Make Me Smart May 11, 2022
Note: Marketplace podcasts are meant to be heard, with emphasis, tone and audio elements a transcript can’t capture. Transcripts are generated using a combination of automated software and human transcribers, and may contain errors. Please check the corresponding audio before quoting it.
Kai Ryssdal: It’s weird, by the way. Little weird, all I’m saying. Actually, I’m just not gonna look at you.
Kimberly Adams: Alright, well, we’ll keep our eyes down.
Kai Ryssdal: Not gonna look at you. Eyes down, straight ahead. Hey, everybody, I’m Kai Ryssdal. Welcome back to Make Me Smart making today make sense is what we’re doing on this pod.
Kimberly Adams: And I’m Kimberly Adams sitting in the D.C. bureau with Kai actively not looking at me.
Kai Ryssdal: No it’s just bizarre. So I’ve been down for some other stuff. And we’re we’re in a, you know, 10 by 10 little booth here. And it’s just bizarre. That’s all I’m saying.
Kimberly Adams: And don’t worry, we both tested negative for COVID Very recently. But thank you for joining us for Whaddya Want to Know Wednesday. The day that we answer your questions, you can email those questions to firstname.lastname@example.org or leave us a voicemail. Our number is 508-U-B-SMART. First up, voicemail, which I think is pegged to our deep dive last week with the economist Professor Bill Spriggs about the Federal Reserve and Black unemployment.
Susannah: Hi, this is Susannah from Cathedral City, California. I just listened to Tuesday’s episode about unemployment. And I still don’t understand why in a market where we have a global shortage of workers why we’re not aiming for 100% employed. I mean, if we need workers, and we obviously do, doesn’t it make sense to just employ everyone who wants to work? Am I missing something? Help make me smart please.
Kai Ryssdal: That’s fair, you want to that one or am I taking this one?
Kimberly Adams: You can go ahead.
Kai Ryssdal: Okay. All right. So that’s a really good question. Because obviously, the common sense thing is we want everybody in this economy who wants a job to have a job. The problem is that you’re never going to have that you’re never going to have 100% unemployment because there is a natural rate of churn in an economy and it’s anywhere from three ish to four ish percent, maybe a little bit higher. People are leaving, stepping out of the workforce taking time to have babies doing doing whatever people do when they don’t have a job, right. So that’s number one, the natural thing. Number two is let’s think about what the Federal Reserve tries to do, because that’s the thing we talked about with Dr. Spriggs last weekend, or last week, rather, the Federal Reserve has two mandates, right? One part is maximum employment, right. The other part though, as I sidestep to avoid p-popping on this microphone that doesn’t have a pop filter is stable prices. And here’s the catch. There’s a thing called the Phillips curve, which has been in some academic doubt lately. But the bottom line of the Phillips Curve is, look, if and when unemployment gets really, really low, what usually happens is that inflation goes up, prices go up because workers become more in demand. Right? Then their salaries go up, they can command higher prices, that forces companies to charge more so that they can pay those workers the higher salary. And that is the challenge. Now, the Phillips Curve, as I said, has been under some, shall we say revision lately, but it kind of doesn’t work to have an economy where everybody is employed all the time. That just doesn’t allow for any elasticity. It doesn’t allow for any movement in interest rates, or frankly, what people do human behavior. And so that’s why we can’t really go for 100% unemployment all the time.
Kimberly Adams: I remember you just brought flash – brought flashbacks of all that coverage we did. Oh my gosh, it’s so weird with you sitting right there.
Kai Ryssdal: Okay, for the record, I looked at you once for like three seconds as I was getting cup of coffee – a sip of cup and you’re the one who’s going “oh it’s so weird.” Head down.
Kimberly Adams: No head down. Okay. No, but before the pandemic, we did all these stories about what’s wrong with these curves, like there’s low unemployment, but inflation is stuck. Inflation is stuck inflation. Oh, those were the days.
Kai Ryssdal: And look. So you know what’s funny, sorry, one more thing. We had conversations in the before times, when employment was unemployed was getting down to like four, four and a half percent and Mitchell Hartman did 1000 stories on, ooh are we at maximum employment and we’re not because look, here we are at 3.6% today and there’s more people coming into the workforce. So, you know.
