The Mintsim 5GB plan is $300/year or $25/month. It's not that much more, although you're sucking extra minutes. I bought into the 3-month deal to save money and to test if I wanted to keep this carrier first, because I'm not investing in a year if it's going to be shit-quality; so far it's been as decent as Ting or T-Mobile.
Verizon has a network just as good as T-Mobile's. Some areas of the country are absolute shit on Verizon; others are absolute shit on T-Mobile. The carrier of choice depends on where you are. AT&T and Sprint have less-built-out networks and more deadspots, although if you live in a Verizon-T-Mobile deadspot with AT&T service for 100 mile radius you probably want AT&T anyway.
They're "unlimited" plans. This started in a time where many plans would charge you $50 for going over your data limit--and many still do throw $10 or $30 charges at you the minute you go a byte over your limit. These plans let you run data forever, but will throttle after exceeding a high-speed allotment.
If they say "unlimited high-speed data", they're lying unless you can run at max 24/7.
With T-Mobile, I was paying $69/month for unlimited voice and text, including a $5/month add-on for 2GB high-speed data.
I switched to Ting, which bills by usage, and frequently paid $40/month for using more than 100 minutes and text messages. Used 375-900MB of data (data saver was off on that last one) so paid $10 for data. Still cheaper than T-Mobile directly.
I recently switched to Mintsim. $199/year plus 3% regulatory fees ($6) means I pay $205 each year up-front and get 12 months, unlimited voice, unlimited text, 2GB data, throttled after using 2GB. $17/month and I don't get to half my data usage.
You're all ridiculous. $80/month cell phone plans, what the hell? I have Spotify and I'm approximately never on Wifi when I use it; I don't watch 4K netflix shit from my phone over LTE+ because I have wifi when I'm not driving.
So wait, 1,000,000 people having their livelihoods ripped from them is okay, but 10,000 having their livelihoods left obsolete is theft?
You are advocating serfdom. You realize this, right? Serfdom is obsolete because of technical progress, which necessarilydoes those things you just described as "theft".
Way back in the day, people didn't go out and buy clothes. Clothes required hours and hours of labor to purchase, and people had to be compensated for those hours. Farms were inefficient, and so required many farmers to produce food for few people. To pay the farmers for your food, you had to work long hours. Likewise, long labor hours were required to pay off the long hours to make a shirt or some trousers.
How long?
In the early 1800s, the total labor cost of a shirt was 479 hours. At an $8.25/hr minimum wage, that's $3,951.75 for one shirt. You get that shirt for $15 at WalMart today; there's a lot less time invested in its production, and about an hour of that time is invested by a Chinese worker making $3.20/hr, while another hour in total is invested by the farmers, shippers, spinners, and dye makers making the cotton cloth he uses.
Back before rail, we used to ship goods across sea. Seaward shipping was relatively-expensive, but at the time it was a hell of a lot cheaper than overland shipping--a lot more labor involved moving things over poorly-maintained dirt roads. One day, someone invented the hot-blast furnace, which makes 86,400 tonnes of iron using the same labor required to make 200 tonnes of iron; and thus rail was born, and overland shipping became cheaper than seaward shipping. Less labor in total was used to ship things overland: not only did we unemploy the sailors, but we employed fewer workers per unit goods shipped overland than we did shipping them across the sea.
Note that sea shipping isn't itself inefficient: moving a 40-foot container from China to the US costs $1,300, or 6 cents out of a $14.97 pair of pants; meanwhile domestic overland freight is nearly half the price at the register. It's inefficient to ship something from Maryland to Pennsylvania by boat, however, when you can just put it on a train. The logistics are complex, but come down to the number of hand-offs and the directness of the route; shipping around the coast--especially in a world where sea navigation is dangerous and requires hundreds of crew--costs more than just going by rail.
Speaking of shipping, did you know about wooden shipping pallets? Loading and unloading a freight of canned goods took a crew 3 16-hour days in 1920--48 total working hours. Palletized, the same crew can do the job in 4 hours. That means goods got stacked at the factory and were done, instead of being moved, unstacked and restacked onto a truck, moved again, unstacked and restacked onto a train, and so on: a lot more than 44 hours vanished out of the shipping chain. Later we invented the 40-foot shipping container, so we can do multiple hand-overs (truck to ship to truck) by simply lifting the whole trailer and stacking it somewhere else instead of moving all the pallets.
Construction, with electrical and pneumatic power tools.
Farm work, with tractors, fertilizers, pesticides, GMO, advanced irrigation. United States, 1900: 38% of the labor force are farm workers, 29 million farmers. United States, 1950: 12.2% of the labor force are farm workers, 25 million farmers. United States, 1960: 8.3% of the labor force are farm workers, 15.6 million farmers. 1970: 4.6% of the labor force are farm workers, 9.7 million farmers. 1990: 2.6% of the labor force are farmers, 2.1 million.
Food cost 40% of the middle-class family's income in 1900, 33% in 1950, and 15% in 1990. To put that into perspective: for today's $54,000 median income household, the 1900s technology boasts a total $21,600 spending on food, while the 1950s would require them to spend only $17,820, and 1990 requires them to only spend $8,100.
So it will happen, but we just shouldn't worry about it.
It's not guaranteed to happen; it's unlikely to happen in the foreseeable future. That is: it's as likely to happen tomorrow as it was yesterday; it's as likely to happen in 500 years as it is today. The transition requires entirely-new technology of a form largely different from what we have today, and technology is not something that happens by brute force; it's a constant gamble with results mediated largely by luck.
How do we summarize this evidence? Many studies over the years find that higher minimum wages reduce employment of teens and low-skilled workers more generally. Recent exceptions that find no employment effects typically use a particular version of estimation methods with close geographic controls that may obscure job losses. Recent research using a wider variety of methods to address the problem of comparison states tends to confirm earlier findings of job loss. Coupled with critiques of the methods that generate little evidence of job loss, the overall body of recent evidence suggests that the most credible conclusion is a higher minimum wage results in some job loss for the least-skilled workers—with possibly larger adverse effects than earlier research suggested.
Basically nearly all studies detect a loss of jobs; and narrow geographical studies show little to no localized impact. San Francisco may not suffer unemployment by raising minimum wage to $15/hr, while somewhere else in the country jobs are lost because that total flow of income has to come from someone's labor hours purchasing fewer things.
I never said how much I would increase the minimum wage.
Any increase has the same general effect; it's a matter of magnitude.
Since Bernie's done the research, let's start with $15/hr and set increases based on inflation.
Bernie likes to start sentences with, "You don't need to have a Ph.D. in economics to know..." and then say something that's totally fucking bonkers and doesn't align with objective reality. He doesn't know a god damned thing about economics and is approximately the political equivalent of Dr. Oz or Dr. Mercola.
Bernie and Trump have the same position on trade and economics in general.
Inflation is actually slower than wealth growth, by the way.
Say you have 10 workers working $10/hr making 10 chairs per hour. That's $10 per chair. Now you find a way for them to produce 20 chairs per hour, that's $5/chair. You have deflation!
The first observation you should make: the old way meant one worker worked 1 hour (1h) to purchase 1 chair. The new way meant one worker worked 0.5 hours (0.5h) to purchase 1 chair. That chair costs half as much.
So we want to keep a 2% inflation rate. Assume the above occurs over 10 years, the $10 chair should cost $12.19. Well, that chair costs 0.5h because 10 workers make 20 per hour. For those wages to adjust to this inflation, the workers must make $12.19/hr; but to have chairs cost $12.19/hr, we must pay workers $24.38/hr. It's impossible for wages to not exceed inflation in general.
Something like a Universal Social Security automatically adjusts for this because it just takes a percentage of the per-capita income and levels it. No human intervention required. This also has the bonus effect of moving the income outside the wage structure, which
How interesting that you understand that this guy is a tax burden, but don't realize that under UBI everyone is a tax burden. Everyone gets the same amount, don't they?
Everyone doesn't pay the same amount. Measurement is, as well, difficult and prone to interpretation.
In an economy, you have production and consumption. What is produced is consumed, and there is waste: if you dig holes and fill them in again, you're not making food; and if you pay your hard-earned wage (that is: money representing time you worked) for someone to dig and fill holes, you don't have that wage to pay to buy food (or iPads). Everything produced in an economy thus impacts wealth: the more produced with the same labor, the more wealthy people at every income level are, as a general trend.
So you have an economization: we find a way to produce more with fewer labor-hours, or we find a way to get things cheaper by trade. This temporarily unemploys people, which has real consequences in their micro-economy. Those consequences extend to the macroeconomy: if we're paying to treat the sick or to raise children to replace workers who died in temporary unemployment, then we're spending money on worthless things. Preventing people from getting sick and dying reduces that burden, but carries a cost; when the cost is lower than the burden it reduces, you have an economization--you've found a way to waste less labor in your economy.
(It's notable that the population and labor force always expands to a point of scarcity, so lost workers will get replaced. Any time we've created new technology allowing us to support a larger population, there's been a population boom.)
That economization is welfare.
So a UBI must necessarily provide similar or improved effectiveness at welfare while reducing the burden on taxpayers. That means you might work 40 hours for $80,000/year and keep $62,000 today, whereas under a UBI you might work 40 hours for $80,000/year and keep $68,000. If that works, then you've got a more-efficient system with less waste than the current one.
It would be an enormous misuse of statistics to claim that you're "reducing the burden on the taxpayer" for the guy who only pays $100 and gets $7,000 back. That guy's tax burden isn't reduced; he's receiving an enormous government benefit, paid for by other taxpayers. That benefit happens to cost those taxpayers less than the current system, so they have a reduced tax burden; it's not reduced to zero.
I find it interesting that every time someone figures out a better way to tax people, or hand out free money, they claim that my taxes won't go up. And then I run my numbers through their plan and wind up paying a lot more. (The "fair tax", for example.)
Fair Tax is a universal flat tax, which is total crap. Flat taxes are good for a very narrow span of uses, notably where your system's stability depends on collecting a rough proportion of total buying power. The only system requiring that thus far is my Universal Social Security, and as far as I can tell that's superior to all other UBI plans (obviously, or else I'd be pushing for something else).
The USS takes a 17% flat tax from business and personal income at all levels, and adds a general fund on top of that. The taxes to pay current welfare are equivalent to 55% of the total income tax taken including the 6.2% OASDI individual tax; thus the rough-in is to add the 6.2% to each tax bracket within the SSWB ($118,500) and multiply the result by 45%. This produces a lopsided tax system--the current tax brackets actually tax a single individual as high as 34.2% at $90k-$118k, and then 28% on income from $118k-$190k--so the numbers get adjusted.
To replace current single-filer brackets of 10%+6.2%, 15%+6.2%, 25%+6.2%, 28%+6.2%, 28%, 33%, 35%, 39.6%, I produced 0%+17%, 6%+17%, 17%+17%, 17%+17%, 17%+17%, 18%+17%, 20%+17%, and 22.6%+17%. The +6.2% is OASDI; the +17% is the
Current welfare, as a pile of expenses, is equivalent to 55% of the total income taxes taken. Out of the top tax of 39.6%, 21.78% reflects that proportion. So let's compare systems.
