Guaranteed Minimum What?
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Well that's true, where they don't add value. What's the difference between the case of getting movie tickets and your waiter at a fancy restaurant? One of them is practically a useless annoyance, and the other one is part of the experience.
Someone in a movie box isn't going to tell you about the movie, or have a conversation about it with you. They are there to take the most basic info (movie, time) and money, and give you a ticket. It's also always done thru a thick bit of glass that makes communication sometimes difficult if not painful.
On the other hand, the fancy waiter will make recommendations. Will tell you about other things, and is generally part of the ambiance and experience of eating out.
Honestly, do we really like interacting with the people with minimum wage jobs? Not really. Most people seem to prefer the automated checkout, ordering on their phone, etc. While sometimes the person doing the job can be interesting, or friendly, even if the person is amazing, generally these jobs are pretty repetitive, and could be done easier, faster, and cheaper with automation. Not only for the employer, but the customer. Most of these people also are not thrilled about their jobs and be lazy, or do a bad job (I can't blame them really, you get what you pay for). The only thing keeping employees around was that automation was more expensive (and more unreliable). Now it's the flip - labor is much more expensive and unreliable than automation. Now people in those jobs have to prove where they add value, if it's only to watch over the machines.
I honestly think the whole demise of customer service is the result of this. People feel in a double bind because they aren't allowed and aren't supposed to help customers. Or if they can, they aren't rewarded for it and take a greater risk by doing it. People can do much greater things, be more helpful, be more friendly, and generally add value - if their employer would allow and reward it. But most are just looking at profit, and speed from entry to exit, and a lot of customers are too.
If you play was "we can provide a worse service for less" then yes, you're going to get steamrolled by automation. If your business is run around adding value (like informative parent of yore in the ticket booth), then your value is going to increase until strong AI (if that ever happens).
Assuming people like talking to humans. Sometimes I wonder about the HN crowd...
Some people like talking to humans, some don't. It often changes as well. But for incredibly basic mundane transactions, I'd lean on the "I don't like talking to humans." But it's also slower to talk to humans, and generally there is a line, making it again slower. If I have to add travel time in there, that's a factor. So if the person at the end doesn't add at least some positive value (other than just doing what I need done), I'd rather go the faster way.
Also, if a company is squeezing the workers and not the market, that probably means that company is having trouble no matter what the workers are doing.
The point being that lots of independent and service focused restaurants have died, and automation, consistency and efficiency has decimated the alternative.
Imho, McD and the first wave of franchisee stores leveraged price and consistency as their advantage. Their logistic chains were more efficient, and they could standardize their operation (benefit to efficiency and customer).
The market did decide that their prices (which were nationally set afaik) and consistency won over the qualities independent chains brought to the picture.
However, I think in the intervening years there have been a few developments.
Firstly, Sysco and the national food suppliers as intermediaries. So aside from volume discounts, everyone's sitting on the same logistics backing now.
Secondly, consistency as a commodity. Whereas before this was a competitive advantage (because it distinguished them from Local Dairy Freeze 283), now it's the market average.
I see it as, as you noted, McD's and the like put everyone else out of business... but we're now in the future past that where they have become the model that's ripe for disruption.
Maybe that looks like Chipotle and Five Guys (limited menu, better product, slightly higher price), or maybe it looks like a return to local service, now backed by automation and turnkey logistics chains.
I can't see a future with McD's where it isn't a fully-automated, human-less burger factory though. Unless they basically toss out their existing business model.
So it's true now, then.
> If you've lost sight of the value of basic human interaction with anyone not baked into your caste, I pity you, even if you are in the majority.
This seems a bit extreme. I assume you don't use ATMs, auto-bill pay, or automatic check deposit then either? Because you clearly value human interaction at all possible avenues?
Perhaps people's "need" for interaction as they go about their day is somewhere in the middle.
Your smartphone gives you all of these answers now.
Talk to some locals and you'll quickly learn the atmospheres of various locations, times to go, where to avoid, etc. As long as their preferences are fairly similar to your own the suggestions will always trump what a generic review site will offer. This also sidesteps the problem of paid reviews and the like.
That dive down the road may not be as terrible as it seems. Provided you're looking for a specific type of experience. Avoid the food, stay for the local brew, sweaty 20 somethings and stumbling down alleys with some new friends.
>Worked in the restaurant industry for a few years
You argument is much stronger as "Why trust the waiter over meaningful online reviews?"
That argument is much stronger and I can only attack in niche markets like very high end restaurants.
Many movies are polarizing. In aggregate, they're OK. Talking to a single person whose opinion I trust is much more helpful than getting an average from 1,000s. Look at Yelp ratings - everything is pretty good by now, and the recommendations are mostly meaningless. They don't fit my needs, if my needs go beyond "I need edible food in a certain price category".
It turns out experts trump the crowd when it comes to opinions, because the opinion of a crowd is almost always indifferent.
> Talking to a single person whose opinion I trust
Why should we trust the person at the ticket counter?
They have no special knowledge or insight. It seems likely to me they will have below average insight otherwise they wouldn't be working an easy to automate job.
If a consideration in employing someone at the ticket counter is that they have well-founded opinions or suggestions to offer on films, then, by way of their expert status, you've cause to believe them.
Otherwise, this collapses to a general critique of the upstream assertion: that "low-value" positions, such as box-office worker, see no labour value add, whilst simultaneously a certain set of positions, say, white-linens restaurant waiter and/or somnlier, do.
I don't see both arguments being valid simultaneously.
Their opinions as to what constitutes a good movie are almost certainly wildly at variance with my own.
That said, Yelp-type reviews aren't much better.
About the best you can do is find a professional movie or restaurant reviewer whose opinions match yours and go with that.
That doesn't address the case where the condition is satisfied.
"If a consideration in employing someone at the ticket counter is that they have well-founded opinions or suggestions to offer on films, then, by way of their expert status, you've cause to believe them."
I'm disregarding it because it's observably not true.
People are employed at theatre ticket offices because they are teens who are willing to work nights and weekends for minimum wage, not because they're film experts.
Expecting a ticket booth employee to be Roger Ebert is about as reasonable as expecting a Radio Shack employee to be a qualified electrical engineer.
I can't calibrate for the averaged-together soup of opinions on online forums. Because everything is average, nothing matters.
The person behind the counter, for example, has likely seen the movie given the folks I've known who work these jobs. As well, they might tell you something like "the people leaving the movie are always talking animatedly" or some other insight that a random movie-goer likely couldn't assert themselves.
I was just pointing out that people have different preferences and that there are many reasons one might trust a single person behind the ticket counter over whatever information they might derive from their smartphone.
That this is so controversial is amusing to me.
I'm not sure how I can learn to interpret something that's been manipulated by people with vested interest to promote their product or put down a competitor's.
The value from these sites stem from actual consumer ratings, not bots or the services themselves changing ratings.
If that's a service that makes sense to have theaters can always keep it. One staffed line for people that want to chit chat and automated kiosks for people like me who just want to buy a ticket.
Survivorship bias. They always have been.
No, there are periods that are artistically more fruitful and interesting that others, and the history of art knows and documents several of them.
Sure, but the claim was just that there have always been bad movies.
Here's a test: If there's some year you know of where bad movies were exceptionally rare, let us know. Then we'll see if we can provide counterexamples.
But really, how do you quantify good? Taste is subjective. The original Transformers move is a great example. I didn't like it. but i believe 14 year old me would have absolutely loved it.
It's similar to the statistics about Word users only use 5% of the functionality of Word. But everybody uses a different 5%.
I guess if you want to go by money, i'm going to pick 1939. I'd guess about $18,000,000 in production expenses, and about $240,000,000 in box. [1] (arbitrarily assigning 1,000,000 to the unlisted numbers, but keeping the box at $0 for unlisted numbers) Seems like a pretty good ROI. (although i think of, Gone with the wind, Mr Smith goes to washington, and the Wizard of Oz as subjectively good. 25% is a pretty good percentage)
Kind of a fun exercise poking through the years. 1997 was a standout, but everything i looked at had memorable and fun movies. I don't think any year would hit that 25% mark though.
Very funny.
> I guess if you want to go by money, i'm going to pick 1939.
You listed several great films, but I'm not disputing there were years with several great films, that's a completely separate point.
> But really, how do you quantify good? Taste is subjective.
I will concede that if we adopt a radical skepticism towards all aesthetic values then the claim "every year has bad films" collapses.
However, if we agree to make that move... the original claim that "everything in the theater now is terrible" is also false. Or "there's something special (and bad) about the quality of film at this very moment" also collapses.
So I'm good with this move. I accept the gambit.
That's why I don't use random individual tastes as a measure, but informed (from decades of studying movies and moviemaking) and argued critiques (by movie critics, other directors, and everyone with similar expertise).
The same way most will agree that Citizen Kane is a great movie, even if 16 year old John, from Buffalo, Indiana finds it "boring and gay".
That said, I also don't believe that just because something is fuzzy (like "what's a good work of art") and can't be defined with numerical precision, it's also impossible to reason about at all. So, in that sense, I'm satisfied with a general "expert consensus" on whether a movie's great and don't expect to have some absolute quantification of that.
So, to agree with my opinion, one should probably also be OK with fuzzy, not totally quantified inquiries (incidentally the inverse is something the climate deniers use for their advantage: they say that because the scientific community can explicitly give a specific number on the impact of human activity on the climate, it is bogus: http://blog.dilbert.com/post/157823678756/tucker-carlson-ind... ).
It used to take a lot more resources and know how to make a movie. Today, any hack can do so. Gawd.
Which makes filtering all the more critical.
