1 00:00:03,720 --> 00:00:06,760 Speaker 1: Hello, and welcome to Stephanomics, the podcast that brings the 2 00:00:06,760 --> 00:00:15,680 Speaker 1: global economy to you. How will we all keep busy 3 00:00:15,840 --> 00:00:18,280 Speaker 1: when we only have to work fifteen hours a week? 4 00:00:19,040 --> 00:00:22,320 Speaker 1: That's the question the great economist John Maynard Canes asked 5 00:00:22,480 --> 00:00:25,840 Speaker 1: nearly ninety years ago, thinking ahead to the possibilities of 6 00:00:25,920 --> 00:00:28,920 Speaker 1: his grandchildren. By the end of the twentieth century, he 7 00:00:29,000 --> 00:00:31,880 Speaker 1: thought the economy would be so productive we'd scarcely have 8 00:00:31,960 --> 00:00:35,440 Speaker 1: to work at all. It didn't work out that way. 9 00:00:35,640 --> 00:00:38,159 Speaker 1: The economy is a lot more productive, and we do 10 00:00:38,280 --> 00:00:41,720 Speaker 1: spend a lot less time collectively on chores like washing 11 00:00:41,760 --> 00:00:46,800 Speaker 1: clothes and dishes, collecting water. But in most advanced economies, 12 00:00:46,800 --> 00:00:50,839 Speaker 1: the daily grind, if anything, has become even grindeer. So 13 00:00:51,000 --> 00:00:53,360 Speaker 1: much for modern technology letting us all spend more time 14 00:00:53,400 --> 00:00:56,120 Speaker 1: in the garden or at the opera. But that might 15 00:00:56,160 --> 00:00:58,240 Speaker 1: all be about to change. In a minute, I'm going 16 00:00:58,280 --> 00:01:01,200 Speaker 1: to talk about a possible revolution in our work week 17 00:01:01,520 --> 00:01:05,199 Speaker 1: with one of Bloomberg's most read economic columnist, Noah Smith. 18 00:01:05,640 --> 00:01:08,039 Speaker 1: I'll also be checking in on the latest on the 19 00:01:08,160 --> 00:01:12,120 Speaker 1: US trade wars. But first, here's UK Treasury reporter Jes 20 00:01:12,280 --> 00:01:15,240 Speaker 1: Shankleman to tell us what's been happening in the UK. 21 00:01:24,000 --> 00:01:26,679 Speaker 1: What if you never went to work on a Friday, 22 00:01:27,319 --> 00:01:30,320 Speaker 1: not because you're ill or pretending to be, not because 23 00:01:30,319 --> 00:01:32,160 Speaker 1: you have to look after the kids, or because you're 24 00:01:32,160 --> 00:01:36,840 Speaker 1: on vacation. This is the four day week and maybe, 25 00:01:37,440 --> 00:01:43,959 Speaker 1: just maybe it could be coming to your workplace. The 26 00:01:44,080 --> 00:01:48,320 Speaker 1: lighting designers Elektra in London. It became a reality at 27 00:01:48,320 --> 00:01:50,919 Speaker 1: the start of this year when they stopped working Fridays 28 00:01:51,040 --> 00:01:56,120 Speaker 1: and added an extra hour to Monday through Thursdays. Director 29 00:01:56,240 --> 00:02:00,720 Speaker 1: Neil Knowles now spends his newly extended weekends perfecting his 30 00:02:00,800 --> 00:02:04,440 Speaker 1: sour dough bread and visiting galleries. One of his colleagues 31 00:02:04,520 --> 00:02:09,040 Speaker 1: has taken up welding. He says output has remained broadly 32 00:02:09,080 --> 00:02:12,040 Speaker 1: the same, and both his team and his clients are 33 00:02:12,080 --> 00:02:15,600 Speaker 1: happy with the switch. I think the biggest surprise would 34 00:02:15,639 --> 00:02:18,320 Speaker 1: be quite how much difference it makes personally it makes. 35 00:02:18,840 --> 00:02:20,919 Speaker 1: It's not I think I think it's going to make 36 00:02:21,080 --> 00:02:23,960 Speaker 1: a little bit of difference going from two day weekends 37 00:02:24,000 --> 00:02:27,720 Speaker 1: to three, but actually it makes an enormous difference, massive 38 00:02:27,800 --> 00:02:34,280 Speaker 1: difference in the UK. It's something Jeremy Corbyn's opposition Labor 39 00:02:34,320 --> 00:02:37,600 Speaker 1: Party is looking at in a bid to kickstart productivity 40 00:02:37,720 --> 00:02:41,200 Speaker 1: and boost well being. The idea is just one of 41 00:02:41,200 --> 00:02:44,560 Speaker 1: a series of radical left wing economic policies that increased 42 00:02:44,560 --> 00:02:48,480 Speaker 1: Corbyn's popularity since the financial crash, an event that caused 43 00:02:48,520 --> 00:02:52,799 Speaker 1: people to question the fairness of capitalism. Some of his 44 00:02:52,880 --> 00:02:57,720 Speaker 1: other ideas include nationalizing utilities, giving employees a stake in 45 00:02:57,840 --> 00:03:01,960 Speaker 1: large companies, and delist businesses from the Stock Exchange if 46 00:03:01,960 --> 00:03:06,440 Speaker 1: they don't do enough to tackle climate change. John McDonald, 47 00:03:06,520 --> 00:03:10,840 Speaker 1: Labor's economic spokesman, who commissioned a review into the idea, 48 00:03:11,320 --> 00:03:13,760 Speaker 1: I think shorter working weeks will be a vote winner. 49 00:03:14,800 --> 00:03:19,920 Speaker 1: The influential grassroots socialist group called Momentum wants Labor to 50 00:03:19,960 --> 00:03:22,560 Speaker 1: adopt a four day week as an official policy in 51 00:03:22,600 --> 00:03:26,680 Speaker 1: its next manifesto, and with the ruling Conservative Party in 52 00:03:26,760 --> 00:03:31,080 Speaker 1: turmoil over its failure to deliver on Brexit, a general 53 00:03:31,080 --> 00:03:35,520 Speaker 1: election seems perpetually on the horizon. I asked John McDonald 54 00:03:35,560 --> 00:03:38,520 Speaker 1: recently in Parliament about his latest thoughts on a four 55 00:03:38,600 --> 00:03:42,000 Speaker 1: day week. It's about making sure that people have a 56 00:03:42,360 --> 00:03:46,000 Speaker 1: quality of life or work life balance, and it's all levels. 