Video – The Second Machine Age – Thoughts on New Technologies

Video

After the publication of their book, the Second Machine Age,  Andrew McAfee and Erik Brynjolfsson give an interview on their thoughts on the acceleration of technical progress and its impact on the economy, on the labor market and on education.

The first industrial revolution was an automation of physical tasks (steam machine). It helped to reduce physical efforts.The current industrial revolution is a cognitive revolution where due to rapid acquisition and accumulation of information, the machine can decide in place of men.

This will change dramatically the forms of labor. The two authors say that the change will  probably go faster than what we imagine. We will have to be reactive and proactive.

For information, visit their dedicated website http://www.secondmachineage.com/

Figures were revised on the French Labor Market

Last week I was surprised by the number of registered people at Pôle Emploi the labor French Agency. The number of registered dropped by 50 000 in August and it was perceived as too much with regard to the economic situation. (see here for my analysis)

Today the minister of labor has published a press release saying that there was a mistake in the number. Instead of -50 000 the number was comprised between -22 000 and – 29 000. The main reason is the following: someone who is already at Pôle Emploi has to check his registration every month. Five days before the last day to register, Pôle Emploi sends a SMS  to those who are late. There was a problem with the SMS and a large number of people did not receive the message.
There were too many radiations.

Is the number totally wrong or not? That’s the important question.
In my analysis mentioned above I said that there were two parts in the figure.
One reflects lower separation rate from companies. But the recovery is not perceived as strong enough to start hiring. I said that it was a very positive part of the figure as it means that companies start thinking differently about their activity and the labor market. This part of the analysis is unchanged and that’s good news for the French economy. It shows a change in behavior due to better prospects.
The other part of the figure is linked to radiations. The lack of precision for August implies that I will wait until September figures to make a new analysis.

What is puzzling with this publication is the fact that everyone has perceived that something was wrong even at the ministry of labor. There was a warning on the first page of the publication. But the figure was published. And once it is published it is considered as true.
Then if there was a doubt at the ministry why was it published? The other question is to know at what moment of the procedure it has been said that it was not worrisome to publish such a figure on which there is doubt. The press release doesn’t say anything on that but that’s probably the most fascinating part of the story.

French Labor Market: A change in regime? Yes but not for the good reasons

A French version with more details is available on my French blog

Numbers at the French labor agency (Pôle Emploi) have improved a lot in August. The number of people registered at Pole Emploi has dropped for the first time since April 2011. This clearly shows a more satisfying labor market behavior but there are so many surprising numbers in this report that we cannot imagine a homogenous improvement.

The first surprising number is this large drop in people registered. In August the number was -50 000. Such a number has not been seen since November 2000. It was a long time ago and growth was stronger than what is currently seen. In 2000 GDP growth was 3% and explained easily the labor market improvement. This is not currently the case. In the Budget for 2014 that has been presented today by the French government, expectations for 2013 GDP growth are just at a mere 0.1%. What is puzzling is that the carryover growth number for 2013 at the end of the first half is already 0.1%. This means that the government does not expect a stronger momentum for the third and the fourth quarters. (Carry-over growth at the end of the first half is the calculation of the average growth rate for 2013 with Q3 and Q4 GDP level equals to Q2 GDP number.) – There is still fragility in the French labor market. Continue reading

Two Remarks on Industrial Policy and on Employment

Industry is generally seen as a source of employment on a large-scale. This is often, at least implicitly, the reason to highlight the need for an industrial policy. It does not work like that now. Manufacturing activity grows but creates very few jobs. New technologies have taken over the production system, highlighting trends already evident for many years.
The American example illustrates this phenomenon. The rebound in industrial activity has been strong without creating a lot of jobs. It is this dynamic that must be now understood when we look at the manufacturing sector. Europe will not escape this. Continue reading

Change on the Labor Market in the Euro Area

In July, for the second month in a row, the number of unemployed has decreased in the Euro Area. We can see this change of the first chart below. This number was up every month during 25 months from May 2011 to May 2013. This is a real change. It’s a signal that the business cycle profile is changing. Companies’ firing behavior has changed. That’s what is important as it is the translation on the labor market that their expectations have changed. Continue reading