Kimberly Adams: Yeah, okay, we have another question about the labor force from Brett in Macon, Georgia who writes, “With all the job openings available to people, what skills exactly are needed? Why are these skills not being taught? Or maybe people don’t, just don’t like doing these jobs.” And I know I read your part there, but I’m gonna go for it anyway. Um, employers talk about this quite a bit, this so called skills gap. And this is one of the reasons why they can’t find workers to fill certain jobs, particularly the sort of high paying jobs that don’t necessarily require a college degree like trade jobs and things like that. But a lot of economists think that this is overblown. And so we called up Kathryn Zickuhr she’s a labor market policy analyst at the Washington Center for Equitable Growth. And she said, there really isn’t that much evidence of a skills mismatch in our current economy. And she said, basically, in a lot of cases, it’s not that there’s a shortage of skilled workers, but a shortage of workers who are willing to take certain jobs at the wages and working conditions being offered.
Kathryn Zickuhr: So for instance, employers and construction and trucking have often complained about skills gaps. And these are sectors that can offer some relatively higher wages for workers without college degrees, for instance. But they have really high turnover, like trucking has really high turnover. If you have really high turnover you don’t have skills mismatch, because you clearly have workers, and they clearly are leaving. And it’s much more important to figure out why they’re leaving, and why those jobs aren’t working for them why those working conditions aren’t working for them. That is to say, we need to train up more workers to take their place.
Kai Ryssdal: We should also talk about something here, I think that we talked about with Dr. Spriggs last week, when we were talking about the racial disparity in unemployment rates in this economy, that the skills gap excuse, right, and I’m using that word on purpose has been used to explain why the Black unemployment rate is effectively double the white unemployment rate. And it has been for decades and is you know, as of this airing of this podcast. The catch is, of course, that the skills gap argument ignores, oh shall we say structural racism in this economy, mass incarceration of Black Americans, hiring discrimination? So I think you have to sort of factor that thing in as well, when when you start talking about the the way that the skills gap is talked about in the broader employment context. That’s my sense.
Kimberly Adams: And also, employers could close skills gaps by training workers, like the the idea of a skills gap, proposes that it is the responsibility of the worker to walk into every job with all of the skills necessary, as opposed to it is the responsibility of the employer to train you to do a particular job. And you know, you can make arguments on both sides of that.
Kai Ryssdal: Yeah, for sure. You know, it’s interesting, I hear morning. Well, no, couldn’t make it, I was traveling, maybe yesterday on one of the many NPR shows I listened to. And it was worker saying, “I don’t want to get trained, man. I just want a job.” And I’m like, okay, but mmm.
Kimberly Adams: You’ll make more money if you get trained.
Kai Ryssdal: Yeah, totally. So anyway, so that’s the skills gap. Here, we got another voice memo. Hit it.
Carly: Hi, Kai and Kimberly. This is Carly Oris from New Boston, Michigan. I have lots of electric car questions. I would like to know how Americans are supposed to be able to afford electric cars when the average income of an American is $53,000. And the average price of an electric car is $63,000. Also, what happens to the batteries in them once they go bad? Isn’t this going to be a big environmental problem if everyone in America is supposed to drive an electric car? Also, how are Americans supposed to travel long distances and then need to recharge? I’m thinking we have five kids. What are we supposed to do for half an hour or more while we wait for an electric vehicle to charge? Thanks for making me smart.
Kimberly Adams: That was a lot of questions.
Kai Ryssdal: Carly has some questions.
Kimberly Adams: We need to divvy this up, you go first.
Kai Ryssdal: So yes, here’s the thing. EVs are expensive, give or take 60 $65,000. And the median household income in this country is give or take $50,000 Maybe a little bit more. Here’s the thing that the electric car industry will tell you. Number one, you got to figure long term costs, right? That includes not having to pay for gas, right? That includes some of the tax credits that you can get depending on the kind of electric car you get there local tax breaks state and local tax breaks as well. Generally speaking, EVs are easier to maintain there are fewer moving parts. So it’s cost of the vehicle versus over a lifetime sorry, rather than just the amount you pay to drive off a lot. That’s that’s that part of that equation.
Kimberly Adams: Yeah, and you know, those tax credits alone can knock off a pretty significant chunk.
Kai Ryssdal: 7,500 bucks actually, I think is the federal tax credit.
Kimberly Adams: Okay, so what happens to the batteries? This is literally a problem that the EV industry is struggling to work out right now, because there is a growing battery recycling industry. And these batteries do degrade over time, they lose something like 2% of their range per year and last about 10 years. But they are really hard to recycle. And at this point, it’s more expensive to recycle most of the components than it is to just dig up the materials and make a new one. And so and they’re heavy, and they’re hard to transport. And so a lot of the cost comes from just like moving them to the recycling center. A recent study by UC Davis researchers found as much as 40% of the cost of recycling and battery comes from transporting it to the recycling facility. So…
Kai Ryssdal: That’s crazy. How is that doable? It’s not actually so.
