Layoffs and Job Reductions

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    ‘Training My Replacement’: Inside a Call Center Worker’s Battle With A.I.

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    To many people, chatbots and other technology feel like a ticking time bomb, sure to explode their work. But to some, the threat is already here.“This A.I. stuff is getting really crazy.”The voices of Charlamagne tha God, host of the nationally syndicated radio show “The Breakfast Club,” and his guests Mandii B and WeezyWTF filled Ylonda Sherrod’s car as she sped down Interstate 10 in Mississippi during her daily commute. Her favorite radio show was discussing artificial intelligence, specifically an A.I.-generated sample of Biggie.“Sonically, it sounds cool,” Charlamagne tha God said. “But it lacks soul.”WeezyWTF replied: “I’ve had people ask me like, ‘Oh, would you replace people that work for you with A.I.?’ I’m like, ‘No, dude.’”Ms. Sherrod nodded along emphatically, as she drove past low-slung brick homes and strip malls dotted with Waffle Houses. She arrived at the AT&T call center where she works, feeling unsettled. She played the radio exchange about A.I. for a colleague.“Yeah, that’s crazy,” Ms. Sherrod’s friend replied. “What do you think about us?”Like so many millions of American workers, across so many thousands of workplaces, the roughly 230 customer service representatives at AT&T’s call center in Ocean Springs, Miss., watched artificial intelligence arrive over the past year both rapidly and assuredly, like a new manager settling in and kicking up its feet.Suddenly, the customer service workers weren’t taking their own notes during calls with customers. Instead, an A.I. tool generated a transcript, which their managers could later consult. A.I. technology was providing suggestions of what to tell customers. Customers were also spending time on phone lines with automated systems, which solved simple questions and passed on the complicated ones to human representatives.Ms. Sherrod, 38, who exudes quiet confidence at 5-foot-11, regarded the new technology with a combination of irritation and fear. “I always had a question in the back of my mind,” she said. “Am I training my replacement?”Ms. Sherrod, a vice president of the call center’s local union chapter, part of the Communications Workers of America, started asking AT&T managers questions. “If we don’t talk about this, it could jeopardize my family,” she said. “Will I be jobless?”In recent months, the A.I. chatbot ChatGPT has made its way into courtrooms, classrooms, hospitals and everywhere in between. With it has come speculation about A.I.’s impact on jobs. To many people, A.I. feels like a ticking time bomb, sure to explode their work. But to some, like Ms. Sherrod, the threat of A.I. isn’t abstract. They can already feel its effects.When automation swallows up jobs, it often comes for customer service roles first, which make up about three million jobs in America. Automation tends to overtake tasks that repeat themselves; customer service, already a major site for outsourcing of jobs abroad, can be a prime candidate.The AT&T call center where Ms. Sherrod works, in Ocean Springs, Miss. The company has increasingly been integrating A.I. into many parts of its customer service work.Bryan Tarnowski for The New York TimesA majority of U.S. call center workers surveyed this year reported that their employers were automating some of their work, according to a 2,000-person survey from researchers at Cornell. Nearly two-thirds of respondents said they felt it was somewhat or very likely that increased use of bots would lead to layoffs within the next two years.Technology executives point out that fears of automation are centuries old — stretching back to the Luddites, who smashed and burned textile machines — but have historically been undercut by a reality in which automation creates more jobs than it eliminates.But that job creation happens gradually. The new jobs that technology creates, like engineering roles, often demand complex skills. That can create a gap for workers like Ms. Sherrod, who found what seemed like a golden ticket at AT&T: a job that pays $21.87 an hour and up to $3,000 in commissions a month, she said, and provides health care and five weeks of vacation — all without the requirement of a college degree. (Less than 5 percent of AT&T’s roles require a college education.)Customer service, to Ms. Sherrod, meant that someone like her — a young Black woman raised by her grandmother in small-town Mississippi — could make “a really good living.”“We’re breaking generational curses,” Ms. Sherrod said. “That’s for sure.”In Ms. Sherrod’s childhood home, a one-story, brick A-frame in Pascagoula, money was tight. Her mother died when she was 5. Her grandmother, who took her in, didn’t work, but Ms. Sherrod remembers getting food stamps to take to the corner bakery whenever the family could spare them. Ms. Sherrod cries recalling how Christmas used to be. The family had a plastic tree and tried to make it festive with ornaments, but there was typically no money for presents.To students at Pascagoula High School, she recalled, job opportunities seemed limited. Many went to Ingalls Shipbuilding, a shipyard where work meant blistering days under the Mississippi sun. Others went to the local Chevron refinery.“It felt like I was going to always have to do hard labor in order to make a living,” Ms. Sherrod said. “It seemed like my lifestyle would never be something with ease, something I enjoyed.”When Ms. Sherrod was 16, she worked at KFC, making $6.50 an hour. After graduating from high school, and dropping out of community college, she moved to Biloxi, Miss., to work as a maid at IP Casino, a 32-story hotel, where her sister still works. Within months of working at the casino, Ms. Sherrod felt the toll of the job on her body. Her knees ached, and her back thrummed with pain. She had to clean at least 16 rooms a day, fishing hair out of bathroom drains and rolling up dirty sheets.When a friend told her about the jobs at AT&T, the opportunity seemed, to Ms. Sherrod, impossibly good. The call center was air-conditioned. She could sit all day and rest her knees. She took the call center’s application test twice, and on her second time she got an offer, in 2006, starting out making $9.41 an hour, up from around $7.75 at the casino.