Herbert Simon. Alvin Toffler. James Gleick. Ted Sturgeon.
Movies today are much more likely to be high budget, rehashed/sequels, most common denominator, etc.
TV, on the other hand, has been in a golden era for the past decade. Netflix/HBO/etc. has allowed lots of interesting more niche pieces to get produced.
For what it's worth, I didn't infer any value judgement about caste in the comment.
Yeah I do like interacting with people. Even "minimum wage workers" who last time I checked were still people.
Some people (myself included) appreciate minimum wage workers as humans and still want the efficiency that comes with automation. It's a mixed bag. When I'm at CVS I would rather have actual cashiers. At a movie theater I'd rather have a ticket machine.
This has not been my experience at all. People who work at theaters get discounted, if not free, tickets to movies and have often watched the featured movies themselves. They get to see how often people walk out, ask for a refund or praise a film. They can relate to your tastes and make recommendations based off of them. They can tell you if a movie isn't a great date flick and suggest another.
> Honestly, do we really like interacting with the people with minimum wage jobs? Not really. Most people seem to prefer the automated checkout, ordering on their phone, etc.
Speak for yourself. There is nothing more aggravating to me than self-checkout, it is slow, it is often buggy and I don't like having to scan, punch in codes and bag things myself. I hate having to wait for a manager's approval to apply a coupon or finish checkout because the machine decided I did something wrong and won't let me fix it.
Hell is having $20 a machine won't accept.
I prefer being able to speak with the people who are going to submit or prepare my order, because I can ask questions or customize what I want. I cannot do that with an app or touch screen menu.
> Most of these people also are not thrilled about their jobs and be lazy, or do a bad job
Again, speak for your own experiences.
FWIW it matches my experience. I can't think of a time I've gone to the cinema not already knowing which film I'm there to see, so it wouldn't cross my mind to ask for recommendations.
Most cashiers can't be bothered to puts things like eggs anywhere except directly under gallons of juice. I am not trying to beat them up, most are clearly hard working and decent people. But they are people who are being replaced by more efficient, cheaper an more reliable machines. Except for the part where I have to bag my own eggs, but I won't crush them, because I paid for them.
Oh, man. I never use the self-checkout. It's part of the invisible work movement--stuff someone used to be paid to do for you, now you do yourself. Same thing with pumping your own gas. I miss Oregon, for how there was always someone to pump your gas for you. Is gas cheaper here in Washington, where you have to do it yourself? Nope. Invisible work. Screw that.
The only reason I'm a Co-op member? Customer service. They pump my gas, are helpful in store, the workers are paid fairly and members of my community, managers understanding even do grocery delivery at a loss. Hell my buddy can manage a store and provide for his family as opposed to scraping by.
Kind of tangential to OPs post, but I'm getting disillusioned and sick of watching community funds get transferred away to accounts somewhere else. Fuck that, I'll pay the slight premium.
The scary part is it looks like wealth will be increasingly concentrated, and more and more people will fall to a level where what we consider basic needs in modern society (food, shelter, education and health care) will no longer be attainable. As the author points out, "it will be messy": Those societies usually don't end well.
A diminishing pool of people to pay for stuff, not only hurts businesses profits, but also diminishes the pool of rich people (who make their money off of selling products, houses, services, etc to the masses).
Is it rough when (for example) shipping crates put a bunch of longshoremen out of a job, when they are in their 50s and too old to easily retrain? Sure. But how many people now not only enjoy (as customers) the benefits that Amazon provides, but also enjoy the employment benefits of a massively expanded global market?
On the other hand, the alternatives are harsher: as the population grows and people resist the very innovation that could create new markets, unemployment will grow. For all the problems we have in the US, providing low unemployment is not one.
We've already essentially phased out the useful work that people under IQ 70 can do. It's likely that it's creeped up to 75 or 80, even. As these are automated, let's creep it up to 90.
It also takes out those who are poor and have no branch on which to gain experience for their first job. If we have eliminated the first jobs for all but the most talented and those with connections, what does a somewhat bright poor student do?
Well, it used to be they got a job, proved themselves, and worked their way up. Now, what do they do when they don't have the social capital to get to the point where they can work up?
What are these newly opened industries that will work with these people?
As far as I can tell, it's "magic future ones" and the evidence for these statements is "because I hope that's what happens".
If that really is the best answer then it's time to invest in guillotine manufacturers.
Those newly opened industries have less people in them than the industries they replace. Mostly because our consumption doesn't increase as much as our efficiency does.
Funny you mention Amazon. We enjoy their services, and they enjoy that expanded global market. And they do this by killing local businesses with their ruthless efficiency. (Remember we're supposed to be competitive. There will be winners and there will be losers.) They don't create nearly enough jobs to compensate for the unemployment they cause.
There's also the problem of skill. For instance, in 20 years, truck drivers will be gone. Instead, we'll have an operator managing a fleet of 50 trucks from some control centre. The rest will have to find something else. But what exactly? The low skill jobs will be even scarcer than they are now, and the high skill jobs will be taken up by people who enjoyed a higher education in the first place, as they are now. You could still raise the level of education, but that will be too late for those drivers.
Keep this up to its logical (and absurd) conclusion, and half the population will starve to death in the streets. They're useless, why the market would support them? Of course, we'll have cleaner robots wipe it all away, cleansing the stench of death —those who still have value will be able to enjoy their walk in the park undisturbed.
More realistically though, we'll have a revolution before we get to this point. Or, the rich and powerful will see it coming, and start giving bread and games to the people. Come to think of it, they already do it to some extent.
I'm not saying that people who are displaced will easily be able to retrain to a new job. They will have a rough time, and that's something we need to address as a society.
But assuming that number of "jobs" for humans will decrease to zero is a big stretch. I think that even if we had robots that could take care of all our needs for us, humans would come up with jobs to occupy their time.
It seems to me the amount of available work is steadily decreasing right now. Perhaps not towards zero, but we don't have to lose that much to need substantial reform. Once you reach over 30% unemployment, you have a big problem already.
There's an easy way to increase the number of jobs though: share the existing ones by reducing the work-week. We could start by shaving off a few hours, perhaps as much as a full day (for a 4 day work-week). Then decrease it further to match progress in automation. Of course, we should keep the salaries at the same levels, lest machine owners will just get a bigger and bigger share of the pie, just because they had starting capital the other workers didn't.
I only need the waiter to tell me this because I have no idea what the food with end up looking like. Just put pictures of items on the menu. Problem solved. Now it get to order what looks best.
To put it another way, when you walked into the restaurant you committed to paying a premium for one sensory experience or another. Why not the visual?
This may not be substantive enough for HN guidelines, but you know what? Ewwwww!
The incompassioante charge made by the gp is still fair, I think: Saying these workers provide "no value" is too business-focused and incompassioante. Yes, these workers provide little value in terms of profit to the business, but looking at societal value at a larger scales, these jobs do have value (to the workers, to their families, to the local businesses and landlords they can now make business with using their wages, to homelessness, crime, hunger, etc.). Simply replacing these workers with technology is a net negative for society if we don't do what you suggested.
The free market thinking that the poor deserve to be fired because their skills are no longer competitive, can be, I think, a privileged and incompassioante position.
We could be talking about automation or outsourcing, and it would be the same - labor (especially unskilled) is generally getting cheaper. For outsourcing, there is different labor than us that is benefiting, and that's good. That allows them to prosper and buy food and have a life. We also have robots, which are basically virtual slaves that only benefit their owners.
Overall, you could say that there would be an overabundance of labor then. And we hit this before, with the industrial revolution, and new waves of technology in general. What about all the human telephone operators? Or the candle makers? Maybe it really is different this time. Maybe it's not. Nobody really knows for sure.
It sounds uncompassionate, but these are the same forces that drive down prices so everyone can shop happy at walmart (which I do too). Providing cheaper living is great for everyone as well, and nobody remembers that when talking about fewer people working.
By creating the minimum wage floor the government enforces the notion of value creation. With hypothetical example of minimum wage set at $10 an hour everyone producing $10.01 worth of value within a 60-minute period gets to stay, everyone producing $9.99 and below gets to leave.
Compare that to Asian societies where some companies have an [usually older] tea and coffee lady in the break room. The pay is usually next to non-existent - the lady is usually retired and has a variety of savings and a safety net. She doesn't do it for a paycheck, but she craves human contact, so helping out with tea and coffee while chatting to younger employees is fulfilling her social (but never financial) needs at that age.
Such a position is impossible in US corporate environment within the current framework of labor laws, so we deny older people gigs with simple communication opportunities. Not necessarily because US companies are generally more evil and stingy.
When I used to live in Singapore I saw a lot of miserable looking hunchbacked old ladies and men cleaning food courts and they were for sure doing it for financial reasons:
https://www.bloomberg.com/news/articles/2015-01-06/what-reti...
The worst part is the excuse - the country is staggeringly wealthy, vastly unequal and yet excuses itself with "we can't afford these pensions any more" because "we have fewer children and higher life expectancy", presuming that GDP growth has obviously been zero for the last 40 years and we just haven't noticed that the money actually is there.
50% of minimum wage workers are under the age of 24
25% of minimum wage workers are under the age of 19
* being on time
* attention to detail
* how to work with others
* how to follow instructions ...
High minimum wages price many entry level workers right out of the market making it difficult for them to gain these entry level skills which are important for subsequent jobs.
[1] http://www.pewresearch.org/fact-tank/2014/09/08/who-makes-mi...
1. Workers whose contributions are undervalued.
2. Workers who cannot be trained or educated to provide high-value labour.
These are both issues.
