This seems to belong here ... it's not just the number of jobs, it's their nature and the corporate culture behind them

To Understand Rising Inequality, Consider the Janitors at Two Top Companies, Then and Now

Gail Evans and Marta Ramos have one thing in common: They have each cleaned offices for one of the most innovative, profitable and all-around successful companies in the United States.

For Ms. Evans, that meant being a janitor in Building 326 at Eastman Kodak’s campus in Rochester in the early 1980s. For Ms. Ramos, that means cleaning at Apple’s headquarters in Cupertino, Calif., in the present day.

In the 35 years between their jobs as janitors, corporations across America have flocked to a new management theory: Focus on core competence and outsource the rest. The approach has made companies more nimble and more productive, and delivered huge profits for shareholders. It has also fueled inequality and helps explain why many working-class Americans are struggling even in an ostensibly healthy economy.

The $16.60 per hour Ms. Ramos earns as a janitor at Apple works out to about the same in inflation-adjusted terms as what Ms. Evans earned 35 years ago. But that’s where the similarities end.

Ms. Evans was a full-time employee of Kodak. She received more than four weeks of paid vacation per year, reimbursement of some tuition costs to go to college part time, and a bonus payment every March. When the facility she cleaned was shut down, the company found another job for her: cutting film.

Ms. Ramos is an employee of a contractor that Apple uses to keep its facilities clean. She hasn’t taken a vacation in years, because she can’t afford the lost wages. Going back to school is similarly out of reach. There are certainly no bonuses, nor even a remote possibility of being transferred to some other role at Apple.

Yet the biggest difference between their two experiences is in the opportunities they created. A manager learned that Ms. Evans was taking computer classes while she was working as a janitor and asked her to teach some other employees how to use spreadsheet software to track inventory. When she eventually finished her college degree in 1987, she was promoted to a professional-track job in information technology.

Less than a decade later, Ms. Evans was chief technology officer of the whole company, and she has had a long career since as a senior executive at other top companies. Ms. Ramos sees the only advancement possibility as becoming a team leader keeping tabs on a few other janitors, which pays an extra 50 cents an hour.

They both spent a lot of time cleaning floors. The difference is, for Ms. Ramos, that work is also a ceiling.

Eastman Kodak was one of the technological giants of the 20th century, a dominant seller of film, cameras and other products. It made its founders unfathomably wealthy and created thousands of high-income jobs for executives, engineers and other white-collar professionals. The same is true of Apple today.

But Kodak also created enough working-class jobs to help create two generations of middle-class wealth in Rochester. The Harvard economist Larry Summers has often pointed at this difference, arguing that it helps explain rising inequality and declining social mobility.

“Think about the contrast between George Eastman, who pioneered fundamental innovations in photography, and Steve Jobs,” Mr. Summers wrote in 2014. “While Eastman’s innovations and their dissemination through the Eastman Kodak Co. provided a foundation for a prosperous middle class in Rochester for generations, no comparable impact has been created by Jobs’s innovations” at Apple.

Ms. Evans’s pathway was unusual: Few low-level workers, even in the heyday of postwar American industry, ever made it to the executive ranks of big companies. But when Kodak and similar companies were in their prime, tens of thousands of machine operators, warehouse workers, clerical assistants and the like could count on steady work and good benefits that are much rarer today.

When Apple was seeking permission to build its new headquarters, its consultants projected the company would have 23,400 employees, with an average salary comfortably in the six figures. Thirty years ago, Kodak employed about 60,000 people in Rochester, with average pay and benefits companywide worth $79,000 in today’s dollars.

Part of the wild success of the Silicon Valley giants of today — and what makes their stocks so appealing to investors — has come from their ability to attain huge revenue and profits with relatively few workers.

Apple, Alphabet (parent of Google) and Facebook generated $333 billion of revenue combined last year with 205,000 employees worldwide. In 1993, three of the most successful, technologically oriented companies based in the Northeast — Kodak, IBM and AT&T — needed more than three times as many employees, 675,000, to generate 27 percent less in inflation-adjusted revenue.

The 10 most valuable tech companies have 1.5 million employees, according to calculations by Michael Mandel of the Progressive Policy Institute, compared with 2.2 million employed by the 10 biggest industrial companies in 1979. Mr. Mandel, however, notes that today’s tech industry is adding jobs much faster than the industrial companies, which took many decades to reach that scale.

Many of the professional jobs from those companies in the 1980s and ’90s have close parallels today. The high-paying positions setting corporate strategy, developing experimental technologies and shaping marketing campaigns would look similar in either era.