“That $9 meant so much to me,” she recalled.So did AT&T, a place where she kept growing more comfortable: “Out of 17 years, my check hasn’t ever been wrong,” she said. “AT&T, by far, is the best job in the area.”‘Your Biggest Nightmare’Sam Altman, the chief executive of OpenAI, testified before a Senate subcommittee in May. In recent months, OpenAI’s ChatGPT chatbot has made its way into courtrooms.Win McNamee/Getty ImagesThis spring, lawmakers in Washington hauled forward the makers of A.I. tools to begin discussing the risks posed by the products they’ve unleashed.“Let me ask you what your biggest nightmare is,” Senator Richard Blumenthal, Democrat of Connecticut, asked OpenAI’s chief executive, Sam Altman, after sharing that his own greatest fear was job loss.“There will be an impact on jobs,” said Mr. Altman, whose company developed ChatGPT.That reality has already become clear. The British telecommunications company BT Group announced in May that it would cut up to 55,000 jobs by 2030 as it increasingly relied on A.I. The chief executive of IBM said A.I. would affect certain clerical jobs in the company, eliminating the need for up to 30 percent of some roles, while creating new ones.AT&T has begun integrating A.I. into many parts of its customer service work, including routing customers to agents, offering suggestions for technical solutions during customer calls and producing transcripts. The company said all of these uses were intended to create a better experience for customers and workers. “We’re really trying to focus on using A.I. to augment and assist our employees,” said Nicole Rafferty, who leads AT&T’s customer care operation and works with staff members nationwide.“We’re always going to need in-person engagement to solve those complex customer situations,” Ms. Rafferty added. “That’s why we’re so focused on building A.I. that supports our employees.”Economists studying A.I. have argued that it most likely won’t prompt sudden widespread layoffs. Instead, it could gradually eliminate the need for humans to do certain tasks — and make the remaining work more challenging.“The tasks left to call center workers are the most complex ones, and customers are frustrated,” said Virginia Doellgast, a professor at the New York State School of Industrial and Labor Relations at Cornell.Ms. Sherrod has always enjoyed getting to know her customers. She said she took about 20 calls a day, from 9:30 to 6:30. While she’s resolving technical issues, she listens to why people are calling in, and she hears from customers who just bought new homes, were married or lost family members.“It’s sort of like you’re a therapist,” she said. “They tell you their life stories.”She is already finding her job growing more challenging with A.I. The automated technology has a hard time understanding Ms. Sherrod’s drawl, she said, so the transcripts from her calls are full of mistakes. Once the technology is no longer in a pilot phase, she won’t be able to make corrections. (AT&T said it was refining the A.I. products it used to prevent these kinds of errors.)It seems likely, to Ms. Sherrod, that at some point as the work gets more efficient, the company won’t need quite as many humans answering calls in its centers. Ms. Sherrod wonders, too: Doesn’t the company trust her? For two consecutive years, she won AT&T’s Summit Award, placing her in the top 3 percent of the company’s customer service representatives nationally. Her name was projected on the call center’s wall.“They gave everyone a little gift bag with a trophy,” Ms. Sherrod recalled. “That meant a lot to me.”‘Look at My Life’Ms. Sherrod at the Communications Workers of America’s regional labor union office where she is a vice president.Bryan Tarnowski for The New York TimesAs companies like AT&T embrace A.I., experts are floating proposals meant to protect workers. There’s the possibility of training programs helping people make the transition to new jobs, or a displacement tax levied on employers when a worker’s job is automated but the person is not retrained.Labor unions are wading into these battles. In Hollywood, the unions representing actors and television writers have fought to limit the use of A.I. in script writing and production.Just 6 percent of the country’s private-sector workers are represented by unions. Ms. Sherrod is one, and she has begun fighting her company for more information about its A.I. plans, sitting in her union hall nine miles from the call center, where she works under a Norman Rockwell painting of a wireline technician.For years, Ms. Sherrod’s demands on behalf of the union have been rote. As a steward, she typically asked the company to reduce penalties for colleagues who got in trouble.But for the first time, this summer, she feels that she is taking up an issue that will affect workers beyond AT&T. She recently asked her union to establish a task force focused on A.I.In late May, Ms. Sherrod was invited by the Communications Workers of America to travel to Washington, where she and dozens of other workers met with the White House’s Office of Public Engagement to share their experience with A.I.A warehouse worker described being monitored with A.I. that tracked how speedily he moved packages, creating pressure for him to skip breaks. A delivery driver said automated surveillance technologies were being used to monitor workers and look for potential disciplinary actions, even though their records weren’t reliable. Ms. Sherrod described how the A.I. in her call center created inaccurate summaries of her work.Her son, Malik, was astonished to hear that his mother was headed to the White House. “When my dad told me about it, at first I said, ‘You’re lying,’” he said with a laugh. With her pay and commissions, Ms. Sherrod has been able to buy a home and give her son, Malik, the childhood she never had.Bryan Tarnowski for The New York TimesMs. Sherrod sometimes feels that her life presents an argument for a type of job that one day might no longer exist.With her pay and commissions, she has been able to buy a home. She lives on a sunny street full of families, some of whom work in fields like nursing and accounting. She is down the road from a softball field and playground. On the weekends, her neighbors gather for cookouts. The adults eat snowballs, while the children play basketball and set up splash pads.Ms. Sherrod takes pride in buying Malik anything he asks for. She wants to give him the childhood she never had.“Call center work — it’s life-changing,” she said. “Look at my life. Will all that be taken away from me?” More

