Economists Worry We Aren't Prepared For the Fallout From Automation (theverge.com)

A new paper from the Center for Global Development says we are spending too much time discussing whether robots can take your job and not enough time discussing what happens next. The Verge reports: The paper's authors, Lukas Schlogl and Andy Sumner, say it's impossible to know exactly how many jobs will be destroyed or disrupted by new technology. But, they add, it's fairly certain there are going to be significant effects -- especially in developing economies, where the labor market is skewed toward work that requires the sort of routine, manual labor that's so susceptible to automation. Think unskilled jobs in factories or agriculture.

One class of solution they call "quasi-Luddite" -- measures that try to stall or reverse the trend of automation. These include taxes on goods made with robots (or taxes on the robots themselves) and regulations that make it difficult to automate existing jobs. They suggest that these measures are challenging to implement in "an open economy," because if automation makes for cheaper goods or services, then customers will naturally look for them elsewhere; i.e. outside the area covered by such regulations. [...] The other class of solution they call "coping strategies," which tend to focus on one of two things: re-skilling workers whose jobs are threatened by automation or providing economic safety nets to those affected (for example, a universal basic income or UBI). They conclude that there's simply not enough work being done researching the political and economic solutions to what could be a growing global crisis. "Questions like profitability, labor regulations, unionization, and corporate-social expectations will be at least as important as technical constraints in determining which jobs get automated," they write.

Comments

About time

[bigdavex]

This story hadn't been posted all week.

What about it?

[rsilvergun]

aside from climate change this is the biggest issue facing the human race this century. We've built a civilization around the notion that if you don't work you don't eat and we're about to run out of work. Productivity gains are already biting into wages. If minimum wage had kept pace with inflation it'd be > $20/hr. Instead it's about half what it was in the 70s inflation adjusted.

I keep hearing they'll be new jobs. But what I see is high paying factory jobs being replaced by low paying service sector jobs. We keep ignoring the fallout from the last few industrial revolutions. Luddite wasn't always a casual insult, it was a movement in response to job loses from new tech. It took 80 years for more new tech to catch up to the job losses from the last industrial revolution. This is fact, look it up.

Finally I get the people who kid themselves and say it's not a problem. What I don't understand is all these folks acknowledge the problem and shrug saying "laissez faire". Seriously, when in your life has the best answer to a complex problem been to ignore it and hope it all works out for the best?

Re:What about it?

[PopeRatzo]

(adjusted for constant dollars)

The "constant dollar" measure is virtually worthless. It's based entirely on the Consumer Price Index, which is a number derived from a "basket" of goods that is adjusted at the will of the government. For example, it doesn't count education costs, or fuel costs, or medical costs. Let's say the price of chicken goes way up. Well, the CPI adjusts by assuming people will just eat pork instead. If something gets too expensive, it just gets taken out of the index entirely.

https://www.forbes.com/sites/p...

The actual rate of inflation is much closer to 10-12% than the 2.2% the government publishes. If you take that into account, you will find that no, the income per capita has not increased since 1970. In fact, it has declined for most workers, precipitously.

As a side note: even if you accept the government's inflation number, then most workers have lost ground since Trump's tax cut bill was passed in January. According to Trump's own Bureau of Labor Statistics (see pages 7-8)

https://www.bls.gov/web/eci/ec...

Remember that story about how Americans' paychecks were going to go up by $4000 thanks to the tax cuts? It was a lie.

Re:What about it?

[ShanghaiBill]

People at the top are making far more. People in the middle and below have been stagnant for nearly 40 years.

False. Most of the wealth increases over the last 40 years have gone to the extreme poor, the people at the very bottom, making less than $1 per day. Billions of people have moved out of that condition.

The people that have done the best are poor people in poor countries, who make up over 70% of the world's population. Rich people in both poor and rich countries have also done very well. Middle class people have done reasonably well, and the middle class in poor countries has greatly expanded.

The ONLY people that have not done well are poor people in rich countries, who are still mostly in the top 20% income quintile globally.

Re:What about it?

[Anonymous Coward]

All true except for the "Small area of land" thing. Allowing for year to year climate variation and the need to leave land fallow so you can crop it forever it's a LARGE area of land. Very little land has a 100% reliable river through it and underground water reserves aren't available or usable everywhere.

Drop the population to 1% of what it is now and you have a maybe.

Re:What about it?

[Immerman]

That worked well when humanity was scarce enough that only the choicest environments needed to be inhabited. That's no longer even remotely the case.

Surface area of the Earth (196 million mi^2)* percentage of surface that's land (29%)*percentage of land that's arable (10%) / # of humans (~10 billion, projected peak population) = 0.36 acres per person.

That's not nearly enough to reliably get the job done without backbreaking labor and a lot of good luck.

Re:What about it?

[Billly Gates]

Americans LOVE Capitalism and HATE government!

Instead of being so angry and frustrated and voting for Bernie it meant supporting Trump and blaming their problems on Mexicans and China etc.

It will be very hard if not impossible in my country to vote for socialism. We have been brainwashed by 1950s RedScar McCarthyism, Ronald Reagan, Cold War with the USSR, and FoxNews to change. It is ingrained in our thinking to always fear government and view any handout as theft.

