Tuesday's Activities Include: google calendar settings, donations

Today, I talked to my son about _Only the Brave_, which he asked if he could go see (he has already seen Lego Ninjago and the new MLP movie). I did a little research, and said that he _could_ go see the movie, but I wanted him to know that most of the people in the movie died. We discussed this further: it is based on a true story, and it isn't people killing people, it is fire fighters dying while fighting a fire. After some thought, he concluded that he did not want to see the movie after all.

I keep waiting to find out that my kids want to do something that if I were a very different sort of parent, I would have told them they were not allowed to do. Still waiting. (For the record, I've never been the sort of person to make a kid wait for food if there was food around to eat, nor have I ever been doctrinaire about what kids should or shouldn't eat, which is likely where almost all such battles occur, until kids are past puberty).

Other things I did: I researched google calendar settings, and modified mine. This is probably the only genuinely, long term useful thing I did today, since I spend time every few days tracking down spam events and deleting them, and it is basically ALWAYS google calendar at fault. With luck, I won't ever have to modify anything on google calendar again (I usually access events on my google calendar via iCal, but deleting spam events on the google calendar via the iCal interface doesn't do anything particularly helpful).

I also went for a walk with M. And I drove to Savers and Staples to drop off items that we no longer want. This particular batch of items has been sitting around for a while, because we were sick and traveling and we stalled out on the decluttering. Hopefully, I'll get a chance to restart. But I doubt it; the holiday season is about to start.

A Few Remarks About the Gig Economy

My subject line ran long. It is actually this:

A Few Remarks about Retail Square Footage, Home Delivery, Online Commerce, the Gig Economy and Worker Classification in the US

Just so you know, whenever I post something that starts “A Few Remarks” it goes on and on and on and on and on and on and are you asleep yet? Gone? Oh, yay. Shall we?

A number of trends have collided over the post-Great Recession period in the US economy. Boomers have well and truly quit buying Stuff anywhere, never mind at Big Box stores. There are fewer of my generation, than Boomers, much less Millennials, so it isn’t like we can pick up the slack and a lot of us buy online anyway. Finally, Millennials are only just getting started doing their own shopping, do a lot of shopping online, and because all the jobs are in coastal cities and they can’t afford any space in those coastal cities, they can’t buy much in the way of physical goods even if they do have money.

As a result, there is a lot more Retail Square Footage than our economy needs now or is likely to need in the future, a lot of that square footage is in the “wrong” place: out in deep suburbia, rather than older suburbs and the city proper. (There is also regional maldistribution, with not enough in the coastal cities that have acquired so much development in the last few years vs. in midwestern and other cities away from the coasts, which I won’t address here.)

As Millenials as a cohort age, they will more and more be parents of small children, and moving further out from the city they work in or near. If renewable energy and batteries develop as expected, they could wind up with quite long commutes again, restoring exurbia, but that isn’t likely to happen any time soon. If broadband penetrates more cities around the country, the regional maldistribution may also be ameliorated. But those are longer term trends (10+ years before the world is meaningfully different — the point at which everyone who rereads this piece laughs and says, wow, I forgot things used to be the way they were). But it is safe to say that pricing will force them to at least move a little ways further out, year by year, as more and more of them have apartments and houses and jobs.

Because of the Great Recession, and other longer-term trends, Millennials are fantastically well-educated and have a lot of student debt. They also have trouble accessing full-time W-2 employment. Many of them have participated in the Gig Economy, mostly in the form of payment for doing things that their customers _used_ to do for themselves.

Uber, Lyft etc. replaced taxis, it is true, but they also replaced a lot of trips that would otherwise have involved someone driving themselves somewhere, parking, and continuing with their trip.

TaskRabbit was recently bought by IKEA, presumably in part because people were already using TaskRabbit to replace the portion of furniture manufacturing that IKEA had outsourced to the customer in order to better take advantage of the price reduction that flat pack shipping from China offered.

GrubHub and similar meal delivery services, and Blue Apron and other meal preparation aids replace trips and tasks customers otherwise had to provide for themselves (drive somewhere to pick up takeout, or go to the grocery store to buy food and bring it home and cook it, or go to the restaurant and eat in or whatever).

What the Gig Economy offered the massively overworked, possibly overpaid but definitely time starved professional elites was a way to outsource a lot of tasks they didn’t have time for — to people who had a bunch of time and really needed some money, really, any money at all. It was all made possible by the App universes spawned by Android and Apple and their backing databases in the cloud (predictably, as Levi proved in the gold rush, the way to make money in the gold rush is by selling goods and services to the rushers -- not participating in the rush oneseslf; similarly, the money being made in this stage of tech is being made by older tech companies selling cloud services and infrastructure to the app developers, thus avoiding the legal entanglements detailed below).

As the economy continues to oh-so-slowly recover, in lockstep with the oh-so-slow payment of student debt and progression through the life arc of the Millennial generation (there are a lot of them, but the whole thing is moving remarkably slowly, what with people having fewer kids, later), it is reasonable to expect that difficulties with labor (getting labor, getting labor of good enough quality and a wage that makes the business model work) will strike earliest and hardest at the gig economy. When overworked, possibly overpaid and definitely time starved professional elites finally can take a breath and reduce their hours, there are good odds they’ll go back to doing more things for themselves. When under-employed Millennials get “Real Jobs”, they may stick with the most profitable gig side hustles, but once they have kids and are looking at the economics of a side hustle while paying for child care vs. taking care of the kiddo oneself and dropping the side hustle, some amount of side hustle is going to go away. Which will result in Gig Economy sectors of the economy to either convert to Real Jobs — or go away, depending on where the sweet spot falls between people who want to outsource their delivery, cleaning, rides, etc. and people who want the money enough to schlep for those people.