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    Job Openings Dipped in May, a Sign of Continued Cooling

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    The NewsJob openings fell in May while the number of workers quitting their jobs increased, the Labor Department reported Thursday.There were 9.8 million job openings in May, down from 10.3 million in April, according to the Job Openings and Labor Turnover Survey, known as JOLTS. The report shows that the labor market is maintaining ample opportunities for workers, but that it is losing momentum.“This is a labor market that is moderating, where things are cooling down, but is still hot,” said Nick Bunker, the director of North American economic research at the job search website Indeed.The quits rate, which is often used to gauge a worker’s confidence in the job market, increased in May, particularly in the health care, social assistance and construction industries. A rise in quitting often signals workers’ confidence that they will be able to find other work, often better paying. But fewer workers are quitting their jobs than were doing so last year at the height of what was called the “great resignation.”Layoffs were relatively steady after decreasing in previous months, a sign that employers are hesitant to let go of workers.College students waiting to speak with representatives of tech companies at a job fair in Atlanta.Alex Slitz/Associated PressWhy It Matters: The Fed’s next move on interest rates is unclear.Policymakers at the Federal Reserve have worried about the strength of the labor market as they continue to tackle stubbornly high inflation.The Fed chose to leave interest rates unchanged in its June meeting after 10 consecutive increases. The JOLTS report is one of several factors that will inform the Fed’s next decision on rates.Some economists worry that the Fed will push interest rates too high and set off a recession.But the JOLTS report as well as previous economic temperature checks have led others to believe that a “soft landing” — an outcome in which inflation eases to the Fed’s goal of 2 percent without a recession — is within reach. The biggest question is whether wage growth can continue to cool as workers switch jobs, said Aaron Terrazas, chief economist at the career site Glassdoor.“A tight labor market does not necessarily have to be inflationary,” he said.Background: A cooling labor market retains underlying strength.The labor market has remained resilient amid the Fed’s efforts to slow down the economy but has shown signs of cooling in recent months. Job openings were down for three consecutive months until April.Initial jobless claims during the week that ended Saturday, also released by the Labor Department on Thursday, nudged higher from the week before, though the four-week trend shows initial claims declining.Although job openings are cooling, the reading of 9.8 million in May is high compared with prepandemic levels. In 2019, for example, the monthly totals hovered around seven million.“To some degree, I worry we’ve become desensitized to numbers that were once upon a time eye-popping,” Mr. Terrazas said.What’s Next: The June jobs report comes Friday.The June employment report — another indicator closely watched by the Fed — will be released by the Labor Department on Friday. Economists surveyed by Bloomberg expect the report to show a gain of 225,000, down from the initial reading of 339,000 for May.The unemployment rate jumped to 3.7 percent in May, from 3.4 percent a month earlier. Although still historically low, the rate was the highest since October and exceeded analysts’ expectations.Fed policymakers will hold their next meeting July 25-26. More

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    Job Openings Rose in April, Defying Cooling Trend