Our current welfare system is a public aid system. It takes the above money from everyone and hands it out to a minority of lower-income households. That means the major payers of welfare--notably the middle-class--receive nothing.
A UBI such as a Universal Social Security takes money from everyone and redistributes it to everyone. That means the major payers are also recipients, and can discount their tax burden by the payment they receive.
Because of this, it's relatively easy to use a similar (or substantially-larger) amount of money for the Universal Social Security and end up with lower taxes. It is, in fact, a necessary fact that the tax burden will be lower; the only question is to whom will we charge less?
Using a 17% model--taking the same amount of money we take now--would require us to drop the 39.6% high-bracket tax rate to 22.6%. That plus 17% gives 39.6%. The remaining tax brackets would adjust--notably, they'd adjust upwards, meaning the tax burden wouldn't decrease for middle-incomes by the full amount of the UBI/USS benefit. That is to say: if the benefit pays $7,000, you might find yourself paying a net $5,000 less in taxes because your income taxes are $2,000 higher.
There's another side to this, though: People have the delusion that we can make the lower-class the middle-class. They think we can give them a middle-class income of some sort. That's by definition impossible, and by any logical analysis won't work; but they think that. Any income is going to add to a basic income, and that means your middle-class is above your lower-class; and as the middle-class has that bottom income plus, all you get is bigger incomes. Likewise, to fund something like that, you have to take more from people, so you wind up doing unstable things to the economy.
My model only works as of 2013 because I used retail market prices to compute most things, and then did some engineering with the housing market. The housing budget I used reflects retail market prices for housing, and it incorporates risk reductions. That includes, primarily, that people with only UBI/USS have stable incomes: they won't lose their jobs/welfare/whatever because the money is money they're 100% guaranteed to receive. They face the same irresponsible spending risk as current low-income unassisted housing, which I based my cost model on; and they can pay a security deposit, in as much as anyone can, since payments start the day you're 18 and we can suppose we'll eventually end up with zero homeless children or at least that you can survive 3-4 more months on the street if you did it for years already. Even so, the average low-cost rents from California, New York, and Maryland samples is consistently around $1.00-$1.06 per square foot; and I budgeted $1.33 per square foot as a risk reserve.
Per single individual, I designed 244sqft apartment units. There are actually microunit projects like that today, experimentally, for different purposes; they're livable. That would likely only cover the 1.6 million homeless Americans. There are 5 million Americans on HUD, and only 25% of HUD-qualified Americans receive housing assistance; 75% of qualifying applicants go on a waiting list and never receive benefits. These households would almost universally receive benefits in excess of what HUD
Kind of the same problem. It's all economizing: if you lose your job, you lose income and now you have to find work (effort). At the same time, instability is bad, and the threat to your own ability to hold a job is visceral and scary.
The thing is outsourcing (trade) and technical progress both immediately eliminate jobs at a point. You find a faster way to shear sheep, you only need 9 of every 10 sheep shearers; that last guy can go find somewhere new to work. Maybe that doesn't happen, and the drop in the price of wool causes 10% more wool purchases; or maybe something in-between happens, and only 1 in 20 workers goes away; or maybe the opposite happens, and wool becomes affordable enough that its superiority to cotton causes it to displace cotton, and now you hire 8 times the sheep shearers but the cotton industry has round after round of layoffs as nobody's buying anymore.
Trade and technical progress also reduce the actual cost of products, and leads to a reduction in price. That means your ability to buy your own clothes instead of making them or waiting for rich people to throw them out for scavenging when the new styles come in is contingent on generations of your forefathers losing their jobs repeatedly to less-labor-intensive processes. At a point, those processes turned the market around and made clothing a widely-purchased commodity, although that came when people could afford it by way of us not having to employ a lot of people per clothing article made--which, when you go from a 10%-population market to a 98%-population market, is still a lot of movement. Even then, the actual ability to purchase clothing means the same money wasn't spent on something else--either because that something else got cheaper or because people liked clothes better and stopped buying it.
From that market turn-around, you then only have the reduction of clothing-maker jobs. New tech to make clothes cheaper, but we don't buy more clothing (we buy video games instead); outsourcing to import clothing cheaply, and the manufacture jobs vanish (but we can buy other things). The shipping and retail worker jobs grew with each of these--more stuff bought, more shipped, more sold--although we economize that, too (wooden shipping pallets...).
I'm part of this system, too. My job can go away. I work with computers and do system administration and network security; I always look for ways to minimize the costs. Less labor, fewer analysts, easier administration. I moved this company from Linux with programs to Linux configured by Puppet, and now to Linux with Docker, and now performing my job takes literally 1/100 as long (I've replaced repeating processes that took 6 days with processes that take 5 minutes, seriously). I always argue for systems that do most of their analysis and tuning for us so we don't need to hire 15 analysts for 24-hour coverage--this is literally the difference between Snort with BASE and something like CISCO FirePower: one person can do IDS analysis with FirePower here, and it would literally take at least 15 analysts at $40k/year each (plus more administrative overhead) to stitch together a cheap, home-grown system. I'm not exempt.
I've torn out systems in the past and re-architected them with half as many components because the parts I wanted to remove were breaking. Near 100% of support calls for those systems went away, and several impacted departments down the line became more-productive. I'm removing over 90% of the systems I've ever supported because I've built new stuff that replaces it all. I've argued for new business processes, and am trying to develop a documentation process and procedure here--and document the processes used to deploy new systems, deploy new software, and maintain all this crap. It's all trivial, and it's getting more-trivial day by day.
Eventually they just won't need me. They might promote me to another position just to keep me. People have tried; I've had people try to hire me simply to have me on-hand for
It's more that they want more money diverted to their own pockets. The same as the rest of us, really.
The main thrust of prices is you're paying the wages of workers providing goods and services. Apple, Microsoft, and Google are big outliers with their 25% profit margins, and Tesla's luxury niche lets them get 22% in a market where Ford and GM make in the 12% range; people like to look at these and at single-quarter or single-year profits of healthcare companies (some as high as 49% net profit margins) and claim businesses are taking all the money. On average, American businesses are getting less than 10% of all spending as profit; the rest of the total income is wages. Even some of the big healthcare companies swinging 49% in some years are pulling 30% and higher net losses in others, averaging 11%-14% (which is still high).
You get a narrative where people want higher wages and claim businesses should just take less profit. or CEOs should make less; in reality, that doesn't happen. Profits aren't that high to begin with--e.g. Comcast's $86/month Internet service comes from a business with an 11% net profit margin, so they could drop the price to $77.60 and make $0 profit (assuming they drop the price of every product they offer evenly), and likewise would raise that price basis as they raise wages. CEO salaries are pretty low on a per-worker term, so much so that the top executives of Ford combined could forego all their salary and bonuses and get enough money to buy a latte for every Ford employee once each month.
What we're really talking about is raising wages and raising the price of products. GM could pay workers more and raise the price of cars. AT&T could pay workers more and raise the price of phone service. Then, we would either have less money to spend on other things and thus support fewer American jobs or we'd all move to T-Mobile where they didn't raise worker wages so we could pay less for service and complain about AT&T suddenly laying off 15,000 employees when 80% of their customer base moved to other providers.
Everyone really wants to imagine money comes from nowhere and businesses have infinite profits. The world isn't a video game where we suppose there are consumers and they have money; it's a complex system where money moves back and forth.
If you are being given enough to survive, why would you want to work a weekend job?
When a girl walks into your immaculate, 12,000 square foot mansion, she sucks your dick. It's an automatic impulse. Pull up in a Lamborghini, smile at random girl, she gets in, she shows up at your house, she looks around with huge eyes, she sucks your dick.
I'm not kidding. That's how it works.
If you're rich as fuck, you have to work a lot less-hard to get laid. Girls just jump your bone when they see how fucking rich you are. You're automatically better than everyone else and you call all the shots.
Besides, it's hard to buy a lot of games on Steam and have a $4,000 gaming PC when you only make $200/month more than you need to live.
In undeveloped nations, food can represent a significant part of labor. We expend 2% of our labor on the farm in the US; in developing nations, they expend anywhere from 18%-25% just on the farm, and as high as 60% of their labor in the total act of producing food. The USDA estimates you can readily feed a family of four in $146/week or $36.5 per person per week; that's $607 billion per year, about 4% of all income in the United States.
Imagine 60% of all work done is done to make food. 60% of the wage-hours paid are food. You're looking at roughly 60% of all income spent on food, although farmers might be low-wage workers so maybe it's 50%. Can you imagine taxing 50% just to provide enough food for 100% of the population?
When your middle-income family is only spending 30% on food, you can tax enough to feed that bottom 5%--1.5% of all income--and then have a SNAP program. If you want to spin up a Basic Income, you'll have to take 30% of all income just for food--then there's housing, clothing, personal care, utilities....
In a highly-developed nation, the amount of labor required to provide basic services will be lower. That means the fraction of total income required to provide those services will be lower. That mean the tax required to provide the money to buy those services to everyone will be lower.
We can do it without taking more money from the rich than now, though.
In total, welfare services cost 55% of all income tax taken. That 39.6% the richest of rich pay? 21.78% of that is welfare. Do note that the welfare services procedurally account for their sources differently; if we pile all of the money together and take a count of what pays for those services, it amounts to 55% of all taxes taken as income taxes. That means if we change the accounting--if we get rid of those other procedural sources and source from income--then we can cut off 55% of the income taxes and do our manipulation from there.
In the end, the amount of money moving down in a Universal Social Security system (a particular type of UBI) is $1 trillion lower than the amount of money moving down today, yet more-effective at achieving the welfare goals of all current welfare services.
Do note that, as you observe, we are still taking from the rich and giving to the poor. Current system may take $18,000 from you and give it to poor people; USS may take $13,000 from you instead. The mechanism is fiddly, too: my Universal Social Security is designed to pay bi-weekly or semi-monthly--on the IRS terms for collection--and tends to take $20,000 from you and give back $7,000, so you end up with a net-tax-burden of $13,000. It's designed that way to tie it mathematically to productivity and per-capita purchasing power, meaning it never needs fiddling once set--it's agnostic to inflation and automatically adjusts fairly for standard-of-living.
Taking $13,000 rather than $18,000 is still taking. It's less, but it's still a thing.
Either way, the fundamental problem with the concept of UBI is that it assumes money can always turn have-nots into haves
A UBI is a form of welfare. I use my own Universal Social Security as the primary example because of its superior design to contemporary plans--rather than throwing out arbitrary numbers like "$10k per year", it takes a fixed amount of taxable income as funding and divides it among adult citizens, which is essentially proportional to the per-capita income and proportional in buying power to the per-capita GDP--and can lead off of that to highlight the fundamental property of any type of income: it's a proportion of production.
