. It would be just too painful.

Markets don’t offer smooth passage. They pitch up after each trough and slump over every crest. It gets rough from time to time, so you batten down the hatches, point her steadfastly to the wind, and trust she’ll take the beating. She will, if you hold your course.

In the meantime here are some BullionVault statistics from the last few days, which I think offer a useful reminder about how markets work. Remember, first of all, that for all those people who sold in a bit of a panic, someone bought…

 

  1. Monday and Tuesday were our strongest 48 hour period for new customers this year.
  2. Since Friday the gross value of customer bullion sales increased markedly. About 1% of gold we look after was sold back to the main market. That was characterised by a few large sellers. Holders of 99% of BullionVault inventory were not panicked.
  3. Those who did sell have mostly not withdrawn their cash from the BullionVault system. To me that suggests they may be intending to buy back into gold sooner rather than later.
  4. We normally have about 230 deposits a day (300 on a Monday) and about 100 withdrawals a day (120 on a Monday). Mondays are usually higher because they include weekend activity. On Monday we had 723 deposits versus 284 withdrawals. On Tuesday we had 732 deposits versus 150 withdrawals.
  5. Monday was a record day for business transacted, beating the previous peak of September 2011.

Regards,

Paul Tustain, Director
BullionVault

Solar panels could destroy U.S. utilities, according to U.S. utilities

Solar power and other distributed renewable energy technologies could lay waste to U.S. power utilities and burn the utility business model, which has remained virtually unchanged for a century, to the ground.  That is not wild-eyed hippie talk. It is the assessment of the utilities themselves.  Back in January, the Edison Electric Institute — the (typically stodgy and backward-looking) trade group of U.S. investor-owned utilities — released a report [PDF] that, as far as I can tell, went almost entirely without notice in the press. That’s a shame. It is one of the most prescient and brutally frank things I’ve ever read about the power sector. It is a rare thing to hear an industry tell the tale of its own incipient obsolescence.

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Bitcoin hits new high before losing $160 in value in one day

Bitcoin, the digital currency, lost more than $160 (£104) in value on Wednesday, just hours after hitting a record high.  The currency hit a new high of $266 before falling to $105 and then bouncing back to $130. The fall is unlikely to put off speculators. Two months ago, a Bitcoin was worth $20.  With Europe racked by economic uncertainty following the banking crisis in Cyprus, there have been fears that a “bubble” is being created with speculators piling into the four-year-old digital currency. But Bitcoin has crashed before only to bounce back. It hit a low of $7 in August 2011 after hitting a high of $32 two months earlier.

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