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    After three consecutive months of declines, job openings jumped in April, reaching 10.1 million, the Labor Department reported on Wednesday.The surge signals that job opportunities are withstanding the economic pressures that have led many to believe that the American economy may soon enter a recession.At the same time, the report — known as JOLTS, or the Job Openings and Labor Turnover Survey — showed that the labor market was far less feverish than it was a year earlier.The quits rate — viewed as an indicator of how confident workers are in leaving a job and finding employment elsewhere — was 3 percent, seasonally adjusted, in April 2022. Since then, it has retreated to 2.4 percent, just above its prepandemic peak. And the hiring rate was unchanged from March, which was the lowest since December 2020.Layoffs, however, decreased again, showing that employers are hesitant to let go of employees brought on board during this recovery.A bagel shop in Brooklyn advertised that it had positions to fill.Earl Wilson/The New York TimesThe data complicates the interest-rate outlook.The jump in openings may put pressure on the Federal Reserve to take interest rates even higher.The statistical relationship between high job vacancies, as calculated by the government, and low unemployment has been frequently cited by the Federal Reserve chair, Jerome H. Powell, as a key sign of the labor market’s being “unsustainably hot” and “clearly out of balance, with demand for workers substantially exceeding the supply of available workers.”But even as some economists remain unsatisfied with the progress on subduing prices, others worry that reliance on job openings as a core measure of labor market balance may lead the Fed to keep the cost of borrowing for businesses and households too high for too long, prompting a harsher downturn than necessary.“The quits rate is nearly back to prepandemic levels, the hires rate has already reverted to prepandemic pace,” Skanda Amarnath, the executive director of Employ America, a nonprofit that supports tight labor markets, wrote in a note. “JOLTS data should not drastically color this broader assessment of labor market tightness but will matter at the margins for the Fed’s own perception of labor market heat.”Some question how much weight to give the report.After peaking at a record of around 12 million in March 2022, job openings as measured by the government have fallen overall. For the past year, a mix of strong hiring for positions that were already listed and a decline in business sentiment has led to a pullback in newly created listings. But the April uptick is at least a pause in recent trends.Some economists think the JOLTS report should be taken with a grain of salt. Gregory Daco, the chief economist at EY-Parthenon, said the bump in listings could reflect summer hiring in the rebounding service sector, though he added, “I’d want to see June before assuming that summer hiring is stronger than last year.”The report is based on a survey of about 21,000 nonfarm business and government establishments. The economic research team at Goldman Sachs has made the case that since the response rate to the JOLTS report has fallen sharply since the start of the pandemic, “these findings argue for currently treating JOLTS less like the ‘true’ level of job openings.”The May jobs report will be the next gauge.The May employment report, to be released by the Labor Department on Friday, will fill out the labor market picture before Fed policymakers meet on June 13 and 14.Economists surveyed by Bloomberg expect the data to show the addition of 195,000 jobs on a seasonally adjusted basis, down from 253,000 in the initial report for April. Unemployment, which was 3.4 percent in April — matching the lowest level since 1969 — is expected to rise to 3.5 percent, and the month-over-month increase in wages is expected to ease. More

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    U.S. Employers Added 253,000 Jobs Despite Economic Worries

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    Employers added 253,000 jobs in April and unemployment fell to 3.4 percent, but the labor market’s strength complicates the Fed’s inflation fight.The labor market is still defying gravity — for now.Employers added 253,000 jobs in April on a seasonally adjusted basis, the Labor Department reported Friday, in a departure from the cooling trend that had marked the first quarter and was expected to continue.The unemployment rate was 3.4 percent, down from 3.5 percent in March, and matched the level in January, which was the lowest since 1969. Wages also popped slightly, growing 4.4 percent over the past year.The higher-than-forecast job gain complicates the Federal Reserve’s potential shift toward a pause in interest rate increases. Jerome H. Powell, the Fed chair, said on Wednesday that the central bank might continue to raise rates if new data showed the economy wasn’t slowing enough to keep prices down.It’s also an indication that the failure of three banks and the resulting pullback on lending, which is expected to hit smaller businesses particularly hard, hasn’t yet hamstrung job creation.“All these things are telling us it’s not a hard stop; it’s creating a headwind, but not a debilitating headwind,” said Carl Riccadonna, the chief U.S. economist at BNP Paribas. “A gradual downturn is happening, but it sure is stubborn and persistent in the trend.” Despite the strong showing in April, the labor market continues to gently descend from blistering highs.Downward revisions to the previous two months’ data meaningfully altered the spring employment picture, subtracting a total of 149,000 jobs. That brings the three-month average to 222,000 jobs, a clear slowdown from the 400,000 added on average in 2022. Most economists expect a more marked downshift later in the year.Jobs increased across industriesChange in jobs in April 2023, by sector More

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    Job Openings Slipped in March as Labor Market Continued Cooling

