So what do we do when technological advancement effectively kills jobs that pay a living wage for the majority of the population? We all know that's already taking place, and will soon explode. This isn't going to be just a USA thing, it's going to be worldwide. Wages have declined since the 60's & 70's in America, despite workers being 2.5x as productive, working more hours, and the country having about a 3x larger GDP (all inflation adjusted). Yet the cost of living and education has significantly increased. Over 40% of workers make under 25k per year, almost 30% make under 15k. So what's going on? What do you think further mass automation and technological advancement will continue to do to this trend? And what will be the answer to this problem if UBI is off the table?
The four most dangerous words when it comes to the future of business or systems "This time is different!"
Those left behind present a serious problem for our society. In the Western world those cities which provided solid blue collar jobs in the 19th and 20th century have turned into the bleakest places in the Western World... the Sunderland, Englands of the world or the U.S. rust belt where poverty and drug use is endemic. I mean, the hope is a new industry will pop up and provide a living wage for the populations in these areas but as of now, it largely hasn't. Those populations rely on government assistance and get by by hook and by crook. It's easy to say, "well go get a job in STEM" - yea, well, that's really hard. It's really hard to earn an engineering degree. The vast majority of people aren't/won't be intellectually qualified to do that. It's not like people are losing their job in blue collar industries and saying/thinking, "Oh well I was putting it off before but now I'll just go get my Engineering degree." The human population will/does need "good" jobs which don't require these types of advanced degrees in STEM/IT. If society cannot provide those, we will be in for some problems.
Let the free market handle it. We see this problem now so improving education can help us prepare to handle it. UBI is not a great solution and would ruin the economy. People will just raise their prices if everyone got UBI. Put that UBI money and energy into education and you will see positive results over time. We have to prepare tomorrow's generation. That is the responsible choice.
Let the free market handle automation and wealth inequality? Disasterous, that's what we've been doing for the last 50 years and it's about to rocket at a much higher pace with advanced automation. It's leading to complete plutocracy. I'm all for improving education, but that isn't a silver bullet for automation and wealth inequality. It's a valuable piece to a larger more complex puzzle. One that requires tax reform and economic regulations that are built to serve the working class. I'm not saying UBI is the only way to go, but if we don't go the UBI route we need very strong economic regulations that make sure the working class comes out on the right side of this automation/technological revolution that is taking place.
how do you prevent this from leading to more inflation? Companies will raise prices knowing people have say 1000 extra dollars to spend. Landlords will raise rents. Even independent contractors won't work cheap. They will raise costs. There will be no gain made. Money loses value when there is no scarcity.
Isn't that what the free market is for? If landlords raise rent, then you rent at another location that's cheaper. If your city is too expensive and you aren't working, you can use UBI to move to the country for cheaper rent, where before you couldn't without job prospects.
Still doesn't explain how you will stop prices from rising to the new fact that the consumer pool has more money on hand. I'll give you an example. Army towns where there are housing vouchers given to soldiers to live off base, often see prices on rent rise to ridiculous rates even though people in the town don't earn a lot. This is because the landlords know these soldiers have government money to spend and they aren't shy about upping the rent. If those vouchers didn't exist, the rents would then be lower. The same concept would apply to basic income, where people would essentially raise the price of everything. If I had a house and I wanted to rent it, then I would ask for the market rate. The market rate is determined by what people are willing to pay for it. People will in turn be more willing to pay higher prices and landlords could continue asking higher and higher prices. This price creep effect would happen quickly. UBI still doesn't solve this problem. Or if I am a plumber, and I make 1,000 extra dollars, maybe I don't feel as motivated to fix someone's toilet for x dollars. Now I want a higher amount because that much money just doesn't mean as much to me because the value of those dollars is less when it's just handed out to everyone. Prices will rise. It doesn't just magically fix the economy to give people money. Plus where is it going to come from? Those people at higher levels? So rich people will have options... they can move... or they can stay put, and raise prices to make up for the loss as best they can. UBI is not as simple as just give people money and problem solved! You will see massive poverty as well, because wages will not grow fast enough because the employers will think you don't need it since you get UBI already. And sadly, wages are lagging. Millions of Americans can't pay their auto loans fast enough because they don't have the dough, despite the economic recovery we've seen so far. Wages still are lagging far behind. So how would UBI actually help already stumbling wage growth? I don't think it will. You will see more people sink to poverty if this idea goes forward.
What's amazing is that the people creating the technology and the businesses investing in the technology all agree/admit that they will be getting rid of jobs and are the ones issuing the warnings. They are the ones saying "uh yeah, we are going to kill jobs lol and no we don't have any plans to create new ones elsewhere, sorry!" The ones saying let the free market handle it or that it won't be that bad aren't actually pointing to any actual solution that will emerge, no study that indicates new jobs will emerge, etc. they are just saying "Nothing to see here." They are being Baghdad Bob.
Well you can't be a bleedin heart punk and accept handouts like all the other lazy schmoes! Instead you play to your heritage and claim subsidies are due so you can cut the line! If that doesn't work, starve the beast and call for revolution until it does!
The biggest factor in wages stagnating since the 60s/70s was the influx of women into the workforce. I'm not saying its bad for women to work. My wife kills it at her career. Its just simple math: twice as many people are available to work at all levels of skill. If you double the supply of something, the price will drop or stagnate. If you suddenly removed 80% of the women in the workforce wages would skyrocket.
Taxing robots would be a viable option if it weren't so easy to move work globally. The reason the pushback against ideas to combat this coming change is so strong is because so many people think they won't be impacted. That's the reality.
We migrate to Mexico!! Have the Mexican taxpayers support us and our kids. If not we will call them racist.
I find your explanation uncompelling. My best guess is that American middle class and wages expanded post WWII due to all other major economies having to rebuild. When the other major economies were competitive again, American wages declined and forced women into the economy to support a family's standard of living. Globalization is a b****.
You have a good point, but the UBI solution doesn't actually work in my opinion. It depends on your economic views I guess. I would bring up the fact that throughout history we have had shifts like this because of technology. It works out sometimes, and other times we all just suffer until a new paradigm is fully realized.
I’m not sold on ubi either for reasons you’ve listed as well as the what joe Rogan said which is 12k isn’t going to help people who lose the ability to work. Like that amount would be enough to create a permanent poverty class which seems to be the only solution offered
You have a good point, but the argument that more people in the labor market means the scarcity of workers let's employers get away with offering less money. You can go back and look at medieval Europe, and after the Black Plague wiped out most of the labor, workers were able to do pretty well for themselves because they commanded more power because of the scarcity of their skills. This can be seen in the modern work force where tech skills are rare and they take in six figure salaries, while burger flippers make minimum wage. It's very easy to see modern and historical examples to back this up. Globalization does play a role, but not in the 60s and 70s as much as today and going forward.