(There are other categories: parents, caregivers, the disabled, sick, or handicapped, etc. But the two classifications above represent a major part of systemic failure of labour markets.)
If you think the class gaps and problems of lack of cross-socioeconomic empathy are an issue now, wait until a middle class worker can go 24 hours without ever having to interact with anyone making less than them.
"Raise taxes to fund foodstamps? Crazy! I hear the poor are doing just fine eating their insect protein cubes. I saw a report about it on the TV last night!"
Hell is other people.
As a rule, the only skill entry level jobs teach anymore that apply to future jobs is how to eat shit and keep going. Every single habit you would learn would need to be unlearned to be valuable in skilled labor. You need to be independent and able to think of novel solutions to provide value at higher skilled jobs. Entry level jobs will grind you up and fire you under some made up offense so you can't even get unemployment. You succeed by being as close to a robot as possible.
Eh, I've had this experience at well-salaried jobs too. It's a job thing, not a minimum wage thing.
So you want an order of magnitude more competition for your own job?
Maybe we should be doing what we did in the 1930s when there was a similar 'surplus of labor' - creating jobs which create valuable public works like LaGuardia or the Lincoln Tunnel instead of pretending that if aggregate demand is weak, it's because everybody already has everything that they need.
I visit the great places created by CCC, WPA type efforts and value them, even in their often current state of disrepair.
More please. Worth it.
That said, they can pay someone $1+ mil a year to let the people under him do all the work. Give executives raises. Pay for meetings in expensive hotels that could happen over the phone. Buy lavish furnishings for their buildings. So on and so forth. Don't buy into the idea that most of these companies are ultra-rational actors investing only what they need for the benefit of the company. Lots of politics, gaming the numbers, and people on top trying to move more money their way in most of them.
B) them would never compete with those that were on an "educated" job at an earlier age and can bring years experience to a company
C) will drive fields to regulation and red taping because noone likes a massive influx of lower waged competition
Could be both
So that theory that people will get new opportunities which are as good, or they can transition into is not valid.
Now if the service sector jobs go too?
You're naive if you think this will only impact minimum wage jobs. Paying humans is usually about 30-50% of a companies operating expenses. With less humans you can shave even more percentages off by reducing office space or insurance premiums of applicable.
This might be starting with robot barista arms manipulating coffee machines, but it's really quickly going to make it to lab workers manipulating samples. Where it goes from there depends more on the software than the hardware, but it's really not a stretch to assume that shortly after we replace truckers, we're going to replace pilots and sea captains as well.
We're racing towards a decision. We can allow the automated cargo ships that will soon manage all global trade to be owned by a small cabal, or we can nationalize these systems and use the value they create to support our most disadvantaged populations.
I don't see the distinction. With all due respect to waitstaff (it's a tough job), the function is just begging for automation. An order-and-payment-taking tablet embedded into the table would be so much more efficient:
1. No need to wait for staff to come by, and then do the whole "drinks then wait, then food then wait" dance. Instead, just present a full page description of the food plus a picture, and an "order" button that you tap. You can even order more later if you'd like, without having to summon a waiter. Done.
2. No need to wait for staff to notice you're done eating and need the check. The total is right on the tablet, and it has a card reader.
That would be great. Would probably cut the entire time suck that is restaurant dining by at least 1/2.
You order entirely on the iPad. You do have to pay at the desk on your way out, but they just type in your table number you pay with Square. No tipping allowed so it feels so smooth and simple.
Having a wine expert or a unique expert chef as part of the experience is part of high end dining. Consider one of those mid to high end Japanese steak houses where there they throw shrimp across the room into someone's mouth. Or a more midwestern steakhouse where you can talk with a person who butchered the steak. Or one of the new microbreweries where can can talk with the brewer about some new experiment has has and look at the brewing equipment right there. None of these make sense to automate, until we get strong AI.
The "expert" is there to sell you a story. Not that there's anything wrong with that - the story is a part of the experience that many people like - but let's not pretend it's a technical problem that's difficult to solve.
I know a bunch of people who work in that buisines (my brother is a chef, gradeschool friend as well, ex. is a restaurant waiter, met a bunch of their co-workers, all worked in Michelin star restaurants etc.) what actually goes on vs what the customer hears ...
Then why do Spotify and Netflix et al persist in identifying artists and songs I've heard of (because of obvious similarities to stuff I like) but have actively ignored (because of any of a number of reasons that don't boil down well into an algorithm), over and over and over again?
I still don't want to watch The Office, Netflix. I won't in another six months, either.
But I could tell a person why not, and they could factor that into their recommendations. It's like the difference between trusting Waze and trusting a local that says "even though the app says go another half mile then turn right, turning right here is way easier, since if you wait you'll have to then quickly make your way across three lanes of traffic in a hundred yards to make your left, and making the right here gives you more time to get over."
Though, as someone who has had a credit card stolen via gas pump several times, I'm really hesitant to use a card at one of these devices. They're probably not very secure to begin with and then you couple that with the fact that anyone can sit with one of them for an hour or so with no scrutiny, it's just ripe for exploit.
Pei-wei is another example. These are all the rage because of the efficiency (less wait staff) but still good food and a sit down environment.
The distinction is in expectation. Certain places you expect a waiter, to be seated, brought everything ("fine dining"). The difference between casual dining is mostly the atmosphere (usually better furniture, tablecloth, cutlery, etc) and a waiter (who may or may not be formally dressed).
The fancy waiter is adding value in the second case, because you're looking for that fine dining atmosphere. If it wasn't, they'd probably be going toward iPads too. Instead they have dress codes.
The difference is the waiter doesn't add much to an everyday meal. The waiter could be terrible though. So in terms of a business cost, that's something casual places can skimp on. For a more "fine dining" feel, you need great waitstaff, so that's harder to automate.
Often it is too hard to get a waiters attention to make multiple small additions after they have been around to take orders. With the tablet there is no barrier to you adding an extra drink or side.
The fancy waiter will recommend whatever the owner of the restaurant wants him to recommend, because that is his actual job. He is employed to maximize the dollar value of food and liquor sold.
Now, there are limits to this. A good restauranteur isn't going to sell you inedible crap, and a good waiter isn't going to recommend it, because that will hurt the restaurant's long-term profitability (and in the short term, probably result in a bad tip for the waiter).
Nonetheless, it's wise to keep in mind that the waiter is working for the restaurant, not you.
If you have any friends who've worked in fancy restaurants, ask them about some of the strategies waiters use to encourage a large bill (and thus, a large tip).
This is a limited way of looking at the value of a waiter — I think this is a common misconception. A good waiter knows to listen to what you want and make recommendations based on that. Anytime a waiter recommends mostly or only the most expensive things, I trust them less and they lose the potential to be a great waiter even if the service is otherwise good.
The waiter is not really working for the restaurant because the amount of their pay that comes from the restaurant directly is very low. In a restaurant with tips that comprises most of the waiter's income, and since the amount you tip is voluntary, really the server is working for the customer to earn a good tip.
Obviously not everybody will be like that (I suspect I'm turning into one of those "old people" for whom they manage to keep the bank teller windows open for a few hours a day...) But I just want to point out that this isn't as straight forward as it seems. And, if my suspicion is true, with an ageing population society may actually swing in the direction where they prefer more human contact than less in their every day lives.
You make an interesting point, and I want to remark to it - this is why I don't think the problem is just automation, but in fact social inequality. You can always employ people to take care of a small, privileged class of people.
The extent to which society does this is completely cultural choice. I heard of comparison, in Brazil, several procents of households have a maid (or multiple), where in Sweden, less than half percent of households have one.
It's sad how this socially destructive mindset has washed first over the US and then over the rest of the globe. The money religion has won.
I'm lucky to live in the French countryside, where solidarity is still a guiding principle for social interaction. The cinema in the closest town is run by a not-for-profit organisation, and the people who work there are volunteers (and tickets cost 3€ for adults). Likewise, our village feasts, meant to raise money for our small primary school, are organised by volunteers. Everyone contributes according to their abilities for the common good.
I'm not French and have only recently moved here, and I'm really impressed with the way people here take matters in their own hands and create social and economic value by volunteering.
If not, you're wondering why the starving don't eat cake.
My problem with UBI is that all tests to date look great, but have only been done on a micro level. The fundamental issue I would like addressed is the macro scale inflation you would expect when redistributing trillions of dollars without commensurate economic value being created directly.
Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, etc).
If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined.
Anyway, it would be nice if it worked, but I've seen no evidence that it will in a large system. Comments appreciated.
The thing is though, most people who would benefit from UBI are not currently generating enough economic value to live, or barely so, and many are probably not capable of doing so for any number of reasons. We can do this because:
> Money is a complicated subject, but essentially it represents a transfer of a future scarce resource. For commodities, the cost is essentially the sum of labor to generate it (either to mine the raw resources, build the factory, etc).
...the costs of all of these things are plummeting due previously to outsourcing, and now to automation. As manufacturing becomes more and more automated and the costs of these items continues to drop, you start seeing volume sales/renewing subscriptions being the only possible way to make money on some products.
> If no economic resource is being added to the economy, then you are just devaluing money. That is usually very regressive, and in this case could be made worse by people slightly reducing their economic labor because of the extra income stream. I could see this leading to a bad cycle, where any economic gains due to increasing UBI are later undermined.
This is my one beef with UBI and the one thing that does make me worry about it, but the way I see it is that whatever effect this does have the overall value of the currency cannot possibly approach the effects that the results of borrowing and printing currency to fund things like the outrageous defense budget (of the US) do, the economic benefits of which are muddy at best.