Money itself has no intrinsic value. Money represents hours of labor, and is paid as a wage or salary tied to a unit of work (salaries expect a fixed number of hours, wages pay per actual hour worked). This is complicated by the dynamics of inflation interacting with debt and savings; the most simple and basic fact of the flow-through proportion--the continuous consumer expenditure--is that labor ties to money in such a way that the exchange of money facilitates the exchange of labor, with some labor having more weight than other labor (if you make $20/hr, you can induce a $10/hr worker to work twice as long as you).
That means a UBI can't create wealth out of nowhere: money isn't wealth, and throwing money at people doesn't add wealth to the economy by giving them money. UBI creates stability in an economy, which allows other economic factors to create wealth. A UBI may be more-efficient than contemporary welfare, meaning it creates wealth by diminishing waste. In any case, it doesn't create wealth by installing money.
It also means a UBI only works if we continue to produce. If nobody works, nothing gets made, and the purchasing power goes down. If nobody works and somehow machines produce exactly as much as we produce by our labors today, we actually don't get any poorer--the total purchasing power of all the money people are (somehow) receiving as income remains the same, and our economy's behavior in practice doesn't change so long as the hierarchy of incomes doesn't change.
That kind of post-scarcity economy isn't achievable at this time. The machines will simply diminish labor tied to products, reducing their costs and freeing that labor up for other products. With costs falling, prices fall; with prices falling, consumers can buy more; and with more purchasing, we require more labor. Welfare helps the displaced workers get from here to there. This is, of course, modulated by rate: if we unemploy 50% of our workforce in a month, we're going to experience an extreme recession from which no amount of UBI will save us (note the common line among UBI supporters is UBI will save us when none of us has to work--they're wrong).
Where I think UBI is really going to sting (if implemented) is housing costs
Unlikely, really. Shifting the money around as per my Universal Social Security would produce, in 2013, sufficient income for a non-working single individual to rent a 244sqft apartment. This on top of food, clothing, utilities, and personal care, and including a fair risk margin. Profit margins aren't factored in; I simply used retail prices as a model, and added risk controls on top of that. Housing was a particularly difficult problem because the USS model decreases landlord risk and so controls costs, yet that decrease can't be readily measured; the cost per sqft should be around $1.00-$1.06, and I gave $1.33 as my baseline so as to provide a wide risk reserve to cover my blind spot.
There are two issues here.
First, the USS model creates an entire new housing sector. These 244sqft apartments, when considered against the 1.6 million homeless (no income but USS), create a range of $102M-$128M of straight profits per month, out of $414M-$519M of revenue per month, using a range of $1.06-$1.33 per square foot. Th
Econometric models don't have a really good record at predictions, and need to be verified carefully.
That's because even full econometric models require possession of more information than it's possible to possess. Don't try to predict the sale price of MSFT in 3 weeks 2 days 4 hours 53 minutes; predict whether the tech sector is going to grow.
There are a few things we can know absolutely. We know that the long-term success of various competing efforts falls toward those efforts which are more effective--which use less resource for more production. Using that, we can create conceptual models which are mathematical in nature but which don't attempt to provide fortune-telling superpowers.
The mass will be conserved, not necessarily the volume.
True; we tend to assume mass is proportional to volume, but it's also dependent on temperature and pressure. You see my point, though.
According to the law of supply and demand (which isn't a law in the sense of laws in physics), we lower the price on the widget.
You skipped over the finer points of competition and barriers to entry, but that gets to be a huge pile of conceptual models that could go in several forward-facing directions. Notably:
In a competitive market, the margin ends as about the same as before, but it may not with a monopoly.
If the cost of Tesla-like cars falls into the range of consumer-level purchasing, then suddenly you have dozens of competitors already. Similarly, if the cost of a good like cellular phones falls from $4,000 to $400, your market of ~50,000 people in all of America becomes nearly 100% of the American population--and competitors making ad selling cell phones (and cell phone service) stand to profit a hell of a lot, and so face less risk trying to enter the market, and suddenly your monopoly breaks.
In no case will the manufacturer be compelled to raise worker pay in order to keep the marginal cost the same (the manufacturer might of course see other reasons to).
Sort of.
If we ignore the economic consequences of deflation and pretend a monetary policy of issuing a fixed number of dollars per income-earning person in population, what happens in practice is the same number of dollars buys more things as these effects occur. The number of wage-hours paid goes down, thus the wages paid goes down; this creates the reduction in marginal cost which results in lower prices in the conditions you have observed.
In that situation, the purchasing power of workers increases. They make the same number of dollars and work the same hours; we simply pay fewer of them for a given product. The cost of that product falls, thus its price falls, and the workers gain the ability to buy more of it. The difference in their ability to buy allows them to buy more products, requiring more workers, creating the labor demand that creates new jobs down the line. (Again: the gap in job loss to job creation is why we need welfare.)
From that line of reasoning, though, there's another mathematical fact: if the prices go up and the profit margins don't, then the workers must be earning higher dollar-amount wages.
That increase in wages doesn't change the buying power of workers: the steady increase in the average wage is essentially a zero-sum game on the economy. It has functional impacts via controlling how much inflation we face (negative inflation is deflation), which changes the behavior of the economy--notably, of savings and debt; but the purchasing power of a $10/hr wage when products cost $50 is the same as the purchasing power of a $20/hr wage when products cost $100.
So we see that the buying power of workers must go up in any case due to the continuous reduction in costs and the following reduction in prices; and that the wages of workers must go up faster than inflation if we are to have inflation. It
Detroit, as a city, is devastated. I don't care about cities.
The people of Detroit are a blight. They're a concentration of people who would be just as poor anyway if they were spread out across America--and, in fact, there are way more Americans living like that than just in Detroit--and we're simply uncomfortable having to look at them. We don't want to make Americans wealthier and solve the problems of the poor; we just want to cover over the visible evidence that they exist so we can feel good about it.
Except that the booming city is probably in another country and does not benefit the people in the "rust out" country at all.
Nope. The booming city is San Francisco, Palo Alto, or Cupertino. I was talking about America getting wealthier.
Trade and technical progress make Americans wealthier and move us from undeveloped third-world jobs like manufacture to developed first-world jobs like information technology and medicine. If you impede all of the things we've done since 1900 which had eliminated American jobs, we'd currently look a lot like some of the less-developed parts of Africa: farmers dragging plows and manually carrying water buckets to grow crops, while desperately sewing up holes in our shirts, with little to no access to things like vaccines and medications.
For example: if we stopped importing Men and Boys's Cotton Trousers and Shorts from China, and instead made them here, Americans would be poorer. If we paid the American factory workers over $18/hr, we'd have a net-loss of American jobs; if we paid them less, we'd have a net-gain; and either would buff out in a couple years and return unemployment to the same stable point, so the job situation would ultimately go unchanged.
Meanwhile, the median $27/hr income American pays 0.55 hours of his time for a pair of pants. If those pants were made by a $21/hr factory worker (American), the median-income American would pay 2.07 hours for them; and if they were made by an $8.25/hr minimum-wage worker, the median-income American would pay 1.01 hours for them. For the minimum-wage worker, these numbers are 1.81 hours (now), 6.76 hours ($21/hr factory workers), and 3.31 hours (minimum-wage factory workers). The ones hurt most by undoing trade are the poorest Americans, and the ones who benefit most from trade are the poorest Americans.
We are getting rich off trade--the middle- and lower-classes are getting rich off trade. The lower 90% income earners in America are getting rich off trade. They're also getting rich off technical progress, as technology replaces their jobs here and there. That's what happens.
Are you done arguing from ignorance, or would you like to claim that AIDS is a government conspiracy and not caused by HIV or transmitted sexually?
Ford has 199,000 employees as of 2016. CEO Mark Fields got $5,215,000 cash compensation or 1.31 cents per employee per hour ($26.20/year per employee); Executive Chairman William Clay Ford Jr. got $2,990,000 cash compensation or 0.75 cents per employee per hour ($15.03/year). The other executives each received less in cash compensation. Together, they could pitch all their salaries and bonuses in to raise all Ford employee wages by 4 cents per hour.
A good bump from a $42,000 salary to a $42,080 salary. That's $1.53/week, which if all of Ford's top executives pitched in their entire year's salary, they could give every one of Ford's employees a free latte from Starbucks once each month.
What bullshit do you have next for me to thoroughly debunk? Would you like to claim space aliens are controlling the Government?
The real world is, however, described by math. Simple examples are the most obvious--such that if you do indeed have a gallon of milk, and you take half of it into another container, you can't end with more than a gallon of milk total. If your original measurement is incorrect, then you didn't start with a gallon of milk.
What I described shows that there are, in fact, relationships between input and output conditions in the world. It does require time to produce output. Various production methods require various amounts of time, and environmental factors cause variations in that precise amount of time; and large efforts to repeat the same processes for the same outcome are repeatable to a reliably-consistent average. This is why, for example, Walmart can have little to no staff idle time during busy periods on schedules written two weeks in advance without more than a five-minute register wait and still get all the operational work (stocking shelves, unloading trucks, etc.) done.
Because business profit margins don't continuously grow over time and trend downwards with increasing competitive pressure, the mathematical relationship between wages and prices is inviolable in the long-term aggregate. That has a number of effects, notably that wages must increase faster than inflation, and that goods with high profit margins will become cheaper when they become cheaper to produce simply because the target market increases and so the barrier to entry decreases.
In the real world, we've seen luxury goods such as cell phones become commodity goods. We can predict Tesla's net profit margin of 23% will fall in line with GM and others's net profit margins around 12% as Tesla cars move from things purchased by the moderately-rich to things purchased by everyone--but that's not quite right, is it? Right now, Tesla's net operational margin around the Tesla Model S is pretty high; what we can really predict is that cars like the Model S will have operational margins in line with cars like the Chevy Cobalt when they are similarly-cheap to produce and thus become the standard kind of car basically everyone drives.
We can predict that because there are dozens of car manufacturers around the world, and a dozen or so major actors selling in America (GM, Chrysler, Ford, VAG, BMW, Kia, Hyundai, Mitsubishi, Toyota, Mazda...). Model S is low-demand; but when every manufacturer can make a Model S equivalent for $15,000, what's to stop them from selling it for $20,000 or so? Maybe they want to sell it for $50,000, but it won't start there; why make $30,000 each off a million customers when you can make $5,000 each off a hundred and fifty million customers?
We're back to those lower corporate margins again--or, really, to corporate margins being what corporate margins are going to be as a result of the effects of all external inputs to their pricing. The external factors are mathematically the same--consumers have the same amount of spendable income to divert to their product, competitors are able to provide the same kind of competition, etc--and create the same margin. What's left?
Costs. Costs come ultimately from wages, and prices aggregate from wages plus profits.