But a generation ago, big companies also more often directly employed people who installed products, moved goods around warehouses, worked as security guards and performed many of the other jobs needed to get products into the hands of consumers.

In part, fewer of these kinds of workers are needed in an era when software plays such a big role. The lines of code that make an iPhone’s camera work can be created once, then instantly transmitted across the globe, whereas each roll of film had to be manufactured and physically shipped. And companies face brutal global competition; if they don’t keep their work force lean, they risk losing to a competitor that does.

But major companies have also chosen to bifurcate their work force, contracting out much of the labor that goes into their products to other companies, which compete by lowering costs. It’s not just janitors and security guards. In Silicon Valley, the people who test operating systems for bugs, review social media posts that may violate guidelines, and screen thousands of job applications are unlikely to receive a paycheck directly from the company they are ultimately working for.

And the phenomenon stretches far beyond Silicon Valley, where companies like Apple are just a particularly extreme example of achieving huge business success with a relatively small employee count. The Federal Express delivery person who brings you a package may well be an independent contractor; many of the people who help banks like Citigroup and JPMorgan service mortgage loans and collect delinquent payments work for contractors; and if you call your employer’s computer help desk, there’s a good chance it will be picked up by someone in another state, or country.

Apple emphasizes that its products generate many jobs beyond those who receive a paycheck from the company directly. The company estimates 1.5 million people work in the “app economy,” building and maintaining the mobile applications used on Apple products. Apple stores in 44 states tend to offer more generous pay and benefits than is standard in the retail industry. And it is growing quickly, including far from its California headquarters, such as with 6,000 jobs in Austin, Tex., at an average salary of $77,000 a year, and many more indirectly through what it says is $50 billion in annual spending to suppliers in the United States.

“We’re responsible for creating over two million jobs in the U.S., across all 50 states,” said an Apple spokesman, “ranging from construction, customer care, retail and engineering to app development, manufacturing, operations and trucking. All Apple employees, whether full time or part time, are eligible for benefits and stock grants. We’re also fortunate to have skilled contractors that contribute to our products and services daily, along with over 9,000 suppliers in every state.”

Perhaps the biggest indictment of the more paternalistic approach taken by an earlier generation of corporate behemoths is that, Kodak, despite having been an early innovator in digital photography, is a shell of its former self. After a bankruptcy and many years of layoffs, the company now has only 2,700 employees in the United States and 6,100 worldwide.

But it is also clear that, across a range of job functions, industries and countries, the shift to a contracting economy has put downward pressure on compensation. Pay for janitors fell by 4 to 7 percent, and for security guards by 8 to 24 percent, in American companies that outsourced, Arindrajit Dube of the University of Massachusetts-Amherst and Ethan Kaplan of Stockholm University found in a 2010 paper.

These pay cuts appear to be fueling overall inequality. J. Adam Cobb of the Wharton School at the University of Pennsylvania and Ken-Hou Lin at the University of Texas found that the drop in big companies’ practice of paying relatively high wages to their low- and mid-level workers could have accounted for 20 percent of the wage inequality increase from 1989 to 2014.

The same forces that explain the difference between 1980s Kodak and today’s Apple have big implications not just for every blue-collar employee who punches a timecard, but also for white-collar professionals who swipe a badge.

Forklifts vs. 3D Maps

Phil Harnden was coming out of the Navy in 1970 when he applied for a job at Kodak, and soon was operating a forklift in a warehouse. He made $3 an hour, equivalent to $20 an hour today adjusted for inflation. That is roughly what an entry-level contracting job testing software pays.

The difference between the two gigs, aside from the absence of heavy machinery in Apple’s sleek offices, is the sense of permanence. Mr. Harnden put in 16 years operating forklifts before he left in 1986 to move to Florida. When he returned 10 years later, he was quickly rehired and even kept his seniority benefits.

In interviews, tech industry contractors in Silicon Valley describe a culture of transience. They can end up commuting to a different office park that houses a new company every few months; in many cases 18 months is the maximum a contractor is allowed to spend at one company.

“I would rather have stability,” said Christopher Kohl, 29, who has worked as a contractor at several Silicon Valley companies, including a stint doing quality assurance on Apple Maps. “It’s stressful to find a new job every 12 to 18 months.”

For Silicon Valley’s contracting class, there are reminders large and small of their second-class status. Contractors generally do not receive the stock options that have made some midlevel Silicon Valley workers wealthy over the years, nor the generous paid time off for vacation, illness or the birth of a child. The health insurance plans tend to be stingier than those that the tech giants they serve provide for their direct employees.