57 00:03:46,520 --> 00:03:48,800 Speaker 1: And I think the idea of the way in which 58 00:03:48,800 --> 00:03:51,040 Speaker 1: we can shape the work and week being more flexible 59 00:03:51,080 --> 00:03:55,920 Speaker 1: about it I think will be incredibly proper. Since the 60 00:03:55,960 --> 00:03:59,360 Speaker 1: Industrial Revolution, the length of the work week has taken 61 00:03:59,400 --> 00:04:03,840 Speaker 1: center stage labor relations. In the eighteen sixties, workers averaged 62 00:04:03,880 --> 00:04:07,520 Speaker 1: about sixty or seventy hours a week, and that gradually 63 00:04:07,560 --> 00:04:10,839 Speaker 1: fell to about forty hours a week thanks to improvements 64 00:04:10,840 --> 00:04:14,520 Speaker 1: in labor laws and technology. Now the question of workers 65 00:04:14,600 --> 00:04:17,839 Speaker 1: rights is coming back into the spotlight. Part of the 66 00:04:17,880 --> 00:04:21,440 Speaker 1: reason workers could be left behind amid greater automation and 67 00:04:21,560 --> 00:04:28,599 Speaker 1: use of technology. The consultancy McKinsey estimates of all hours 68 00:04:28,640 --> 00:04:34,800 Speaker 1: work today could be automated using already existing technologies. The 69 00:04:34,880 --> 00:04:39,599 Speaker 1: Trade Union Congress an umbrella group for unions once workers 70 00:04:39,640 --> 00:04:42,679 Speaker 1: as well as companies to reap the benefits of enhanced 71 00:04:42,680 --> 00:04:47,240 Speaker 1: productivity from robots. The group says the march of technology 72 00:04:47,400 --> 00:04:51,200 Speaker 1: so far seems to have increased hours rather than cutting 73 00:04:51,240 --> 00:04:55,240 Speaker 1: them back, so employers increasingly expect people to log on 74 00:04:55,400 --> 00:04:58,039 Speaker 1: all times of the day and as a result, it says, 75 00:04:58,040 --> 00:05:01,719 Speaker 1: British workers currently rack up t two billion pounds of 76 00:05:01,880 --> 00:05:07,080 Speaker 1: unpaid overtime or about forty billion dollars. Here's the Trade 77 00:05:07,160 --> 00:05:10,320 Speaker 1: Union Congress is Kate Bell. We're calling for shorter working 78 00:05:10,400 --> 00:05:12,479 Speaker 1: time with no loss of pay. But I think it 79 00:05:12,560 --> 00:05:14,960 Speaker 1: is important to remember the context we're talking about this in. 80 00:05:15,160 --> 00:05:18,159 Speaker 1: You know, we're hearing all these kind of promises about 81 00:05:18,160 --> 00:05:21,040 Speaker 1: new technology. You know that it's going to give a 82 00:05:21,120 --> 00:05:24,120 Speaker 1: significant boost to our GDP. We've got people like Jeff 83 00:05:24,160 --> 00:05:26,120 Speaker 1: Beesl saying that he's got so much money the only 84 00:05:26,200 --> 00:05:27,479 Speaker 1: thing he can think to do with it is to 85 00:05:27,520 --> 00:05:29,440 Speaker 1: put a man on the moon. You know, we are 86 00:05:29,480 --> 00:05:32,240 Speaker 1: talking about the possibility of getting richer and what we 87 00:05:32,320 --> 00:05:35,680 Speaker 1: know has happened historically over kind of you know, in 88 00:05:35,800 --> 00:05:39,359 Speaker 1: the last Industrial Revolution was when trade unions fought for it, 89 00:05:39,400 --> 00:05:42,240 Speaker 1: we were able to deliver higher pay and shorter working time. 90 00:05:42,320 --> 00:05:46,480 Speaker 1: So that's very much our goal. Labor asked Robert Skidelski, 91 00:05:46,880 --> 00:05:50,080 Speaker 1: an economist at the University of Warwick best known for 92 00:05:50,160 --> 00:05:53,960 Speaker 1: his biography of John Maynard Kines, to study if and 93 00:05:54,000 --> 00:05:57,200 Speaker 1: how the government could cut the working week, and his 94 00:05:57,279 --> 00:06:01,920 Speaker 1: report is set to be published in July. He doesn't 95 00:06:02,000 --> 00:06:05,320 Speaker 1: think capping working hours across the economy is the answer, 96 00:06:05,839 --> 00:06:08,359 Speaker 1: as France's plural Left party did at the turn of 97 00:06:08,400 --> 00:06:12,600 Speaker 1: the century. Instead, he says the UK government should set 98 00:06:12,640 --> 00:06:17,280 Speaker 1: an example. As an employer he found investing in automation 99 00:06:17,440 --> 00:06:21,359 Speaker 1: and improving flexibility in the civil service, health service and 100 00:06:21,480 --> 00:06:26,039 Speaker 1: schools could be a starting point. By now. Skidelski says 101 00:06:26,640 --> 00:06:29,680 Speaker 1: people in Britain should be working about thirty two or 102 00:06:29,720 --> 00:06:33,560 Speaker 1: thirty three hours a week, but actually those hours stopped 103 00:06:33,560 --> 00:06:37,240 Speaker 1: falling in the nineteen eighties, So does that mean a 104 00:06:37,320 --> 00:06:41,880 Speaker 1: more drastic approach from politicians could hold the key? The 105 00:06:42,000 --> 00:06:46,040 Speaker 1: question to to raise is what are the most effective 106 00:06:46,080 --> 00:06:51,200 Speaker 1: forms of government intervention in order to move the whole 107 00:06:51,240 --> 00:06:55,560 Speaker 1: economy to you to increase the denicity of automation, Well, 108 00:06:55,880 --> 00:06:58,520 Speaker 1: the government can do something in the public sector. It's 109 00:06:58,560 --> 00:07:05,200 Speaker 1: the employer and it's got a workforce, and you know 110 00:07:05,320 --> 00:07:09,520 Speaker 1: there are there are seven million, seven million public public 111 00:07:09,560 --> 00:07:13,240 Speaker 1: sector employees. It's about twenty five percent of the workforce. 112 00:07:13,400 --> 00:07:17,920 Speaker 1: You can start doing something there. Don't start planning your 113 00:07:17,920 --> 00:07:20,960 Speaker 1: long weekends quite yet, though. He's keen to avoid the 114 00:07:21,000 --> 00:07:24,400 Speaker 1: trap of using the term four day week and says 115 00:07:24,440 --> 00:07:28,120 Speaker 1: we need to think about shorter working hours overall. So 116 00:07:28,280 --> 00:07:31,480 Speaker 1: that could mean a parent working smarter than leaving at 117 00:07:31,520 --> 00:07:33,520 Speaker 1: three in the afternoon so they can pick up their 118 00:07:33,560 --> 00:07:37,320 Speaker 1: children from school, not just everyone having Fridays off and 119 00:07:37,400 --> 00:07:40,840 Speaker 1: the economy virtually shutting down. You've got to organize in 120 00:07:40,960 --> 00:07:43,760 Speaker 1: such a way, and I know it's difficult, and it 121 00:07:43,880 --> 00:07:45,840 Speaker 1: may be, it may be that there are cost to this. 122 00:07:46,160 --> 00:07:48,280 Speaker 1: You've got organized in such a way that the service 123 00:07:48,320 --> 00:07:53,080 Speaker 1: isn't interrupted because people aren't people