So your solution won't work.

Re: What about it?

[Falconnan]

Well, when Obama took office, the economy was contracting at a record post-war pace. Since then, the rate of decline of wages had been reduced a bit. Further, the Democrats only controlled the legislature for two years during the Obama administration. Two years to reverse a 40-year trend seems a bit unreasonable.

Wealth concentration has become a serious concern not because of social justice concerns (though that could be debated as a consideration), but soon as a serious threat to the economic and political stability of the world generally. Since the baby boomer generation gained marginal control of the vote, investment in society has declined to almost nil, while the tools for concentrating wealth have become far more effective. Trading algorithms run faster than any human can process, and the truly powerful can afford to have servers as close as possible to the exchanges for maximum advantage.

The true reality is we are on the verge of a massive economic shift, and it is already in progress. The odds are against any kind of "better" jobs to replace those lost to automation. New career fields will close faster than they can be created and replaced. Given what I do for a living, I can confirm this is already happening, and rapidly. The old notions of capitalism as it exists currently cannot survive without starving out the population.

I may think Trump is the worst president in over 100 years... You may think Obama was horrible... It's irrelevant. Without leaders who can read the writing on the wall, we're all screwed. That shrinking middle class is going to rapidly disappear, and those who are at the fringes of the upper economic class will become destitute as well as their supposedly "skilled" jobs disappear.

You add the specter of looming arms races with the other global posers, and the military need for rapid response will drive AI development in ways that will accelerate this process out of control as it bleeds into the civilian economy.

Save the blame game and ideological spats for debate class. We don't have time for them anymore. We need to start serious discussions about what to do about what's here, and what's coming.

Re:What about it?

[ShanghaiBill]

Really you have to use something like the Big Mac cost to compare income.

For American families:

Cost of a Big Mac in 1978: $0.75.
Median household income in 1978: $10,556.

Cost of a Big Mac in 2017: $4.79
Median household income in 2017: $56,516

Big Macs have gone up by a factor of 6.39.
Median incomes have gone up by a factor of 5.35.

So at least in terms of Big Macs, the median American family has not kept up.

Disclaimer: I am a vegetarian, so I don't really care what Big Macs cost.

Re:What about it?

[PopeRatzo]

So what you're saying is the drop in the Obama Administration wasn't just 5-6%, but it was closer to 20%?

No, the average CPI increase under Obama was less than it has been under Trump. Wage growth was better under Obama. Employment gains, in both the regular unemployment and the U6 measurement which includes total workforce participation, all did better under Obama. There is not a single economic indicator under Trump that does anything but continue the trajectory established by the Obama administration.

Except one: The Dow is down for the year 2018 so far, and it's already July. It was highest before the Trump/GOP tax bill hit and it's now about 2500 points off it's high. There was never a 6 month period under Obama where the DOW decreased that much. Never.

Re:What about it?

[PopeRatzo]

That seems like a reasonable assumption.

Except it's not. When pork goes up, the CPI assumes people will move to beef, and then fish when beef goes up. At some point, people start eating cheaper cuts and then less and less meat.

You don't have to do this just with meat. Consider it with every food category. If coffee goes up, what are you going to start drinking in the morning? (they eventually took coffee out of the CPI).

See, the problem is, this CPI shell game has been going on forever. You begin to run out of substitutes, eventually. At some point, you start eating hamburger helper with no hamburger, but the government can still say, "There's no inflation!" Gas has gone up about a buck a gallon since Trump took office. That 30% doesn't get counted in the CPI.

That's why things like education, health care, fuel and other things for which there is no roughly equivalent substitute, eventually just got taken out of the CPI so the government could continue to tell us that "All's well! Nothing to see here!"

Re: What about it?

[reanjr]

Water is really just a power constraint. We have plenty of water. It just needs to be desalinated. That should become easier as time goes on - at least in the developed world.

Re:What about it?

[sg_oneill]

Socialism, the real thing, wont happen any time soon, it really need genuine economic distress, the sort you see south of the border before people decide keeping the rich rich and the poor poor is not working out so well for them. Marx pretty much said effective socialism arises out of peoples self interest (And specifically as a class of people poor folks basically deciding theyve had enough and banding together to solve it). As it stands Americans have too much invested in capitalism to want it to go away completely.

However hybridized social-welfare systems are both plausible but also effective. Europe, Australia, Candada, etc all have similar histories of strong investments in capitalism, but have also adopted degrees of welfare to ensure people dont fall completely out of the net with health and basic living standards.

At some point politicians will be forced to realise that either they get a decent welfare and healthcare system in, preferably a universal minimum wage or some income tested variant, or people will start lighting things on fire or pointing guns at politicians.

Re:What about it?

[Ignatius]

> Seriously, when in your life has the best answer to a complex problem been to ignore it and hope it all works out for the best?

More often than I can count. Here in Austria, we even have a word for it: "aussitzen".

Also, there's a whole class of arbitrarily complex problems - mostly political in nature and involving attention seeking and vocal minorities seeking more than their fair share of power - where ignoring is the proper and only solution.

ignatius

Re: What about it?