Right now, the Lawson / GrubHub lawsuit is exploring the W-2 / 1099 question. As with earlier suits in the Gig Economy which have thus far been tossed and/or settled before reaching a courtroom, the question is, is the Schlepper a contractor, and therefore can be Schlepping for multiple services simultaneously (driving for Uber and Lyft, Delivering for InstaCart and GrubHub) or an employee, and therefore can be required to be on call, in a certain area and responsive within a certain time frame, that is to say, subject to management.

Think about it: do you get to say when your plumber shows up to fix a leak or worse in your house? Or are you just pathetically grateful that the plumber shows up, fixes the problem and you pay whatever the hell the plumbers says you owe? The plumber is a contractor. I don’t think the GrubHub driver is a plumber — whether he (ETA: Lawson) is a contractor is the kind of thing that is going to be decided in court, if not in this case, then later.

There is one circumstance in which the court won’t ever make the decision: if all the Gig Economy business go away. And that can really happen. Restaurants are, in many ways, Gig Economy from the Old Days. I got rich in the .com boom, and there was an awesome Scotch bar down the street from my condo. I Loooooovvvved staggering home from an evening consuming single malt and damn fine food, and when they went under, I wanted to know why — they were not lacking for business. But they were having trouble keeping servers, who kept going off to hack HTML for startups.

One way for a company like TaskRabbit to avoid that unpleasantness is to partner with IKEA or Amazon or other companies. IKEA and Amazon sell stuff that requires some expertise in order to make use of. Normally, the customer is on the hook for connecting to contractors, but companies like Home Depot have been providing contractor services for a couple decades now (I remember using them for carpeting in the halls at my condo building back in the late 90s or early 2000s). And every home supply store since forever has been willing to refer out to decorators, contractors, counter top installers, cabinetry people, you name it since forever. Creating a seamless (isn’t that the name of one of the companies that GrubHub bought?) experience can dramatically increase the likelihood that a customer will actually purchase the product that requires installation.

This really could go any of three directions. If labor pressure eases up a lot (another Great Recession), then everything disappears, and no one does anything for a while. If labor pressure eases up a little (a little recession) then things tick along and we get more court cases. But if things keep getting better, a little faster every year, then we’re going to see real pressure on Gig Economy business models to re-price in a way that makes it possible for them to hire and retain W-2 employees. Those that successfully re-price will stick around.

Those that don’t, won’t. Because their employees will be working for someone else, and they won’t be able to hire anyone to replace them.

Manufacturing in the United States

Yep, it’s coming back.

https://www.nbcnews.com/news/all/boeing-slams-questionable-airbus-deal-make-bombardier-cseries-jets-alabama-n811381

This is sort of the really in your face version of it. Making airplanes is super important if you are a military super power. It’s how you project force around the globe. You can talk boots on the ground, but the boots gotta get there, and it can’t all be on boats. The airplane industry, as a result, is highly protected. But there’s a fair amount of money to be made by undercutting on margin especially via innovation, and high barriers can stop that only for so long. The classic end run happened in my childhood / teenage years with cars: stop imports with tariffs? Fine, we’ll just make them in country instead. And, generally speaking, in the South, where the unions aren’t strong. As in, they don't actually exist.

But that isn’t even the kind of manufacturing I had in mind. It’s an important and interesting development, but while I may be from Seattle, I feel approximately the same amount of loyalty to Boeing as Boeing felt to Seattle (which is to say, not very much).

The kind of manufacturing I have in mind is moving to the US from Elsewhere (mostly China) for two reasons.

(1) As the relative value of US and Chinese currencies adjusts to reflect massive changes in the Chinese economy (it’s a slow process, but it is happening), the benefit of moving manufacturing from the US to China has reversed. Basically, the China wage isn’t what it once was. And automation these days is amazeballs.

(2) If you can automate enough of a manufacturing process to reduce the cost of labor required to a tiny fraction of the value of the end product, you don’t give a fuck _where_ you make it, at least not in wage terms. It turns out, you can get the labor cost so low, that you care _more_ about shipping costs than labor costs. At that point, it makes a lot of sense to move closer to where you are going to sell the final product.

Finally, states, local governments, the national government and other entities often create enticing packages of tax incentives and other benefits to move a manufacturer to a given location, in hopes of getting a bunch of sweet, sweet jobs along with it. Generally speaking, corporations seem to be better at hiring people to assess these deals than the politicians who create them (or maybe they just care about the bottom line in terms of dollars more, while the politicians care more about the votes, and it is really us voters who need to Step Up Our Game). That’s a powerful incentive to move manufacturing back to the United States.

Why not move to some other place in the world, cheaper than China? Well, China is already locking down a chunk of the African continent, in terms of manufacturing capacity. Governance issues can’t be entirely ignored, either, because governance tends to determine quality of labor force and infrastructure, which US businesses tend to expect more out of than Chinese businesses.

So, yep, manufacturing is coming back to the United States. But don’t be thinking that’s going to involve a lot of jobs. Because it probably won’t.