For me this is both an issue of economics -and- of people. To me, in a country as rich as mine it's embarrassing that we still have such vast areas of the country that look more like the slums of Brazil than the cities they're usually parked next to. It's also the simple fact that if you continue to displace more and more people, as we've done, who are too old/not smart enough to change careers, eventually something is going to give. Frankly I pitch UBI as how we avoid the second Civil War, where instead of North vs South, we have Urban vs Rural when the much larger (and better armed) population gets tired of the cities and their nonchalant attitude towards their plight.
These are legit questions and I hope we get better answers than mine (I'm no economist), but speaking as someone on the higher end of the income brackets who would never see a dime from UBI, I really don't think continuing to pretend that the rich can keep on getting richer and the poor poorer is a good plan. When it comes right down to it, there are more of the poor than the rich, and the cash won't save you when they break down your door with pitchforks.
If you are concerned with progressive income tax as a means of financing it. Consider the possibility to implement UBI based on land rent instead, like the Alaska oil fund but the rent from all kinds of natural resources that really should be shared fairly anyway.
Regarding the issue that people would work less:
- Perhaps that's not a big problem. Just think of all the people in telemarketing that could just stop contributing to that particular problem. Or perhaps some other truly evil industry, like tobacco, would people with an UBI be more inclined to not work in unethical industries?
- Perhaps more people would dare to start their own business. Trying truly weird stuff that no one would invest in otherwise.
- Perhaps it contributes enough stress reduction in people to have significant effect on healthcare costs
- Given the safety net of an UBI, a lot of laws and institutions surrounding employment could perhaps be relaxed and more dynamic.
In my mind the potential benefits to the economy and could be quite interesting
I wouldn't see a dime because I make far, far more than the people who need it. I don't need help.
(I still support it, and your arguments for why it must be universal are congruent with my own thinking.)
That is, with any such NIT, you can add a fixed amount to the tax laibility so that the amount is never negative, and add a UBI of equal amount, and get exactly the same net results, and with a UBI you can subtract the UBI amount from everyone's tax liability, delete the separate UBI, and have an NIT with the exact same net financial effect. They are basically interchangeable.
Administratively, they are different, in that the UBI payments are effectively an advance against the potentially negative income tax that those above the point with 0% marginal tax have to pay some or all of back at tax time. But that's the only difference.
Well, the slums of Brazil also do not look anything like the cities they're parked next to.
With the increasing economical disparity, less and less reliable government services (and laws), anti-intellectual culture and many other trends visible on the media, it looks the US is getting more and more of the "features" Brazil is working hard to exterminate. That's concerning.
I think the best solution is instead of handing out liquid cash that can be used/abused in any way (and contribute to inflation as you say), the better option is to provide basic accommodations for every citizen in a given country. This means, basic housing / basic education / basic means of transportation (either car or ride sharing credits) / basic forms of entertainment / basic access to some vacation spots. That way no one needs to work anymore but you could keep the general citizen's happiness to a stable level.
The only problem with this solution is that the government has to pay for this by either borrowing money from private creditors or to tax the rich heavily. The rich are only rich because they're good at keeping their money, so it's a good solution, but incredibly hard to pull off.
If we're moving money from rich people to poor people, perhaps we'll see the prices of stuff rich people buy go down and the prices of stuff poor people buy go up.
The vast majority of stuff poor people buy is demand limited, not supply limited, so if poor people start buying more PS4's, Sony will just make more.
I'll also assert that food is demand limited, we have lots more capacity to increase production than people think. It doesn't matter though; the problem with poor people in the United States is that they eat too much, not that they eat too little.
The only thing that might see price movement is housing. That's definitely supply limited in many places. But maybe UBI will encourage people to move from high cost areas where UBI isn't sufficient to live on to low cost areas where it is. And movement will only happen in the margins -- most of the poor in the States already have a place to live, so demand shouldn't increase that much.
I'll give you housing though. One of the reasons housing is expensive, though, is because it is closely tied to job opportunities.
There isn't some sinister cabal of teachers, that restricts supply, for the purposes of keeping their wages high. There isn't a grotesque system of receipts payable, and the user not paying the real price of service, and hidden, unitemizable fees at my local high school (Two of those do, however, start appearing when you go to university.)
There is more then enough education to go around. The problem is that it's not evenly distributed. I'm not talking about sending every kid to Harvard, here.
Healthcare certainly has people restricting its supply, but also has the exact same problem. We have the budgets for it, we have the doctors, and nurses to provide it - but we don't provide it very evenly.
Public spending on infrastructure and services raises land values, as parks, police, and fire departments make locations more attractive to live in. This subsidizes landholders and allows them to charge higher rent whenever these services are paid for by a tax on labor rather than a tax on land.
With a land value tax, landholders have to privately invest in improving the private property on their land, such as expanding the supply of housing units, in order to increase their profits. Without a land value tax, landholders can earn greater rent and profit without actually privately investing in improving their property. They simply have to lobby for higher public spending paid for via taxes on income or consumption and then they can raise rents without competing to improve their supply.
This sounds like how the property tax works today.
At municipal level, where a property tax bill is comprised of (a) land value, (b) improvements and (c) special assessments, which are voter-approved voluntary taxes to pay for things such as new tram line or a pump for the water district.
The land value periodically gets reassessed to account for improvements, public services, and general real estate prices in the area.
How does your system differ from the property tax status quo?
There would be no sales, earnings, payroll, income, excise, personal property, tariffs,state, or federal taxes for residents. Residents in land tax counties would only pay the single land value tax to the county assessor. The county would then pay negotatiated state taxes on behalf of its residents, and ideally the state would also pay negotiated federal taxes on behalf of its counties.
What tax rate are you proposing will genenerate $5.3 Trillion off of taxing the rich?
They already do http://www.oshpd.ca.gov/Chargemaster/
> ban insurance companies
So lose the negotiating advantage and be forced to haggle on prices on a case-by-case basis?
Private healthcare is extremely expensive.
So that "somehow" already has a known solution.
The net result is that you don't need to fund UBI payments for nearly the entire population.
If UBI is funded via taxes on labor and capital rather than taxes on land, it will subsidize landowners and banks and allow them to charge higher rent and make more from mortgages. If the price which a family pays for shelter, rent, and mortagages increases in proportion to the rate which their income increases from UBI, then will not actually be any wealthier.
Society will actually be much poorer, as we would be redistributing money from productive workers and entrepreneurs to unproductive landholders and lenders who were able to capture the increased public spending through higher land prices and rent.
And there's plenty of housing, just not really in places that are convenient to jobs. If you didn't need a job, that becomes less of a problem. So giving people enough money for a secure housing and food situation--somewhere, anywhere--strictly decreases suffering.
However, the reason UBI works is because it allows people to spend their life doing things that are valuable but wouldn't make a living wage.
Healthcare, yeah, that also needs addressing, regardless of the UBI decisions.
UBI can change that by making it feasible for underemployed people to live in those cheaper areas. If there's no economic reason (good for society) to have them work at all, then there's no economic reason for them to live in the scarce housing in the economically most active areas - and they will revitalize the cheaper areas by bringing their spending there.
Markets work best when lightly regulated, when there's corrective action to smooth out the ups and downs of overshoot and collapse tendencies. Something I see lacking is the will to ensure sufficient supply so that demand can have choice, instead of captivity and vulnerability.
If UBI transfer payments are paid out of a consumption or income tax, then landholders and mortgage companies will simply be able to charge all residents higher rent. If residents experience an increase in housing costs associated with savings which must be put away for purchases, rent, and mortgage payments that is in proportion to the increase income they receive via UBI, then UBI will not have made them better off. UBI will only have redistributed money from workers and entrepreneurs to landholders and banks invested in mortgages.
Under a land value tax, landholders cannot charge higher rent due to an increase in land values brought on by public spending on public services. If they want to increase their profits, they have to invest in real property improvements, such as by expanding the stock of available housing. If UBI is paid out of taxes on labor rather than taxes on land, they will be able to charge higher rent.
It seems like a viable contribution to the discussion.
Detroit or Baltimore are pretty affordable already, and some counties will give away free land if one agrees to settle there.
That did not seem to spur much economic development.
UBI would mean that the underemployed people could move to Detroit if they wanted to. That would effect a transfer of money towards Detroit - as money would be taxed elsewhere, flow through these people and get spent in Detroit, spurring economic development.
Widespread remote work could achieve a similar result, having people live and spend in Detroit but earn money elsewhere; but currently it is not widespread and so doesn't make a meaningful impact.
I could see a future where people use UBI to bootstrap an education. Move to a low cost of living area, take some online courses and work on some projects. Once they have built up a small portfolio, attempt to re-enter the workforce etc...
The US is incredibly sparsely populated, there would be billions of residents if we were as dense as Western Europe.
We do have limited supply of housing in artificially low dense cities that have good jobs, but that's politics and not economics.
I'm not very educated in this, so correct me if I'm wrong, but my understanding was that while UBI doesn't create money, but it can move money from people with a lower ratio of money-spent to money-made, to people with a higher ratio. If that's the case, the money that's actively being used should increase.
Outside of the $100+ trillion bond market the examples are indeed hard to come by.
In the simplest possible term demand for money is created through taxes and loans because people need it at a future date to meet these obligations. Spending money does not remove these obligations so it does not devalue money.
Globalisation is ending at the right time for a UBI to emerge, but so long as the first priority is ensuring globalisation is never dented, UBI can't get to the starting line. There are two hundred mice; they can all see the bit of cheese that looks like the solution to many of their problems in the trap; but nobody's going first.