[jellomizer]

It is often because no one like to listen to them. Or the parts that have findings that oppose your political view.
For example most economists support a progressive tax structure which the rich person pays more percentage of tax. However there shouldn’t be corporate tax.
Being that the money will eventually end up in a persons ownership and will be taxed at a rate they can afford. But the Business process shouldn’t be taxed until people get paid.
This economic hypothesis will not sit well with most politicians and wouldn’t be policy.

Re:What about it?

[dcw3]

Disclaimer: I am a vegetarian, so I don't really care what Big Macs cost.

Order two, I'll eat the beef, and you can have all the veggies. See, we can compromise.

Re:What about it?

[burtosis]

That's why in the future people won't grow in wide open fields with nothing below them, there simply won't be room for the trillion inhabitants. We already have shipping container farms that can grow 2-4 tons of produce a year and use water and fertilizer extremely efficiently. I'm sure in 50 to 100 years you could grow all types of produce or vat meat in the same space requirements. If we had inexhaustible power, say from fusion, there isn't a reason due to physics the shipping containers couldn't be stacked 1000 deep anywhere, even under cities. Surface area of the earth 196.9 million sq mi, population density of New York City 27,000 per square mile, yields room for 5.3 trillion people on earth, not making new land or using the oceans in any way. The surface you can see will eventually be a thin film on a very thick layer of growth. 120 years ago the top scientists were saying the earth couldn't support even 5 billion people and they were right, using tech from the 1900s. Don't assume the earth can only hold 11 billion in 2100 using 2000 tech.

Re:What about it?

[Billly Gates]

Dude. I am am American.

People here would rather die than to give up their guns, expensive and worthless health premiums and their paychecks than to fund fellow free loaders in their minds even if it's against their own self interests.

We were founded with a great distrust of authority. The south hates any government because it took their rights to own slaves away. Reagan taught Americans to fear any government as evil. McCarthy as well. Australian and Canadians genetically are cousins but it stops there. We are different and not similar at all. The majority hate here think just how I described and view Marxism as the enemy since we were children during the cold war.

Re:What about it?

[fussy_radical]

How do you know if someone is a vegetarian? Don't worry, they'll tell you. :)

Re:What about it?

[Immerman]

Heck, plenty of scientists today are still saying the world can't support the existing ~seven billion people, even with modern tech. It's not a matter of whether we can feed people today, but whether we can continue doing so indefinitely. With present practices it seems we can't. By producing food at the rate we're doing we're drawing down the ecological capital, reducing long-term productivity in exchange for immediate gains.

Artificial ecologies of course could change things - but the energy requirements will be immense for vertical ones. 1 acre of farmland on the surface receives ~4MW of solar energy. Even if you tune your artificial lighting to just the 45% of the energy spectrum used by plants you'll still need about 2MW of lighting per acre to get the same yields. So either you need nuclear power, or to cover an equivalent surface area with solar panels (assuming incredible 45% efficient solar panels). In which case the benefit of not just covering the surface with greenhouses instead becomes dubious.

Re: What about it?

[shaitand]

We currently use an economic system wherein the poor have to borrow from those with historic wealth to generate new wealth for society and then pay back interest and/or a share of ownership in their venture. For the next round they will need to do it again. With social funding of these ventures people would keep the fruit of their labor but with the current system we pretend disrupting the tiny fraction of the population who have 40% of the historical wealth would be evil rather than less disruptive than building a highway.

Re: What about it?

[Bob the Super Hamste]

Again that is just a power issue. A big pipe and some pumping stations are all that would be needed. Massive amounts of cheap clean power solve a lot of problems at the societal level.

Re:What about it?

[apoc.famine]

People have been talking about how automation is going to kill so many jobs and there's going just to be so much unemployment since the 1970s, but most of the workforce reductions in jobs that can be automated in a practical manner is from having those off-shored. So it's not just the optimists who are repeating the same story over and over again decade in and out, it's also the doomsayers.

No, I think automation killing jobs has happened, and it's still happening. It's just that people are looking at the wrong metrics to see it.

If you look at the productivity of US workers, it's been steadily going up for the last 40 or 50 years. We are something like an order of magnitude or more more productive as a whole now as we used to be. But if you look at wages, they're flat or declining. If you look at wealth inequality, the middle class is about gone, and the gulf between the poor and the rich has been widening at a rather insane pace.

We aren't Marxist, so the workers don't own the means of production. When production becomes more efficient, the benefit goes to the owners. Looking at the cost of goods, nothing has gone down in price, while real wages have. When I look at these things, I see the impact of automation. No, it's not causing half of the population to be out of work. It's doing something more nefarious than that. It's siphoning wealth out of the poor and middle class and transferring it to the upper class. That's harder to see than 20% unemployment, and it causes less outrage, in part because we've baked success as a badge of honor into our culture.

Re:What about it?

[Gilgaron]

Adding or removing items as part of a custom order never changed the price, except for extra cheese or extra meat. Leftover food usually got pitched or taken home by the employees, at the time I worked there: the rules around donating food to the shelters was too onerous for restaurant leftovers to be accepted.

