It’s commencement season, and leaders of various stripes are trotting out their idealism to fresh-faced graduates. Facebook CEO Mark Zuckerberg, a Harvard dropout, yesterday suggested in his Harvard commencement address that the U.S. should explore a “universal basic income” as part of a new social contract.
The universal basic income—which would give a stipend of, say, $1,000 a month to every adult—has become something of a thing in Silicon Valley these days, with Tesla CEO Elon Musk and Y Combinator head Sam Altman, among others, offering it as a way to address the elimination of jobs by technology. It came up several times in our discussions at the Fortune Global Forum in Rome last December. But interestingly, it was Pope Francis’ emissary to the conference, Cardinal Peter Turkson, who turned attention back to the fundamental importance of work. In an interview with Charlie Rose, the cardinal said we need to “recognize what work does to the human person.” It’s an “opportunity for one to exercise his own creativity, put to work his own talent, and his God-endowed riches. That’s probably also the only way that any human person, created in the image of God, resembles God, in producing things out of his own creativity and endowment.” You can watch the interview here.
While Silicon Valley often takes the long view, more sober experts say it’s premature to worry about the elimination of work by technology. But it’s not at all premature to worry about the inadequacy of our current efforts to educate and train people whose jobs are in danger of elimination for new jobs that are being created. In Chicago earlier this week at the Great Place to Work conference, I spoke with AT&T Chairman Randall Stephenson about the enormous effort his company has made to reeducate thousands of employees to handle software-defined networking, which you can read about here. That’s the kind of effort that needs to replicated many times over, and is a better focus for the idealism of today's graduates.
Have a great weekend. More news below.
• Trump says G7 nations should spend more on defense
Leaders of the world's rich nations braced for contentious talks with Donald Trump at a G7 summit in Sicily on Friday after the U.S. president lambasted NATO allies for not spending more on defense and accused Germany of "very bad" trade policies. Trump's remarks in Brussels, on the eve of the two-day summit in a Mediterranean resort town, cast a pall over the meeting at which America's partners had hoped to coax him into softening his stances on trade and climate change. "We will have a very robust discussion on trade and we will be talking about what free and open means," White House economic adviser Gary Cohn told reporters late Thursday. Cohn also predicted robust talks on whether Trump should honor a U.S. commitment to cut greenhouse gas emissions under the 2015 Paris Agreement. Reuters
• Best Buy's sales defy retail's slump
At a time when brick-and-mortar retailers have taken a beating as in-store traffic tumbles and sales gravitate to online channels, Best Buy has proven legacy retailers can still boost sales. The electronics retailer's shares jumped by over 20% on Thursday after the company reported an increase in U.S. sales, a surprise to both the company and Wall Street as each had forecast a decline. Results were lifted by the gaming division, most notably demand for Nintendo's new Switch game console. Best Buy also sees a sales increase for comparable-sales in the current quarter. Chief Executive Officer Hubert Joly has steered a revival at Best Buy with cost cutting and by reinvesting in stores that showcase specific brands and services. The next phase of Best Buy's renaissance under his watch will involve an expansion of Best Buy's digital and international businesses, as well as services such as in-home electronics consultations. Fortune
• GM accused of cheating emissions tests
General Motors was accused in a lawsuit on Thursday of rigging hundreds of thousands of diesel trucks with devices similar to those used by Volkswagen to ensure they pass emissions tests. The proposed class-action lawsuit covers people who own or lease more than 705,000 Chevrolet Silverado and GMC Sierra pickups fitted with "Duramax" engines from the 2011 to 2016 model years. GM said the claims, which allege the company used the devices to ensure that the trucks met federal and state emission standards, were "baseless and we will vigorously defend ourselves." The lawsuit seeks remedies including possible refunds, restitution for lost resale value, and punitive damages. And it also adds potential legal programs to GM, which has already paid about $2.5 billion in penalties and settlements over faulty ignition switches linked to 124 deaths. Reuters
• Abercrombie & Fitch gets big assist from sibling chain
While the Abercrombie & Fitch brand took another sales hit, the company's California-inspired sibling brand Hollister continues to shine, giving investors something to cheer about. Shares rose on Thursday after Abercrombie & Fitch reported comparable sales rose a much better than expected 3% at Hollister, though sales declined by 10% at the namesake business. The encouraging sales data comes as Abercrombie & Fitch is reportedly fielding bids from prospective buyers, including rumored interest from rival American Eagle Outfitters, which may be looking to team up with buyout firm Cerberus to make a potential offer. Abercrombie & Fitch CEO Fran Horowitz says there's more to the chain than the 1990s heyday—"It is a strong brand with 125 years of heritage of history," she told Fortune in an interview. Fortune
Around the Water Cooler
• Amazon testing grocery pickup kiosks
Amazon.com opened two grocery pickup kiosks in Seattle, part of the e-commerce giant's latest effort to enter the $800 billion grocery market and compete with "click and collect" shopping options from traditional retailers like Wal-Mart Stores. Essentially, "AmazonFresh Pickup" spots let shoppers buy groceries online and pick them up in as little as 15 minutes, rather than having them delivered to their home. The service is open to Amazon Prime members who pay $99 a year for delivery discounts and video and music streaming. The move by Amazon indicates that retailers believe consumers will finally shift their grocery purchases to online channels, a change in spending behavior that has been slow for the industry so far. Bloomberg
• Disney doesn't believe hackers stole film
Cybercriminals who said they had stolen the digital copy of an unreleased Disney movie may have been scammers, as the company believes it was not hacked, CEO Bob Iger said Thursday. In an interview with Yahoo Finance, Iger said, "We had a threat of a hack of a movie being stolen. We decided to take it seriously but not react in the manner in which the person who was threatening us had required. We don’t believe that it was real and nothing has happened." Earlier in May, Disney had claimed that hackers boasted they acquired the copy of an unnamed, unreleased Disney film and demanded the studio pay a random. If they weren't paid, they threatened to release the film in short, five-minute clips. Though the film in question hasn't been identified, speculation swirled that it was either Pirates of the Caribbean: Dead Men Tell No Tales or an incomplete cut of Star Wars: The Last Jedi. Fortune
• UPS faces $247 million fine
A federal judge ordered United Parcel Service to pay nearly $247 million in damages and penalties for "illegally shipping" large volumes of untaxed cigarettes in New York state and City. The court awarded New York state $165.8 million and New York City got $81.2 million—far less than the $872 million in damages that they sought. The court also said UPS' court submissions showed a "lack of cooperation" and an "odd abrasiveness." UPS, meanwhile, says it was extremely disappointed by the ruling and plans to appeal the decision. It claims that the aware was excessive, especially given the shipments at issue generated about $1 million in revenue. Reuters
Summaries by John Kell; firstname.lastname@example.org @johnnerkell