Otherwise, the costs add up fast, but the impact does not. eg, even picking a smaller country than the US -- the UK has 70 million people; giving them £14 per year would be a £1bn item in the budget but £14 would not have visible impact to society-as-a-whole, and would be cancelled quickly as an unaffordable indulgence.
It's happened before recently -- eg, the UK's Child Trust Fund policy gave every child born a one-off £250 investment gift (a relatively small sum but with a multiplier effect as it would grow over time and prompt relatives to add to the account). The £250 from the government was cancelled within six years as unaffordable. As the benefits only get seen later (when the children grow up), there's a valley of death for the policy where the cost of it kills it.
https://en.wikipedia.org/wiki/Child_Trust_Fund
Curiously, Iain Duncan Smith's "universal credit" seems about the closest governments have come to a national scheme headed towards being a basic income (or at least a negative income tax), with the idea of at least first eliminating the benefits eligibility cliffs that existed in the system. But it's not been plain sailing, and again started being taken apart before it could be rolled out or "got right". (Any government can be expected to get it wrong first, you just hope they'll get it right later.) So has comparatively little likelihood of growing to be a universal basic income or negative income tax.
Therefore, after UBI is introduced on mass scale we might see a slow but steady decline in economic activity: fewer new companies started, fewer investments made, riches focusing on tax evasion and moving their business abroad instead of just running and developing it, resulting in recession.
Of course you can go with nuclear option and forfeit all their properties at once, in the name of social justice (does that ring a bell?) but you can only do it once, and eventually will run out of the money seized this way.
Sure, most founders want to get rich, but I'd assert most would be just as happy to end up in the 8 figure range ($10's of millions) as they would in the 9-10 figure range. (And such a reduction would require taxes on a scale far beyond what UBI would require)
Few people are going to consider starting a company and then sit down, calculate their tax burden as a billionaire and decide that it isn't worth starting Apple, Facebook or Google.
People are on a continuum between "extremely lazy" and "extremely hard-working". I know that I would stop working if I had ten million dollars, even though I love programming, because I would prefer to read books all day long. Elon Musk, on the other hand, would probably not stop working even with ten billion dollars, because he is obsessed with creating stuff.
This suggests that most people will generally settle where they are content with what they're making. I know this is true for me (it would be easy for me to make twice what I'm making now, and ten times is achievable but would take a lot more effort than I'm willing to put in); from what I can tell, it's true for all the people I know.
Also, you're equivocating on the "giving money" expression. Giving $10 to a homeless person and to Elon Musk would probably not motivate either of them.
And even if they did, you think the banks just sit on it? No, they loan it out.
Two problems:
1) Assuming the "riches' motivation" is something that would be bad to undermine
2) This probably isn't true
The other thing that becomes blindingly clear when you live somewhere like Silicon Valley is that wealth is logarithmic. If you take home a million dollars a year here, you're still living in a 2000 sq foot home in a town with a half-decent school district. If you want a house walkable to downtown Palo Alto, you'd better be making $5 - $10 million (those homes go for $4 - 5 million). And if you want a real mansion, you'll need $20-30 mil. You want your own jet? $100 mil. There's always someone making MUCH more money than you, unless your name is Gates or Bezos. In that environment, a 3x increase in pay is still a meaningful difference in take-home.
I really think people do. Two years ago I had to work 250 hours in December to get a 25k bonus. At ~40% taxation, I felt it was worth it. I probably wouldn't at 65%. That is a pretty extreme case, but well off people turn down work if it isn't lucrative enough.
Plus, if you are taxing investments, then it all matters because of risk. Tax factors into the expected value of an investment. It's not worth investing money if 70% of the proceeds get taken away. This is why world wide, capital is taxed fairly lightly.
Yes it is. As long as the 30% of the proceeds are higher than the proceeds of the best alternative use of your money.
> This is why world wide, capital is taxed fairly lightly.
This is wrong. It is taxed fairly lightly because it is mobile. Tax it too much and it just moves abroad.
Tax is absolutely a huge part of the decision making for any substantial wealth management. Whether you buy property, bonds, or do something more creative is heavily influenced by the taxes you'll have to pay.
You aren't guaranteed proceeds. You can model investment as a probability function of profit. You should only invest when the expected value of the investing is greater than 0. But tax rates factor into the expected value.
Would you bet on a 50/50 coin flip with 3:1 odds? Of course. How about if you were taxed 90% on proceeds?
Say I could spend 30 hrs/week running a small business at moderate efficiency, and make $100k/year in profits, or 60 hrs/week running a much larger, more efficient business for $10m/year in profits.
My motivation to put in the extra 30 hrs/week is going to depend greatly on the absolute value of the difference, after taxes. If taxes are such that I take home $90k vs $7million, I'm probably going to work the 60-hour strategy. If taxes are such that I take home $89k vs $500k, I may or may not consider that worth the extra hours.
To tax the rich is not the same as disincentivizing investment! Investment matters to the economy, not capital.
Yes you need capital in order to invest. You need the right amount of capital in the right places! Rich hoarders are not the best investors.
If you want to tax the rich without taxing capital or labor, then you want to tax land. Unlike capital, there is only a finite supply of land and it cannot be moved overseas. Wealthy individuals like owning land in areas with high land values in stable countries with high public spending, and with a land value tax they directly pay for it.
Commonly stated, but any real data to support it?
I think what kills the economy more is when the barrier to entry is high. This impacts mostly non-wealthy folks. In the US, it is ridiculously trivial to set up a "company". I've heard in some countries, you need to apply for a license, which could be expensive (say $2000). And along with that a lot of regulation that is quite affordable to big companies, but not to the average Jane.
The rich easily absorb all these costs, and it barely hurts their motivation. Poorer people trying to make a living and grow their wealth somewhat are most impacted.
Once you get past a certain wealth level, money actually STOPS being a motivator, at least in the ways that it is for poorer people. Instead, it becomes more like a scorecard, to demonstrate to others your success. That desire to demonstrate your success will always be there, whether you tax the money or not.
Friedman assumes the velocity of money is constant (good assumption), so really the only why you can cause inflation is to increase the supply of money, M. UBI increases the velocity of money by moving money from low-consumption, high-investment rich people to high-consumption, low-investment poor-to-middle-class people. Increase money velocity, and you'll see price inflation to compensate.
Distance is effort, both in energy and time.
Space is already constrained by historical distributional of 'valuable' lands, and restrictions on new ones. There's nowhere left to go out and just settle that someone else doesn't already claim somehow. (Yes, if you go out of the solar system you might claim that... but that's literally how bad the issue is.)
The real solution is increasing supply. Yes, UBI will help individuals, but society must actively balance to ensure that there is enough supply in the markets to maintain liquidity. Otherwise (as we see with housing) flow seizes and prices dramatically rise.
Time: If you are unemployed and on UBI, you have more free time. If prices spike for food, then you can always grow your own. If prices spike for gasoline, then ride a bike.
Space: With UBI, you no longer need to cram into a handful of high-growth economic areas. You can move to cheaper areas, grow your own food, and ride a bike everywhere. People with a lot of free time, and not a lot of money, will be a lot more price sensitive than in our current environment (where time = money). If prices rise due to inflation, they will either do without, or find/create a substitute.
I can guarantee that there will be inflation in areas of the market that cater to poorer people. There is a pretty basic economics law that says when demand for goods go up (aka more money chasing a good) it's price will tend to go up relative to to the "price elasticity" for the good.
Things like basic food stuffs will get more expensive, because there will be more money chasing it. Rents will go up, since disproportionately more poor people rent. Hopefully much of this will be offset by people being free to move to cheaper cities, since they no longer need to worry about work income as much. Alcohol and tobacco will likely get more expensive as well.
You're right, in that eventually production will ramp up to meet increased demand, but it's usually not 1 to 1 increase, which means you'll still have higher prices in the long term (though it does happen occasionally where increased demand leads to lower prices because the volume allows for economies of scale in production).
UBI isn't likely to be the silver bullet that many think it will be. All the experiments have been short term, and inflationary pressures can be small and can take time to take effect. Also the UBI experiments have been in smaller countries, where social aspects may be coming into play.
I'd really like UBI to work, since I dream of having enough basic money to sustain me so I can work on some of the science and engineering that interest me but might not have short term value, but my economics background give me an intuition that it can't be as successful as people think it will be. It'll likely be a beast that will require constantly increasing benefits as price levels rise to adjust to the new equilibriums, with ever fewer reasons to do the work necessary to fuel the costs. Maybe we're approaching a post scarcity world, but economics says no such thing is possible, that there is always something that is scarce that people will compete for.
Why would demand go up? Do you think these people are currently not eating and living in the streets?
So why haven't we seen a massive exodus to Detroit or Mississippi? Outside of coastal areas US already tends to be affordable and accessible.
In the modern economy an increased demand for goods benefits very select entities - mainly a Chinese manufacturer, a Danish shipper, and Seattle-based Amazon.com. There's some job creation to the effect that a UPS guy needs to be hired to deliver those goods, but middlemen are likely to be squeezed on margins, while the value creation is taking place abroad.
Very few people are actively starving. A lot of people have food stamps already, and UBI eliminates them. With a UBI, and the hopeful cultural normalization of utilizing resources over being "poor", you can better optimize the use of excess foodstuffs that end up in food trucks and banks that not enough people can use all the time.
