To Increase Productivity, UPS Monitors Drivers' Every Move
Big Questions Overshadow March Toward Progress
To Increase Productivity, UPS Monitors Drivers' Every MoveJacob Goldstein
Jacob Goldstein
April 17, 2014
The American workforce might want to pay attention to all those brown trucks full of cardboard boxes. UPS is using technology in ways that may soon be common throughout the economy.
On the surface, UPS trucks look the same as they did more than 20 years ago, when Bill Earle started driving for the company in rural Pennsylvania.
But underneath the surface, Earle says, the job has changed a lot. The thing you sign your name on when the UPS guy gives you a package used to be a piece of paper. Now it's a computer that tells Earle everything he needs to know.
The computer doesn't just give advice. It gathers data all day long. Earle's truck is also full of sensors that record to the second when he opens or closes the door behind him, buckles his seat belt and when he starts the truck.
Technology means that no matter what kind of job you have — even if you're alone in a truck on an empty road — your company can now measure everything you do.
In Earle's case, those measurements go into a little black box in the back of his truck. At the end of the day, the data get sent to Paramus, N.J., where computers crunch through the data from UPS trucks across the country.
"The data are about as important as the package for us," says Jack Levis, who's in charge of the UPS data. It's his job to think about small amounts of time and large amounts of money.
"Just one minute per driver per day over the course of a year adds up to $14.5 million," Levis says.
His team figured out that opening a door with a key was slowing their drivers down. So drivers were given a push-button key fob that attaches to a belt loop.
The team figured out how to use sensors in the truck to predict when a part is about to break.
And UPS solved a problem that Bill Earle and other drivers used to have: At the end of the day, there would be a package in the back of the truck that should have been delivered hours before.
"You want to cry 'cause you have to go back," Earle says.
A computer now figures out the best way to load the truck in the morning, and the best way to deliver packages all day.
Earle says a typical day for him used to be around 90 deliveries — now it's about 120.
When you hear people talk about technology increasing workers' productivity, this is what they're talking about: same guy, same truck — lots more deliveries.
In the long run, as workers have gotten more productive, their pay has gone up. UPS drivers today make about twice what they made in the mid '90s when you add up their wages, health care and pensions, according to the head of their union.
But Earle says there is another side of driving around a truck full of sensors: "You know, it does feel like big brother."
Take, for example, backing up. For safety reasons, UPS doesn't like it when their drivers back up too much.
"They know exactly how many times you're backing up," Earle says, "where you're backing up, and they also know the distance and the speed that you're backing at."
Every day, Earle says, the company lets drivers know if they are backing up too much.
"You can't let it feel like it's an attack on your own personal, the way you've been doing the job," Earle says. "You can't look at it that way 'cause you'll get so frustrated that you won't even want to do it anymore."
Jack Levis, the UPS data guy, says the data are just a new way to figure out how to do things better, and faster. And, he says, the drivers benefit from that along with the company.
"They're the highest paid in the business, which is why my job is to keep them productive so they remain the highest paid in the industry."
Still, issues over the data the company collects have become part of the bargaining process between the drivers' union and the company. Under the drivers' contract, the company cannot discipline drivers based solely on data, and can't collect data without telling them.
This kind of back and forth — about what kind of data companies can collect, and what they can do with it — isn't limited to UPS. It's going to start popping up for more and more workers and more and more companies.
Big Questions Overshadow March Toward Progress
Kemal Dervis
April 17, 2014
Slowly but surely, the debate about the nature of economic growth is entering a new phase. The emerging questions are sufficiently different from those of recent decades that one can sense a shift in the conceptual framework that will structure the discussion of economic progress - and economic policy - from now on.
The first question, concerning the potential pace of future economic growth, has given rise to serious disagreement among economists. Robert Gordon of Northwestern University, for example, believes that the US economy will be lucky to achieve 0.5 percent annual per capita growth in the medium term. Others, perhaps most carefully Dani Rodrik, have developed a version of growth pessimism for the emerging economies. The key premise, common to many of these leading analysts, is that technological progress will slow, including the catchup gains that are most relevant for emerging and developing countries.
On the opposite side are the "new technologists." They argue that we are at the beginning of a fourth industrial revolution, characterized by truly "intelligent machines" that will become almost perfect substitutes for low- and medium-skill labor. These "robots" (some in the form of software), as well as the "Internet of things," will usher in huge new productivity increases in areas such as energy efficiency, transport (for example, self-driving vehicles), medical care and customization of mass production, thanks to 3D printing.
Second, there is the question of income distribution. In his instantly famous book, Thomas Piketty argues that fundamental economic forces are fueling a persistent rise in profits as a share of total income, with the rate of return on capital constantly higher than the rate of economic growth. Moreover, many have observed that if capital is becoming a close substitute for all but very highly skilled labor, while education systems need long adjustment times to supply the new skills in large quantities, much greater wage differentials between highly skilled and all other labor will cause inequality to worsen.
Perhaps the US economy in 10 years will be one in which the top 5 percent - large capital owners, very highly skilled wage earners, and global winner-take-all performers - get 50 percent of national income (the percentage is not far below 40 percent today). Though national circumstances still differ greatly, the fundamental economic trends are global. Are they politically sustainable?
The third question concerns the employment effects of further automation. As was true in previous industrial revolutions, human beings may be freed from much "tedious" work. There will be no need for cashiers, call operators, and toll collectors, for example, and less need for accountants, travel or financial advisers, drivers and many others.
If the "technologists" are half-right, GDP will be much higher. So why should we not rejoice at the prospect of a 25- or 30-hour workweek and two months of annual leave, with intelligent machines taking up the slack?
Why, with all this new technology and imminent productivity increases, do so many continue to argue that everyone has to work more and retire much later in life if economies are to remain competitive? Or is it just the highly skilled who have to work harder and longer, because there are not enough of them? In that case, perhaps older workers should retire sooner to make room for the young, who have skills more appropriate to the new century. If such a shift were to increase overall GDP, fiscal transfers could pay for early retirement, while retirement itself could become a flexible and gradual process.
Finally, there is the question of climate change and possible natural-resource constraints, issues that have become more familiar over the last decade. Will these factors impede long-term growth, or can a transition to a clean-energy economy fuel another technological revolution that actually increases prosperity?
As these questions move to the top of the policy agenda, it is becoming clearer that the traditional focus on growth, defined as an increase in aggregate GDP and calculated using national accounts invented a century ago, is less and less useful.
The nature and measurement of economic progress should involve a new social contract that allows societies to manage the power of technology so that it serves all citizens. Working, learning, enjoying leisure, and being healthy and "productive" should be part of a continuum in our lives, and policies should be explicitly aimed at what facilitates this continuum and increases measured well-being.
The trends underpinning widening inequality will have to be counteracted using many policy instruments, with tax regimes and lifelong, inclusive, and affordable education and healthcare at the center of the effort to ensure equity and social mobility. Though the quality of human lives can still be greatly improved, even in the advanced countries, focusing on aggregate GDP will be less helpful in achieving this goal.
The questions surrounding future economic growth are becoming clearer. But we are only at the start of the process of creating the new conceptual framework needed to enable national and global policies to advance the cause of human progress.
The author, former minister of economic affairs of Turkey and former administrator of the United Nations Development Programme, is vice president for the Global Economy and Development at the Brookings Institution. Copyright: Project Syndicate, 2014. bizopinion@globaltimes.com.cn
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