We're back where we started. If we lower the labor required, the cost goes down; at the given margin, the price comes down; to keep the price the same, costs must go up; to increase costs, we must raise wages to compensate for decreased labor; and to have inflation, we must raise wages further than that. That's a mathematical relationship.
You know that's how the real world works. If you go into Safeway and they have peanut butter for $30 per 18oz can, are you going to buy it, or just go across the street to Wegman's and pay $2.19? You can't buy from the guy across the street and sell to his same customers for twice the price and expect a booming business; you have to take slimmer profits or get the product cheaper if you're going to compete on price--and consumers want to maximize the distance their dollars go, so price has weight.
No, this is what happens when you're one of 500,000 Americans living in Detroit and you make cars, but America has decided to buy its cars from Japan and now 300,000 Americans are wealthier and live better lives--oh, and along with that, they're able to buy things made by 40 million Americans in Silicon Valley and other west-coast urban tech centers.
Are you willing to advocate writing millions of people off to poverty so that thousands can avoid a little discomfort in temporary transitioning away from the jobs they had? We have welfare for those transitions, but nothing to replace the loss of wealth drawn by trade and technical progress--and that wealth allows us to provide welfare, without which there would still be poor, and the poor would be much worse off.
The fact that one quiet town raises a booming industry as another booming industry town rusts out in the path of progress is called growth. You can afford more than a loincloth and a day of hunting and gathering for nuts and rabbits because of this growth.
The math is a reflection of how the real world works; it's not the other way around.
It's also mathematically-impossible to feed 144 people 2 pounds of food each from 5 pounds of bread and 2 pounds of fish. If you try that in the real world, it won't work; you could do it in a story or a video game.
Yes, out of stone hauled from the ground, rolled on wheels, etc. Amazing what a little leverage will get you. The Romans used concrete; it was faster and they built actual cities.
It's mathematically-impossible for the middle-class and lower-class to not get wealthier as society gets wealthier.
Net profit margins aren't rising. Net profit margins are around 10%--on average, anyway; some medical businesses fluctuate between 29% losses and 49% profits year after year, and make a 7%-14% 10-year running average net profit. Adidas Shoes goes between 12% and -7%, with a 4%-5% average for any 5-year period. Apple, Microsoft, and Google actually average 20%-22% because what the fuck; while Ford averages 4.5% and Exxon Mobil averages 7% (seriously, an oil company averages peasant profits? They literally run the world).
So yeah, the spread is kind of wide, from low single-digits to the low-20%s; but profit margins do average somewhere around (just below, iirc) 10% for businesses as a whole in the United States. They have for decades.
Technical progress reduces the number of labor-hours used to produce a thing. That means each product has a minimum price equivalent to a lower sum of wages--you know, the money you pay your workers for working. That's only in current terms, of course: inflation involves the increase of wages.
That's the lynchpin.
If 10 people work 1 hour at $10/hr to make 10 units of a product, that product costs $10 per each. That's 1 labor-hour of work. Each of these people makes $400/week working their 40 hours.
If you find a way to make that thing twice as fast, then 10 people working 1 hour at $10/hr make 20 units, at a cost of $5 per each. That's a half labor-hour. Each of these people still makes $400/week, despite the lower cost. Unemployment is currently roughly 5% and is in line with the stable levels reached since the 1940s and prior largely because the extra $5 not being spent on product X can buy product Y--which, considering you only need half as many workers to make product X, can easily be made by employing the labor displaced by making product X cheaper. This doesn't happen instantly, hence the need for things like welfare to keep your economy healthy.
Yes, that's right: your standard-of-living is built on the backs of people losing their jobs, constantly, every day, throughout all of history.
So the Federal Reserve tries to keep a 2% inflation rate. Let's say the above happens over 10 years--50% unemployment overnight would suck, anyway, and your economy would go through a major recession. You have this product that costs $10, and 10 years later you want it to cost $12.19; but it takes half as many wage-hours to make.
Well, to pull this off, the workers involved have to make higher wages. That $10/hr pay has to be $20/hr, plus inflation--$24.38/hr.
The median income in the United States in 1998 was $38,383; while the median income in 2015 was $56,516. That's roughly a 47% increase.
Back in 1998, you could get 128K ISDN for $35/month. 2015 had 200Gb Cable Internet at $83/month--1,562.5 ISDN lines, $54,687.50/month, for just $83. In part, the free market controlled for inflation here by simply delivering in bulk and not selling you a 128K line at a reasonable price. Shrug.
What's bigger is the decrease in percent of income spent on food--despite eating more food out-of-home, which increases the cost--and on clothing, as well as the increase on entertainment and other discretionary spending. In two decades it's small, compared to 1950-2000 swing (especially with the huge technology boom through the 80s). We're looking at another boom like that.
he gave a voice to the displaced of the Rust Belt, which are swing states
Basically, yeah: if 10,000,000 people get richer and 1,000 people get poorer, you have... well, poor people. Keep doing this and you have a wealthy nation: the poor people are displaced, and the poor people in other areas become middle-class. What you have is a small elite (previously, auto manufacturers) losing station to a larger class of poor, who then become a larger middle-class; and then you h
Basic Income was conceived of in response to the idea that human labor might become obsolete in a wide sense.
Which is both ludicrous and history. The amount of manual labor required to perform what we do today is ludicrous. Go back to the Holy Roman Empire and have them build the things we build; they can't do it. It's not that they physically can't build any given thing; it's that they are physically incapable of supplying the labor to build that much of the things we build.
Before we invented the hot blast furnace, we used over 200 times as much labor to make iron. Railroads didn't exist until the hot blast furnace because it would require more than the GDP of the world to maintain all the world's railways; they'd never get into operation before they were already aging and falling apart.
A universal social security is a form of basic income. It's unplanned, in as much as any policy is unplanned.
I described a Universal Social Security including transitional plans, tax modifications, and the like as of 2013, to avoid both tax increases and hard cut-offs of in-use welfare services. This transitions away our existing services and replaces them with a cash benefit for every resident, adult American over the age of 18. For naturalized Americans (immigrant citizens), this is paid as a non-refundable tax credit instead; and naturalized Americans and children in low-income households receive public aid from a condensed system providing food security, housing assistance, and unemployment benefits--basically the same system, today, cut back to roughly 1/12 its size.
The Universal Social Security benefit collects a 17% flat tax on all income (business and personal) by taxable income rules, similar to OASDI's 6.2% tax on paychecks. This replaces OASDI's paycheck and payroll taxes, as well as 55% of the current income tax; the remainder of income tax is adjusted to a new progressive tax system ranging from 0% to 22.6%, giving total income tax brackets from 17% to 39.6%. The 17% income is collected bi-weekly as per current IRS rules (as with OASDI) and funds the Social Security Trust Fund; benefits are paid as a flow-through system. This uses the same model as OASDI.
This system has a number of features. Of note to you, in this context, there are two.
Firstly, this system automatically adjusts for income and productivity. This system takes the number of taxable dollars earned total (which is always minimized by any means available to the taxpayer), reserves from it a fixed percentage, and divides this up among all resident, adult Americans evenly. In simple terms, this gives out a percentage of the after-tax income per capita, which is roughly proportional to the total income per capita. Because of this feature, the actual purchasing power of the Universal Social Security benefit increases precisely to reflect increases in America's total purchasing power.
Second, this system supports Malthusian growth in the same way as the general economy. When the economy grows to the edge of its means, it encounters scarcity: further growth requires an increase in labor greater than the increase in population, and so the economy's ability to provide goods decreases, and the price of goods provided increases with the additional labor required to scale that far. This is self-stabilizing: because more is spent on these more-expensive goods, nothing is spendable on the goods we can't produce, thus there is no demand for jobs for which there is no labor. The Universal Social Security benefit is impacted by this to its exact degree: growth into scarcity reduces the per-capita purchasing power, and thus proportionally reduces the purchasing power of the benefit; the poor and middle-class will thus feel the pressure of this scarcity the same way they feel any recession, to the same effect.
Thus this form of universal basic income is not substantially-different in terms of basic economic behavior from any current system; and this system is bluntly mathematical, being adjusted by what occurs in the economy without requiring the knowledge, calculation, and planning of central bureaucrats. It is a system founded on free-market principles and on the natural, rational behavior of individuals to economize, and itself is nothing more than a reflection of the economy around it.
Why would you not make a self-stabilizing system? Human planners can't get anything right; things change and they insist on staying the same.
There aren't enough workers to make everything we want with no robots. Therefore, we need robots, because there aren't enough workers.
People can't get that far, and you're not there yet; but good eye, finally.
I keep telling people scarcity occurs when the production rate of a good scales beyond linear. That is: if you have 1,000,000 people and grow population to 1,100,000 people, you need 10% more farmers--exactly as many farmers and, specifically, farm labor hours per person as before--and food prices don't go up. If you have 10,000,000 people and scale to 11,000,000, you run out of good land; you can still make enough food, but at lower yield and with more fertilizer and irrigation, meaning you need 24% as many people instead of 11% more (10% farmers, 1% everyone else involved), and that last marginal unit of food becomes 2.4x as expensive (food is overall 11.7% more expensive).
Most people can't seem to grasp this simply because they're exposed to high school economics, and attached to this idea that supply is independent outside factors and the economy of scale is infinite. Good luck growing wheat on uneven, rocky soil--there's a reason supply stops where it does. Somehow they occasionally get as far as explaining that demand is the demand for a good at a given price, and can't figure out why something is at any given price; they try to assert that all prices are set based on maximizing price x demand, and then talk about competition bringing prices down, and fail to see the conflict in their own incomplete reasoning.
So to complete the thought: there aren't enough workers because we can't scale production to feed and otherwise support those workers while deriving more stuff from them; and, more fundamentally, there aren't enough workers because workers would create more demand for goods (being themselves consumers), so we can't keep up.
Robots are just technology. We did this with electricity, with motor cars, with pneumatic hammers, with shipping pallets... we replace jobs. We reduce the number of labor-hours to achieve a result, and then what? Instead of 10 workers making $10/hr, you have 5 workers making $10/hr; each of those 5 workers still gets his $400/week, and the things he makes cost half as much--leaving money to spend. Eventually (after cycling unemployment) those other 5 workers make other things, and we can buy those products and pay them.
We want the robots; we just don't want them to come all at once. Bump unemployment by 0.1%, continuously, month after month. The economy will recover before it starts to sink into recession. If you bump it by 2% in 6 months, everybody will panic, and the replacement rate will accelerate, and we'll be back at 8% or 12% unemployment and in another major recession.
Slashdot Mirror
The Mintsim 5GB plan is $300/year or $25/month. It's not that much more, although you're sucking extra minutes. I bought into the 3-month deal to save money and to test if I wanted to keep this carrier first, because I'm not investing in a year if it's going to be shit-quality; so far it's been as decent as Ting or T-Mobile.
Verizon has a network just as good as T-Mobile's. Some areas of the country are absolute shit on Verizon; others are absolute shit on T-Mobile. The carrier of choice depends on where you are. AT&T and Sprint have less-built-out networks and more deadspots, although if you live in a Verizon-T-Mobile deadspot with AT&T service for 100 mile radius you probably want AT&T anyway.