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    The NewsJob openings in March fell to 9.6 million, the Labor Department reported on Tuesday, the lowest level in two years and a further indication that the slowdown in the labor market is becoming more entrenched. It was the third straight month that job openings have declined, a notable development after last year, when job openings bounced around month to month.“The labor market has been, through Q1, a resilient anchor for the economy,” said Aaron Terrazas, chief economist at the career site Glassdoor. “But we’re getting more and more signals that those foundations are really starting to tremble.”Transportation, warehousing and utilities, professional and businesses services and construction were among the sectors that posted large drops in open positions, as higher interest rates and fears of a pullback in consumer spending continued to discourage employers from hiring.Other readings in Tuesday’s report underscored the labor market’s restraint. The total number of open jobs per available unemployed worker, a ratio that the Federal Reserve has been watching as it tries to tame rapid inflation, decreased slightly to 1.6, the lowest level since October 2021. Layoffs, which have remained historically low outside of some big-name companies in the tech sector, rose to 1.8 million in March. The number of workers voluntarily leaving their jobs — a sign that workers are finding opportunities to switch to better-paid positions, or are confident they can do so — was relatively unchanged but has been inching down.Policymakers are interested in the number of open jobs per available unemployed worker, which has remained stubbornly high for months.Hiroko Masuike/The New York TimesWhy It Matters: The last major data release before the Fed’s rate decision.The report released on Tuesday, called the Job Openings and Labor Turnover Survey, or JOLTS, is one of many that the Federal Reserve watches closely each month to gauge its efforts to slow the economy and ease inflation without spurring widespread layoffs.The Fed has been raising interest rates for more than a year as it tries to bring down rapid inflation to its target of 2 percent. It will announce its next decision on Wednesday; officials are widely expected to raise rates by a quarter percentage point, to just above 5 percent. The JOLTS report is the last major piece of data that Fed policymakers will see before their decision.In particular, they are interested in the number of open jobs per available unemployed worker, which has remained stubbornly high for months. That mismatch has helped to drive up pay and contributed to inflation. More recently, however, the ratio has been declining, a welcome sign for the Fed that underscores the labor market’s gradual slowdown.Officials also track other details in the report, including the number of layoffs and workers who quit their jobs. The Background: Labor market resilience complicates the Fed’s plan.Month after month, the labor market has remained robust, defying expectations and complicating the Fed’s efforts to cool the economy. The latest evidence came on Friday, when government data showed that wages and salaries for private-sector workers were up 5.1 percent in March from a year earlier, the same growth rate as in December.Still, higher interest rates are taking a toll on the job market, albeit gradually. Employers added 236,000 jobs in March, a healthy number but down from an average of 334,000 jobs added over the prior six months. The year-over-year growth in average hourly earnings also fell to its slowest pace since July 2021.What’s Next: A big week for economic news.The report on Tuesday kicked off a big few days for economic news.In addition to the Fed decision on Wednesday, there will be the Labor Department’s monthly snapshot of the employment situation on Friday. The report, based on April data, will provide a clearer and more up-to-date picture of the labor market, including the change in the number of jobs — a figure that has been positive for 27 straight months — and the unemployment rate. More

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    California Economy Is on Edge After Tech Layoffs and Studio Cutbacks