aren't at at work. 124 00:07:54,000 --> 00:07:56,960 Speaker 1: And key to making all of this work is increased 125 00:07:57,000 --> 00:08:01,600 Speaker 1: investment in technologies that can do monotony us and repetitive tasks, 126 00:08:02,200 --> 00:08:05,240 Speaker 1: freeing people up to spend more time on innovation and 127 00:08:05,280 --> 00:08:11,240 Speaker 1: creative thinking that might help boost productivity in Britain, where 128 00:08:11,280 --> 00:08:15,120 Speaker 1: the metric is among the worst in Europe, the average 129 00:08:15,120 --> 00:08:18,760 Speaker 1: American worker gets as much done by Thursday afternoon as 130 00:08:18,760 --> 00:08:22,760 Speaker 1: their British counterpart currently does in an entire week. According 131 00:08:22,800 --> 00:08:26,440 Speaker 1: to the International Monetary Fund, The nation also has the 132 00:08:26,480 --> 00:08:30,240 Speaker 1: lowest use of robots in manufacturing of any G ten country. 133 00:08:31,920 --> 00:08:35,320 Speaker 1: But despite promises for getting a better work life balance, 134 00:08:35,840 --> 00:08:40,920 Speaker 1: shorter working hours don't necessarily boost the economy. The UK's 135 00:08:40,960 --> 00:08:45,440 Speaker 1: biggest business lobby group, the Confederation of British Industry, isn't 136 00:08:45,559 --> 00:08:49,600 Speaker 1: convinced a rigid reduction in ours will help productivity or 137 00:08:49,760 --> 00:08:53,640 Speaker 1: works well being. Rain Newton Smith for c b i 138 00:08:53,720 --> 00:08:57,600 Speaker 1: S chief economist, said forcing everyone to move to compressed 139 00:08:57,640 --> 00:09:01,360 Speaker 1: ours could make it harder for people to have the 140 00:09:01,400 --> 00:09:08,880 Speaker 1: work life balance they want or need. Back at Electra, 141 00:09:09,080 --> 00:09:12,440 Speaker 1: the lighting design company, Neil Knowles says the decision to 142 00:09:12,480 --> 00:09:16,480 Speaker 1: shift to a four day week wasn't easy. It does mean, 143 00:09:16,679 --> 00:09:20,200 Speaker 1: as the CBI says, less flexibility on the days they 144 00:09:20,240 --> 00:09:22,240 Speaker 1: are at work. So there's a lot of sorting out 145 00:09:22,559 --> 00:09:26,640 Speaker 1: when we started it, which we kind of started in 146 00:09:26,720 --> 00:09:29,640 Speaker 1: about January February this year. A lot of discussion on 147 00:09:31,040 --> 00:09:33,959 Speaker 1: things and a lot of kind of agreement on things. 148 00:09:34,280 --> 00:09:36,440 Speaker 1: For example, that we don't let people take time off 149 00:09:36,520 --> 00:09:38,800 Speaker 1: to get deliveries, which I used to used to be 150 00:09:38,840 --> 00:09:41,640 Speaker 1: fairly small. We're kind of flexible that people say, I'm 151 00:09:41,679 --> 00:09:45,839 Speaker 1: getting a washing machine delivered kind of coming two hours later. 152 00:09:45,880 --> 00:09:48,760 Speaker 1: The answer is now, no, you can't do it on Friday. 153 00:09:49,320 --> 00:09:50,679 Speaker 1: You want to go to the dentist to do it 154 00:09:50,720 --> 00:09:56,160 Speaker 1: on Friday. And while it might work for their small company, 155 00:09:56,720 --> 00:09:59,560 Speaker 1: four day weeks may not be so easy to implement 156 00:09:59,600 --> 00:10:03,320 Speaker 1: in a ret staunt or a shop. He says. The 157 00:10:03,360 --> 00:10:06,480 Speaker 1: answer would be it works for consumpcy companies where you've 158 00:10:06,520 --> 00:10:08,600 Speaker 1: got an output you're charging for, but if you're charging 159 00:10:08,600 --> 00:10:11,360 Speaker 1: for your time rather than for your services. It's not 160 00:10:11,400 --> 00:10:15,600 Speaker 1: going to work for you. Yeah, so works for the 161 00:10:15,600 --> 00:10:25,599 Speaker 1: professional classes, which is nice for us, isn't it for 162 00:10:25,679 --> 00:10:33,760 Speaker 1: Bloomberg News. I'm Josh equl Well. I'm was quite happy 163 00:10:33,760 --> 00:10:36,079 Speaker 1: to have that segment because it reminds listeners that there 164 00:10:36,080 --> 00:10:39,240 Speaker 1: are some people who are occasionally getting to talk about 165 00:10:39,240 --> 00:10:42,480 Speaker 1: things other than Brexit in the UK. But the idea 166 00:10:42,559 --> 00:10:45,360 Speaker 1: of a four day week and having more flexibility around 167 00:10:45,440 --> 00:10:47,840 Speaker 1: working patterns is also something you hear a lot in 168 00:10:47,880 --> 00:10:50,240 Speaker 1: the US, and I wanted to talk about the economics 169 00:10:50,280 --> 00:10:54,160 Speaker 1: of it and the possible implications of all that with 170 00:10:54,559 --> 00:11:01,280 Speaker 1: one of our most read economic columnists, Noah Smith. Um. No, uh, 171 00:11:01,840 --> 00:11:04,240 Speaker 1: You've written a bit about issues related to this. I mean, 172 00:11:04,280 --> 00:11:06,800 Speaker 1: do you think it's the future that more companies will 173 00:11:06,800 --> 00:11:08,880 Speaker 1: move to a four day week or some version of that. 174 00:11:10,559 --> 00:11:13,000 Speaker 1: You know, it's a really good question. I think that 175 00:11:13,040 --> 00:11:16,400 Speaker 1: what you've seen in European countries that have sort of 176 00:11:16,440 --> 00:11:20,680 Speaker 1: forced their people to take lots of vacation, you've seen 177 00:11:20,760 --> 00:11:23,959 Speaker 1: a rise in productivity per hour, which makes sense because 178 00:11:24,120 --> 00:11:25,959 Speaker 1: number one, you need to get more stuff done within 179 00:11:26,000 --> 00:11:28,760 Speaker 1: the small time allotted. Number Two, you're just more sort 180 00:11:28,760 --> 00:11:32,160 Speaker 1: of alert the question is whether a four day work 181 00:11:32,200 --> 00:11:35,040 Speaker 1: week is actually the right way to accomplish that, or 182 00:11:35,080 --> 00:11:38,880 Speaker 1: whether it would be better to do sort of shorter 183 00:11:38,960 --> 00:11:42,440 Speaker 1: working days across the work week, because you know, I 184 00:11:42,559 --> 00:11:45,280 Speaker 1: liken it to um, you know, full year school versus 185 00:11:45,360 --> 00:11:48,640 Speaker 1: year round school. I think that the United States has 186 00:11:48,760 --> 00:11:52,360 Speaker 1: very long summer vacations in school and sometimes, yeah, there's 187 00:11:52,400 --> 00:11:54,840 Speaker 1: research showing this is bad and basically people start forgetting. 