They're "unlimited" plans. This started in a time where many plans would charge you $50 for going over your data limit--and many still do throw $10 or $30 charges at you the minute you go a byte over your limit. These plans let you run data forever, but will throttle after exceeding a high-speed allotment.
If they say "unlimited high-speed data", they're lying unless you can run at max 24/7.
With T-Mobile, I was paying $69/month for unlimited voice and text, including a $5/month add-on for 2GB high-speed data.
I switched to Ting, which bills by usage, and frequently paid $40/month for using more than 100 minutes and text messages. Used 375-900MB of data (data saver was off on that last one) so paid $10 for data. Still cheaper than T-Mobile directly.
I recently switched to Mintsim. $199/year plus 3% regulatory fees ($6) means I pay $205 each year up-front and get 12 months, unlimited voice, unlimited text, 2GB data, throttled after using 2GB. $17/month and I don't get to half my data usage.
You're all ridiculous. $80/month cell phone plans, what the hell? I have Spotify and I'm approximately never on Wifi when I use it; I don't watch 4K netflix shit from my phone over LTE+ because I have wifi when I'm not driving.
So wait, 1,000,000 people having their livelihoods ripped from them is okay, but 10,000 having their livelihoods left obsolete is theft?
You are advocating serfdom. You realize this, right? Serfdom is obsolete because of technical progress, which necessarilydoes those things you just described as "theft".
Way back in the day, people didn't go out and buy clothes. Clothes required hours and hours of labor to purchase, and people had to be compensated for those hours. Farms were inefficient, and so required many farmers to produce food for few people. To pay the farmers for your food, you had to work long hours. Likewise, long labor hours were required to pay off the long hours to make a shirt or some trousers.
How long?
In the early 1800s, the total labor cost of a shirt was 479 hours. At an $8.25/hr minimum wage, that's $3,951.75 for one shirt. You get that shirt for $15 at WalMart today; there's a lot less time invested in its production, and about an hour of that time is invested by a Chinese worker making $3.20/hr, while another hour in total is invested by the farmers, shippers, spinners, and dye makers making the cotton cloth he uses.
Back before rail, we used to ship goods across sea. Seaward shipping was relatively-expensive, but at the time it was a hell of a lot cheaper than overland shipping--a lot more labor involved moving things over poorly-maintained dirt roads. One day, someone invented the hot-blast furnace, which makes 86,400 tonnes of iron using the same labor required to make 200 tonnes of iron; and thus rail was born, and overland shipping became cheaper than seaward shipping. Less labor in total was used to ship things overland: not only did we unemploy the sailors, but we employed fewer workers per unit goods shipped overland than we did shipping them across the sea.
Note that sea shipping isn't itself inefficient: moving a 40-foot container from China to the US costs $1,300, or 6 cents out of a $14.97 pair of pants; meanwhile domestic overland freight is nearly half the price at the register. It's inefficient to ship something from Maryland to Pennsylvania by boat, however, when you can just put it on a train. The logistics are complex, but come down to the number of hand-offs and the directness of the route; shipping around the coast--especially in a world where sea navigation is dangerous and requires hundreds of crew--costs more than just going by rail.
Speaking of shipping, did you know about wooden shipping pallets? Loading and unloading a freight of canned goods took a crew 3 16-hour days in 1920--48 total working hours. Palletized, the same crew can do the job in 4 hours. That means goods got stacked at the factory and were done, instead of being moved, unstacked and restacked onto a truck, moved again, unstacked and restacked onto a train, and so on: a lot more than 44 hours vanished out of the shipping chain. Later we invented the 40-foot shipping container, so we can do multiple hand-overs (truck to ship to truck) by simply lifting the whole trailer and stacking it somewhere else instead of moving all the pallets.
Construction, with electrical and pneumatic power tools.
Farm work, with tractors, fertilizers, pesticides, GMO, advanced irrigation. United States, 1900: 38% of the labor force are farm workers, 29 million farmers. United States, 1950: 12.2% of the labor force are farm workers, 25 million farmers. United States, 1960: 8.3% of the labor force are farm workers, 15.6 million farmers. 1970: 4.6% of the labor force are farm workers, 9.7 million farmers. 1990: 2.6% of the labor force are farmers, 2.1 million.
Food cost 40% of the middle-class family's income in 1900, 33% in 1950, and 15% in 1990. To put that into perspective: for today's $54,000 median income household, the 1900s technology boasts a total $21,600 spending on food, while the 1950s would require them to spend only $17,820, and 1990 requires them to only spend $8,100.
This is the march of tec
So it will happen, but we just shouldn't worry about it.
It's not guaranteed to happen; it's unlikely to happen in the foreseeable future. That is: it's as likely to happen tomorrow as it was yesterday; it's as likely to happen in 500 years as it is today. The transition requires entirely-new technology of a form largely different from what we have today, and technology is not something that happens by brute force; it's a constant gamble with results mediated largely by luck.
Give some research that backs up your claims.
It's generally complex, but shows a trend of minimum wage increase causing job loss. The studies to determine if it does are statistical, and have problems with confounding. The analysis I use is mathematical based on supply of income, which is only representative of the trade of working hours.
How do we summarize this evidence? Many studies over the years find that higher minimum wages reduce employment of teens and low-skilled workers more generally. Recent exceptions that find no employment effects typically use a particular version of estimation methods with close geographic controls that may obscure job losses. Recent research using a wider variety of methods to address the problem of comparison states tends to confirm earlier findings of job loss. Coupled with critiques of the methods that generate little evidence of job loss, the overall body of recent evidence suggests that the most credible conclusion is a higher minimum wage results in some job loss for the least-skilled workers—with possibly larger adverse effects than earlier research suggested.
Basically nearly all studies detect a loss of jobs; and narrow geographical studies show little to no localized impact. San Francisco may not suffer unemployment by raising minimum wage to $15/hr, while somewhere else in the country jobs are lost because that total flow of income has to come from someone's labor hours purchasing fewer things.
I never said how much I would increase the minimum wage.
Any increase has the same general effect; it's a matter of magnitude.
Since Bernie's done the research, let's start with $15/hr and set increases based on inflation.
Bernie likes to start sentences with, "You don't need to have a Ph.D. in economics to know..." and then say something that's totally fucking bonkers and doesn't align with objective reality. He doesn't know a god damned thing about economics and is approximately the political equivalent of Dr. Oz or Dr. Mercola.
Bernie and Trump have the same position on trade and economics in general.
Inflation is actually slower than wealth growth, by the way.
Say you have 10 workers working $10/hr making 10 chairs per hour. That's $10 per chair. Now you find a way for them to produce 20 chairs per hour, that's $5/chair. You have deflation!
The first observation you should make: the old way meant one worker worked 1 hour (1h) to purchase 1 chair. The new way meant one worker worked 0.5 hours (0.5h) to purchase 1 chair. That chair costs half as much.
So we want to keep a 2% inflation rate. Assume the above occurs over 10 years, the $10 chair should cost $12.19. Well, that chair costs 0.5h because 10 workers make 20 per hour. For those wages to adjust to this inflation, the workers must make $12.19/hr; but to have chairs cost $12.19/hr, we must pay workers $24.38/hr. It's impossible for wages to not exceed inflation in general.
Something like a Universal Social Security automatically adjusts for this because it just takes a percentage of the per-capita income and levels it. No human intervention required. This also has the bonus effect of moving the income outside the wage structure, which
How interesting that you understand that this guy is a tax burden, but don't realize that under UBI everyone is a tax burden. Everyone gets the same amount, don't they?
Everyone doesn't pay the same amount. Measurement is, as well, difficult and prone to interpretation.
In an economy, you have production and consumption. What is produced is consumed, and there is waste: if you dig holes and fill them in again, you're not making food; and if you pay your hard-earned wage (that is: money representing time you worked) for someone to dig and fill holes, you don't have that wage to pay to buy food (or iPads). Everything produced in an economy thus impacts wealth: the more produced with the same labor, the more wealthy people at every income level are, as a general trend.
So you have an economization: we find a way to produce more with fewer labor-hours, or we find a way to get things cheaper by trade. This temporarily unemploys people, which has real consequences in their micro-economy. Those consequences extend to the macroeconomy: if we're paying to treat the sick or to raise children to replace workers who died in temporary unemployment, then we're spending money on worthless things. Preventing people from getting sick and dying reduces that burden, but carries a cost; when the cost is lower than the burden it reduces, you have an economization--you've found a way to waste less labor in your economy.
(It's notable that the population and labor force always expands to a point of scarcity, so lost workers will get replaced. Any time we've created new technology allowing us to support a larger population, there's been a population boom.)
That economization is welfare.
So a UBI must necessarily provide similar or improved effectiveness at welfare while reducing the burden on taxpayers. That means you might work 40 hours for $80,000/year and keep $62,000 today, whereas under a UBI you might work 40 hours for $80,000/year and keep $68,000. If that works, then you've got a more-efficient system with less waste than the current one.
It would be an enormous misuse of statistics to claim that you're "reducing the burden on the taxpayer" for the guy who only pays $100 and gets $7,000 back. That guy's tax burden isn't reduced; he's receiving an enormous government benefit, paid for by other taxpayers. That benefit happens to cost those taxpayers less than the current system, so they have a reduced tax burden; it's not reduced to zero.
I find it interesting that every time someone figures out a better way to tax people, or hand out free money, they claim that my taxes won't go up. And then I run my numbers through their plan and wind up paying a lot more. (The "fair tax", for example.)
Fair Tax is a universal flat tax, which is total crap. Flat taxes are good for a very narrow span of uses, notably where your system's stability depends on collecting a rough proportion of total buying power. The only system requiring that thus far is my Universal Social Security, and as far as I can tell that's superior to all other UBI plans (obviously, or else I'd be pushing for something else).
The USS takes a 17% flat tax from business and personal income at all levels, and adds a general fund on top of that. The taxes to pay current welfare are equivalent to 55% of the total income tax taken including the 6.2% OASDI individual tax; thus the rough-in is to add the 6.2% to each tax bracket within the SSWB ($118,500) and multiply the result by 45%. This produces a lopsided tax system--the current tax brackets actually tax a single individual as high as 34.2% at $90k-$118k, and then 28% on income from $118k-$190k--so the numbers get adjusted.
To replace current single-filer brackets of 10%+6.2%, 15%+6.2%, 25%+6.2%, 28%+6.2%, 28%, 33%, 35%, 39.6%, I produced 0%+17%, 6%+17%, 17%+17%, 17%+17%, 17%+17%, 18%+17%, 20%+17%, and 22.6%+17%. The +6.2% is OASDI; the +17% is the
I managed to spec out a basic income that doesn't tax anyone at any higher rate. It reduces the tax burden on Americans by a combined $1 trillion, counting the tax burden as money moved downward--that means the guy paying $100 in taxes and receiving $7,000 doesn't count as "reducing the tax burden by $6,900" because he is the tax burden.
