Friday, April 14, 2017

Onslaught Of Automation Means Time For Guaranteed Basic Income Has Arrived

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When I first saw the projected stats on CNBC they boggled my mind: 74 percent of all retail jobs estimated to be eliminated because of automation by 2033. Also, 94 percent of all the waiters and waitresses will be rendered redundant and have to look for something else. Anomalies? No, it's projected in many jobs across the board even 100 percent of truck drivers - to be replaced by driverless trucks. 

Then there was the WaPo article (4/ 8) by Jeff Guo,  'Robots Take Production Up Another Notch', pointing out that economists "have long argued that automation - not trade- has been responsible for eliminating the bulk of jobs over the past 25 years", adding:

"Industrial robots alone have eliminated up to 670,000 American jobs between 1990 and 2007, according to new research from MIT's Daron Acemoglu and Boston University's Pascual Restrepo."

The authors note two divergent conclusions have come out of the research: 1) robots are "winning the race for American jobs", and 2) the nation is ill-equipped to deal with the upheaval caused by automation. In particular in the latter case, half of all job losses have resulted from robots directly replacing workers. Far from Stephen Hawking's AI nightmare world coming true, that we will all be made the "slaves" of high order artificial intelligence entities, the real nightmare is here and now,  staring us in the face. It is the displacement of human labor by robots-auotmation resulting in mass human under employment and unemployment.

And there is a compounding effect. As the authors write:

"It seems after a factory sheds workers the economic pain reverberates, triggering further unemployment at the grocery store or the neighborhood car dealership".

Well, of course this would follow if those in the neighborhood lack the money to buy groceries or cars.

Which elicits the question of what is to become of these people? Or more exactly, how are they to be supported if there aren't enough jobs to enable them to even put food on the table, far less a roof over their heads? (And looking at an important WSJ article yesterday (p. A2) referencing teachers unable to afford homes in many municipalities, because of exploding home prices, it becomes downright scary. In Denver, for example, 87 % of all homes are out of the reach of teachers, as well as police.)

One of several myths circulating is there are ample jobs to go around if people just look for them, but the fact is there aren't.  A huge "job pyramid" is the abiding reality with only a few (mainly techie) jobs at the top but a vast base of underpaid work below and much of that being swallowed by automation. Another odious myth is that workers are "unwilling to move to take jobs".  Robert Samuelson, for his part, has insisted that "work is mobile, workers are not". So what?  Samuelson seriously expects workers are to pack up and move every time they're downsized?  Samuelson, neolib moron that he is, forgets that most workers are locked into homes, and mortgages. They can't pack up and move at will. Oh, and let's recall the cautionary case of the poor guy who moved lock,stock and barrel from Cleveland to Denver....and ten days into his new job, was told his skill set didn't quite match and they didn't need him after all.

Another myth being circulated (such as in yesterday's WSJ,  'How Technology Liberates Human Capital') is that it's no biggie if manufacturing or other human labor intense jobs (trucking, restaurant waiters, retail) are lost because that human "capital"  is then "freed up for higher level duties" (e.g. mind dominated) leaving robots for the "routine jobs".    But seriously, how many newly unemployed truckers, retail clerks or waiters are really going to go into data processing for quantum computers or even regular computers?  Or teaching, or practicing law?

The fact is most won't. Even those with advanced college degrees aren't assured of "mind jobs" that can keep body and soul together.   The associate professor at university level is becoming a  thing of the past. The percentage of teaching positions occupied by non-tenure-track faculty has more than tripled in the past four decades. According to the Adjunct Project, “Two-thirds of the faculty standing in front of college classrooms each day aren’t full-time or permanent professors.” 