188 00:11:54,840 --> 00:11:57,760 Speaker 1: So there's a question of will constant three day weekends 189 00:11:58,040 --> 00:12:01,079 Speaker 1: cause people to you sort of get out of the 190 00:12:01,200 --> 00:12:03,600 Speaker 1: rhythm of working and really hate coming back to work 191 00:12:03,640 --> 00:12:06,920 Speaker 1: on Monday. Um, would it be better to simply have 192 00:12:07,280 --> 00:12:10,160 Speaker 1: shorter working days and more you know, sort of vacation 193 00:12:10,240 --> 00:12:11,560 Speaker 1: days out of the year. And I think that's a 194 00:12:11,600 --> 00:12:15,320 Speaker 1: debate that people are going to have. Another possibility is 195 00:12:15,360 --> 00:12:17,360 Speaker 1: to have a four day work week but have only 196 00:12:17,400 --> 00:12:20,520 Speaker 1: a two day weekend and then another off day in 197 00:12:20,559 --> 00:12:22,880 Speaker 1: the middle of the week. So that's another model people 198 00:12:22,920 --> 00:12:24,760 Speaker 1: can experiment with. And I think people are going to 199 00:12:24,800 --> 00:12:28,599 Speaker 1: experiment with these models because we haven't seen much of 200 00:12:28,600 --> 00:12:31,120 Speaker 1: a hit to GDP per person from you know, sort 201 00:12:31,120 --> 00:12:34,880 Speaker 1: of shorter work weeks over the years, and and I 202 00:12:34,920 --> 00:12:37,079 Speaker 1: think people are realizing that it can boost productivity to 203 00:12:37,280 --> 00:12:40,000 Speaker 1: how does that sound, Well, there's some of the people 204 00:12:40,040 --> 00:12:43,360 Speaker 1: who are being who are earning the most we know, 205 00:12:43,480 --> 00:12:47,280 Speaker 1: are also the people who are doing the longest hours. 206 00:12:47,320 --> 00:12:50,720 Speaker 1: So somehow it doesn't always um work out. People don't 207 00:12:50,720 --> 00:12:52,959 Speaker 1: seem to make that choice, or at least they're they're 208 00:12:53,040 --> 00:12:57,040 Speaker 1: choosing jobs that have um, that have the money, and 209 00:12:57,080 --> 00:12:59,040 Speaker 1: then they're not able to sort of trade the money 210 00:12:59,080 --> 00:13:02,400 Speaker 1: against hours. But it does sound like you think there 211 00:13:02,480 --> 00:13:05,360 Speaker 1: is a kind of economic free lunch somewhere here, whether 212 00:13:05,400 --> 00:13:08,200 Speaker 1: it's a four day week or shorter hours that you 213 00:13:08,280 --> 00:13:12,959 Speaker 1: could have uh quite dramatic changes to our sort of 214 00:13:13,040 --> 00:13:15,200 Speaker 1: nine to five, five day a week culture, or even 215 00:13:15,200 --> 00:13:16,880 Speaker 1: the bit the longer hours that lots of us have 216 00:13:16,960 --> 00:13:20,880 Speaker 1: got used to working without having a significant hit to 217 00:13:20,960 --> 00:13:23,880 Speaker 1: the economy and maybe making people happier into the bargain. 218 00:13:24,880 --> 00:13:27,480 Speaker 1: That's absolutely right. You know, the key to getting a 219 00:13:27,520 --> 00:13:30,880 Speaker 1: free lunch is to stop throwing away your lunch, always say, 220 00:13:31,320 --> 00:13:34,760 Speaker 1: and you know, I've I've studied Japan a bit and 221 00:13:34,800 --> 00:13:38,800 Speaker 1: lived there, and it's almost certainly true that Japanese people 222 00:13:39,040 --> 00:13:42,839 Speaker 1: at many many companies work much longer than's necessary for 223 00:13:42,880 --> 00:13:46,240 Speaker 1: productivity and The reason that they do is because of 224 00:13:46,480 --> 00:13:49,480 Speaker 1: you know, essentially poor management. Management doesn't know how to 225 00:13:49,520 --> 00:13:52,560 Speaker 1: evaluate their work output, so instead it simply evaluates their 226 00:13:52,600 --> 00:13:54,840 Speaker 1: work inputs. So staying there at your computer till late 227 00:13:54,880 --> 00:13:57,840 Speaker 1: at night doing essentially useless busy work is counted as 228 00:13:57,880 --> 00:14:00,480 Speaker 1: work when in fact nothing is getting done because that's 229 00:14:00,480 --> 00:14:02,520 Speaker 1: the only way that managers know how to monitor it. 230 00:14:03,000 --> 00:14:05,920 Speaker 1: And so the Japanese government has been trying to crack 231 00:14:06,000 --> 00:14:09,400 Speaker 1: down that. The question is where a country falls along spectrum. 232 00:14:09,400 --> 00:14:12,480 Speaker 1: I mean, obviously, if you enforce a one day work week, 233 00:14:12,960 --> 00:14:15,040 Speaker 1: then nobody's going to be able to get their work done, 234 00:14:15,120 --> 00:14:18,400 Speaker 1: and companies are going to have big problems because they're 235 00:14:18,400 --> 00:14:20,520 Speaker 1: going to have to hire many more people to do tiny, 236 00:14:20,560 --> 00:14:23,400 Speaker 1: fragmented days of work, and there's going to be just 237 00:14:23,520 --> 00:14:26,720 Speaker 1: mass confusion and chaos and unproductivity. So there's there's a 238 00:14:26,760 --> 00:14:29,680 Speaker 1: happy medium in there in each country, and to a 239 00:14:29,680 --> 00:14:32,520 Speaker 1: certain extent, each company really has to find it. We 240 00:14:32,560 --> 00:14:35,920 Speaker 1: have these mechanisms that push against finding that happy medium 241 00:14:35,960 --> 00:14:38,600 Speaker 1: because everybody wants to look good for the boss. You know, 242 00:14:38,640 --> 00:14:41,400 Speaker 1: everyone wants to look like they're putting in a lot 243 00:14:41,480 --> 00:14:44,960 Speaker 1: of hours, especially when there's a recession. Or weak economy. 