Current welfare, as a pile of expenses, is equivalent to 55% of the total income taxes taken. Out of the top tax of 39.6%, 21.78% reflects that proportion. So let's compare systems.
Our current welfare system is a public aid system. It takes the above money from everyone and hands it out to a minority of lower-income households. That means the major payers of welfare--notably the middle-class--receive nothing.
A UBI such as a Universal Social Security takes money from everyone and redistributes it to everyone. That means the major payers are also recipients, and can discount their tax burden by the payment they receive.
Because of this, it's relatively easy to use a similar (or substantially-larger) amount of money for the Universal Social Security and end up with lower taxes. It is, in fact, a necessary fact that the tax burden will be lower; the only question is to whom will we charge less?
Using a 17% model--taking the same amount of money we take now--would require us to drop the 39.6% high-bracket tax rate to 22.6%. That plus 17% gives 39.6%. The remaining tax brackets would adjust--notably, they'd adjust upwards, meaning the tax burden wouldn't decrease for middle-incomes by the full amount of the UBI/USS benefit. That is to say: if the benefit pays $7,000, you might find yourself paying a net $5,000 less in taxes because your income taxes are $2,000 higher.
There's another side to this, though: People have the delusion that we can make the lower-class the middle-class. They think we can give them a middle-class income of some sort. That's by definition impossible, and by any logical analysis won't work; but they think that. Any income is going to add to a basic income, and that means your middle-class is above your lower-class; and as the middle-class has that bottom income plus, all you get is bigger incomes. Likewise, to fund something like that, you have to take more from people, so you wind up doing unstable things to the economy.
My model only works as of 2013 because I used retail market prices to compute most things, and then did some engineering with the housing market. The housing budget I used reflects retail market prices for housing, and it incorporates risk reductions. That includes, primarily, that people with only UBI/USS have stable incomes: they won't lose their jobs/welfare/whatever because the money is money they're 100% guaranteed to receive. They face the same irresponsible spending risk as current low-income unassisted housing, which I based my cost model on; and they can pay a security deposit, in as much as anyone can, since payments start the day you're 18 and we can suppose we'll eventually end up with zero homeless children or at least that you can survive 3-4 more months on the street if you did it for years already. Even so, the average low-cost rents from California, New York, and Maryland samples is consistently around $1.00-$1.06 per square foot; and I budgeted $1.33 per square foot as a risk reserve.
Per single individual, I designed 244sqft apartment units. There are actually microunit projects like that today, experimentally, for different purposes; they're livable. That would likely only cover the 1.6 million homeless Americans. There are 5 million Americans on HUD, and only 25% of HUD-qualified Americans receive housing assistance; 75% of qualifying applicants go on a waiting list and never receive benefits. These households would almost universally receive benefits in excess of what HUD
Kind of the same problem. It's all economizing: if you lose your job, you lose income and now you have to find work (effort). At the same time, instability is bad, and the threat to your own ability to hold a job is visceral and scary.
The thing is outsourcing (trade) and technical progress both immediately eliminate jobs at a point. You find a faster way to shear sheep, you only need 9 of every 10 sheep shearers; that last guy can go find somewhere new to work. Maybe that doesn't happen, and the drop in the price of wool causes 10% more wool purchases; or maybe something in-between happens, and only 1 in 20 workers goes away; or maybe the opposite happens, and wool becomes affordable enough that its superiority to cotton causes it to displace cotton, and now you hire 8 times the sheep shearers but the cotton industry has round after round of layoffs as nobody's buying anymore.
Trade and technical progress also reduce the actual cost of products, and leads to a reduction in price. That means your ability to buy your own clothes instead of making them or waiting for rich people to throw them out for scavenging when the new styles come in is contingent on generations of your forefathers losing their jobs repeatedly to less-labor-intensive processes. At a point, those processes turned the market around and made clothing a widely-purchased commodity, although that came when people could afford it by way of us not having to employ a lot of people per clothing article made--which, when you go from a 10%-population market to a 98%-population market, is still a lot of movement. Even then, the actual ability to purchase clothing means the same money wasn't spent on something else--either because that something else got cheaper or because people liked clothes better and stopped buying it.
From that market turn-around, you then only have the reduction of clothing-maker jobs. New tech to make clothes cheaper, but we don't buy more clothing (we buy video games instead); outsourcing to import clothing cheaply, and the manufacture jobs vanish (but we can buy other things). The shipping and retail worker jobs grew with each of these--more stuff bought, more shipped, more sold--although we economize that, too (wooden shipping pallets...).
I'm part of this system, too. My job can go away. I work with computers and do system administration and network security; I always look for ways to minimize the costs. Less labor, fewer analysts, easier administration. I moved this company from Linux with programs to Linux configured by Puppet, and now to Linux with Docker, and now performing my job takes literally 1/100 as long (I've replaced repeating processes that took 6 days with processes that take 5 minutes, seriously). I always argue for systems that do most of their analysis and tuning for us so we don't need to hire 15 analysts for 24-hour coverage--this is literally the difference between Snort with BASE and something like CISCO FirePower: one person can do IDS analysis with FirePower here, and it would literally take at least 15 analysts at $40k/year each (plus more administrative overhead) to stitch together a cheap, home-grown system. I'm not exempt.
I've torn out systems in the past and re-architected them with half as many components because the parts I wanted to remove were breaking. Near 100% of support calls for those systems went away, and several impacted departments down the line became more-productive. I'm removing over 90% of the systems I've ever supported because I've built new stuff that replaces it all. I've argued for new business processes, and am trying to develop a documentation process and procedure here--and document the processes used to deploy new systems, deploy new software, and maintain all this crap. It's all trivial, and it's getting more-trivial day by day.
Eventually they just won't need me. They might promote me to another position just to keep me. People have tried; I've had people try to hire me simply to have me on-hand for
It's more that they want more money diverted to their own pockets. The same as the rest of us, really.
The main thrust of prices is you're paying the wages of workers providing goods and services. Apple, Microsoft, and Google are big outliers with their 25% profit margins, and Tesla's luxury niche lets them get 22% in a market where Ford and GM make in the 12% range; people like to look at these and at single-quarter or single-year profits of healthcare companies (some as high as 49% net profit margins) and claim businesses are taking all the money. On average, American businesses are getting less than 10% of all spending as profit; the rest of the total income is wages. Even some of the big healthcare companies swinging 49% in some years are pulling 30% and higher net losses in others, averaging 11%-14% (which is still high).
You get a narrative where people want higher wages and claim businesses should just take less profit. or CEOs should make less; in reality, that doesn't happen. Profits aren't that high to begin with--e.g. Comcast's $86/month Internet service comes from a business with an 11% net profit margin, so they could drop the price to $77.60 and make $0 profit (assuming they drop the price of every product they offer evenly), and likewise would raise that price basis as they raise wages. CEO salaries are pretty low on a per-worker term, so much so that the top executives of Ford combined could forego all their salary and bonuses and get enough money to buy a latte for every Ford employee once each month.
What we're really talking about is raising wages and raising the price of products. GM could pay workers more and raise the price of cars. AT&T could pay workers more and raise the price of phone service. Then, we would either have less money to spend on other things and thus support fewer American jobs or we'd all move to T-Mobile where they didn't raise worker wages so we could pay less for service and complain about AT&T suddenly laying off 15,000 employees when 80% of their customer base moved to other providers.
Everyone really wants to imagine money comes from nowhere and businesses have infinite profits. The world isn't a video game where we suppose there are consumers and they have money; it's a complex system where money moves back and forth.
If you are being given enough to survive, why would you want to work a weekend job?
When a girl walks into your immaculate, 12,000 square foot mansion, she sucks your dick. It's an automatic impulse. Pull up in a Lamborghini, smile at random girl, she gets in, she shows up at your house, she looks around with huge eyes, she sucks your dick.
I'm not kidding. That's how it works.
If you're rich as fuck, you have to work a lot less-hard to get laid. Girls just jump your bone when they see how fucking rich you are. You're automatically better than everyone else and you call all the shots.
Besides, it's hard to buy a lot of games on Steam and have a $4,000 gaming PC when you only make $200/month more than you need to live.
Actually, it's the other way around.
In undeveloped nations, food can represent a significant part of labor. We expend 2% of our labor on the farm in the US; in developing nations, they expend anywhere from 18%-25% just on the farm, and as high as 60% of their labor in the total act of producing food. The USDA estimates you can readily feed a family of four in $146/week or $36.5 per person per week; that's $607 billion per year, about 4% of all income in the United States.
Imagine 60% of all work done is done to make food. 60% of the wage-hours paid are food. You're looking at roughly 60% of all income spent on food, although farmers might be low-wage workers so maybe it's 50%. Can you imagine taxing 50% just to provide enough food for 100% of the population?
When your middle-income family is only spending 30% on food, you can tax enough to feed that bottom 5%--1.5% of all income--and then have a SNAP program. If you want to spin up a Basic Income, you'll have to take 30% of all income just for food--then there's housing, clothing, personal care, utilities....
In a highly-developed nation, the amount of labor required to provide basic services will be lower. That means the fraction of total income required to provide those services will be lower. That mean the tax required to provide the money to buy those services to everyone will be lower.
We can do it without taking more money from the rich than now, though.
In total, welfare services cost 55% of all income tax taken. That 39.6% the richest of rich pay? 21.78% of that is welfare. Do note that the welfare services procedurally account for their sources differently; if we pile all of the money together and take a count of what pays for those services, it amounts to 55% of all taxes taken as income taxes. That means if we change the accounting--if we get rid of those other procedural sources and source from income--then we can cut off 55% of the income taxes and do our manipulation from there.
In the end, the amount of money moving down in a Universal Social Security system (a particular type of UBI) is $1 trillion lower than the amount of money moving down today, yet more-effective at achieving the welfare goals of all current welfare services.
Do note that, as you observe, we are still taking from the rich and giving to the poor. Current system may take $18,000 from you and give it to poor people; USS may take $13,000 from you instead. The mechanism is fiddly, too: my Universal Social Security is designed to pay bi-weekly or semi-monthly--on the IRS terms for collection--and tends to take $20,000 from you and give back $7,000, so you end up with a net-tax-burden of $13,000. It's designed that way to tie it mathematically to productivity and per-capita purchasing power, meaning it never needs fiddling once set--it's agnostic to inflation and automatically adjusts fairly for standard-of-living.
Taking $13,000 rather than $18,000 is still taking. It's less, but it's still a thing.
Either way, the fundamental problem with the concept of UBI is that it assumes money can always turn have-nots into haves
A UBI is a form of welfare. I use my own Universal Social Security as the primary example because of its superior design to contemporary plans--rather than throwing out arbitrary numbers like "$10k per year", it takes a fixed amount of taxable income as funding and divides it among adult citizens, which is essentially proportional to the per-capita income and proportional in buying power to the per-capita GDP--and can lead off of that to highlight the fundamental property of any type of income: it's a proportion of production.