70 percent of college courses offered are now taught by adjuncts — part-timers who are paid a pittance and have no job security. Many indeed, have to go on food stamps along with the minimum wage workers at Mickey D's or Walmart. This has only come to the fore recently with a widely circulated article, 'The Ph.D. Now Comes With Food Stamps', published in The Chronicle of Higher Education. See:

So the issue then becomes how do we provide for all these millions of displaced workers in the next 20 to 30 years?   The answer, even now being circulated by the likes of Elon Musk, Marc Andreesen and Robert Reich, is to pay displaced workers a guaranteed basic income.  In essence, given tens of millions will be displaced - most permanently - from work in the next 20-30 years, they are at least owed a basic income, a monthly stipend of $1,000 - 2,000 which of course must be adjusted for inflation.

This is not some totally novel idea either. As the authors (Phillippe Van Parijs and Yannick Vanderborght)  of the new book, 'Basic Income'  make clear, it was conceived as long ago as the 16th century by scholar Juan Luis Vives. Even Thomas Paine, author of the pamphlet 'Common Sense' that incited the American Revolution, proposed the government should pay 10 pounds per year to every person age 50 or over, needy or not.

Authors Van Parijs and Vanderborght, meanwhile, make a strong case that basic income should be universal because stipends aimed only at the poor or jobless "have an intrinsic tendency to turn their beneficiaries into a permanent class of welfare claimants".  Well, maybe, but maybe not. NO one on his or her own wants to be thought of as a slacker or parasite, but if it means getting food into your kid's mouth that sort of false pride goes by the backboards.

So the time has come, especially now with the automation bogey. All over the world, sensible and intelligent people are talking guaranteeing basic incomes for citizens as a viable policy.Half of all Canadians want it. The Swiss have had a referendum on it. The American media is all over it: The New York Times’ Annie Lowrey considered basic income as an answer to an economy that leaves too many people behind, while Matt Bruenig and Elizabeth Stoker of The Atlantic wrote about it as a way to reduce poverty.

The benefits ae indisputable, and arguably greater than more F35s or MOAB bombs:

1) It would help fight poverty: America is the richest country in the world, yet widespread poverty continues to afflict us. (See above for the low -wage bottleneck reasons for this!)

Matt Bruenig calculated that by giving everybody a mere $3,000 a year, including children (who would receive the money through their parents), we could potentially cut poverty in half.

2)  It would be good for the economy: A basic guaranteed income has the potential to positively impact the economy in several ways, which is why economists from John Kenneth Galbraith to Milton Friedman have advocated it. The basic problem solved would be low aggregate demand.

3) It would be more efficient than present hodge podge of systems: In the current patchwork of systems confronting poverty, like welfare, food stamps and vouchers, people can fall through the cracks. A guaranteed income could help solve problems caused by rules and restrictions that leave some without subsistence income when they need it. It's automatic nature - merely by having a birth certificate or S.S. number ensures receipt.

4) It supports  basic human dignity: Why is living in dignity not a right? These days, even Americans who get up in the morning every day and report to full-time jobs may not earn enough for a decent standard of living. People like fast-food workers, big-box store employees, caregivers (paid and unpaid, i.e. in families), beauty salon workers, and farm hands often can’t earn enough to feed their families and keep a roof over their heads

Of course, the knuckle draggers will howl like stuck banshees at all of this:

"Get money for doin' nuthin'? Are you nuts? Where's the money gonna come from to support it?"

Easy, Sparky! We stop acting like a World Empire - projecting our self-interest hither, thither and yon -  spending trillions a year on military occupations, military toys (like the F 35) and adventures, and start taking care of our people at home, and of course, tending to our crumbling infrastructure. 

We do not need 4,400 military bases all over the world, or super size MOAB Bombs at $ 15 million each. Nor can we be the permanent cops of the world. It is madness to believe so.  It is now time to take care of business at home and an automatic basic income would go a long way in that regard. The basic axiom of economics now is that ever more humans will be made redundant over time due to automation. Nowhere near even 50 percent of them will land in new, 'mental' jobs as "recycled human capital".  Hence, they will need financial support.

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