Kimberly Adams: But I mean it’s kind of like food. A lot of the food costs.
Kai Ryssdal: But yeah, no, I know. Uh, yeah, but But I mean, my point being How’s recycling doable? business wise? If 40% of the cost of getting it to work gets recycled is transportation. That’s, that’s cray cray.
Kimberly Adams: Yeah. As for charging? Charging is speeding up. So if you – what would what would you do with five kids? I mean, if you can get lunch and actually no, it’s interesting, the the infrastructure law that passed that has all this EV infrastructure money, they are kind of setting it up so that a lot of these EV charging stations are going to be at rest areas or at places where there’s like a food stop along the major interstate system, because the idea is to put these things near facilities where those that time is going to go by a little bit faster. So but still, some of them are getting quicker Tesla superchargers can charge a Model S for up to 200 miles in 15 minutes, even though it does take planning and so I’m just looking at the notes. The infrastructure package has the Biden administration giving states $5 billion to build half a million EV chargers over five years. And they’re prioritizing sort of disadvantaged communities, but also sort of the main corridors to deal with some of that range anxiety.
Kai Ryssdal: It’s totally gonna get easier. I was talking to Brian Allison, one of the Marketplace engineers who has I think it’s a Model 3 and he had just driven like back and forth to like Ohio or something for from California. And I asked him number one, the range anxiety question. But number two, the charging planning question. He’s like, there are apps out there, there’s software that will literally chart the course for you. And yeah, you got to kill a little time. But generally speaking, it’s doable. And I think it’s only gonna get I hope, it’s only gonna get better from here, right? Because as all the gas stations turn into electric charging stations, and we’ll figure out how to zap those electrons into batteries faster. Physics allowing. It’ll be less onerous. But yeah, those I mean, look, not everything is great about EVs and charging is one of em.
Kimberly Adams: I mean, one of my good friend who I’ve known since we were six years old, she and her husband have an EV. And they’ve had a Tesla for years now. And they travel more than anybody else I know. And they go everywhere. And like they’ve come to D.C. a couple of times from Missouri, and just like they’re like, “yeah, it was no problem.” And they’re like, “yeah, it’s great. We just chill the whole way here.”
Kai Ryssdal: Good, good, good. Okay, so on the way out super quick. Today’s Wednesday, we’re doing Whaddya Want to Know, but we’re also doing a little a little plea, because, number one, we need your help. But number two, much like charging an EV, doing this show can be hard. And it can be hard because we need resources. And that’s why we come to you. There is so much news going on right now inflation, oil prices, cryptocurrency sanctions, you name it. abortion access, reproductive rights, reproductive health is an economic story and a cultural story that we’ve been talking about. We can’t do this alone. We need your help. We need your support. We have needed it since we started at Marketplace. And at Make Me Smart mart. And now we need it again, marketplace.org/givesmart if you can help us out.
Kimberly Adams: Yeah, and just you know, we don’t charge a fee for our reporting and the information that we really try to provide to give people better economic context, and it’s your support that actually provides it and gives people information that they might not otherwise have. So thank you for that. And if you can that give that would be great. And with that, I’m going to end our first in-person Make Me Smart. Thank you all for listening. And to that we should have recorded this and like the weird way that we’re like looking at each other across the table. It’s like Oh, you’re 3D, so odd. We’re back tomorrow. We have news and some Make Me Smiles.
Kai Ryssdal: Keep your questions coming for Whaddya Want to Know Wednesday also just for you know, random interaction with the audience. I think that’s the name of the game of this podcast always has been. Email us email@example.com Leave us a voice memo. At 508-U-B-SMART. And we’ll we’ll get you on the pod, get you on the pod.
Kimberly Adams: Make Me Smart is produced by Marisa Cabrera today with help from Rose Conlon our intern is Tiffany Bui.
Kai Ryssdal: Jayk Cherry was in charge down the line in L.A., Ben Tolliday and Daniel Ramirez composed our theme music. Our senior producer is Bridget Bonner. She was in charge of all thins.
Kimberly Adams: Although I have to say I operated the board on the D.C. side.
Kai Ryssdal: That’s right. That’s true.
Kimberly Adams: I push some buttons.
Kai Ryssdal: Because I don’t know how. Let me just say I don’t know how.
Kimberly Adams: Pushed some buttons and faders.
Kai Ryssdal: The engineers don’t let me.
Kimberly Adams: Probably with good reason.
Kai Ryssdal: No, that’s true. That’s true.