The smaller reminders can be just as telling. One former Apple contractor recalled spending months testing a new version of Apple’s operating system. To celebrate the release, the Apple employees they’d worked closely with on the project were invited to a splashy party in San Francisco, while the contractors had beers among themselves in a neighborhood pub.

The compensation these white-collar contractors receive puts them squarely in the middle rungs of workers in the United States, and the most skilled can make six figures (though that doesn’t go far in the hyper-expensive Bay Area housing market). Apple, based on its consultants’ report, expected to be indirectly responsible for nearly 18,000 jobs in Santa Clara County by now at an average pay of about $56,000 a year.

There are some advantages. If they work for one of the companies like Apple or Google that feature a subsidized, high-quality cafeteria, contractors can enjoy the food. They can tell their friends that they work at one of the world’s most admired companies, and enjoy predictable, regular hours. Once in a while, a contractor will be hired into a staff position.

“It’s not evil,” said Pradeep Chauhan, managing partner of OnContracting, a site to help people find tech contracting positions. “They have a job and they’re getting paid. But it’s not ideal. The problem with contracting is, you could walk in one day and they could say, ‘You don’t need to come in tomorrow.’ There is no obligation from the companies.”

And that is the ultimate contrast with the middle-skill, middle-wage jobs of earlier generations of titans — a sense of permanence, of sharing in the long-term success of the company.

“There were times I wasn’t happy with the place,” Mr. Harnden said of his Kodak years. “But it was a great company to work for and gave me a good living for a long time.”

Transmissions vs. Staplers

When an automaker needs a supplier of transmissions for its cars, it doesn’t just hold an auction and buy from the lowest bidder. It enters a long-term relationship with the supplier it believes will provide the best quality and price over time. The company’s very future is at stake — nobody wants to buy a car that can’t reliably shift into first gear.

But when that same automaker needs some staplers for the office supply cabinet, it is more likely to seek out the lowest price it can get, pretty much indifferent to the identity of the seller.

Labor exists on a similar continuum.

The right product engineer or marketing executive can mean the difference between success or failure, and companies tend to hire such people as full-time employees and as part of a long-term relationship — something like the transmission supplier. What has changed in the last generation is that companies today view more and more of the labor it takes to produce their goods and services as akin to staplers: something to be procured at the time and place needed for the lowest price possible.

There is plenty of logic behind the idea that companies should focus on their core competence and outsource the rest. By this logic, Apple executives should focus on building great phones and computers, not hiring and overseeing janitors. And companies should outsource work when the need for staff is lumpy, such as for software companies that may need dozens of quality-assurance testers ahead of a major release but not once the product is out.

There’s no inherent reason that work done through a contractor should involve lower compensation than the same work done under direct employment. Sometimes it goes in the other direction; when a company hires a law firm, it is basically contracting out legal work, yet lawyers at a firm tend to be paid better than in-house counsel.

But as more companies have outsourced more functions over more time, a strong body of evidence is emerging that it’s not just about efficiency. It seems to be a way for big companies to reduce compensation costs.

Firms in the United States are legally required to offer the same health insurance options and 401(k) match to all employees — meaning if those programs are made extra generous to attract top engineers, a company that doesn’t outsource will have to pay them for everyone.

More broadly, there are a whole set of social pressures and worries about morale that encourage companies to be more generous with pay and benefits for employees who are on the same payroll.

“There was an overriding concern about equity,” said Mr. Cobb, the Wharton professor. “Firms would try to set pay so that the gap between the security guard or administrative assistant and senior V.P. wasn’t as great as you might expect, essentially by paying lower- and middle-skill workers more than they were probably worth on the market.”

Linda DiStefano applied for a secretarial job at Kodak during Easter week of her senior year in high school in 1968, and was hired to start immediately after her graduation for $87.50 a week, today’s equivalent of $32,000 a year. She put in four decades at the company, first as a secretary, then helped administer corporate travel and other projects.

“I helped put on the dinners for the board of directors, which in retrospect someone of my grade shouldn’t have been doing,” she said. “But I had a series of managers who trusted me.”

It bought her a house off Lake Avenue, a new car every few years and occasional long-distance trips to Motown reunion concerts. When her department was abolished in 2008, the travel bookings contracted out, she was making $20 an hour. The best job she could find was as a pharmacy technician at a grocery store for $8.50 an hour.