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    As recession fears persist, the troubles in major industries have hurt tax revenues, turning the state’s $100 billion surplus into a deficit.California has often been at the country’s economic forefront. Now, as fears of a national recession continue to nag, the state is hoping not to lead the way there.While the California economy maintains its powerhouse status, outranking even those of most countries, the state’s most-powerful sectors — including tech companies and supply chain logistics — have struggled to keep their footing, pummeled by high interest rates, investor skittishness, labor strife and other turmoil.Even the weather hasn’t cooperated. Severe flooding throughout much of the winter, caused by atmospheric rivers, has left farming communities in the Central Valley devastated, causing hundreds of millions of dollars in crop losses.Thousands of Californians have been laid off in the last few months, the cost of living is increasingly astronomical, and Gov. Gavin Newsom revealed in January that the state faced a $22.5 billion deficit in the 2023-24 fiscal year — a plummet from the $100 billion surplus a year ago.“It’s an EKG,” Mr. Newsom said at the time, comparing a graph of the state’s revenue to the sharp spikes and drops of the heart’s electrical activity. “That sums up California’s tax structure. It sums up the boom-bust.”The structure, which relies in large part on taxing the incomes of the wealthiest Californians, often translates into dips when Silicon Valley and Wall Street are uneasy, as they are now. Alphabet, the parent company of Google, one of the state’s most prominent corporations, said in January that it was cutting 12,000 workers worldwide, and Silicon Valley Bank, a key lender to tech start-ups, collapsed last month, sending the federal government scrambling to limit the fallout.This has coincided with a drop in venture capital funding as rising interest rates and recession fears have led investors to become more risk-averse. That money, which declined 36 percent globally from 2021 to 2022, according to the management consulting firm Bain & Company, is critical to Silicon Valley’s ability to create jobs.“The tech sector is the workhorse of the state’s economy, it’s the backbone,” said Sung Won Sohn, a finance and economics professor at Loyola Marymount University. “These are high earners who might not be able to carry the state as much as they did in the past.”Gov. Gavin Newsom, center, said in January that the state faced a $22.5 billion deficit in the 2023-24 fiscal year, after a $100 billion surplus a year ago.Lipo Ching/EPA, via ShutterstockEntertainment, another pillar of California’s economy, has also been in retreat as studios adjust to new viewing habits. Disney, based in Burbank, announced in February that it would eliminate 7,000 jobs worldwide.In California alone, employment in the information sector, a category that includes technology and entertainment workers, declined by more than 16,000 from November to February, according to the latest Bureau of Labor Statistics data, which predates a recent wave of job cuts in March.A recent survey from the nonpartisan Public Policy Institute of California found widespread pessimism about the economy. Two-thirds of respondents said they expected bad economic times for the state in the next year, and a solid majority — 62 percent — said they felt the state was already in a recession.When Mr. Newsom announced the deficit earlier in the year, he vowed not to dip into the state’s $37 billion in reserves, and instead called for pauses in funding for child care and reduced funding for climate change initiatives. Joe Stephenshaw, director of the California Department of Finance, said in an interview that he and top economists had begun to spot points of concern — persistent inflation, higher interest rates and a turbulent stock market — on the state’s horizon during the second half of last year.“Those risks became realities,” said Mr. Stephenshaw, an appointee of the governor.He acknowledged that the problem was driven largely by declines in high earners’ incomes, including from market-based compensation, such as stock options and bonus payments. As activity slowed, he said, interest rates rose and stock prices fell.But the state’s problems aren’t limited to the tech industry.Cargo processing at the Port of Los Angeles in February was down 43 percent from the year before.Alex Welsh for The New York TimesCalifornia’s robust supply chain, which drives nearly a third of the state’s economy, has continued to buckle under stresses from the pandemic and an ongoing labor fight between longshoremen and port operators up and down the West Coast, which has prompted many shipping companies to rely instead on ports along the Gulf and East Coasts. Cargo processing at the Port of Los Angeles, a key entry point for shipments from Asia, was down 43 percent in February, compared with the year before.“The longer it drags on, the more cargo will be diverted,” said Geraldine Knatz, a professor of the practice of policy and engineering at the University of Southern California, who was executive director of the Port of Los Angeles from 2006 to 2014. Still, wherever the economic cycle is leading, California heads into it with some strengths. Although unemployment in February, at 4.3 percent, was higher than in most states, it was lower than the rate a year earlier. In the San Francisco and San Jose metropolitan areas, unemployment was below 3.5 percent, better than the national average.Over decades, California’s economy has historically seen the highest of highs and the lowest of lows, part of the state’s boom-bust history. During the recession of the early 1990s, largely driven by cuts to aerospace after the end of the Cold War, California was hit much harder than other parts of the country.Zeeshan Haque is looking for a job after losing his position as a software engineer at Google. “It’s just very competitive at this time because of so many layoffs,” he said.Mark Abramson for The New York TimesIn March, the U.C.L.A. Anderson Forecast, which provides economic analysis, released projections for both the nation and California, pointing to two possible scenarios — one in which a recession is avoided and another in which it occurs toward the end of this year.“Even in our recession scenario we have a mild recession,” said Jerry Nickelsburg, director of the Anderson Forecast.Regardless of which scenario pans out, California’s economy is likely to be better off than the national one, according to the report, which cited increased demand for software and defense goods, areas in which California is a leader. Mr. Nickelsburg also said the state’s rainy-day fund was healthy enough to withstand the decline in tax revenues. But that shortfall could complicate the speed at which Mr. Newsom can carry out some of his ambitious, progressive policies. In announcing the deficit, Mr. Newsom scaled back funding for climate proposals to $48 billion, from $54 billion.The fiscal outlook also casts a cloud over progressive proposals, widely supported by Democrats, who have a supermajority in the Legislature.A state panel that has been debating reparations for Black Californians is set to release its final report by midyear. Economists have projected that reparations could cost $800 billion to compensate for overpolicing, housing discrimination and disproportionate incarceration rates. Once the panel releases its report, it will be up to lawmakers in Sacramento to decide how much state revenue would support reparations — a concept that Mr. Newsom has endorsed.Through all this, one thing has remained constant: Many Californians say their biggest economic concern is housing costs.The median value for a single-family home in California is about $719,000 — up nearly 1 percent from last year, according to Zillow — and recent census data shows that some of the state’s biggest metro areas, including Los Angeles and San Francisco Counties, have continued to shrink. (In Texas, where many Californians have relocated, the median home value is about $289,000.)Still, some Californians remain optimistic.Zeeshan Haque, a former software engineer at Google, learned in January that he was being laid off. His last day was March 31.“It was out of nowhere and very abrupt,” said Mr. Haque, 32, who recently moved from the Bay Area to Los Angeles.He bought a $740,000 house in the city’s Chatsworth neighborhood in February and spent time focusing on renovations. But in recent weeks, he has begun to look for a new job. He recently updated his LinkedIn avatar to show the hashtag #opentowork and said he hoped to land a new job soon.“It’s just very competitive at this time because of so many layoffs,” he said.Ben Casselman More

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    Job Openings Fell in February, JOLTS Report Shows