244 00:14:45,000 --> 00:14:47,120 Speaker 1: People don't want to be the first to get fired, 245 00:14:47,160 --> 00:14:48,720 Speaker 1: so they're all sort of competing with each other to 246 00:14:48,800 --> 00:14:51,360 Speaker 1: look like they're putting in the you know, they're they're 247 00:14:51,360 --> 00:14:54,800 Speaker 1: burning the midnight oil. And so I think, you know, 248 00:14:54,840 --> 00:14:56,920 Speaker 1: it does take government to sort of, you know, push 249 00:14:56,960 --> 00:15:00,560 Speaker 1: against these things. One other possible plan that I didn't 250 00:15:00,560 --> 00:15:03,080 Speaker 1: mention is to to go to a four day work 251 00:15:03,080 --> 00:15:07,640 Speaker 1: week temporarily during recessions to encourage companies to retain staff 252 00:15:07,720 --> 00:15:10,120 Speaker 1: and encourage them not to do layoffs, because layoffs are 253 00:15:10,200 --> 00:15:13,680 Speaker 1: very damaging instructive, and that does happen in Germany really well. 254 00:15:13,680 --> 00:15:17,000 Speaker 1: Places where you have closer relationships between the unions and 255 00:15:17,040 --> 00:15:20,800 Speaker 1: the particular factories or the companies, you can often have 256 00:15:21,240 --> 00:15:26,200 Speaker 1: shared limited limiting of hours in exchange for holding onto 257 00:15:26,240 --> 00:15:29,000 Speaker 1: more more people. That's been over the years, that's been 258 00:15:29,080 --> 00:15:31,280 Speaker 1: something that unions have negotiated. One of the reasons why 259 00:15:31,320 --> 00:15:34,280 Speaker 1: sometimes you feel like unions can actually play a positive 260 00:15:34,360 --> 00:15:37,880 Speaker 1: role as as well as sometimes a negative one. But 261 00:15:37,960 --> 00:15:40,240 Speaker 1: it sounds I mean, so you actually think the government 262 00:15:40,240 --> 00:15:43,720 Speaker 1: could sort of play a positive nudge role here and 263 00:15:44,080 --> 00:15:49,040 Speaker 1: help people to solutions that the market wouldn't necessarily lead to. Well, 264 00:15:49,160 --> 00:15:52,400 Speaker 1: I definitely do. But you know, there's a caution, which 265 00:15:52,440 --> 00:15:54,600 Speaker 1: is that, you know, the hammer and nail problem. When 266 00:15:54,760 --> 00:15:56,560 Speaker 1: all you've got as a hammer, everything looks like a nail, 267 00:15:57,120 --> 00:16:00,440 Speaker 1: and there's the possibility that sort of over zealous bureaucrats 268 00:16:00,440 --> 00:16:03,160 Speaker 1: will simply say, Okay, well, you know, because this works sometimes, 269 00:16:03,200 --> 00:16:05,440 Speaker 1: it works all the time, and we should just restrict 270 00:16:05,440 --> 00:16:07,400 Speaker 1: people from working as much as possible. And I think 271 00:16:07,680 --> 00:16:11,280 Speaker 1: that very quickly degenerates into this this negative, one size 272 00:16:11,280 --> 00:16:13,840 Speaker 1: fits all solution that would then end up, you know, 273 00:16:13,920 --> 00:16:17,400 Speaker 1: hurting more than it helps. The other The other problem 274 00:16:17,520 --> 00:16:21,400 Speaker 1: is ideology. If you have a government that's ideologically committed 275 00:16:21,440 --> 00:16:24,120 Speaker 1: to the idea of of you know, forcing people to 276 00:16:24,120 --> 00:16:26,560 Speaker 1: work less work is bad, we should lead lives of leisure, 277 00:16:26,800 --> 00:16:30,000 Speaker 1: or simply the more rules we can make, the better. Well, 278 00:16:30,040 --> 00:16:32,280 Speaker 1: then that's a danger too, and that's you know, I 279 00:16:32,360 --> 00:16:35,680 Speaker 1: certainly worry about this in the context of Bernie Sanders 280 00:16:35,720 --> 00:16:38,360 Speaker 1: and and some of his allied people in the United States, 281 00:16:38,800 --> 00:16:41,080 Speaker 1: and I don't know as much about Corbin in the UK, 282 00:16:41,200 --> 00:16:44,320 Speaker 1: but I'd say you might want to think about is 283 00:16:44,400 --> 00:16:47,120 Speaker 1: this move being done for ideological reasons, or you know, 284 00:16:47,240 --> 00:16:49,280 Speaker 1: is it really being done for practice. If there's an 285 00:16:49,280 --> 00:16:51,880 Speaker 1: interesting form here because the Labor when the Labor Party 286 00:16:51,920 --> 00:16:54,600 Speaker 1: came in in the seventies, they created the May Day 287 00:16:54,600 --> 00:16:57,080 Speaker 1: Bank holiday in the UK, which previously we've had across 288 00:16:57,120 --> 00:16:59,880 Speaker 1: Europe but not in the UK. So there's a sense 289 00:16:59,880 --> 00:17:01,920 Speaker 1: of which they're also just trying to recreate the idea 290 00:17:01,920 --> 00:17:05,080 Speaker 1: of giving everyone a holiday. Um, but I think there 291 00:17:05,160 --> 00:17:08,439 Speaker 1: is also there's a kind of I've seen some work 292 00:17:08,520 --> 00:17:12,119 Speaker 1: by unions, but also some academics on both sides of 293 00:17:12,160 --> 00:17:14,800 Speaker 1: the Atlantic which talks about this in a slightly different 294 00:17:14,800 --> 00:17:17,640 Speaker 1: way and says we should see it as a potential 295 00:17:17,640 --> 00:17:21,080 Speaker 1: opportunity for workers to have more of the benefits of 296 00:17:21,160 --> 00:17:25,480 Speaker 1: the coming automation revolution. So instead of just a chunk 297 00:17:25,520 --> 00:17:30,040 Speaker 1: of workers losing their jobs because everything is more efficient 298 00:17:30,040 --> 00:17:32,679 Speaker 1: and automated, and shareholders doing very well out of the 299 00:17:32,720 --> 00:17:35,960 Speaker 1: extra profits for companies, this is how they would put it. Instead, 300 00:17:36,040 --> 00:17:39,440 Speaker 1: you have all workers do less work and they're still 301 00:17:39,440 --> 00:17:42,199 Speaker 1: able to be paid the same because of that. If 302 00:17:42,240 --> 00:17:45,960 Speaker 1: you like automation dividend, does any is any of that coherent? 303 00:17:46,040 --> 00:17:49,520 Speaker 1: Do you think from ancon economist standpoint that idea and 304 00:17:49,560 --> 00:17:52,400 Speaker 1: of course I immediately think it sounds great in principle, 305 00:17:52,560 --> 00:17:54,359 Speaker 1: but how would it work on a kind of company 306 00:17:54,400 --> 00:17:56,800 Speaker 1: to company level? But sort of if you're taking a 307 00:17:56,880 --> 00:18:00,960 Speaker 1: very macro view, is that a coherent thing to think about? 308 00:18:02,280 --> 00:18:04,159 Speaker 1: So I think that you have to look at it 309 00:18:04,160 --> 00:18:07,199 Speaker 1: in terms of productivity and not in terms of automation. 