Rochester vs. Cupertino

As you drive around Rochester, the role of Eastman Kodak in the city is evident everywhere, in the Kodak Tower that looms over the center of town, in the Eastman Theater on Main Street, and in the hulking buildings and empty parking lots of the manufacturing center known as Kodak Park.

In reading the company’s old annual reports, you get a sense that its executives thought of the jobs created and the wages paid as a source of pride and achievement. On the first page of most years’ annual reports was an accounting of how many employees the company had in the United States and worldwide, and the total pay and benefits they received.

Apple, with a spaceship-like campus about to open, looms large over Cupertino in its own way, accounting for something like 40 percent of the jobs in the city, and investing $70 million in local environmental and infrastructure upgrades. It is no middle-class enclave; the median home price is $1.9 million.

“We definitely feel a sense of pride to be the home of Apple,” said Savita Vaidhyanathan, the mayor of Cupertino. “But they consider themselves a global company, not necessarily a Cupertino company.” She said she has never met Tim Cook, Apple’s chief executive. “We would have a hard time getting an audience with anybody beyond upper-middle management,” she said.

Ms. Ramos, the Apple janitor, lives down the road in San Jose. She pays $2,300 monthly for a two-bedroom apartment where she and her four children live. Before overtime and taxes, her $16.60 an hour works out to $34,520 a year. Her rent alone is $27,600 a year, leaving less than $600 a month once the rent is paid. Overtime, in addition to the wages from one of her teenage children who works part time at a grocery store, helps make the math work, though always tenuously.

She works from 6 p.m. until 2 a.m. On days when one of the other cleaners doesn’t show up, she may get a few extra hours, which is great for the overtime pay, but it means even less sleep before it is time to take her children to school.

A 60-cent-an-hour raise this year negotiated by her union, the SEIU United Service Workers West, helped. Kodak in its prime was not unionized, though in that era when organized labor was more powerful over all, managers deliberately kept wages high to try to prevent the company’s workers from forming one.

There is little chance for building connections at Apple. “Everyone is doing their own thing and has their own assignment, and we don’t see each other outside of work,” said Ms. Ramos in Spanish.

Ms. Evans, who was a Kodak janitor in the early 1980s before her rise to executive there and at other leading firms like Microsoft and Hewlett-Packard, recalls a different experience.

“One thing about Eastman Kodak is they believed in their people,” said Ms. Evans, now chief information officer at Mercer, the human resources consulting giant. “It was like a family. You always had someone willing to help open a door if you demonstrated that you were willing to commit to growing your skills and become an asset that was valuable for the company.”

The shift is profound. “I look at the big tech companies, and they practice a 21st-century form of welfare capitalism, with foosball tables and free sushi and all that,” Rick Wartzman, senior adviser at the Drucker Institute and author of “The End of Loyalty,” said. “But it’s for a relatively few folks. It’s great if you’re a software engineer. If you’re educated, you’re in command.”

But in the 21st-century economy, many millions of workers find themselves excluded from that select group. Rather than being treated as assets that companies seek to invest in, they have become costs to be minimized.

https://www.nytimes.com/2017/09/03/upsh ... -news&_r=1

What many of these companies absolutely refuse to understand is that they are eating themselves in this constant quest for higher profits at the expense of the working class. They don't realize that their profits don't come from gutting their workforce. The come from selling their products to the very people they are underpaying. The woman with only six hundred a month after rent is not going to buy many IPhones or I Pads. The companies will survive for awhile at the current level but eventually the dying market will take its toll.

Apple is seeing some of the consequences itself with sales of it's IPhone 7 way down and it's revenues faltering. It's share values are following its revenues. Some blame the drop on customers waiting for the new and improved IPhone 8 but others are saying most of those are waiting because Apple usually knocks the price of it's previous model down by a hundred or so dollars. People in great numbers can't afford the "new and improved" anymore. They don't have the disposable income for it.

They're also figuring out they don't need it.

Gonna be real careful raising the idea to gramma about getting rid of things she don't need.

They definitely understand that but, as the article points out, they have to compete in a market where everyone else is doing the same thing. Failure to do so means that their products will be significantly more expensive than those sold by their competitors. So, unless someone can come up with a way to force everyone to change this isn't going to stop.

shiftless2 wrote:

jimwilliam wrote:

What many of these companies absolutely refuse to understand is that they are eating themselves in this constant quest for higher profits at the expense of the working class. They don't realize that their profits don't come from gutting their workforce. The come from selling their products to the very people they are underpaying.