Re:What about it?

[dgatwood]

Per the Census, income per capita (adjusted for constant dollars) has increased since 1970s. Minimum wage may be stagnant, but actual wages aren't.

Bzzt. That's not what that means. Thanks for playing. Repeat after me: Averages are useless without standard deviations.

I'll let that sink in for a moment. What you're saying is that the average wage has gone up. What the folks on the other side are saying is that the poorest and most vulnerable people — the ones who are actually making minimum wage are getting seriously screwed. You are both correct. But the purpose of a minimum wage is to protect the poorest and most vulnerable, not to raise the average wage. The latter is merely an unavoidable side effect of the former. So that means the minimum wage is too low.

As far as minimum wage laws go, there shouldn't be one at a Federal, and most likely even at State levels. What minimum wage would you set that would apply in San Francisco or Manhattan that would also be applicable to McAllen, TX? It makes no sense on a Federal level. And in some States (such as CA), it makes no sense state-wide. The cost of living in Oxnard is about 46% of that in Santa Monica, just 45 minutes away. How do you set a minimum wage that is "livable" for someone in a high-income area and doesn't kill small businesses in low-cost areas?

What makes you think that the minimum wage in San Francisco ($14.00) is the same as the minimum wage in McAllen, TX ($7.25)? The federal minimum wage is just that — a minimum. States like California ($11.00) are allowed to set higher minimums. And municipalities are allowed to set even higher minimums than at the state level. What they are not allowed to do is set a lower minimum than is prescribed by a less granular law.

Thus, the federal minimum wage should be based on the average baseline cost of living, ignoring cities with significantly elevated cost of living. It need not be high enough to allow mobility from the poorest area to the richest area, but it does need to be high enough to allow some mobility, within reason.

Similarly, the state's minimum wage should be based on the average cost of living, possibly ignoring outlier cities like San Francisco, and each city's minimum wage should be based on the average cost of living in the city, again possibly ignoring outlier neighborhoods like Pacific Heights.

Ostensibly, a city could even provide minimum wage zones in which the minimum wage was higher or lower than the normal city minimum wage, though that would tend to result in not having employees in the lower-wage zones, so this is probably a bad idea in practice, but nothing legally prevents it.

The solution is to eliminate a minimum wage law at the Federal and State level, and let counties or municipalities set it if they so choose.

Congratulations. You've just solved a problem that doesn't actually exist. States, counties, and municipalities already can set the wage higher if they so choose. And there is no valid reason to allow them to set the minimum wage lower than some reasonable median poverty line for the state, because doing would eliminate any possibility of mobility for people in the poorest areas.

Re:What about it?

[PopeRatzo]

That's because gas price increases are not related to inflation. They are a result of supply and demand and politics.

Can you give an example of the price of anything that's not the result of "supply and demand and politics"?

Re:What about it?

[SCVonSteroids]

Oh the issue is so, so much more than that.

A lot of folks would rather have the internet connection that allows us to have this debate than have the food we need to live delivered to our doors.
Amazon will ship worthless plastic to your door for *free*, and you're trying to say affordability is the issue here?

It's a complicated mess really. We solve for food and shelter, we end up with too many people. But then we end up solving for too many people... and then we get more people. You'd think something would give eventually, but I think we'll end up being our own worst enemy, because the universe is, in our own perception at least, pretty damn abundant. We have insane knowledge right now, but the masses choose not to use it fully, so money gets siphoned elsewhere.

Re:What about it?

[LynnwoodRooster]

I'm a vegetarian. I just like it processed into pork, beef, and chicken...

Not really

[Kohath]

Economists take the posture of pretending to worry about automation. They are playing to (and condescending to) an audience.

In truth, Economists know that automation and the associated productivity will make life much better, just like it always has. Automation is why you aren’t at the stream beating your dirty clothes against a rock to clean them. It’s why you aren’t manually grinding grain between 2 flat stones to make an edible paste right now.

Economists know that watching over a bunch of self-driving trucks on a computer screen is better than spending your life behind a steering wheel.

Economists should be able to see the 4% unemployment we have and the possible start of inflation due to wage pressure. And they should be able to see the productivity gains from automation, and see that automation solves the nascent labor shortage and productivity gains prevent wage inflation (because output rises faster than wages as labor becomes more productive).

But they will tell you they are worried. For some reason, that's what you want to hear. Why don't you want to hear the good news instead? The good news is actually true.

Re:Not really

[Lennie]

Any economist will agree with you on: technology grows the pie like nothing else.

There are 4 problems:

- This will benefit some people, many more times than others. Which can be fine (it's not important how much 'the 1%' makes), unless the lowest paid don't get paid enough anymore.

- Everyone always says: new types of jobs will be created. Well, it has happened so far, the worry is: what if it doesn't happen ? Which law of nature or any other can give us these guarantees ?

- 4% unemployment might or might not be true, lots of people disagree on the method used to measure this. The bigger problem is: quality of the jobs has been going down over time. Quality in this case means: the job security, benefits, etc.

- the rate of change: the rate of change which is coming will be much greater than in the past. The best solution for this would be education. But education is already behind right now.