310 00:18:07,560 --> 00:18:09,320 Speaker 1: The thinking about it in terms of automation will get 311 00:18:09,320 --> 00:18:11,560 Speaker 1: you in trouble because automation is difficult to measure and 312 00:18:11,640 --> 00:18:15,080 Speaker 1: even more difficult to produce. In other words, suppose that 313 00:18:15,160 --> 00:18:18,679 Speaker 1: automation comes in and drives a lot of people's wages 314 00:18:18,720 --> 00:18:21,600 Speaker 1: down because suddenly the technology is substituting for people instead 315 00:18:21,640 --> 00:18:25,240 Speaker 1: of complementing them. Then no wages are going down. And 316 00:18:25,280 --> 00:18:28,000 Speaker 1: then you're asking, okay, so wages went down, should we 317 00:18:28,040 --> 00:18:30,959 Speaker 1: actually make people work fewer hours? Well that's a double whammy, right, 318 00:18:31,000 --> 00:18:33,440 Speaker 1: Your wages went down and you can't work as much. 319 00:18:34,320 --> 00:18:36,919 Speaker 1: But if you look at it through a productivity lens, 320 00:18:37,359 --> 00:18:40,760 Speaker 1: you say, okay, would making those people work less actually 321 00:18:40,800 --> 00:18:44,000 Speaker 1: increase their productivity, which would increase their wages and partially 322 00:18:44,000 --> 00:18:47,120 Speaker 1: counteract the effect of automation, So they could be doing 323 00:18:47,160 --> 00:18:49,760 Speaker 1: fewer hours for the same productivity and the same wages. 324 00:18:49,800 --> 00:18:52,080 Speaker 1: I guess that's the model. Well, right, I'm saying that 325 00:18:52,240 --> 00:18:56,199 Speaker 1: if you if you don't increase for our productivity and 326 00:18:56,280 --> 00:18:58,920 Speaker 1: you restrict hours, if people are paid by the hour, 327 00:18:59,040 --> 00:19:02,600 Speaker 1: you're reducing pay. Only if people are paid to sort 328 00:19:02,640 --> 00:19:06,600 Speaker 1: of a fixed monthly or weekly salary, will that maintain 329 00:19:06,760 --> 00:19:09,480 Speaker 1: their incomes for less work. You've also got to think 330 00:19:09,480 --> 00:19:12,680 Speaker 1: about how these people are getting paid and what what 331 00:19:12,720 --> 00:19:16,040 Speaker 1: the pay structure is there. As for you know, automation, 332 00:19:16,600 --> 00:19:19,000 Speaker 1: there's the question of what automation will do. If automation 333 00:19:19,040 --> 00:19:22,080 Speaker 1: starts actually reducing aggregate employment and there's a whole bunch 334 00:19:22,119 --> 00:19:25,680 Speaker 1: of people who are just unemployed in the street, well 335 00:19:25,720 --> 00:19:28,840 Speaker 1: then you might want to cut people's hours or days 336 00:19:28,880 --> 00:19:32,000 Speaker 1: of work just to force companies to sort of overstaff. 337 00:19:32,720 --> 00:19:34,760 Speaker 1: You hire hire two people to do the job you'd 338 00:19:34,800 --> 00:19:37,720 Speaker 1: hire one person to do before, and if you want 339 00:19:37,720 --> 00:19:39,880 Speaker 1: to keep everybody in work. And of course then there's 340 00:19:39,880 --> 00:19:42,359 Speaker 1: also the answer question of do we actually want work 341 00:19:42,440 --> 00:19:45,399 Speaker 1: to be the model going forward of who deserves what 342 00:19:45,560 --> 00:19:49,080 Speaker 1: in a society. Do we want to go to a 343 00:19:49,160 --> 00:19:52,119 Speaker 1: universal basic income where people get paid just for being themselves, 344 00:19:52,520 --> 00:19:54,399 Speaker 1: or do we want to sort of stick with the 345 00:19:54,440 --> 00:19:58,080 Speaker 1: traditional industrial age model of those who do not work 346 00:19:58,760 --> 00:20:02,080 Speaker 1: neither shall they eat. I think that's a biblical quote 347 00:20:02,240 --> 00:20:05,879 Speaker 1: and a quote from the Soviet Constitution, so well, I 348 00:20:05,880 --> 00:20:08,040 Speaker 1: think it's it's a reminder. It is like we've almost 349 00:20:08,040 --> 00:20:10,200 Speaker 1: come back to some of the issues that that John 350 00:20:10,240 --> 00:20:14,240 Speaker 1: Maynard Kane's mentioned in the essay that I mentioned at 351 00:20:14,280 --> 00:20:16,640 Speaker 1: the beginning of the podcast, which was thinking about how 352 00:20:16,640 --> 00:20:19,919 Speaker 1: the world would change when where we've had all this 353 00:20:20,040 --> 00:20:23,119 Speaker 1: increase in productivity and he felt we just wouldn't need 354 00:20:23,160 --> 00:20:25,160 Speaker 1: to work very much. You know, all of these debates 355 00:20:25,160 --> 00:20:30,320 Speaker 1: about automation and the future structure of the economy do 356 00:20:30,440 --> 00:20:32,280 Speaker 1: make us think about the place of work in our 357 00:20:32,280 --> 00:20:35,280 Speaker 1: lives as well as wages, although I think we're probably 358 00:20:35,280 --> 00:20:38,280 Speaker 1: still pretty focused on them too. Noah Smith, thank you 359 00:20:38,359 --> 00:20:40,640 Speaker 1: very much. I hope we get you on the podcast again. 360 00:20:40,840 --> 00:20:43,720 Speaker 1: We we've we've enjoyed that, We've enjoyed having you, and 361 00:20:44,040 --> 00:20:46,840 Speaker 1: we'll continue debating. Thank you very much. I really appreciate 362 00:20:46,840 --> 00:20:56,240 Speaker 1: you having the Well, it wouldn't be Stephanomics without some 363 00:20:56,320 --> 00:21:00,399 Speaker 1: more breaking news on trade wars. Donald Trump opened a 364 00:21:00,400 --> 00:21:03,440 Speaker 1: whole new front in his trade wars in the last week, 365 00:21:03,560 --> 00:21:08,119 Speaker 1: this time against Mexico or Mexico. Economy reporter Eric Martin 366 00:21:08,240 --> 00:21:10,160 Speaker 1: was on his way. He was on a plane from 367 00:21:10,320 --> 00:21:13,520 Speaker 1: Mexico City to New York when the news broke. Eric, 368 00:21:13,640 --> 00:21:17,680 Speaker 1: What on earth has happened, Stephanie. It's been fascinating, really 369 00:21:17,720 --> 00:21:21,840 Speaker 1: astonishing turn of events last Thursday with this teriff threat. 