Money itself has no intrinsic value. Money represents hours of labor, and is paid as a wage or salary tied to a unit of work (salaries expect a fixed number of hours, wages pay per actual hour worked). This is complicated by the dynamics of inflation interacting with debt and savings; the most simple and basic fact of the flow-through proportion--the continuous consumer expenditure--is that labor ties to money in such a way that the exchange of money facilitates the exchange of labor, with some labor having more weight than other labor (if you make $20/hr, you can induce a $10/hr worker to work twice as long as you).
That means a UBI can't create wealth out of nowhere: money isn't wealth, and throwing money at people doesn't add wealth to the economy by giving them money. UBI creates stability in an economy, which allows other economic factors to create wealth. A UBI may be more-efficient than contemporary welfare, meaning it creates wealth by diminishing waste. In any case, it doesn't create wealth by installing money.
It also means a UBI only works if we continue to produce. If nobody works, nothing gets made, and the purchasing power goes down. If nobody works and somehow machines produce exactly as much as we produce by our labors today, we actually don't get any poorer--the total purchasing power of all the money people are (somehow) receiving as income remains the same, and our economy's behavior in practice doesn't change so long as the hierarchy of incomes doesn't change.
That kind of post-scarcity economy isn't achievable at this time. The machines will simply diminish labor tied to products, reducing their costs and freeing that labor up for other products. With costs falling, prices fall; with prices falling, consumers can buy more; and with more purchasing, we require more labor. Welfare helps the displaced workers get from here to there. This is, of course, modulated by rate: if we unemploy 50% of our workforce in a month, we're going to experience an extreme recession from which no amount of UBI will save us (note the common line among UBI supporters is UBI will save us when none of us has to work--they're wrong).
Where I think UBI is really going to sting (if implemented) is housing costs
Unlikely, really. Shifting the money around as per my Universal Social Security would produce, in 2013, sufficient income for a non-working single individual to rent a 244sqft apartment. This on top of food, clothing, utilities, and personal care, and including a fair risk margin. Profit margins aren't factored in; I simply used retail prices as a model, and added risk controls on top of that. Housing was a particularly difficult problem because the USS model decreases landlord risk and so controls costs, yet that decrease can't be readily measured; the cost per sqft should be around $1.00-$1.06, and I gave $1.33 as my baseline so as to provide a wide risk reserve to cover my blind spot.
There are two issues here.
First, the USS model creates an entire new housing sector. These 244sqft apartments, when considered against the 1.6 million homeless (no income but USS), create a range of $102M-$128M of straight profits per month, out of $414M-$519M of revenue per month, using a range of $1.06-$1.33 per square foot. Th
Econometric models don't have a really good record at predictions, and need to be verified carefully.
That's because even full econometric models require possession of more information than it's possible to possess. Don't try to predict the sale price of MSFT in 3 weeks 2 days 4 hours 53 minutes; predict whether the tech sector is going to grow.
There are a few things we can know absolutely. We know that the long-term success of various competing efforts falls toward those efforts which are more effective--which use less resource for more production. Using that, we can create conceptual models which are mathematical in nature but which don't attempt to provide fortune-telling superpowers.
The mass will be conserved, not necessarily the volume.
True; we tend to assume mass is proportional to volume, but it's also dependent on temperature and pressure. You see my point, though.
According to the law of supply and demand (which isn't a law in the sense of laws in physics), we lower the price on the widget.
You skipped over the finer points of competition and barriers to entry, but that gets to be a huge pile of conceptual models that could go in several forward-facing directions. Notably:
In a competitive market, the margin ends as about the same as before, but it may not with a monopoly.
If the cost of Tesla-like cars falls into the range of consumer-level purchasing, then suddenly you have dozens of competitors already. Similarly, if the cost of a good like cellular phones falls from $4,000 to $400, your market of ~50,000 people in all of America becomes nearly 100% of the American population--and competitors making ad selling cell phones (and cell phone service) stand to profit a hell of a lot, and so face less risk trying to enter the market, and suddenly your monopoly breaks.
In no case will the manufacturer be compelled to raise worker pay in order to keep the marginal cost the same (the manufacturer might of course see other reasons to).
Sort of.
If we ignore the economic consequences of deflation and pretend a monetary policy of issuing a fixed number of dollars per income-earning person in population, what happens in practice is the same number of dollars buys more things as these effects occur. The number of wage-hours paid goes down, thus the wages paid goes down; this creates the reduction in marginal cost which results in lower prices in the conditions you have observed.
In that situation, the purchasing power of workers increases. They make the same number of dollars and work the same hours; we simply pay fewer of them for a given product. The cost of that product falls, thus its price falls, and the workers gain the ability to buy more of it. The difference in their ability to buy allows them to buy more products, requiring more workers, creating the labor demand that creates new jobs down the line. (Again: the gap in job loss to job creation is why we need welfare.)
From that line of reasoning, though, there's another mathematical fact: if the prices go up and the profit margins don't, then the workers must be earning higher dollar-amount wages.
That increase in wages doesn't change the buying power of workers: the steady increase in the average wage is essentially a zero-sum game on the economy. It has functional impacts via controlling how much inflation we face (negative inflation is deflation), which changes the behavior of the economy--notably, of savings and debt; but the purchasing power of a $10/hr wage when products cost $50 is the same as the purchasing power of a $20/hr wage when products cost $100.
So we see that the buying power of workers must go up in any case due to the continuous reduction in costs and the following reduction in prices; and that the wages of workers must go up faster than inflation if we are to have inflation. It
Detroit, as a city, is devastated. I don't care about cities.
The people of Detroit are a blight. They're a concentration of people who would be just as poor anyway if they were spread out across America--and, in fact, there are way more Americans living like that than just in Detroit--and we're simply uncomfortable having to look at them. We don't want to make Americans wealthier and solve the problems of the poor; we just want to cover over the visible evidence that they exist so we can feel good about it.
Except that the booming city is probably in another country and does not benefit the people in the "rust out" country at all.
Nope. The booming city is San Francisco, Palo Alto, or Cupertino. I was talking about America getting wealthier.
Trade and technical progress make Americans wealthier and move us from undeveloped third-world jobs like manufacture to developed first-world jobs like information technology and medicine. If you impede all of the things we've done since 1900 which had eliminated American jobs, we'd currently look a lot like some of the less-developed parts of Africa: farmers dragging plows and manually carrying water buckets to grow crops, while desperately sewing up holes in our shirts, with little to no access to things like vaccines and medications.
For example: if we stopped importing Men and Boys's Cotton Trousers and Shorts from China, and instead made them here, Americans would be poorer. If we paid the American factory workers over $18/hr, we'd have a net-loss of American jobs; if we paid them less, we'd have a net-gain; and either would buff out in a couple years and return unemployment to the same stable point, so the job situation would ultimately go unchanged.
Meanwhile, the median $27/hr income American pays 0.55 hours of his time for a pair of pants. If those pants were made by a $21/hr factory worker (American), the median-income American would pay 2.07 hours for them; and if they were made by an $8.25/hr minimum-wage worker, the median-income American would pay 1.01 hours for them. For the minimum-wage worker, these numbers are 1.81 hours (now), 6.76 hours ($21/hr factory workers), and 3.31 hours (minimum-wage factory workers). The ones hurt most by undoing trade are the poorest Americans, and the ones who benefit most from trade are the poorest Americans.
We are getting rich off trade--the middle- and lower-classes are getting rich off trade. The lower 90% income earners in America are getting rich off trade. They're also getting rich off technical progress, as technology replaces their jobs here and there. That's what happens.
Are you done arguing from ignorance, or would you like to claim that AIDS is a government conspiracy and not caused by HIV or transmitted sexually?
The top CEOs of Ford, Chipotle, and other large businesses have a total cash compensation of around 0.1 to 1.7 cents per hour per employee. That means if any one of the highest-paid executives in America gave up all their bonuses and salaries, they could pay their employees $34/year more.
Ford has 199,000 employees as of 2016. CEO Mark Fields got $5,215,000 cash compensation or 1.31 cents per employee per hour ($26.20/year per employee); Executive Chairman William Clay Ford Jr. got $2,990,000 cash compensation or 0.75 cents per employee per hour ($15.03/year). The other executives each received less in cash compensation. Together, they could pitch all their salaries and bonuses in to raise all Ford employee wages by 4 cents per hour.
A good bump from a $42,000 salary to a $42,080 salary. That's $1.53/week, which if all of Ford's top executives pitched in their entire year's salary, they could give every one of Ford's employees a free latte from Starbucks once each month.
What bullshit do you have next for me to thoroughly debunk? Would you like to claim space aliens are controlling the Government?
The real world is, however, described by math. Simple examples are the most obvious--such that if you do indeed have a gallon of milk, and you take half of it into another container, you can't end with more than a gallon of milk total. If your original measurement is incorrect, then you didn't start with a gallon of milk.
What I described shows that there are, in fact, relationships between input and output conditions in the world. It does require time to produce output. Various production methods require various amounts of time, and environmental factors cause variations in that precise amount of time; and large efforts to repeat the same processes for the same outcome are repeatable to a reliably-consistent average. This is why, for example, Walmart can have little to no staff idle time during busy periods on schedules written two weeks in advance without more than a five-minute register wait and still get all the operational work (stocking shelves, unloading trucks, etc.) done.
Because business profit margins don't continuously grow over time and trend downwards with increasing competitive pressure, the mathematical relationship between wages and prices is inviolable in the long-term aggregate. That has a number of effects, notably that wages must increase faster than inflation, and that goods with high profit margins will become cheaper when they become cheaper to produce simply because the target market increases and so the barrier to entry decreases.
In the real world, we've seen luxury goods such as cell phones become commodity goods. We can predict Tesla's net profit margin of 23% will fall in line with GM and others's net profit margins around 12% as Tesla cars move from things purchased by the moderately-rich to things purchased by everyone--but that's not quite right, is it? Right now, Tesla's net operational margin around the Tesla Model S is pretty high; what we can really predict is that cars like the Model S will have operational margins in line with cars like the Chevy Cobalt when they are similarly-cheap to produce and thus become the standard kind of car basically everyone drives.
We can predict that because there are dozens of car manufacturers around the world, and a dozen or so major actors selling in America (GM, Chrysler, Ford, VAG, BMW, Kia, Hyundai, Mitsubishi, Toyota, Mazda...). Model S is low-demand; but when every manufacturer can make a Model S equivalent for $15,000, what's to stop them from selling it for $20,000 or so? Maybe they want to sell it for $50,000, but it won't start there; why make $30,000 each off a million customers when you can make $5,000 each off a hundred and fifty million customers?