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    The U.S. job market continues to ease off its red-hot pace, a government report shows, but there are still more openings than unemployed workers.Demand for workers in the United States eased in February, a sign that the red-hot labor market continues to cool off somewhat.There were 9.9 million job openings in February, down from 10.6 million on the last day of January, the Labor Department reported Tuesday in the Job Openings and Labor Turnover Survey, known as JOLTS.The drop in open positions is a signal that the labor market is slowing, but the report included data that points to a still-healthy environment for workers: Four million workers quit their jobs during the month, a slight increase from January, and the number of layoffs decreased slightly to 1.5 million.There were 1.7 jobs open for every unemployed worker in February, a decline from 1.9 in January. The Federal Reserve has been paying close attention to that ratio as it looks to slow hiring, part of its effort to contain inflation.Until recent months, the number of available jobs had risen substantially as the economy recovered from the pandemic recession, with companies rushing to hire workers after public health restrictions were rolled back.“The general trend in JOLTS in recent months has been a gradual movement back toward more normal labor market dynamics,” said Julia Pollak, the chief economist at ZipRecruiter. “This looks more like a rebalancing. Job openings were way up in the stratosphere.”The gradual slowing may be encouraging for policymakers. Fed officials worry that a tight job market is contributing to inflation, as employers may feel pressure to raise wages to compete for workers and then pass along price increases to consumers. The number of available openings has remained high in spite of climbing borrowing costs.The central bank has raised interest rates to about 5 percent, from near zero, over the past year, aiming to make it costlier for companies to expand and consumers to spend. But it also wants to avoid setting off widespread layoffs or causing lasting damage to the labor market.“We’re still in a market that is quite strong,” said Nick Bunker, economic research director for North America at the Indeed Hiring Lab. But, he added, “the cool-off is more apparent now.”One measure of inflation that the Fed watches closely — the Personal Consumption Expenditures index — showed that price gains slowed substantially in February, to 5 percent on an annual basis, down from 5.3 percent in January.Despite high-profile job cuts in the tech sector, layoffs overall have been historically low, a sign that employers may be reluctant to part with workers hired during pandemic-era spikes. The number of workers quitting their jobs voluntarily — a sign that they are confident they can find work elsewhere — rose slightly in February, to four million.“The layoffs we’re seeing all over the media in tech and finance are being more than offset by an absence of layoffs and discharges in the Main Street economy,” Ms. Pollak said. “Labor-market dynamics look pretty favorable to workers still,” she added.JOLTS is considered a lagging indicator, telling more about conditions in the recent past than offering information about what may come. On Friday, the Labor Department will release employment data for March. Economists surveyed by Bloomberg expect the report to show that employers added about 240,000 jobs, a slight slowdown from February but still a pace of hiring that reflects a robust labor market. More

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    Tinkering With ChatGPT, Workers Wonder: Will This Take My Job?

