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As Robots Eat Our Jobs, Fed Should 'Drop the Money From Helicopters,' Says Bill Gross (janus.com)
As technology continues to change the world -- and kill many jobs -- it may soon change the very nature of what is considered work, said Bill Gross, a renowned American financial manager in his recently released investment outlook. Gross says that in a year or so we will need to start guaranteeing income for everyone. Gross, added that the current crop of national leaders is hopelessly behind the curve, leaving it to central bankers to fix the mess. "Our economy has changed, but voters and their elected representatives don't seem to know what's really wrong," he writes. "They shout: (1) build a wall, (2) balance the budget, (3) foot the bill for college, or (4) make free trade less free. "That will fix it" they discordantly proclaim, and after November's election some unlucky soul may do one or more of the above in an effort to make things better. Similar battles are being fought everywhere." The Sydney Morning Herald reports: Central bank "helicopter money" will avoid a long recession that looms as millions of millennials face losing their jobs to robot technology, Gross says. In news that is sure to depress anyone under the age of 30, Gross says that while presidential hopefuls in the US spout mantras about how they are going to spur growth, none are addressing the reality of the future: that robots and technology are going to render "millions" of jobs redundant. "Virtually every industry in existence is likely to become less labour-intensive in future years as new technology is assimilated into existing business models," Gross writes. Transport is a visible example of this transition and millions of truck and taxi drivers will be out of a job in the next 10 to 15 years due to driverless vehicles, he says. "We should spend money where it's needed most -- our collapsing infrastructure for instance, health care for an aging generation and perhaps on a revolutionary new idea called UBI -- Universal Basic Income."
You must understand that Bill Gross was speaking in jest. He's a lifelong bond investor and the inflation he predicts from this strategy is anathema to bonds. Now he wouldn't mind some inflation if it meant the net interest rates would rise as a result (ie, interest on bonds minus inflation) but he doesn't expect that from the strategy he proposes in the article. Again, it was written in jest.
There is a very obvious problem of mass unemployment and automation
No there isn't. Unemployment is at 5%, with is basically full employment. Workforce participation isn't back to where it was in 2007, but basically nearly everyone that wants a job can find one. The problem is that the jobs being offered are not very good, and wages are stagnant.
If automation was happening on a massive scale, productivity would be soaring. But productivity is stagnant and barely rising at all. Many manufacturing jobs were lost to automation in the 1970s and 1980s, but that process has mostly run its course, and service jobs, which dominate today's economy, are proving much harder to automate.
Someday, robots may steal all our jobs, but there is very little evidence of that happening today.
You're arguing a technicality. Yes, there are jobs still available, but as you admit, they are low paying crap jobs. There are whole industries that revolve around taking advantage of cheap human labor and even those are starting to be automated. Just because we can give everyone a job doesn't mean the original good jobs didn't disappear. It's like a nursing home that replaced all it's doctors and nurses with robots and then hired minimum wage "companions" to sit and talk to the elderly. Yes, technically they still employ the same amount of people but the real jobs are gone. That's what a lot of these service jobs are. It's actually worse than that. Many of the service jobs *could* be automated, these people are just cogs in a machine but it's cheaper to pay someone minimum wage than it is to buy and maintain an expensive robot.