We're back to those lower corporate margins again--or, really, to corporate margins being what corporate margins are going to be as a result of the effects of all external inputs to their pricing. The external factors are mathematically the same--consumers have the same amount of spendable income to divert to their product, competitors are able to provide the same kind of competition, etc--and create the same margin. What's left?
Costs. Costs come ultimately from wages, and prices aggregate from wages plus profits.
We're back where we started. If we lower the labor required, the cost goes down; at the given margin, the price comes down; to keep the price the same, costs must go up; to increase costs, we must raise wages to compensate for decreased labor; and to have inflation, we must raise wages further than that. That's a mathematical relationship.
You know that's how the real world works. If you go into Safeway and they have peanut butter for $30 per 18oz can, are you going to buy it, or just go across the street to Wegman's and pay $2.19? You can't buy from the guy across the street and sell to his same customers for twice the price and expect a booming business; you have to take slimmer profits or get the product cheaper if you're going to compete on price--and consumers want to maximize the distance their dollars go, so price has weight.
No, this is what happens when you're one of 500,000 Americans living in Detroit and you make cars, but America has decided to buy its cars from Japan and now 300,000 Americans are wealthier and live better lives--oh, and along with that, they're able to buy things made by 40 million Americans in Silicon Valley and other west-coast urban tech centers.
Are you willing to advocate writing millions of people off to poverty so that thousands can avoid a little discomfort in temporary transitioning away from the jobs they had? We have welfare for those transitions, but nothing to replace the loss of wealth drawn by trade and technical progress--and that wealth allows us to provide welfare, without which there would still be poor, and the poor would be much worse off.
The fact that one quiet town raises a booming industry as another booming industry town rusts out in the path of progress is called growth. You can afford more than a loincloth and a day of hunting and gathering for nuts and rabbits because of this growth.
The math is a reflection of how the real world works; it's not the other way around.
It's also mathematically-impossible to feed 144 people 2 pounds of food each from 5 pounds of bread and 2 pounds of fish. If you try that in the real world, it won't work; you could do it in a story or a video game.
Yes, out of stone hauled from the ground, rolled on wheels, etc. Amazing what a little leverage will get you. The Romans used concrete; it was faster and they built actual cities.
It's mathematically-impossible for the middle-class and lower-class to not get wealthier as society gets wealthier.
Net profit margins aren't rising. Net profit margins are around 10%--on average, anyway; some medical businesses fluctuate between 29% losses and 49% profits year after year, and make a 7%-14% 10-year running average net profit. Adidas Shoes goes between 12% and -7%, with a 4%-5% average for any 5-year period. Apple, Microsoft, and Google actually average 20%-22% because what the fuck; while Ford averages 4.5% and Exxon Mobil averages 7% (seriously, an oil company averages peasant profits? They literally run the world).
So yeah, the spread is kind of wide, from low single-digits to the low-20%s; but profit margins do average somewhere around (just below, iirc) 10% for businesses as a whole in the United States. They have for decades.
Technical progress reduces the number of labor-hours used to produce a thing. That means each product has a minimum price equivalent to a lower sum of wages--you know, the money you pay your workers for working. That's only in current terms, of course: inflation involves the increase of wages.
That's the lynchpin.
If 10 people work 1 hour at $10/hr to make 10 units of a product, that product costs $10 per each. That's 1 labor-hour of work. Each of these people makes $400/week working their 40 hours.
If you find a way to make that thing twice as fast, then 10 people working 1 hour at $10/hr make 20 units, at a cost of $5 per each. That's a half labor-hour. Each of these people still makes $400/week, despite the lower cost. Unemployment is currently roughly 5% and is in line with the stable levels reached since the 1940s and prior largely because the extra $5 not being spent on product X can buy product Y--which, considering you only need half as many workers to make product X, can easily be made by employing the labor displaced by making product X cheaper. This doesn't happen instantly, hence the need for things like welfare to keep your economy healthy.
Yes, that's right: your standard-of-living is built on the backs of people losing their jobs, constantly, every day, throughout all of history.
So the Federal Reserve tries to keep a 2% inflation rate. Let's say the above happens over 10 years--50% unemployment overnight would suck, anyway, and your economy would go through a major recession. You have this product that costs $10, and 10 years later you want it to cost $12.19; but it takes half as many wage-hours to make.
Well, to pull this off, the workers involved have to make higher wages. That $10/hr pay has to be $20/hr, plus inflation--$24.38/hr.
The median income in the United States in 1998 was $38,383; while the median income in 2015 was $56,516. That's roughly a 47% increase.
Back in 1998, you could get 128K ISDN for $35/month. 2015 had 200Gb Cable Internet at $83/month--1,562.5 ISDN lines, $54,687.50/month, for just $83. In part, the free market controlled for inflation here by simply delivering in bulk and not selling you a 128K line at a reasonable price. Shrug.
What's bigger is the decrease in percent of income spent on food--despite eating more food out-of-home, which increases the cost--and on clothing, as well as the increase on entertainment and other discretionary spending. In two decades it's small, compared to 1950-2000 swing (especially with the huge technology boom through the 80s). We're looking at another boom like that.
he gave a voice to the displaced of the Rust Belt, which are swing states
Basically, yeah: if 10,000,000 people get richer and 1,000 people get poorer, you have... well, poor people. Keep doing this and you have a wealthy nation: the poor people are displaced, and the poor people in other areas become middle-class. What you have is a small elite (previously, auto manufacturers) losing station to a larger class of poor, who then become a larger middle-class; and then you h
"Robots" have been taking jobs for hundreds of years.
Have you been listening? You must be the only one; everyone else here is luddites.
Basic Income was conceived of in response to the idea that human labor might become obsolete in a wide sense.
Which is both ludicrous and history. The amount of manual labor required to perform what we do today is ludicrous. Go back to the Holy Roman Empire and have them build the things we build; they can't do it. It's not that they physically can't build any given thing; it's that they are physically incapable of supplying the labor to build that much of the things we build.
Before we invented the hot blast furnace, we used over 200 times as much labor to make iron. Railroads didn't exist until the hot blast furnace because it would require more than the GDP of the world to maintain all the world's railways; they'd never get into operation before they were already aging and falling apart.
A universal social security is a form of basic income. It's unplanned, in as much as any policy is unplanned.
I described a Universal Social Security including transitional plans, tax modifications, and the like as of 2013, to avoid both tax increases and hard cut-offs of in-use welfare services. This transitions away our existing services and replaces them with a cash benefit for every resident, adult American over the age of 18. For naturalized Americans (immigrant citizens), this is paid as a non-refundable tax credit instead; and naturalized Americans and children in low-income households receive public aid from a condensed system providing food security, housing assistance, and unemployment benefits--basically the same system, today, cut back to roughly 1/12 its size.
The Universal Social Security benefit collects a 17% flat tax on all income (business and personal) by taxable income rules, similar to OASDI's 6.2% tax on paychecks. This replaces OASDI's paycheck and payroll taxes, as well as 55% of the current income tax; the remainder of income tax is adjusted to a new progressive tax system ranging from 0% to 22.6%, giving total income tax brackets from 17% to 39.6%. The 17% income is collected bi-weekly as per current IRS rules (as with OASDI) and funds the Social Security Trust Fund; benefits are paid as a flow-through system. This uses the same model as OASDI.
This system has a number of features. Of note to you, in this context, there are two.
Firstly, this system automatically adjusts for income and productivity. This system takes the number of taxable dollars earned total (which is always minimized by any means available to the taxpayer), reserves from it a fixed percentage, and divides this up among all resident, adult Americans evenly. In simple terms, this gives out a percentage of the after-tax income per capita, which is roughly proportional to the total income per capita. Because of this feature, the actual purchasing power of the Universal Social Security benefit increases precisely to reflect increases in America's total purchasing power.
Second, this system supports Malthusian growth in the same way as the general economy. When the economy grows to the edge of its means, it encounters scarcity: further growth requires an increase in labor greater than the increase in population, and so the economy's ability to provide goods decreases, and the price of goods provided increases with the additional labor required to scale that far. This is self-stabilizing: because more is spent on these more-expensive goods, nothing is spendable on the goods we can't produce, thus there is no demand for jobs for which there is no labor. The Universal Social Security benefit is impacted by this to its exact degree: growth into scarcity reduces the per-capita purchasing power, and thus proportionally reduces the purchasing power of the benefit; the poor and middle-class will thus feel the pressure of this scarcity the same way they feel any recession, to the same effect.
Thus this form of universal basic income is not substantially-different in terms of basic economic behavior from any current system; and this system is bluntly mathematical, being adjusted by what occurs in the economy without requiring the knowledge, calculation, and planning of central bureaucrats. It is a system founded on free-market principles and on the natural, rational behavior of individuals to economize, and itself is nothing more than a reflection of the economy around it.
Why would you not make a self-stabilizing system? Human planners can't get anything right; things change and they insist on staying the same.
There aren't enough workers to make everything we want with no robots. Therefore, we need robots, because there aren't enough workers.
People can't get that far, and you're not there yet; but good eye, finally.
I keep telling people scarcity occurs when the production rate of a good scales beyond linear. That is: if you have 1,000,000 people and grow population to 1,100,000 people, you need 10% more farmers--exactly as many farmers and, specifically, farm labor hours per person as before--and food prices don't go up. If you have 10,000,000 people and scale to 11,000,000, you run out of good land; you can still make enough food, but at lower yield and with more fertilizer and irrigation, meaning you need 24% as many people instead of 11% more (10% farmers, 1% everyone else involved), and that last marginal unit of food becomes 2.4x as expensive (food is overall 11.7% more expensive).
Most people can't seem to grasp this simply because they're exposed to high school economics, and attached to this idea that supply is independent outside factors and the economy of scale is infinite. Good luck growing wheat on uneven, rocky soil--there's a reason supply stops where it does. Somehow they occasionally get as far as explaining that demand is the demand for a good at a given price, and can't figure out why something is at any given price; they try to assert that all prices are set based on maximizing price x demand, and then talk about competition bringing prices down, and fail to see the conflict in their own incomplete reasoning.
So to complete the thought: there aren't enough workers because we can't scale production to feed and otherwise support those workers while deriving more stuff from them; and, more fundamentally, there aren't enough workers because workers would create more demand for goods (being themselves consumers), so we can't keep up.
Robots are just technology. We did this with electricity, with motor cars, with pneumatic hammers, with shipping pallets ... we replace jobs. We reduce the number of labor-hours to achieve a result, and then what? Instead of 10 workers making $10/hr, you have 5 workers making $10/hr; each of those 5 workers still gets his $400/week, and the things he makes cost half as much--leaving money to spend. Eventually (after cycling unemployment) those other 5 workers make other things, and we can buy those products and pay them.
We want the robots; we just don't want them to come all at once. Bump unemployment by 0.1%, continuously, month after month. The economy will recover before it starts to sink into recession. If you bump it by 2% in 6 months, everybody will panic, and the replacement rate will accelerate, and we'll be back at 8% or 12% unemployment and in another major recession.
It's time. The last dimension is time.