They definitely understand that but, as the article points out, they have to compete in a market where everyone else is doing the same thing. Failure to do so means that their products will be significantly more expensive than those sold by their competitors. So, unless someone can come up with a way to force everyone to change this isn't going to stop.

What you say is true if everything stays the same. The exception to that is that it will stop if they don't do something. If you can't sell your product there's not much profit being made.

Some things companies could do without endangering their competitiveness are:

1. Deciding what is a reasonable rate of return as opposed to a maximized rate of return.

2. Constraining top level salaries and bonuses. I've actually been shocked at how much of many companies revenues go to executive compensation.

3. Capitalism is a social system as well as a economic system. A change in attitude would benefit the companies and society markedly. As the article pointed out there was a time when corporations proudly pointed to what they contributed to society as well as their profitability.

Companies who adopted these points would probably see their share prices drop but, if the main shareholders were wise enough to look at the long term viability of the company, it wouldn't matter. After the IPO's the value of the shares doesn't mean a lot to the company anyway. Whether I pay $15 or $50 for a share makes no difference to the company. It has received all it is going to receive from those shares. Shareholders might not get as much as if maximizing profits was the main purpose of the company but the company itself would notice no difference.

Jim, re: "Companies who adopted these points would probably see their share prices drop..."

Since the sole fiduciary responsibility of the corporate executives is to protect the interests of the shareholders, share price drops results in them losing their jobs. Also... since a large part of their compensation package includes shares in their companies, they have an obscene incentive to do everything to prevent share price drops. As for constraining top level salaries and bonuses - - who determines how much is enough? The executives.... nuff said.

And, if the share price drops as a result of something the board did, it's pretty much a given that they'd be on the receiving end of a D&O lawsuit.

You can defend the corporate executives as much as you like but the end result of not making those or similar changes is the demise of many of those corporations. Responsibility to the shareholders should include the continued existence of the firm.

If businesses follow the path of Sears and Kodak there's not going to be a whole lot of shareholder equity, extravagant wage packages or bonuses to go around.

Not defending anybody. Just making observations.

And responsibility to the shareholders begins and ends with the next quarterly report.

BTW, when you refer to businesses that "follow the path of Sears and Kodak", don't forget that Kodak is one of the companies that is being held out in #76 as an example of the way employees should be treated.

Who says I'm defending them? I'm only pointing out the reality. Corporate executives hold all the cards. If a government tries to change things, the executives will use all of their financial resources to fight those changes. Just look at what Trudeau is attempting to do with "income sprinkling".... out come the rich business "leaders" with their smear campaign and PostMedia at the ready.

Proof you can't fix stupid ...

Awaiting Trump's coal comeback, miners reject retraining
Valerie Volcovici

When Mike Sylvester entered a career training center earlier this year in southwestern Pennsylvania, he found more than one hundred federally funded courses covering everything from computer programming to nursing.

He settled instead on something familiar: a coal mining course.

”I think there is a coal comeback,” said the 33-year-old son of a miner.

Despite broad consensus about coal’s bleak future, a years-long effort to diversify the economy of this hard-hit region away from mining is stumbling, with Obama-era jobs retraining classes undersubscribed and future programs at risk under President Donald Trump’s proposed 2018 budget.

Trump has promised to revive coal by rolling back environmental regulations and moved to repeal Obama-era curbs on carbon emissions from power plants.

“I have a lot of faith in President Trump,” Sylvester said.

But hundreds of coal-fired plants have closed in recent years, and cheap natural gas continues to erode domestic demand. The Appalachian region has lost about 33,500 mining jobs since 2011, according to the Appalachian Regional Commission.

Although there have been small gains in coal output and hiring this year, driven by foreign demand, production levels remain near lows hit in 1978.

A White House official did not respond to requests for comment on coal policy and retraining for coal workers.

What many experts call false hopes for a coal resurgence have mired economic development efforts here in a catch-22: Coal miners are resisting retraining without ready jobs from new industries, but new companies are unlikely to move here without a trained workforce. The stalled diversification push leaves some of the nation’s poorest areas with no clear path to prosperity.

Federal retraining programs have fared better, with some approaching full participation, in the parts of Appalachia where mining has been crushed in a way that leaves little hope for a comeback, according to county officials and recruiters. They include West Virginia and Kentucky, where coal resources have been depleted.

But in southern Pennsylvania, where the industry still has ample reserves and is showing flickers of life, federal jobs retraining programs see sign-up rates below 20 percent, the officials and recruiters said. In southern Virginia’s coal country, participation rates run about 50 percent, they said.

