A blueprint for AI regulation in hiring?

Make Me Smart July 6, 2023

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Meghan McCarty Carino 

Oh, hey, hey it’s time!

Amy Scott 

It is. Hey, everybody, I’m Amy Scott, welcome back to Make Me Smart, where we make today make sense. It’s July 6.

Meghan McCarty Carino 

And I am Megan McCarty Carino. Thank to everybody for joining us today, Kimberly and Kai are off today. But you know, we’re here, we’re gonna do the news. We’re gonna get you smiling. We got to cover for them.

Amy Scott 

We’re gonna do our best, right? Almost blew the intro, but we’ll get there.

Meghan McCarty Carino 

I mean, that’s all we can do, I guess.

Amy Scott 

All right, let’s do the news, shall we? Meghan, do you want to go first?

Meghan McCarty Carino 

All right, I will go first. So I brought an item. It’s a story that I have been covering for quite a long time, actually. The city of New York, they have this law about the use of artificial intelligence in hiring that finally, after a very long time went into effect yesterday. So the law requires that companies that use artificial intelligence in decision making in the hiring process, which the the Equal Employment Opportunity Commission estimates that like four out of five employers are using artificial intelligence of some kind in the hiring process, that companies that want to use AI in hiring have to have those systems audited for gender and racial bias every year. And they have to inform applicants that they’re using this, inform applicants of what kind of data is being collected and analyzed. This was something that the New York City Council passed back in December 2021, it’s been kind of delayed a bunch of times, but this is, people are really looking at this as an example of a way to regulate this very quickly evolving field of AI being used for everything, including these very kind of, you know, high impact, very significant fields, like hiring where, you know, companies are using algorithms to narrow down, you know, sort through resumes to narrow down the pool of applicants, they’re using artificial intelligent chat bots, or, you know, using algorithmic assessment of video interviews to score applicants on all these different kind of like personality metrics. They’re using AI to scrape social media to compile a kind of personality profile for, you know, for applicants. So all of these kinds of uses of artificial intelligence, of course, there is promise that these tools could, you know, provide more objective analyses than human, you know, analyses do obviously, humans can have overt and unconscious biases that we see play out in in the hiring process all the time. But human data is what is being used to train these algorithms. And sometimes they can magnify, you know, some of that bias and make it even worse and make it so that, you know, they’re black boxes, you can’t really interrogate the algorithm as to why it gave a certain score that it did, or you know what it was thinking because it’s a machine.

Amy Scott 

So this law has gone into effect in New York. Are there similar versions of this elsewhere?

Meghan McCarty Carino 

Yeah, so New York is kind of the New York City first of its kind. Mind, there are, you know states, California is kind of looking into to something similar, a lot of other places are watching to see how this goes, there could be some similar things, you know, various agencies at the federal level kind of taking a cue from some of this, it’s seen as like an area that is ripe for regulation, because it is kind of narrowly focused. Whereas, you know, AI that’s kind of used in a very general way is a bit harder to regulate. So I think this is kind of first of its kind, but definitely not the last, and we’re gonna see a lot more of this moving forward.

Amy Scott 

Yeah, that’s really interesting. I’d be interested to know more about the audit process, like how do you how do you rate the algorithms and find those biases, especially if humans are doing the audits? It’s really exactly it. Yeah, we’ve seen this and all sorts of automated processes, like valuing homes, some of those very same historic, you know, racial biases get baked in when you’re looking at comparable sales in neighborhoods that have been historically marginalized and redlined. Those things end up repeating. So yeah, that’ll be interesting to watch.

Meghan McCarty Carino 

Well, speaking of kind of hiring and labor markets and all that, you have some news on that front to discuss.

Amy Scott 

Yeah, so tomorrow, we get the the latest jobs report from the Labor Department, the official numbers for the month of June. Of course, the Fed has been concerned that the labor market is too strong and part of what’s driving inflation and keeping it too high. And so based on some numbers out today, that’s still the case. The payroll processing company, ADP said today that in June, private employers added 497,000 jobs. You know, almost half a million jobs, which is just huge, it’s way more than economists were expecting, and has renewed fears, at least on Wall Street, that inflation, the fight against inflation is not over, the Fed will need to aggressively raise interest rates for longer. And that the official government figures that are out tomorrow, you know, could be higher than folks expect as well. But there were some other signs that while the job market is still strong, and may be cooling off in some ways that are healthy. Neil Irwin had a piece on Axios about this. And the Labor Department also said today, that job openings fell by almost half a million in May. But the number of workers who voluntarily quit during that month rose by about 250,000 from the previous month. So overall, we’re not at the sort of great resignation levels of quitting. But what he suggested is that the labor market might be in sort of a sweet spot right now, where employers are having a better time finding workers, so there aren’t as many job openings, but workers are still having a relatively easy time finding jobs and still feel comfortable quitting. Interestingly, that was also backed up by today’s weekly jobless claims, which show that while first time claims for unemployment benefits went up last week, continuing claims fell, suggesting that, you know, if people lose their jobs, they may still be able to find another one fairly quickly. So if we’re in a sweet spot, that would be nice. First, we’ll get the official numbers tomorrow. And you know, we have a totally different set of analysis. But I thought that was a pretty interesting piece, which we will link to on the show page. Also in Axios. Today, I saw something that you may have followed, tech layoffs apparently disproportionately have affected women. There was an analysis and analysis by Layoffs.fyi, which found that between October 2022 And June 2023, women made up 45% of laid off tech workers while men were 55%. But women make up a much smaller share that that of the overall industry, about 33%, according to Deloitte. And one reason for the disparity seems to be that the departments that have had more layoffs tend to be dominated by women, human resources, recruiting, marketing. And so there are concerns that that could hurt diversity efforts in the industry, which has been trying to become less, less of a bro industry as you know.