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    In December, the staff of the American Writers and Artists Institute — a 26-year-old membership organization for copywriters — realized that something big was happening.The newest edition of ChatGPT, a “large language model” that mines the internet to answer questions and perform tasks on command, had just been released. Its abilities were astonishing — and squarely in the bailiwick of people who generate content, such as advertising copy and blog posts, for a living.“They’re horrified,” said Rebecca Matter, the institute’s president. Over the holidays, she scrambled to organize a webinar on the pitfalls and potential of the new artificial-intelligence technology. More than 3,000 people signed up, she said, and the overall message was cautionary but reassuring: Writers could use ChatGPT to complete assignments more quickly, and move into higher-level roles in content planning and search-engine optimization.“I do think it’s going to minimize short-form copy projects,” Ms. Matter said. “But on the flip side of that, I think there will be more opportunities for things like strategy.”OpenAI’s ChatGPT is the latest advance in a steady march of innovations that have offered the potential to transform many occupations and wipe out others, sometimes in tandem. It is too early to tally the enabled and the endangered, or to gauge the overall impact on labor demand and productivity. But it seems clear that artificial intelligence will impinge on work in different ways than previous waves of technology.The positive view of tools like ChatGPT is that they could be complements to human labor, rather than replacements. Not all workers are sanguine, however, about the prospective impact.Katie Brown is a grant writer in the Chicago suburbs for a small nonprofit group focused on addressing domestic violence. She was shocked to learn in early February that a professional association for grant writers was promoting the use of artificial-intelligence software that would automatically complete parts of an application, requiring the human simply to polish it before submitting.The platform, called Grantable, is based on the same technology as ChatGPT, and it markets itself to freelancers who charge by the application. That, she thought, clearly threatens opportunities in the industry.“For me, it’s common sense: Which do you think a small nonprofit will pick?” Ms. Brown said. “A full-time-salary-plus-benefits person, or someone equipped with A.I. that you don’t have to pay benefits for?”Artificial intelligence and machine learning have been operating in the background of many businesses for years, helping to evaluate large numbers of possible decisions and better align supply with demand, for example. And plenty of technological advancements over centuries have decreased the need for certain workers — although each time, the jobs created have more than offset the number lost.Guillermo Rubio has found that his job as a copywriter has changed markedly since he started using ChatGPT to generate ideas for blog posts.In-camera double exposure by Mark Abramson for The New York TimesChatGPT, however, is the first to confront such a broad range of white-collar workers so directly, and to be so accessible that people could use it in their own jobs. And it is improving rapidly, with a new edition released this month. According to a survey conducted by the job search website ZipRecruiter after ChatGPT’s release, 62 percent of job seekers said they were concerned that artificial intelligence could derail their careers.“ChatGPT is the one that made it more visible,” said Michael Chui, a partner at the McKinsey Global Institute who studies automation’s effects. “So I think it did start to raise questions about where timelines might start to be accelerated.”That’s also the conclusion of a White House report on the implications of A.I. technology, including ChatGPT. “The primary risk of A.I. to the work force is in the general disruption it is likely to cause to workers, whether they find that their jobs are newly automated or that their job design has fundamentally changed,” the authors wrote.For now, Guillermo Rubio has found that his job as a copywriter has changed markedly since he started using ChatGPT to generate ideas for blog posts, write first drafts of newsletters, create hundreds of slight variations on stock advertising copy and summon research on a subject about which he might write a white paper.Since he still charges his clients the same rates, the tool has simply allowed him to work less. If the going rate for copy goes down, though — which it might, as the technology improves — he’s confident he’ll be able to move into consulting on content strategy, along with production.“I think people are more reluctant and fearful, with good reason,” Mr. Rubio, who is in Orange County, Calif., said. “You could look at it in a negative light, or you can embrace it. I think the biggest takeaway is you have to be adaptable. You have to be open to embracing it.”After decades of study, researchers understand a lot about automation’s impact on the work force. Economists including Daron Acemoglu at the Massachusetts Institute of Technology have found that since 1980, technology has played a primary role in amplifying income inequality. As labor unions atrophied, hollowing out systems for training and retraining, workers without college educations saw their bargaining power reduced in the face of machines capable of rudimentary tasks.The advent of ChatGPT three months ago, however, has prompted a flurry of studies predicated on the idea that this isn’t your average robot.One team of researchers ran an analysis showing the industries and occupations that are most exposed to artificial intelligence, based on a model adjusted for generative language tools. Topping the list were college humanities professors, legal services providers, insurance agents and telemarketers. Mere exposure, however, doesn’t determine whether the technology is likely to replace workers or merely augment their skills.Shakked Noy and Whitney Zhang, doctoral students at M.I.T., conducted a randomized, controlled trial on experienced professionals in such fields as human relations and marketing. The participants were given tasks that typically take 20 to 30 minutes, like writing news releases and brief reports. Those who used ChatGPT completed the assignments 37 percent faster on average than those who didn’t — a substantial productivity increase. They also reported a 20 percent increase in job satisfaction.A third study — using a program developed by GitHub, which is owned by Microsoft — evaluated the impact of generative A.I. specifically on software developers. In a trial run by GitHub’s researchers, developers given an entry-level task and encouraged to use the program, called Copilot, completed their task 55 percent faster than those who did the assignment manually.Those productivity gains are unlike almost any observed since the widespread adoption of the personal computer.“It does seem to be doing something fundamentally different,” said David Autor, another M.I.T. economist, who advises Ms. Zhang and Mr. Noy. “Before, computers were powerful, but they simply and robotically did what people programmed them to do.” Generative artificial intelligence, on the other hand, is “adaptive, it learns and is capable of flexible problem solving.”That’s very apparent to Peter Dolkens, a software developer for a company that primarily makes online tools for the sports industry. He has been integrating ChatGPT into his work for tasks like summarizing chunks of code to aid colleagues who may pick up the project after him, and proposing solutions to problems that have him stumped. If the answer isn’t perfect, he’ll ask ChatGPT to refine it, or try something different.“It’s the equivalent of a very well-read intern,” Mr. Dolkens, who is in London, said. “They might not have the experience to know how to apply it, but they know all the words, they’ve read all the books and they’re able to get part of the way there.”There’s another takeaway from the initial research: ChatGPT and Copilot elevated the least experienced workers the most. If true, more generally, that could mitigate the inequality-widening effects of artificial intelligence.On the other hand, as each worker becomes more productive, fewer workers are required to complete a set of tasks. Whether that results in fewer jobs in particular industries depends on the demand for the service provided, and the jobs that might be created in helping to manage and direct the A.I. “Prompt engineering,” for example, is already a skill that those who play around with ChatGPT long enough can add to their résumés.Since demand for software code seems insatiable, and developers’ salaries are extremely high, increasing productivity seems unlikely to foreclose opportunities for people to enter the field.That won’t be the same for every profession, however, and Dominic Russo is pretty sure it won’t be true for his: writing appeals to pharmacy benefit managers and insurance companies when they reject prescriptions for expensive drugs. He has been doing the job for about seven years, and has built expertise with only on-the-job training, after studying journalism in college.After ChatGPT came out, he asked it to write an appeal on behalf of someone with psoriasis who wanted the expensive drug Otezla. The result was good enough to require only a few edits before submitting it.“If you knew what to prompt the A.I. with, anyone could do the work,” Mr. Russo said. “That’s what’s really scares me. Why would a pharmacy pay me $70,000 a year, when they can license the technology and pay people $12 an hour to run prompts into it?”To try to protect himself from that possible future, Mr. Russo has been building up his side business: selling pizzas out of his house in southern New Jersey, an enterprise that he figures won’t be disrupted by artificial intelligence.Yet. More