Re:Not really

[turbidostato]

"Why is automation better?"

It is not. Automation is only better up to the point is cheaper and less conflictive.

Right now, automation is always less conflictive and it's more expensive only where you can have human labour at semi-slavist conditions (i.e.: China). So, right now, you can avoid automation as long as you allow to downgrade your live status to Chinese standards. And even China-like status is in danger: automation is not going to be more expensive but the other way around, cheaper and more pervasive, and even in those places that it makes economic sense because of the extremely cheap human labour costs, these costs can only grow as it has been the trend since industrial revolution.

And then, what?

Re:Not really

[swillden]

In truth, Economists know that automation and the associated productivity will make life much better, just like it always has.

Your argument is a strawman which misses the point. Obviously economists understand that massive automation will create equally massive gains in productivity, causing prices to plummet and goods to be abundant. This isn't the topic of the debate. The topic is what to do about the fact that our current model for distributing goods and services is based on the notion that labor is scarce and that people must be motivated to work. Automation makes labor abundant and may ultimately remove the opportunity for many people to work, and under the present system, if they don't work, they don't get to eat (or, more accurately, they're forced to grovel to a massive, sneering bureaucracy for the opportunity to eat, barely).

This means that continuing our current approach looks like it will create a rather dystopian future, which means that we really should be thinking hard about alternatives. The paper argues that we're not putting enough effort into the latter.

Re:Not really

[swillden]

This will benefit some people, many more times than others. Which can be fine (it's not important how much 'the 1%' makes), unless the lowest paid don't get paid enough anymore.

If humans were rational, it wouldn't be important how much the 1% makes. In reality absolute inequality does cause social unrest, even if the lowest have more than kings of centuries past (which, arguably, is the case now, much less in an automation-heavy future that makes everything dirt cheap). The fact is that we are a status-seeking species, and although we not only allow but almost demand a certain level of inequality, so that there is status to seek, when inequality gets to be too great it generates anger. That anger manifests first as a simmering disregard of social norms (e.g. crime) plus escapism (e.g. drug abuse), but can boil over into serious civil unrest (e.g. riots) and perhaps even actual warfare.

So, it is and will be in the best interest of the 1% to ensure not only that the bottom have food, shelter, clothing and entertainment, but that the level of inequality doesn't get to be too great. If the 1% are really smart, they'll endeavor to reduce inequality to a fairly low level... say no more than 100X between top and bottom, because there's ample evidence that equality is strongly correlated with overall happiness and safety.

I'm a decidedly libertarian person, with a strong belief in market efficiency and therefore a preference for laissez faire economic policy, but the fact that absolute inequality does matter to people because of the way our brains are wired has convinced me that this we really do need to reduce inequality, and would even if the absolute wealth of those at the bottom were perfectly adequate.

Re:Not really

[swb]

Economists don't want to take the good-new side of this issue because the last few times they gave the thumbs up and the good news about macroeconomic shifts, entire towns got hollowed out when their jobs went overseas and we got stories about how 50 year old factory workers would be re-training to deploy Juniper border routers and writing software and everything would be OK.

Instead, we got opioid epidemics, mass unemployment and regional economic destruction and employers bulk imported workers from overseas to deploy routers and write software. The overwhelming majority didn't relocate to Silicon Valley, buy skinny jeans and write software in open office plans.

Yes, the economists were able to back to their covens and cauldrons and return with all the evidence about how much better we all were collectively -- and it's probably true. But we're also left with economic gains that mostly went to major owners of capital and sociological toxic waste dumps that capital owners didn't want to clean up.

Economists love to trumpet collective gains from macroeconomic shifts but treat the displaced as just mere externalities rather than real people. It's high time they were more than just cheerleaders for the policies of the capital class, no matter how successful they might be when averaged over an entire population.

Re:Not really

[swillden]

Even if humans are rational, when being in the 1% alone helps keep you in the 1% then that's a problem. It's too easy to use wealth to stay wealthy. You should have to do something valuable to remain wealthy.

Meh. That's not inherently a problem except in outcome-based conceptions of social justice. Until it provokes riots, anyway. Then it's an actual problem for society. Otherwise, it may be a societal opportunity cost, no more. If society allowed greater mobility it would be easier for the most competent and energetic to acquire resources which they would presumably put to better use than the silver spoon set. And it seems like an opportunity that is potentially more than offset by the costs and risks inherent in empowering someone to reallocate the silver spoon wealth.

Note that I'm not actually saying that we shouldn't try to change this, just that it's not clear that it's inherently problematic, much less that it's fixable without doing larger damage to society. Any attempt to fix it should proceed cautiously.

Re:Great Abundance

[apoc.famine]

Everything will get cheaper as a result of automation.

Right. Just like AT&T Promised Lower Prices After Time Warner Merger.

OR....

[DMJC]

We could dismantle globalisation and start forming trade blocs that enforce minimum standards of workers rights and economic development and only let in other nations that develop to an acceptable level. We could then use these blocs to negotiate how the advanced economies transition to a laborless economy that's fair to everyone.

Re:OR....