Food prices are always in a balancing act. Premium goods like beef and lobster fluctuate based both on the amount of money in the market for them, that can spur investment in increasing supply, or in the amount available, that can vary significantly depending on seasonal yield (moreso in lobster than cows). If a UBI increases the food spending budgets of the poor, they start buying more lobster and sirloin, and the prices go up. Then the market is up on those goods and more will be produced because the cost of manufacture probably didn't go up - the poor weren't suddenly demanding tractors or rural farmland or grain feed - meaning you still have the same net cost to manufacture, so the supply side pressure is there to increase the supply to meet the demand. Prices normalize again as a result of that, and they would not be dramatically higher. It depends on the total sum of social desire for these products relative to their competitors. If people start eating more beef, the price of chicken might drop in response and pressure people into maintaining the natural balances and optimizations around what the market can best provide at the cheapest prices.
> Rents will go up... about work income as much.
Housing is in balance now between rural and urban, and it would be after UBI. If rents get too high in cities (or just more generally, wherever the poor want to be) there is a cost ceiling where they will start inhabiting the dirt cheap rural towns that have been abandoned for decades because it is infeasible to live there without an income. Overnight, millions of unoccupied and unlivable houses become usable again.
> Alcohol and tobacco will likely get more expensive as well.
Luxury goods go up in price. The world isn't hurt at all for this.
> you'll still have higher prices in the long term
UBI has an economic effect you can see in food stamps now. The market treats food stamps as a price floor - they know that the worst their customers can be is on food stamps, so they price accordingly because the amount of money in the food stamps system is huge. As long as they can make any profit at the prices food stamp recipients can afford, they will compete in the market for their money.
The exact same would happen with UBI. Suddenly even the poorest person has a market voice, and there are still enough poor people - the median US income right now is only about 4k a year over the poverty line - to influence markets with their size, if not their density of money per person.
Inflation is not magic. The inflation in the US right now is from expanding the monetary base. If the federal reserve stopped printing money entirely, inflation would slow or stop. You would certainly see inflation immediately after instituting UBI - because suddenly billions of dollars effectively frozen in the stock market and trading in economic circles outside of the general consumer market are moved back into it - but it would not cause sustained inflation if you are just moving around funds in the economy that already had velocity. And even then, it would not be a severe jolt - billionaires don't just hoard benjamins under their mattresses. They invest them in companies that spend the money. Unless you are Apple or hoard billions overseas, but those are generally the exception to the standard rule of money in your pocket is money lost. The velocity would go up, but not tremendously, in ways that can destabilize an economy.
And that price floor that UBI sets puts tremendous pressure on businesses to meet demand at the price level. Properties would be built and refurbished to accommodate that income bracket. Food production would insure that food is available at that bracket. And of course vice and luxury will try to price themselves into that bracket. Because it would be billions of dollars of demand - you can't just ignore it - but because the UBI income puts an effective ceiling on costs that people can pay if they have no other income, that pressure fixes prices to that income threshold. It wouldn't respond instantaneously - you could and would see examples of people not being able to afford living off UBI in isolated years - but those are from market variability. The prices will either drop to get their money, or they will move where they can. And the US is big enough that we won't have a shortage of places to go, like we do right now where the limiter is a drying up pool of job offers.
If UBI is funded via taxes on labor and its products (income and consumption taxes) then one should expect further inflation in housing prices, and ultimately the transfer of money from productive workers and entrepeneurs to unproductive landholders and mortgage lenders.
If you don't want this transfer to occur, then you need to fund it via a land value tax, which does not allow landholders to charge higher rent in proportion to increased public spending.
If you are funding UBI via increased taxes on income and consumption rather than land, then you run the risk of making the majority of people poorer if housing, rent, and mortgage costs increase faster than their UBI transfer payments increase.
That seems pretty cool if you're US, but what about Chad or Tajikistan where there are no rich people of the Forbes 1,000 variety and primary employment happens to be in government services?
The closest examples we have are resource-rich USSR and Venezuela, both of which did not do well inflation-wise. The jury is still out on Norway or Saudi Arabia.
So long as interest rates are > 0%, I think that's going to be a pretty rare situation.
Government handaouts are not why a head of lettuce in a small town in Nunavut can cost ~$15.
I'm not convinced that the sum total of all these benefits plus the current infrastructure that is needed to maintain, dispense and detect/punish abuse on them is significantly larger than the total expenditure on UBI.
Of course, all the people that you let go from the benefits departments initially will end up on UBI, so that's not really a big win. But eventually they will find employment elsewhere, hopefully.
Most western social democracies publish the data on costs of running departments and numbers of working age people in employment or receiving each type of subsidy, so we know that the admin costs are negligible compared with the cost of paying a living subsidy to an enormous number of working age people who aren't claiming disability or unemployment benefits, generally because they don't need the money enough to take the steps necessary to claim it.
A better way is to use UBI which a portion earmarked only to purchase health insurance. Instant universal coverage with consumer choice and market forces stay intact.
Also, if I already own a house privately, I would pay the commons rent on what I already own? This seems to pervert the notion of ownership.
The point is that because it is a grant from the commons there is no natural law that says that that grant cannot be handled in a different way than it is now.
If society as a whole decides that this grant is no longer to be regarded as absolute then there is no barrier to taxing the occupier of the land.
So health care savings, the ability to quit your job and go back to school (or other kinds of re-training, generally a diversified workforce is a beneficial one), reducing the need for shelters, etc.
This is aside from the fact that a reduced engagement in the workforce doesn't have to be a negative thing - plenty of money is being made, it's just not being distributed very well :) UBI just intends to right that inequality in a productive way.
And you can therefore consider financing UBI by virtue of the time saved by automating these tasks. You take that time saved and hand it back as dollars instead of translating it into additional profit.
work is not some thing apart from ourselves. work is not something apart from play or recreation or relaxation or any such things. we move and create and change and destroy all the same. we value these things as part of our social fabric of keeping a community of us humans alive. money lets us abstract away the need to trade immediate goods for that purpose, but it also lets us abstract out the fairness of it all. those who seem to contribute more to the general welfare might deserve a little more in return, whether it be in goods or esteem or respect. but we're all expected to put in along with taking out.
UBI would tear up that implicit social contract and unmoor us from our democratic underpinnings. while well-intended, UBI suffers from the same idealism as libertarianism by failing to grasp even a basic modicum of the human condition.
despite automation, people will create ways to make a living. lives are literally depending on it. that's not to advocate long-term suffering, but our social responsibility should be focused on using our natural craftiness to help others help themselves (and leveling the playing field), not providing handouts.
There needs to be a radical shift in how we look at our economic systems and culture in the medium term. However, if the currently proposed health care replacement is evidence of current thinking, U I is a pipe dream.
I don't usually make predictions, but it is going to get very ugly in the next 10 years if nothing changes.
At the moment if you handed everyone more cash without an increase in output you would get inflation.
If you took the money from the rich and gave it to the poor you might get some inflation in basic goods as the poor tend to spend their money while the rich invest it. Also possibly deflation in luxury condos. This probably isn't going to happen in a hurry due to politics.
If robots start producing a lot of goods and services then giving more money to people would not necessarily be inflationary and there would be more money spent but more goods and services also. Your hairdresser would have twice the customers but employ robo-haircutters rather than raise prices as it were. I could see something along these lines being gradually rolled out with the amount of basic income increasing as human labour became less necessary.
In most western countries unemployment does equal lack of food or housing... due to a large number of welfare programs.
The soldiers' farms fell into disrepair while they were away campaigning and were bought by the wealthy senators when the soldiers realised they could not work them anymore. The Senators then used the slaves they had brought back from overseas to work those farms thereby eliminating the need for hired labour from the dispossessed. The now landless soldiers lived off the grain dole until popularist leaders came along and offered to pay them directly to fight for them. This was a key factor in the breakdown of Roman democracy and the rise of the emperors (princeps).
This pattern is actually the one I'm worried about the most. New tech is giving outsize advantage to the major players across almost every industry, who can afford to invest in creating internal teams for these big new technologies.
I see this in every industry I encounter. The middle class worker lost out over the last few decades. Now the middle tier company is going to get killed cause they can't change fast enough.
1. Invest in small companies broadly enough so they get key insight so they can acquire before they become a threat. See GV, Intel Ventures etc...
2. Overwhelm small companies through brute force if they can't acquire. See: Facebook vs Snap
3. Invest in internal moonshots that startups can't compete with. See: Google X
In previous times, big monoliths didn't have the foresight to do this or weren't agile enough to restructure internally. I think the way AFGAM operates and has proven they can pivot at scale, using their market dominance to change that whole equation.
All established companies sooner or later face the choice between destroying a huge revenue stream to get a chance on the new thing, or keep the current revenue and limit its lifetime. Nearly all of them choose the second, and the ones that choose the first do not always make it either.
Oohh, this very much.
Inside Amazon warehouses, there are tens of thousands of employees called 'Pickers'. They walk around with these handscanners with 300x300 pixel screens that tell them where to go and what item to get next.
For two years, my job was to make the UX of that application a little bit faster. Not the order to pick the items (another team) not the decision of which shipments should be processed next (also different team) or which items should be picked by which picker (you guessed it- a different team). Just the UX for the 0.9MP of screen space in front of the user.
Labour costs for that job are in the hundreds of millions per year, so any team that made a 1% improvement to overall efficiency would be covering its own costs a many times over. And we did.
Amazon can afford to get those small 1% gains multiple times per year, but for smaller companies the gains wouldn't pay for the costs. If they want to beat Amazon, they'll need to find a very big win that Amazon didn't see first. The only company I can think of that did that was Kiva Robotics- wait, it's called Amazon Robotics now.
300x300 pixel screen, IE 5.5, tiny tiny processor, 128MB of ram (64MB on the old ones).
