Three Big Data Articles today

There are several good articles in the NY Times Sunday Business section today that serve to illustrate the coming world of Big Data.  

30% of customers opt in to driver monitoring.  This is Facebook meets car insurance.  I am amazed that this many people willingly subject themselves to this kind of monitoring.  Here is my post about how insurance companies have detached themselves from the basic concept of insurance.  In short, insurance companies are increasingly able to exit the insurance business.  They have always wanted to collect premiums, and not pay claims --- now they can do it.

Building snow skis from skier's DNA.  For $1,750 you can get custom skis made to your skiing DNA (not your biological DNA thank goodness).  It would be very interesting to know how unique the 1,000 pairs of skis this guy made last year are.  I would not be surprised if they all boil down to a dozen or less basic designs.  This kind of short run (run of 1 in this case) manufacturing brings to light IP that is actually protectable - the design process and the distribution of actual designs.  Very interesting.

Dr. Langer's Lab at MIT succeeds at tech transfer.  This one is a bit more of a stretch, but any new medical product involves a mountain of testing data and data proficiency and the cross over from one product to the next is indeed changing very fast due to better data management techniques.

Happy reading.

Washington State Unemployment Insurance Hits 7%

In the period of 2009 to 2013 the Washington State Employment Security Department will have increased our unemployment insurance rate from 3.7% to over 7%.  'Here is our tax rate history displayed on the top of our last statement.

Those of you that have fought this battle know that these insurance rates should reflect our experience rating.  This essentially means that companies that have more people on unemployment pay higher rates.  There are many problems with this system, but here are the two that I think are the biggest.

1. Insurance should spread risk over the pool.  The idea that the State of Washington should make money on each unemployment insurance premium -- is counter to the idea of insurance.  The government regulates the insurance industry to protect consumers from insurance companies that want to make a profit on every policy holder.  The government should apply that measure to itself.
2. The structure of the system raises costs to businesses during an economic recovery.  We do not have access to the data that drives our experience rating.  In fact, we believe that our experience rating has improved at the same time that our rates have doubled.  The more corrosive thing is that if the current system was properly implemented, it would dampen every recovery by increasing tax rates that apply directly to hiring -- right when the economy needs employers to hire the most badly -- during a recovery.  We now have to pay over $2,000 per employee per year to have employees in Washington State.  And that money does not go to employees -- it goes to the Employment Security Department.

Some communities in our state depend very heavily on state assistance to exist and a good deal of that assistance is delivered by the Employment Security Department.  Those communities need jobs.  Unfortunately, the more a community depends on government assistance, the less that community will be able to attract new employers.  The simple reason is that no employer can compete with unemployment benefits that exceed its ability to pay wages.  We have closed facilities in small Washington communities for this very reason.  No rational person would choose to work for a living if the state will pay them more to not work. I am sure I don't have to carry this scenario out to the extreme to make the sustainability point.

Every time we hire for new positions, we advertise in all of our locations and hire the best people we can find.  This dramatic increase in the cost of operating in the State of Washington is going to push us to hire more in other locations.  The net result will be that the cost of unemployment insurance will have to be borne by fewer and fewer employees.  One must wonder where the tipping point is - 10%?  

I hope someone starts working to turn this around.