“Part of our problem is we still have coal,” said Robbie Matesic, executive director of Greene County’s economic development department.

Out-of-work miners cite many reasons beyond faith in Trump policy for their reluctance to train for new industries, according to Reuters interviews with more than a dozen former and prospective coal workers, career counselors and local economic development officials. They say mining pays well; other industries are unfamiliar; and there’s no income during training and no guarantee of a job afterward.

In Pennsylvania, Corsa Coal opened a mine in Somerset in June which will create about 70 jobs – one of the first mines to open here in years. And Consol Energy recently expanded its Bailey mine complex in Greene County.

But Consol also announced in January that it plans to sell its coal holdings to focus on natural gas. And it has commissioned a recruitment agency, GMS Mines and Repair, to find contract laborers for its coal expansion who will be paid about $13 an hour - half the hourly wage of a starting unionized coal worker. The program Sylvester signed up for was set up by GMS.

The new hiring in Pennsylvania is related mainly to an uptick in foreign demand for metallurgical coal, used in producing steel, rather than domestic demand for thermal coal from power plants, the industry’s main business. Some market analysts describe the foreign demand as a temporary blip driven by production problems in the coal hub of Australia.

Officials for U.S. coal companies operating in the region, including Consol and Corsa, declined requests for comment.

“The coal industry has stabilized, but it’s not going to come back,” said Blair Zimmerman, a 40-year veteran of the mines who is now the commissioner for Greene County, one of Pennsylvania’s oldest coal regions. “We need to look at the future.”

Students sit in a training class at the Pennsylvania Career Link office located in Waynesburg. REUTERS/Aaron Josefczyk

EMPTY SEATS

The Pennsylvania Department of Labor has received about $2 million since 2015 from the federal POWER program, an initiative of former President Barack Obama to help retrain workers in coal-dependent areas. But the state is having trouble putting even that modest amount of money to good use.

In Greene and Washington counties, 120 people have signed up for jobs retraining outside the mines, far short of the target of 700, said Ami Gatts, director of the Washington-Greene County Job Training Agency. In Westmoreland and Fayette counties, participation in federal job retraining programs has been about 15 percent of capacity, officials said.

“I can’t even get them to show up for free food I set up in the office,” said Dave Serock, an ex-miner who recruits in Fayette County for Southwest Training Services.

Programs administered by the Appalachian Regional Commission, a federal and state partnership to strengthen the region’s economy, have had similar struggles. One $1.4 million ARC project to teach laid-off miners in Greene County and in West Virginia computer coding has signed up only 20 people for 95 slots. Not a single worker has enrolled in another program launched this summer to prepare ex-miners to work in the natural gas sector, officials said.

Greene County Commissioner Zimmerman said he’d like to see a big company like Amazon or Toyota come to southwestern Pennsylvania to build a distribution or manufacturing plant that could employ thousands.

But he knows first the region needs a ready workforce.

Amazon spokeswoman Ashley Robinson said the company the company typically works with local organizations to evaluate whether locations have an appropriate workforce and has no current plans for distribution operations in Western Pennsylvania. Toyota spokesman Edward Lewis said the company considers local workforce training an “important consideration” when deciding where to locate facilities.

SIGNS OF LIFE

Sean Moodie and his brother Steve spent the last two years working in the natural gas industry, but see coal as a good bet in the current political climate.

“I am optimistic that you can make a good career out of coal for the next 50 years,” said Sean Moodie.

Coal jobs are preferable to those in natural gas, they said, because the mines are close to home, while pipeline work requires travel. Like Sylvester, the Moodie brothers are taking mining courses offered by Consol’s recruiter, GMS.

Bob Levo, who runs a GMS training program, offered a measure of realism: The point of the training is to provide low-cost and potentially short-term labor to a struggling industry, he said.

“That’s a major part of the reason that coal mines have been able to survive,” he said. “They rely on us to provide labor at lower cost.”

Clemmy Allen, 63, a veteran miner and head of the United Mineworkers of America’s Career Centers, said miners are taking a big risk in holding out for a coal recovery.

He’s placing his hopes for the region’s future on retraining. UMWA’s 64-acre campus in Prosperity, Pennsylvania - which once trained coal miners - will use nearly $3 million in federal and state grants to retrofit classrooms to teach cybersecurity, truck driving and mechanical engineering.

“Unlike when I worked in the mines,” he said, “if you get laid off now, you are pretty much laid off.”