370 00:21:22,119 --> 00:21:26,360 Speaker 1: Now that tariffs don't actually go into effect until next Monday, 371 00:21:26,440 --> 00:21:30,359 Speaker 1: June tenth. So what's happening now is Mexico has a 372 00:21:30,480 --> 00:21:34,520 Speaker 1: delegation of the highest level in Washington meeting with the 373 00:21:34,640 --> 00:21:39,480 Speaker 1: US Trade representative, with Agriculture, with Department of Commerce, with 374 00:21:39,600 --> 00:21:43,120 Speaker 1: Homeland Security, trying to convince them to get the President 375 00:21:43,400 --> 00:21:46,439 Speaker 1: not to actually follow through with this teriff threat. Just 376 00:21:46,480 --> 00:21:49,040 Speaker 1: remind us what he said sort out of the blue. Well, 377 00:21:49,080 --> 00:21:52,800 Speaker 1: the President on Thursday afternoon said that he plans to 378 00:21:52,840 --> 00:21:56,800 Speaker 1: impose a tariff beginning at five percent next week, in 379 00:21:56,920 --> 00:22:00,359 Speaker 1: ratcheting up to twenty five percent by October. A less 380 00:22:00,400 --> 00:22:05,000 Speaker 1: Mexico does more to stop undocumented immigration to the US. Now, 381 00:22:05,000 --> 00:22:07,320 Speaker 1: this issue has been a thorn in the side of 382 00:22:07,320 --> 00:22:10,879 Speaker 1: the president for years. It's been an irritant something that 383 00:22:10,920 --> 00:22:15,240 Speaker 1: he mentioned even in his campaign launched speech in But 384 00:22:15,359 --> 00:22:17,119 Speaker 1: this is one of the first times we're seeing a 385 00:22:17,200 --> 00:22:20,560 Speaker 1: very clear linking of the trade in immigration issues. And 386 00:22:20,600 --> 00:22:23,040 Speaker 1: you're normally you're in the US at the moment, but 387 00:22:23,080 --> 00:22:25,280 Speaker 1: you're normally sitting in Mexico City. How has this gone 388 00:22:25,320 --> 00:22:29,639 Speaker 1: down in Mexico. Well, it's been an absolute bombshell. Uh. 389 00:22:29,840 --> 00:22:33,960 Speaker 1: Mexico had just sent the updated naft and after two 390 00:22:34,000 --> 00:22:35,960 Speaker 1: point oh the U s m c A to its 391 00:22:35,960 --> 00:22:40,400 Speaker 1: Senate for debate and ratification. And in fact, the Deputy 392 00:22:40,440 --> 00:22:44,840 Speaker 1: Minister of Foreign Relations for North America was already scheduled 393 00:22:44,840 --> 00:22:46,800 Speaker 1: to speak to the press in what was supposed to 394 00:22:46,800 --> 00:22:50,360 Speaker 1: be a celebratory event about this document, this treaty having 395 00:22:50,400 --> 00:22:54,479 Speaker 1: been sent to lawmakers. Complete change of plans with the 396 00:22:54,520 --> 00:22:57,480 Speaker 1: president's tweet. This came out of nowhere. Mexico was not 397 00:22:57,600 --> 00:23:01,360 Speaker 1: expecting this, There was no warning. We saw a significant 398 00:23:01,600 --> 00:23:04,680 Speaker 1: drop off in the selloff in the peso on Friday, 399 00:23:04,720 --> 00:23:07,720 Speaker 1: the currency at its worst day since October. Just a 400 00:23:07,800 --> 00:23:11,400 Speaker 1: really remarkable turn of events. And what does this mean 401 00:23:11,560 --> 00:23:14,359 Speaker 1: for the US Mexico Canada trade agreement that we're not 402 00:23:14,400 --> 00:23:17,600 Speaker 1: allowed to say is just like NAFTA. Well, it certainly 403 00:23:17,640 --> 00:23:20,720 Speaker 1: poisons the well. Uh, this was an agreement that Mexico 404 00:23:21,200 --> 00:23:24,280 Speaker 1: was not thrilled about. There was a defense of the 405 00:23:24,359 --> 00:23:27,320 Speaker 1: gains that Mexico had through NAFTA. So there was already 406 00:23:27,440 --> 00:23:30,560 Speaker 1: some concern about the agreement or thinking that this is 407 00:23:30,600 --> 00:23:35,840 Speaker 1: not the ideal scenario, but trying to protect the advantages 408 00:23:36,359 --> 00:23:39,080 Speaker 1: one through the NAFTA process in the early nine nineties. 409 00:23:39,480 --> 00:23:42,000 Speaker 1: This certainly poisons the well and makes it much harder 410 00:23:42,840 --> 00:23:45,800 Speaker 1: for Mexico and for Canada, and frankly for the US 411 00:23:45,840 --> 00:23:48,800 Speaker 1: to go forward with Trump's agreement. There was already significant 412 00:23:49,240 --> 00:23:52,879 Speaker 1: US opposition among Democrats in the House and the idea 413 00:23:52,960 --> 00:23:56,280 Speaker 1: that they would give the president of victory a political 414 00:23:56,359 --> 00:23:59,359 Speaker 1: victory by being able to say that he fixed NAFTA 415 00:23:59,359 --> 00:24:02,000 Speaker 1: the problems the first and after at a time when 416 00:24:02,040 --> 00:24:06,960 Speaker 1: he's putting taxes on Mexico. In what one analyst said 417 00:24:07,040 --> 00:24:10,280 Speaker 1: is it's really like taxing Texas. I mean, Mexico is 418 00:24:10,359 --> 00:24:13,760 Speaker 1: so integrated with the US economy. People refer to it 419 00:24:14,080 --> 00:24:16,280 Speaker 1: in a kind of facetious way, but as the fifty 420 00:24:16,359 --> 00:24:19,600 Speaker 1: first state economically, and you know, to be putting these 421 00:24:19,680 --> 00:24:22,480 Speaker 1: kind of levies on an economy that has so much 422 00:24:22,520 --> 00:24:25,919 Speaker 1: integrated production with the US, to most economist makes no sense. 423 00:24:26,320 --> 00:24:28,560 Speaker 1: And I guess if you're looking from the outside and 424 00:24:28,600 --> 00:24:30,920 Speaker 1: maybe even not not sitting in the US, but sitting 425 00:24:30,960 --> 00:24:33,320 Speaker 1: in Europe or even China. You know, what does this 426 00:24:33,440 --> 00:24:38,119 Speaker 1: tell us about President Trump's attitude to trade wars? You know, 427 00:24:38,160 --> 00:24:40,320 Speaker 1: there was a time when we thought he'd be very 428 00:24:40,400 --> 00:24:41,919 Speaker 1: keen to He's keen to have a deal, and he 429 00:24:42,000 --> 00:24:44,119 Speaker 1: just wanted a deal, even if it wasn't necessarily a 430 00:24:44,160 --> 00:24:47,320 Speaker 1: good deal. That seems to have changed certainly with regard 431 00:24:47,320 --> 00:24:49,440 Speaker 1: to China over the last few months. He seems to 432 00:24:49,480 --> 00:24:51,520 Speaker 1: be a bit nervous of doing a deal that would 433 00:24:51,560 --> 00:24:55,720 Speaker 1: then maybe played badly on the political campaign trail moving 434 00:24:55,760 --> 00:24:59,439 Speaker 1: onto to the next year's election. Does this tell us 435 00:24:59,440 --> 00:25:01,840 Speaker 1: that he's just he doesn't mind how many fronts he 436 00:25:01,880 --> 00:25:03,520 Speaker 1: opens a trade war on, or do you think this 437 00:25:03,640 --> 00:25:07,639 Speaker 1: is a specific short term play for Mexico. Well, absolutely 438 00:25:08,200 --> 00:25:11,120 Speaker 1: worsens the outlook for a deal with China. That if 439 00:25:11,119 --> 00:25:15,359 Speaker 1: Trump is capable of withdrawing from essentially this is a 440 00:25:15,400 --> 00:25:18,240 Speaker 1: de facto withdrawal from NAFTA, at least on a short 441 00:25:18,359 --> 00:25:21,199 Speaker 1: term basis, to be putting five percent tariffs up to 442 00:25:22,440 --> 00:25:24,760 Speaker 1: against a partner with whom he has an existing free 443 00:25:24,800 --> 00:25:27,919 Speaker 1: trade agreement. So the idea that if he's capable of 444 00:25:27,960 --> 00:25:32,560 Speaker 1: doing this with one of America's closest commercial allies. He's 445 00:25:32,600 --> 00:25:36,119 Speaker 1: capable of anything in terms of going back on his 446 00:25:36,200 --> 00:25:39,359 Speaker 1: word or good faith agreements with Europe or with China 447 00:25:39,440 --> 00:25:41,200 Speaker 1: down the line. So a lot of people looking at 448 00:25:41,200 --> 00:25:43,840 Speaker 1: the signal that this sends. And even if this happens 449 00:25:43,840 --> 00:25:46,560 Speaker 1: in the short term, which is what most economists who 450 00:25:46,560 --> 00:25:50,200 Speaker 1: Bloomberg spoke with expect, even if this only happens for 451 00:25:50,640 --> 00:25:53,639 Speaker 1: a period of months, or tariff's only rise to ten percent, 452 00:25:53,960 --> 00:25:57,399 Speaker 1: could have a significant impact on the Mexican economy, potentially 453 00:25:57,440 --> 00:26:01,320 Speaker 1: put an already weak Mexican economy into recession. And that's 454 00:26:01,400 --> 00:26:04,760 Speaker 1: counter to what President Trump wants in terms of the 455 00:26:04,840 --> 00:26:08,359 Speaker 1: migration pattern that so much immigration has been coming from 456 00:26:08,400 --> 00:26:11,920 Speaker 1: Central America. Mexico has not been the problem on undocumented 457 00:26:12,280 --> 00:26:15,680 Speaker 1: immigration in recent years. But if the economy goes into recession, 458 00:26:15,960 --> 00:26:20,680 Speaker 1: that increases the impulse or the allure of the US economy, 459 00:26:20,720 --> 00:26:25,520 Speaker 1: the US labor market for Mexican workers looking for a livelihood. 460 00:26:25,720 --> 00:26:27,159 Speaker 1: And I guess we should say I mean, there's a 461 00:26:27,200 --> 00:26:30,520 Speaker 1: lot of things that President Trump does where there's an 462 00:26:30,520 --> 00:26:33,360 Speaker 1: outrage that he's not playing by the rules, and he's 463 00:26:33,400 --> 00:26:35,679 Speaker 1: saying things that people in the past haven't said, and 464 00:26:35,680 --> 00:26:37,920 Speaker 1: then sometimes in retrospect we say, you know what, he 465 00:26:38,040 --> 00:26:40,440 Speaker 1: shaped things up, and actually he revealed that some things 466 00:26:40,440 --> 00:26:42,880 Speaker 1: were possible that we didn't think we're possible. Is there 467 00:26:42,920 --> 00:26:45,399 Speaker 1: any chance that this could fall into that category? And 468 00:26:45,440 --> 00:26:50,040 Speaker 1: actually you would see a significant change in illegal immigration 469 00:26:50,160 --> 00:26:53,440 Speaker 1: into the US from Mexico as a result of this. Well, 470 00:26:53,440 --> 00:26:57,280 Speaker 1: the concern along analysts is that we've already seen uh 471 00:26:57,520 --> 00:27:01,560 Speaker 1: tens of thousands of undocumented immigrants arriving to the US 472 00:27:02,240 --> 00:27:04,960 Speaker 1: in the current year. And the idea that if the US, 473 00:27:05,119 --> 00:27:08,240 Speaker 1: the world's biggest economy, one of the wealthiest countries in 474 00:27:08,280 --> 00:27:12,240 Speaker 1: the world, could not stop illegal immigration, what is to 475 00:27:12,359 --> 00:27:16,160 Speaker 1: make one think that Mexico will be able to achieve that. Well, 476 00:27:16,200 --> 00:27:19,119 Speaker 1: it's really nice to have the perspective of someone sitting 477 00:27:19,119 --> 00:27:21,640 Speaker 1: in the US, but also with such good insight into 478 00:27:21,680 --> 00:27:33,000 Speaker 1: what's happening in Mexico. Eric Martin, thanks very much, Thank you, Stephanie, 479 00:27:36,200 --> 00:27:38,920 Speaker 1: thanks for listening to Stephanomics. We'll be back next week 480 00:27:39,000 --> 00:27:41,640 Speaker 1: with more on the ground insights into the global economy. 481 00:27:41,960 --> 00:27:44,200 Speaker 1: In the meantime, you can find us on the Bloomberg 482 00:27:44,280 --> 00:27:47,840 Speaker 1: Terminal website, app or wherever you get your podcasts. We'd 483 00:27:47,840 --> 00:27:49,479 Speaker 1: love it if you took the time to rate and 484 00:27:49,520 --> 00:27:52,119 Speaker 1: review our shows so you can reach more listeners. And 485 00:27:52,200 --> 00:27:55,640 Speaker 1: for more news and analysis from Bloomberg Economics, follow at 486 00:27:55,680 --> 00:27:59,000 Speaker 1: Economics on Twitter. It's that's simple. You can also find 487 00:27:59,040 --> 00:28:02,720 Speaker 1: me on at my Stephanomics. The story in this episode 488 00:28:02,760 --> 00:28:05,680 Speaker 1: was reported and written by Lucy Meekin and jess Shanklman, 489 00:28:06,080 --> 00:28:09,320 Speaker 1: was produced by Magnus Hendrickson and edited by Scott Lanman, 490 00:28:09,440 --> 00:28:12,960 Speaker 1: who is also the executive producer of Stephanomics. Be sure 491 00:28:12,960 --> 00:28:15,520 Speaker 1: to read Lucy and Jessica's article on this topic, which 492 00:28:15,560 --> 00:28:19,359 Speaker 1: was edited by Brian Swint. Special thanks to Noah Smith 493 00:28:19,480 --> 00:28:24,160 Speaker 1: and Eric Martin. Francesco Levy is the head of Bloomberg Podcasts.