[MightyMartian]

Robots don't need minimum working standards. In a generation you're going to see even the people in countries you want to exclude being replaced by machines. Not even the most cheaply paid labor will be able to work that cheaply.

Income per capita is meaningless

[rsilvergun]

and it's a stat cherry picked to hide income inequality. It's _average_ income. Take everybody, take all the money, divide. This is why everybody looks at inflation adjusted wages.

Buddy of mine just got a call center job paying $8/hr. He had a job in the 90s doing about the same thing that paid $12. You could buy an economy car in the 90s for $6k. Same car today is $15. Has a few more features, gets about 3-5 mpg more. costs almost 3x as much. Same for rent. 1 bd when he was making $12? $500/mo. Today? $800. Same complex. Inflation's a bitch.

Better example. Woman "retires" from kmart when the store closed. Making $9/hr. She was making $3 something in the 70s. The problem? Adjusted for inflation she was making the equivalent of $16/hr in the 70s. She lost almost half her pay after 45 years of work.

You know damn well why we don't let municipalities choose. The billionaires find it easy to divide and conquer small municipalities. It takes organization on a national level to stand up to that much economic power. This is precisely why their media machines (Fox News, Sinclair, CNN, MSNBC, they're all economically right wing and they're all supply siders) push these "States Rights" narratives. I don't know if you work for them, the Russians, or if you just fell for their propaganda. But either way wake up. If you're one of their shills they'll turn on you eventually. If you're not then they've already turned on you. I don't know what kind of game you think you're playing, but you'll lose it in the end.

Re:Income per capita is meaningless

[Anonymous Coward]

As long as you work for someone else, you're a slave to their whims. I know plenty of guys here in Texas who make tons of coin doing their own thing. My lawn care/painting buddy from El Salvador makes over $100k a year painting two house a week in the Woodlands/Conroe/Spring area. He also employs three full time lawn care guys who cut lawns for the wealthier white guys at 75-100 a lawn, and they do 10-15 lawns a day. The lawn guys are making $60k a year, no nights, no weekends, no on-call BS. I'm half tempted to go into the trades myself because IT is a shell of its former self.

I started off as a Unix admin, moved to Linux, can program, admin about anything, but everything in Houston has been either outsourced or went to the "cloud". All of the wealthiest people I associate with are self-made: plumbers, electricians, and welders. All are $100k men and they all work for themselves. I've come to the conclusion this summer that I might make the break into the trades because they cannot be outsourced or automated. You cannot automate plumbing needs, welding in the specialty my buddy does, or running and installing electrical lines. Hell, my barber buddy made $80k last year in a two man shop. I'm fully convinced that a man is only his own man if he works and generates his own income and calls the shots.

Re:Income per capita is meaningless

[Billly Gates]

As long as you work for someone else, you're a slave to their whims. I know plenty of guys here in Texas who make tons of coin doing their own thing. My lawn care/painting buddy from El Salvador makes over $100k a year painting two house a week in the Woodlands/Conroe/Spring area. He also employs three full time lawn care guys who cut lawns for the wealthier white guys at 75-100 a lawn, and they do 10-15 lawns a day. The lawn guys are making $60k a year, no nights, no weekends, no on-call BS. I'm half tempted to go into the trades myself because IT is a shell of its former self.

I started off as a Unix admin, moved to Linux, can program, admin about anything, but everything in Houston has been either outsourced or went to the "cloud". All of the wealthiest people I associate with are self-made: plumbers, electricians, and welders. All are $100k men and they all work for themselves. I've come to the conclusion this summer that I might make the break into the trades because they cannot be outsourced or automated. You cannot automate plumbing needs, welding in the specialty my buddy does, or running and installing electrical lines. Hell, my barber buddy made $80k last year in a two man shop. I'm fully convinced that a man is only his own man if he works and generates his own income and calls the shots.

Hold on there! .... first things first. That guy with 100K? He is a business owner. Not a guy hanging out at home depot with a lawn mower looking for work. Second 10 to 15 lawns a day is alot of work that requires multiple people. He might pull 100K off the other guys before expenses.

Second, Housing is booming in Houston. 10 years ago you couldn't find a job! Many immigrants went back to latin America after finding no work. Today IT is big ... 10 years ago or 17 years ago after the .com crash you had Indians flying and are all jumping for $45,000 a year jobs out of desperation.

I had a friend hire a CISCO network engineer/System Admin for $10/hr and I was offended. HE laughed at me as he had a stack of 75 applicants all with 10 years experience in 2009 all begging to work for $10/hr!

Things are cyclical.

Third 85% of all businesses fail after 2 years. SOmething to think about.

Also great if you've got Amazing Genetics

[rsilvergun]

and don't need a heart stint of bypass at 50 or blood pressure medicine. Also so long as you never hurt yourself. Also if you've got a nice piece of land with plenty of water that doesn't need modern irrigation, fertilizer and pest control techniques.

There's a whole host of reasons why Galt's Gultch isn't a nice place to live.

Re:Also great if you've got Amazing Genetics

[shaitand]

That is true, no one has the right to force others to support them and create an artificial right to property, right to pass property across generations, pretend wealth redistribution is a crime, etc. Life isn't fair, deal with it.