Follow Trump’s impact on energy, environment, healthcare, immigration and the economy at The Trump Effect - www.reuters.com/trump-effect

SOURCE

If anyone really believes that AI won't eventually outstrip human intelligence ...

Checkmate humanity: In four hours, a robot taught itself chess, then beat a grandmaster with moves never devised in the game's 1,500-year history and the implications are terrifying

- Robot taught itself chess in just four hours and learned moves never seen before
- Oxford academic: AI could go rogue and become too complex for engineers
- AlphaZero surpassed years of human knowledge in just a few hours of chess

JOHN NAISH FOR THE DAILY MAIL

Will robots one day destroy us? It’s a question that increasingly preoccupies many of our most brilliant scientists and tech entrepreneurs.

For developments in artificial intelligence (AI) — machines programmed to perform tasks that normally require human intelligence — are poised to reshape our workplace and leisure time dramatically.

This year, a leading Oxford academic, Professor Michael Wooldridge, warned MPs that AI could go ‘rogue’, that machines might become so complex that the engineers who create them will no longer understand them or be able to predict how they function.



Yes, it’s a concern, but a ‘historic’ new development makes unpredictable decisions by AI machines the least of our worries. And it all started with a game of chess.

AlphaZero, an AI computer program, this month proved itself to be the world’s greatest ever chess champion, thrashing a previous title-holder, another AI system called Stockfish 8, in a 100-game marathon.

So far, so nerdy, and possibly something only chess devotees or computer geeks might get excited about.

But what’s so frighteningly clever about AlphaZero is that it taught itself chess in just four hours. It was simply given the rules and — crucially — instructed to learn how to win by playing against itself.

In doing so, it assimilated hundreds of years of chess knowledge and tactics — but then went on to surpass all previous human invention in the game.

In those 240 minutes of practice, the program not only taught itself how to play but developed tactics that are unbeatably innovative — and revealed its startling ability to trounce human intelligence. Some of its winning moves had never been recorded in the 1,500 years that human brains have pitted wits across the chequered board.

Employing your King as an attacking piece? Unprecedented. But AlphaZero wielded it with merciless self-taught logic.

Garry Kasparov, the grandmaster who was famously defeated by IBM’s supercomputer Deep Blue in 1997 when it was pre-programmed with the best moves, said: ‘The ability of a machine to surpass centuries of human knowledge . . . is a world-changing tool.’
Simon Williams, the English grandmaster, claimed this was ‘one for the history books’ and joked: ‘On December 6, 2017, AlphaZero took over the chess world . . . eventually solving the game and finally enslaving the human race as pets.’

The wider implications are indeed chilling, as I will explain.

AlphaZero was born in London, the brainchild of a UK company called DeepMind, which develops computer programs that learn for themselves. It was bought by Google for £400 million in 2014.

The complex piece of programming that created AlphaZero can be more simply described as an algorithm — a set of mathematical instructions or rules that can work out answers to problems.

The other term for it is a ‘deep machine learning’ tool. The more data that an AI such as AlphaZero processes, the more it teaches itself — by reprogramming itself with the new knowledge.

In this way, its problem-solving powers become stronger all the time, multiplying its intelligence at speeds and scales far beyond the abilities of a human brain. As a result it is unconstrained by the limits of human thinking, as its success in chess proved.

But the real purpose of such artificial intelligence goes far beyond playing board games against other boxes of silicon chips. It is already starting to make life-or-death decisions in the high-tech world of cancer diagnosis.

It is being trialled at NHS hospitals in London, including University College London Hospital (UCLH) and Moorfields Eye Hospital.

At UCLH, a system is being developed in which an AI developed by DeepMind will analyse scans of patients with cancers of the head and neck, which afflict more than 11,000 people a year in the UK.

Google experts say the AI should be able to teach itself to read these scans ever quicker and more accurately than any human, so radiation can be more precisely targeted at tumours while minimising damage to healthy tissues in the brain and neck. What currently takes doctors and radiologists four hours could be done in less than an hour.

Meanwhile, at Moorfields, a DeepMind AI will analyse the 3,000 or so high-tech eye scans carried out each week. Currently, only a handful of experts can interpret the results, which may cause delays in treatment. It is believed that AI will be able to identify problem scans faster.

On the surface, it looks like a win-win for patients and the NHS. But there are major issues. The first is privacy — the London hospital trials have involved handing over the scans of more than a million NHS patients to Google.

This is causing alarm among privacy campaigners and academics. Dr Julia Powles, who works on technology law and policy at Cambridge University, says ‘Google is getting a free pass for swift and broad access into the NHS, on the back of unproven promises of efficiency and innovation’.