Meghan McCarty Carino 

I feel like this, you know, this sort of like story was just like, bad news. Good news, bad news. Good news. He was like, okay, like women were 45% which is like that’s less than half and they were like Oh, but they’re only a third of the, you know, tech jobs. And then, like, oh, but it’s because..

Amy Scott 

Yeah, sorry for the whiplash. It’s kind of what the economy is right now, though, right? It’s a little good news, a little bad news. And everyone’s kind of figuring out where it’s gonna land.

Meghan McCarty Carino 

I mean, the fact that like women are so underrepresented still in the technical jobs that have not had, not been as affected by by job losses, it’s still like hrrr.

Amy Scott 

Yeah. All right. I guess that’s it for the news fix. Should we do some smiles?

Meghan McCarty Carino 

Think you should go first with the smiles because I’m going to kind of build on

Amy Scott 

Okay, good. Yeah. So Matt and Kimberly talked about this on the show yesterday. So I’m not gonna say much about Threads, the Twitter killer app that that Meta has launched, to sort of take advantage of Twitter’s issues since Elon Musk took over. So last night, Mark Zuckerberg posted his first tweet in 11 years, and it was just that meme of Spiderman pointing at another spider man that you might have seen in the spider verse movies. I had to look it up. It actually comes from a 1967 episode of Spiderman, the animated series called “double identity.” But clearly it was just one billionaire poking at another billionaire over their ongoing rivalry and was pretty funny.

Meghan McCarty Carino 

I did not know that. Have you joined? Did you did you jump on Threads yet?

Amy Scott 

No, I didn’t. I you know, I’m on the fence about it. I still use Instagram because I like photos. But I have a lot of reservations about these companies. And just the effect on society on our own mental health. And so I’m reluctant to try another one. Although I do I have to say, I miss Twitter for for news gathering? I really do. Yes. So yeah. Yeah, I’m on the fence.

Meghan McCarty Carino 

I do too. I’m like, I still use Twitter. I think I’m like one of the last people on our staff. Like I just, yeah, I like that kind of like passive exposure to conversations that I wouldn’t have seen otherwise. But it is has not been working very well. And there are a lot of, you know, problematic issues, aside from the technical ones. And so I did download the Threads app, and I sort of left it hanging in the signup phase. You know, once it got to the, what has been reported to be a less than ideal privacy policy. And it’s kind of like, you know, yeah, leaving one problematic social media app for another. It’s just not that intense.

Amy Scott 

Yeah, I would love to hear what our listeners are thinking about this, whether you use Twitter or not in the first place. You know, I think I’ve signed up for almost every rival, but I don’t I haven’t posted anything, I think it’s a good time, as much as I think it’s a good time to sort of reevaluate one’s social media use and how useful it really is.

Meghan McCarty Carino 

So, so, so true. Which I guess kind of like weeds into my make me smile for today, which was an article in the Washington Post that I saw from earlier this week, about people actually, using the internet and social media platforms for pro-social activities, to find actual friends, like to actually make friends meet them in real life. Like, I guess there’s been an uptick or kind of a mainstreaming of use of apps like Meetup and Bumble, which I think most people know is a dating app, but also you can use for just for platonic friendship, Discord groups that are geared to making friends in real life. And, you know, I think this is sort of like what we all imagined when the internet came into our lives and social media came into our lives, like, oh, it’s gonna be a way to connect and meet like-minded people. And I just found it really interesting that, you know, dating apps and dating online and digitally, that has become the most common way that couples meet, according to, you know, some studies or a study that Stanford did a few years ago that found this is the most common way for romantic partners to meet and yet, it has not really caught on as much as a way for people to make friends, you know, just platonic friends and form friendships and but I guess, you know, young people have really had their social lives disrupted over the past several years. You know, we have this epidemic of loneliness that is particularly acute among young people. And it seems like people are finally starting to, you know, turn to these platforms and apps and groups to make real life friendships. There were a number of people that the Washington Post interviewed who had met their best friends through these apps and you know, between kind of remote work and remote school and so much of the digitization that has happened in the fracturing of people’s lives that this is becoming a more mainstream and acceptable way to meet people you could be friends with.

Amy Scott 

Yeah, that is a nice thing. And let’s face it is really hard to make friends as an adult and I have been working at home since the start of the pandemic. It’s yeah, it is. It can be pretty lonely. So I like it. We started trashing social media and came around to thinking maybe it has done some good in the world.

Meghan McCarty Carino 

There’s hope.There’s hope yet. All right. Well, that is it for us today. I will be back tomorrow with Reema Khrais. Join us for a spirit-free, non-alcoholic “Economics on Tap” happy hour. We’ll be just as happy. The YouTube livestream starts at 3:30 Pacific, 6:30 Eastern and if you want to get a sneak peek at our drinks, you can sign up for the make me smart newsletter. It’s out every Friday morning marketplace.org/newsletters.

Amy Scott 

Make me smart is produced by Courtney Bergsieker. Today’s episode was engineered by Drew Jostad Ellen Rolfes writes our newsletter. Our intern Niloufar Shahbandi.

Meghan McCarty Carino 

Marisa Cabrera is our senior producer. Bridgette Bogner is director of podcasts and Francesca Levy is the executive director of Digital.