Re:Finally someone is waking up!

[Memnos]

Very high-end beneficiaries of capital gains, both long and short term. They're the humans who are in the end realizing the monetary returns from any automation (or other) productivity gains.

That kind of cyclical economy

[rsilvergun]

means you can never build any wealth. You're always losing what little you have in the next crash. Meanwhile the rich buy it off you during the crash for peanuts (using your money in the form of the bailouts they got). Crap like that is why I'm a Keynesian style Democratic Socialist.

Re:Finally someone is waking up!

[Memnos]

No, taxes on the very wealthy will not cover anywhere near the expenditures. I should have made a more complete response, but I was being lazy and I wanted to get something to eat. The majority of the funding for such a program will come from taking the money back from a lot of the people you just gave it to, in the form of a graduated increase in taxes. Now this by itself doesn't mean that taxpayers are going to be just giving money to the poor, though I suspect that will come into play.

What it means is if, say, the UBI was $1500/month for a US Citizen. $18,000/year. And say you were making $100K/year before you counted it (so you now make $118K with it) your tax bill would be increased by an amount that wound up taking all that $18K back. (These numbers are just made up, they'd be different, based upon the distribution of income in the population, and calibrated and adjusted to be what our productivity allowed us to afford without undue burden on our efficiency.) The point is that for many people, it would be close to a wash. At higher income levels you'd be paying more in than you took out, and at lower levels of income, it would be a net gain. At the lowest levels, you'd get to keep all the money from that little job you got for some spending cash.

But at no point along the income distribution curve would earning more pre-tax income leave you with less after-tax income. If you're scraping along on UBI, then some shit job would give you more, and at these lowest levels it'd hardly be taxed at all, just like today. As you moved up the scale Uncle Sam would take a larger and larger bite, and at some income level you'd be paying more out than you had gotten in, maybe significantly more as you entered the upper quintile or decile of income. We do a lot of that already with the tax structure we have in place.

But it wouldn't have the perverse incentives we see in means-tested income assistance, where pursuing gainful employment might mean you're barely better off, with the added downside of having to work a grinding meaningless job. And it would get the government out of the business of monitoring whether you were still properly beat down enough, and had jumped through enough bureaucratic hoops, to justify its pity. It's just "prove you're a citizen, with a pulse, tell us where to send the direct deposit, then go away, fix your shit on your own. We might take some or all of it or maybe even more back next April."

Re:Finally someone is waking up!

[Memnos]

That is a very good point. Any suggestions? I'd ask you to consider while making them that "automating all our jobs away" might actually be a good thing if an efficient way was found for citizens of a country to have an investment stake in the (putative) productivity gains that came from it.

Other jobs would be defined by the market, as long as the distribution of wealth made it so that there was a market. And the gains in productivity could, partially, be harvested to increase a nation's social safety net. IOW, "Here, you get your X dollars, just like every other citizen, so you won't starve, you can work it out so you have a place to live. But you don't get any guaranteed minimum wage. If you want, you can get that shit-paying apprentice job that'll be low-risk for the employer and you might prove yourself worthy of moving up to a decent-paying job if you show your mettle."

This is not going to happen overnight, more like over decades. And it wouldn't affect me personally even if it did, except for a tax increase that I can, all things considered, handle without much pain. And it will take a lot of thought if it is ever to evolve in a functional way, reasonably free of perverse incentives and without too many unintended consequences. The avoidance of those was what I meant in referencing your very good point. The math and the incentives need to work out, or we table it for later consideration.

Also, as I responded elsewhere in this thread, milking the rich, be it a little or a lot, isn't really where the funding for a UBI would come from. Increases in capital gains taxes are more to prevent our nation's wealth disparity from growing exponentially out of control, which it's doing now to an extent.

But I don't think the diametrically opposing alternatives will lead too much good at all. I'd rather send cash and say you're on your own than strangle you with means-testing and social control to see if you were worthy of my pious pity. An increasingly disaffected and disillusioned society, dystopian wealth distribution disparities, dysfunctional bureaucracies like the ones our social safety nets have become -- these aren't the emblems of a society I want to live in. Even in my gated enclave, I like it better when those outside the gates can have a decent life.

Re:Finally someone is waking up!

[Memnos]

That would create a discontinuity of the very type I think should be avoided. One where gainful employment can actually reduce income, which is not the way it should work. Working should get you more. Conversely, not working might become attractive, because the UBI comes back. Free lunch, with beer!

Say there's a person getting $1500/month on UBI (as some number yanked from my ass). Say there's no minimum wage, at all, which in this scenario there should not be. Employers are free to pay any pittance they choose, and perhaps take a chance, because people get about 9 bucks/hour doing nothing at all so it's no longer on them. Prospective employees get to pick a job they might actually tolerate doing, or even make into a career. This reduces the bargaining power of the employer, and they'll only attract employees to jobs that are rewarding for some other reason, or who'd just love that extra $3/hr to spend. It also reduces the employer's constraints, since the risk to their cash flow and profit margins are less.