The only advantage that thing had was that if you dropped it from a fourth story window, the device would be fine. I was told we had tested this to be sure.
Those are tiny tweaks that they could make easily.
Plus Amazon is much more than just a place to buy. They are data services, logistics, analytics, seller services, infrastructure etc...
Obviously not much. The point I was trying to make was that a small player probably can't compete with Amazon on price, but they may be able to compete some other way.
But the moment they do that, right there is where you can undercut Amazon. If they are abusing their competitive advantage by the nature of abusing it they are giving it up.
At worse, they raise prices circumstantially to maximize profit, but that is more the benefits of winning the market than of exploiting a monopoly, because they would still be overall cheaper than any competitor could manage.
As long as Amazon is cheaper (and not exploiting employees) than what a competitor could do, the consumer is winning.
Issues like this are probably due to Amazon's size and culture, which competitors could take advantage of.
Anther example of Amazon doing an unexpectedly poor job was when my brand new seller account was rejected/disabled by mistake, it took significant effort to get any human to look at my case.
Not directly, at least I don't think, but through lack of health care, lack of shelter, lack of education, poor diet, use in waging war, incarceration, and probably once they get desperate and try and get theirs, being labelled terrorists.
People who have money, and therefore power, in the United States are not going to give it up so someone down the economic scale can have a modicum of comfort and dignity and purpose. They will, carefully and covertly, and maybe even inadvertently, remove them.
I think this is the 'natural' progression and it is well understood by the key members of the major social improvement movements. The intent of these movements is to change this, to improve the human condition.
Only works if they die before reproducing...
It's interesting, that poor people have "so many children", normal people "just 2" and the rich again many... seems like everyone has their reasons/strategy:
Rich people can just have as many kids as they like. Normal people as they can sustain and poor people are just pounding them out with good hope that some/any will make it
Really? Because this is this the basic premise behind one of the greatest examples of satire in history...
This one?
A Modest Proposal
For Preventing The Children of Poor People in Ireland From Being A Burden to Their Parents or Country, and For Making Them Beneficial to The Public
By Jonathan Swift (1729)
It won't be pretty and the reality is that the rich can't isolate themselves from the calamities that are coming.
The strategies vary between rich, poor and average people (I'd consider you and me to be average)
Average people would always point to the rich or poor for making mistakes plus discrediting other "average" people to not take the right measures
Poor people have a lot of kids in hope that ~2 survive. Rich people drain the planet and average people accuse other average people to not have saved enough of the poor people's children
I sadly agree this is likely to happen. I really hope I'm proved wrong and we can all come together. To figure out a way to live in this world together, peacefully.
The conspiracy theory in me can't help but wonder though, if one day, some group will make a virus to wipe out a large chunk of the population. Kind of a forced cull if you will.
https://phys.org/news/2017-05-strategy-ways-emerging-antibiotic-resistant.html
I imagine it will go the other way with people having the right to food housing entertainment and the like. We'll quite likely end up like the landed gentry of the UK past - think Bertie Wooster - but with robot butlers and less land.
They're tablets, from Ziosk. iPad is the Kleenex of this generation.
I rather like those, nothing like paying (and leaving) when I want instead of trying to track down the waiter for 20 minutes
I never understand why waiters don't give me a chance to hand them the card immediately when they drop the check. I don't need to sit with it for 10 minutes, especially after it took 10 minutes to flag you down for it. Years ago I was a waiter, so I don't really sympathize with an argument that they're too busy. The whole system could be revised.
On occasion—if I've been in a hurry, for example—I've gotten my card out once done eating and had it ready to hand to the server when they bring the check.
I'm not talking about restaurants where you expect excellent service. I'm talking about restaurants where you can't take it as a given that they're going to be attentive to something you say when they put the check down.
You cannot make a man worth a given amount by making it illegal for anyone to offer him anything less. You merely deprive him of the right to earn the amount that his abilities and situation would permit him to earn, while you deprive the community even of the moderate services that he is capable of rendering. In brief, for a low wage you substitute unemployment. You do harm all around, with no comparable compensation.
Try letting go of the 70 year old theories and read some modern research.
If your competitors can hire cheap people for working there, you will never be able to justify hiring more expensively. But if they can not hire that cheaply, you will be able to spend more too.
It's hard to tell with many HNs saying incorrect things about economics and then realizing they were serious.
Value is what you gain by the use of it.
Price is the common agreement between those who have a thing, and those who want it, net of all other circumstances, to mediate an exchange.
If price exceeds costs, then that trade is equitable and sustainable.
Where a wage is offered that does not meet the provisioning costs of a good or service, that good or service cannot be sustainably provisioned, and the exchange is only sustained by the net transfer of wealth from the seller to the buyer. Such exchanges frequently occur, under a "backwards S-shaped" supply curve.
Here, the short term costs of a good or service may be met, but its long-term costs are not. A paradox is that as wages are pushed down, working hours increase, because the only way a worker can afford sufficient food is to increase the hours worked.
Similar dynamics are seen in oil, e.g., the $0.02/bbl price of oil low hit during the East Texas Oil Boom ~1929 - 1931. (Daniel Yergin, The Prize, chapter 13, generally).
As Adam Smith observed:
A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more, otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation.
(Wealth of Nations, Book I, Chapter 8 https://redd.it/2311mb)
What Hazlitt describes isn't a business. It's either a scam, or a charity, operated for the benefits of the owner, at the cost of the workers.
But, yes, let's deregulate everything so a few property owners can amass all the wealth to themselves. Great idea. Never been done before. Let's give it a shot.
Maybe instead of UBI, we should consider a scheme where we grant an ownership interest in productive property.
One naive way to implement that is to just grant shares in an index fund that tracks the robotics/automation sector, such as the ROBO Global Index (http://www.roboglobal.com).
Obviously, that's not the best way to do it, because if I've just been laid off and have to pay my mortgage, I'm going to turn all my shares into cash.
But there might be some more sophisticated way to grant ownership of productive property that would both generate income and also give influence to the very workers who are most affected by the technology's success.
A sovereign wealth fund that automatically distributes 'shares' to its citizens, prohibits them from selling their shares, and distributes a dividend regularly? Seems pretty functionally equivalent to a UBI.
But that's not viable politically in many western countries.
I'm proposing the direct ownership of automation technology/companies by the workers themselves, not by their government.
This is in keeping with a political philosophy called distributism, which advocates for the widest possible (private) ownership of productive property. Proponents of distributism typically view both capitalism and socialism as systems that tend toward a small number of people holding power over a large amount of capital. (In the case of capitalism, super wealthy investors, and in the case of socialism, government officials.) They see widespread private ownership of productive property as a way of neutralizing the dangers of both Big Business and Big Government.
This was a relatively sparse post compared to others from the same blog and is, in my opinion, mostly a 'look, more examples' kind of thing for the blog's regular audience. In this case, literally 'look, more examples of low-status work being squeezed out of the world'.
I wish UBI discussions on here generally revolved around actual predictions and the awkward mathematics of who's paying for it when, but I understand that it's easier to sell dubious ideas with pictures of robots than falsifiable claims
UBI makes little sense whenever someone making 500K a year still gets it unconditionally. The marginal utility of that is nil, but its tax implications are massive (how do you even fund something like that in today's economy).
I don't find this especially convincing, since from a purely rational point of view decreasing UBI increases net income for the rich. But maybe there are complex psychological/political factors at play.
Everyone gets the UBI, but the more money you make, the more you're paying in additional taxes to support the UBI. At some threshold you're paying as much in additional taxes as your making in UBI payments. Past another threshold and you're paying more in additional taxes than you're taking in.
Alternatively, you could say that--even with non-NIT UBI--since we have a progressive tax structure, the net change in taxes for people above some income level will be exactly the same net change in taxes as NIT is proposing. The money has to come from somewhere after all.
Even if you make twice as much as the negative income tax floor, you're still facing really high marginal rates. Enough people would drop out of the market economy to make the negative income equivalent to a basic income in financial cost, but more inefficient both because low income jobs would be obliterated and because it'd be (a bit) more complicated to administer and more prone to fraud.
Compare that to a basic income. There, as a first order effect there's no reason for the person to quit the 12k job, because they're now making 24k.
It might seem silly to give someone making 500k 12k a year, but economically and fiscally it doesn't matter: they're taxed at a rate that covers their own basic income and plenty more.
Then there's no reason to work at the lower end of the wage scale, because you'd be working for free.
This is why I think we need to accelerate the pace of automation as much as possible. That's the only way of creating enough governmental pressure fast enough to reduce the suffering time of the first waves hit by automation. Counter-intuitive, but the faster we get there the less suffering in the transition and the faster society wakes up to the fact that we have to take care of our own.
The right to subsistence has been conveniently tied to the ability to work because that's easy to understand, but it's always been an artificial link.
If you aren't going to outright kill people, and if you expect them to "bootstrap" and move on to the next job, you should put some effort into making sure they are healthy enough to do so.
Not to mention basic morality.
Nor that problems treated early are smaller and cost less. And that society pays that cost, whether through cost spreading by private healthcare (hospital critical care -- the last line of defense); Medicaid and government programs; or prison.
Unless you really are going to just bury them, and spring for a pauper's grave.
Sounds rhetorical? Look at Jeff Sessions' latest mandate to prosecutors: 'Lock them up! For as long as possible!'
Look at the widening gaps in longevity.
Follow the money (to the top).
We are a long ways off from programs programming themselves. NLP and machine learning are still in their infancy. Program analysis and automated bug patching is still young tech. There is still a lot of work to be done and I am confident we will find ways to provide value to each other.
Hah, yeah right. Boy is the author gonna be surprised when those jobs get automated too.