Dr Powles adds: ‘We do not know — and have no power to find out — what Google and DeepMind are really doing with NHS patient data.’

Google has tried to address the criticisms of its project by declaring that all data access will be subject to NHS monitoring, but this is an organisation that has long had to contend with allegations of prying into people’s data for commercial advantage.

It faces court action in the UK over claims it unlawfully harvested information from 5.4 million UK users by bypassing privacy settings on their iPhones. The group taking action, called Google You Owe Us, alleges Google placed ‘cookies’ (used to collect information from devices to deliver tailored adverts) on users’ phones without their knowledge or permission.

Google has responded: ‘This is not new. We don’t believe it has any merit and we will contest it.’

But the insertion of a super-intelligent AI into NHS decision-making procedures brings an infinitely more worrying concern.

It is an open secret that the NHS effectively rations access to care — through waiting lists, bed numbers and limiting availability of drugs and treatments — as it will never have enough funds to give everyone the service they need.

The harsh reality is that some deserving people lose out.

The harsher alternative is to be coldly rational by deciding who and who not to treat. It would be most cost-effective to exterminate terminally ill or even chronically ill patients, or sickly children. Those funds would be better spent on patients who might be returned to health — and to productive, tax-paying lives.

This is, of course, an approach too repugnant for civilised societies to contemplate. But decision-making AIs such as AlphaZero don’t use compassionate human logic because it gets in the way. (The ‘Zero’ in that program’s name indicates it needs no human input.)

The same sort of computer mind that can conjure up new chess moves might easily decide that the most efficient way to streamline the health service would be to get rid of the vulnerable and needy.

How we keep control of deep learning machines that will soon be employed in every area of our lives is a challenge that may well prove insurmountable. Already top IT experts warn that deep-learning algorithms can run riotously out of control because we don’t know what they’re teaching themselves.

And the programs can develop distinctly worrying ideas. A system developed in America for probation services to predict the risk of parole-seekers reoffending was recently discovered to have quickly become unfairly racially biased.

DeepMind certainly acknowledges the potential for problems. In October it launched a research team to investigate the ethics of AI decision-making. The team has eight full-time staff at the moment, but DeepMind wants to have around 25 in a year’s time.

But, one wonders, are 25 human minds enough to take on the super-intelligent, constantly learning and strategising powers of a monstrously developed AI?

The genie is out of the bottle. In building a machine that may revolutionise healthcare, we have created a system that can out-think us in a trice. It’s a marvel of human ingenuity. But we must somehow ensure that we stay in charge — or it may be checkmate for humanity.

http://www.dailymail.co.uk/sciencetech/ ... hours.html

Maybe AI will destroy us before we destroy the planet.

Reset or power down will work. Pulling the processor too. As long as the AI needs a power source and has removable parts, we can control it. Simple I would think. Then again, I don't think like an AI.

For now - at least until the machines learn to fight back.

But joking aside - this raises the concept of machines that design the next generation of machines who, in turn design the next generation of machines who, ... Long a staple of science fiction, at some point we end up with machines that human engineers don't begin to understand.

Definitely within the realm of the possible, IMO.

Colossus: The Forbin Project

2001: A Space Odyssey

I, Robot

You can't say we haven't been warned... what was science "fiction" is now science fact. We either stop the nonsense or learn to live with it. I think AI is making that choice for us.

Or, for self-preservation we become Borg

Didn't want to start a new thread (and it is from the Daily Star) but this is interesting and follows from earlier posts

Conscious killer robots to 'bide their time' to ENSLAVE humans
KILLER robots with a conscience may become so advanced they could enslave the human race before killing our species, a leading expert has warned.
By David Rivers

Some scientists are lauding the rapid development of artificial intelligence but others fear their progress will prove fatal.

Expert opinion is split on the possibility of AI developing consciousness, which some warn could be used by machines to rebel against humans and kill us.

https://www.dailystar.co.uk/news/latest ... ubhash-kak

Still a stretch but not inconceivable and likely the best reason to never let the military control AI... NEVER.

The real problem isn't when the military controls AI, but when AI becomes capable of controlling itself.

I'm afraid that's already happening. I saw some younger folks being interviewed on Discovery Channel because they voluntarily had different brain implants installed. I can't remember what the various implants did because I was too freaked out to care.

That's the tipping point right there. My fear is that we are going to dive into AI and we won't have time to prevent or react to reaching that point.

maybe we will all become AI, and leave this corporeal plane to the lesser creatures!