What would these rewarding reasons be? Throughout history, things like apprenticeship have been the kind that has shown to be important. "Come, do this poorly paying job, but if you're good at it then it will turn into a good paying job because it has a future. Decide on your own if it seems right for you, and I'll decide the same."

But it's not based on whether you have a job or not. It's not based on any test of means or deservedness. It's just taken back more as you make more, incrementally in a graduated manner. At every point, making more is better. The government does not create a discontinuous distinction between having a job and not having a job, it just sets the taxation so that by the time you make enough not to need your UBI dividend it's all going back to the government anyway.

You make $10K on top of that $18K, you still get to keep almost all of the UBI, and the money you made. You make $30K on top of it, you still get to keep most of it. $60K? Ok, well a lesser amount of it. $100K, none of it, you pay it all back in taxes above and beyond what you'd otherwise pay, so the UBI is a wash for you. $250K, you're paying it back and paying for 1-2 other people too. But at each point, earning more pre-tax means earning more after tax. And not just a tiny bit more, but an amount more that is pretty much in line with the graduated tax rates typical of a competitive western economy. Again, the numbers would have to be worked out, and second-order effects would have to be considered and adjusted for.

Post scarcity economy - see Cyberpunk ...

[Qbertino]

... for details.

To me it's pretty obvious: classic capitalism has basically run its course. Modern tribes, a vertical, horizontal and criss-cross melange of belief Systems, philosophies and economic cycles is going to replace it.

It's happening right now already.

Right now I'm at the bus stop. Chromebook, Freitag bag, cheap ain't outfit, part-time college student, part time software developer. Now is the guy in that 90000+Euro Porsche at the red light better off than me? Maybe. He looks skinny and in good shape so he probably has the discipline to lead a good life. He's roughly my age, probably has a beautiful wife and grown kids. I "just" have a cute girlfriend and a grown daughter. We both have access to the best healthcare in human history (I'm in Germany, in case you're confused), I'm typing this on my Android phone that costs less than 3 days off work for me and is just as powerful as a supercomputer from my childhood. And as his iPhone that costs 3 times as much.

The lines that separate both Mr. Porsche and me are blurring. He's in a traffic jam and has a 70 hour workweek. I'm on the bus now, having spent the morning chilling and having slow sex and now going to a college lecture.

Post scarcity economy.

The bazillions of national dept just as the bazillions of market cap are basically thin air. Money is losing its worth, which is why we've had negative interest for years now (EU money). The machines will do the work and hopefully the teenage Indian/Bangladeshi girl who made the t-shirt I'm wearing will get to do the exact same stuff I'm doing right now when she's grown up.

My 2 eurocents.

Automation is good!

[Sardokaur]

Every time that someone whines about about automation, I think about excavators. Here is a machine that does the work of 100 or more men. Over the years these machines have taken the job of thousands of workers. The travesty!
Then there is also the average computer. These infernal machines have made hundreds of accountants jobless!
Also can you even imagine how many farm workers are out of jobs, because of what tractors can do? Ban these infernal machines

False [Re:Not really ]

[Tablizer]

automation and the associated productivity will make life much better, just like it always has.

That's not true. The Luddites didn't riot because they hated new gizmos, but because they lost their jobs.

I agree automation has the potential to make most lives easier, but the distribution of the benefits and downsides is not even. Owners of the automation don't necessarily want to share the benefits. Inequality is increasing and shows no signs of slowing down.

Automation is why you aren't at the stream beating your dirty clothes against a rock to clean them.

If you don't have money because a machine took your job, then you may end up doing similar in your bathtub to save a buck.

Economists should be able to see the 4% unemployment

Economies are cyclical and the slumps appear to be lasting longer. Plus, we don't know the full extent of eventual automation. Extrapolating past patterns is an imperfect way to know the future of jobs. At least be somewhat prepared by asking tough questions up front. Why bash economists for asking questions?

Re:So developing economies can afford a UBI now?

[apoc.famine]

Everything you're posting is a strawman attacking something that UBI is not.

You do not know what UBI is. Go learn.

Sure they do

[rsilvergun]

that's what civilization is. You're forced to participate in it. If we don't guarantee a minimum quality of life what's the point? And if that quality of life isn't improving again, what's the point? That's humanism. The idea that all human beings have intrinsic value. It's the only principle that can lead to anything but dystopia.

Basically we all work together whether we like it or not because the alternative is objectively worse. Nobody gets left behind. Nobody gets abandoned to fate. Life is made fair because that's what human reason is for.

Or we could just keep trying your way. I mean, sure, we had close to 10 thousand years of nasty, brutish and short life that can be directly traced to your dog-eat-dog philosophy and nonsensical supply side economics. We can ignore the reason dictators rise to power and just be pointlessly scared of them, ignoring root causes right up until the point we've got another dark ages on our hands. That works too, I guess.

Short-sighted government

[TJHook3r]

Western govts don't seem to look beyond the next 5 years. Automation will see govts topple all over the world. Good time to be a far-right candidate :(

UBI FTW

[NewYork]

UBI improves lives, enhances freedom and is a matter of social justice, writes Guy Standing
https://www.economist.com/open-future/2018/07/04/why-the-world-should-adopt-a-basic-income