That eliminates the day labor, you would probably still want a weekly cleaning crew to come around and get in all the nooks and crannies, but it is also reasonable to design buildings around being robot-maintenance friendly, and the more and better of a job the robots can do the less often you need the cleaning crews coming through until you never need them anymore.
The problem right now is that buying a robot that can wipe tables is a large upfront expense few places want to eat up. Prices will come down, though, as they always do. The cost to manufacture machinery is fairly fixed by volume in the endgame anyway, you just have to overcome the R&D costs.
I'm not sure how it would help with the "cleaning" part of things, but what if the tables were robots themselves? Could that help with cleaning?
It could help with a lot of things - for instance, imagine a conference center that could re-arrange itself between groups or conferences, then put itself "away" as needed.
Or imagine a garbage can at some venue that loiters around people with disposable items (and perhaps reminds them about its presence when it senses they need to throw something away - I experience this once at a "human level" at a 5-star hotel, where instead of visible garbage cans, there were people who stood around to take your "garbage").
One could potentially think up many such instances - where everyday items become robots for tasks (which might also help to keep such things clean, as well).
A simple example of the challenges this sort of reasoning present; assume you're a being that perceives time very slowly, perhaps your lifetime is a mere 100 milliseconds rather than 100 years. But your perception is fairly good and you can observe and measure things several yards away in all direction. And you're living in seawater near the beach. Through out your entire life, and for several generations, the amount of seawater above your head has been growing and growing. You believe that eventually there will be sea water "as far as you can observe" above your head.
As an outside observer with a different time scale and perception, we "see" that this being is part of an ocean wave that once the mass of water above the center of gravity moves ahead of it because of water below being slowed by the the beach, the wave will 'crash' and fall into foam.
Now if we could explain this to the creature in the wave, or if the creatures there had some sort of stored history, they might know that in the past there have been waves and the waves have crashed and that the seawater never extended so far into the sky. And there might be debates because some waves reached a height that was higher than any other wave in recorded history and so maybe this time, this time the wave would grow forever.
Except from our time spanning view we realize that all of those fears and understandings arise from the the short lifetimes of the creatures versus the longer time of a wave cycle, and so few creatures will ever encounter another who has experienced "the crash".
These unemployment doomsday articles suffer from a similar myopia. Yes, technology does advance, and yes, it changes how people are employed and what it takes to be employed. Technology shifts however have not resulted in a 'net loss' of employment opportunities when looked at in the full view, ever.
So rather than focus on the 'loss of jobs' let us focus on "transition" support. I point out to people all of the time that we have tremendous gaps between supply and demand in what have historically been called "the trades."
The reality of that was brought home to me when I started a bathroom remodeling project in Las Vegas. For that project I need a plumber, an electrician, and a mason. Three classic 'trades'. I cannot find three people that I can schedule who are licensed contractors, any sooner than 6 months from now. They are all booked up, and as a result leaving money on the table from unfilled demand.
What is more, Las Vegas has very affordable housing. It was hit hard by the mortgage crisis and house prices have still not recovered in large parts of the city. So it isn't like a plumber can't afford to live in the city.
I really think we need to stop stressing out that the number of retail cashier jobs are going away and start figuring out why people aren't able to train for the jobs that are available and going unfilled.
You could have done away with most of your comment and just left the last bit.
Articles of this nature help to illustrate that the problem exists. Before we can focus on the "transition" support, we have to acknowledge and agree that there is, in fact, a problem. You might know there is an impending shift because we witness it (and create it) within the tech bubble, but the world at large is just coming to learn that change is coming. Kiosks at the movie theater are a natural extension of existing technology. It doesn't change the world. It's part of the process, but it's so minute that we don't consider there used to be 3 ticket sellers where there is only one now. It's the slow burn of progress before the inevitable shift that will come quickly and won't be entirely understood until after the fact. And as you said, we don't know what is coming, exactly, so how can we describe the solutions now?
Truthfully, from your example, I take it to mean that you are facing the same problem every employer has: finding skilled labor. It's the case now and it will be the case in the future. These are the inefficiencies of a market-based economy. They present opportunities for those who can capitalize on them. Those plumbers should be charging more.
This rebuttal suffers from the same problem, it extrapolates "yesterday" into "tomorrow". A computer isn't the same sort of thing as a steam-powered mill or a printing press. A robot isn't a tractor. When we create machines that are simply better at work than humans both physically and mentally -- there isn't anywhere to go from there.
There will always be jobs for people but we're eliminating jobs at a fast pace and there isn't anything replacing it. We aren't doing new things that require new jobs; we're doing the same things more efficiently with less people. This should lead to the future utopia of old science fiction but we will need to re-define what it means to be a functioning member of society.
To give an example for you to think about, the machine gun eliminated more jobs for infantry than we have for cashiers. As veterans came home from WW II and 'mustered out' we provided the GI bill to train them in skills other than soldering. This provided an economy that transitioned a standard army to one tenth its previous size.
On the social justice side I am totally in favor of, and have advocated for, using tax payer money to provide the education and training to anyone who needs it to take a job that could use them. An example of how that has fallen down and needs our help was that the VA will not pay for veterans to learn to code[1]. That is a problem we can do something about.
What I categorically reject is the notion that there is any solid reasoning for trying to artificially create jobs that happen to meet existing skill sets. My favorite example of that failing spectacularly was the railroad union concession of having people work on trains in jobs that were no longer necessary[2].
[1] https://backchannel.com/thousands-of-veterans-want-to-learn-...
[2] http://www.coyoteblog.com/coyote_blog/2005/08/great_moments_...
We're going to get self-driving cars in our lifetimes and the number one job in most states is "truck driver". My job as a software developer is to eliminate jobs (or simply prevent new ones from being required). I'm personally responsible for the loss of more jobs that I have.
> As veterans came home from WW II and 'mustered out' we provided the GI bill to train them in skills other than soldering. This provided an economy that transitioned a standard army to one tenth its previous size.
Of course, they transitioned into a world where all the other major countries had their manufacturing industries destroyed by war. Again, extrapolating from the past has it's issues; you cannot simply say "training" was the only, or even the most significant, factor. If you had a functional body, you could get a good job.
> using tax payer money to provide the education and training to anyone who needs it to take a job that could use them.
I think right now we have an absolute glut of educated people; no time in history have you needed to be as educated as you are right now to get an entry level position. People are literally taking jobs that don't pay anything. The number of recent collage grads that are underemployed (employed in jobs that don't require their degree) is at the highest level in 20 years.
> What I categorically reject is the notion that there is any solid reasoning for trying to artificially create jobs that happen to meet existing skill sets.
Absolutely; it's a terrible practice. And the thing is, you don't even have to artificially create it. We already have "bullshit jobs"[1] that fill this vacuum already.
[1] http://evonomics.com/why-capitalism-creates-pointless-jobs-d...
> The share of U.S. economic output that's paid out in wages in at the lowest
> point since the government started keeping track of it. In 1964 AT&T was worth
> $267 billion in today's dollars and employed 758,611 people. Google is worth
> $370 billion but has only about 55,000 employees -- less than a tenth the size
> of AT&T's workforce in its heyday.
> If you had a functional body, you could get a good job.
> I think right now we have an absolute glut of educated people;
We need to be careful about terms, there are many people who have college degrees for which there is no career path other than perhaps teaching people who would like to get that same degree. They are 'educated' and essentially unemployable because the number of teaching positions is small relative to the available candidates. But working it backwards from the job to the employee does work, there are unfilled jobs available for people where there is also training available to teach people to do those jobs. Some are 'college' jobs and require STEM training, some are trades jobs and require skills training.
So, how long is the full view? For how long are poor people expected to just starve off and die before the magic hand of Capitalism restores the labor vs. capital valuation into something reasonable?
I wonder how this will impact the world of fine dining and establishments that have a great reputation with their community. Just yesterday I was watching a Japanese show about a restaurant owner in Louisiana who would spend all night in his store going between the customers and the kitchen, coming up with new menu items on the fly with his friends(customers), introducing people to each other, going to the neighboring bars to visit and try out their new drinks/food, and just really combining the best aspects of a chef, host, and wait staff. I doubt his store will be severely impacted by automation since you're not just buying food or a drink, you're there to be a part of something you really love and supporting a man and his business in keeping something beautiful alive.
Maybe this whole automation issue will give the big box retailers and chain restaurants a kick in the butt to up add a deeper human element to their experiences? Or maybe the space will be filled in by people who can make spaces for people to just have a good time and connect with their community, instead of being walked along like dogs through a programmed conveyor belt experience.
In general this is just normal evolution, something more efficient replaces something less effecient. And it's not completely stopabble. Let's say you can create laws that force McDonalds to keep staff and not use robots. Then at some point McDonalds will get bankrupt and another company will take its place. Maybe you can make the laws that forces all companies in your country to employ people despite not needing them any more. Then at some point your country will be too poor and gets replaced by another country, either through invasion, or revolution, or both.
I don't know if UBI is the answer, or even if the problems are tied to mechanization. But certainly I think we hit the nail on the head when we realize that things are glib and something needs to be done. If not UBI, than something big to ensure that everyone can share in the wealth our society produces and that people are not scrounging, fighting and drowning in debt just to barely get by.
The most relevant column is the second one (Thousands of Jobs, 2014). Just seeing this table makes clear how broad the modern economy is.
https://www.bls.gov/emp/ep_table_201.htm
Here's a more detailed version:
It is as inevitable as CAP theorem.
Current US population: 324 million people, 250 million adults.
Poverty line income: $22,000 for the family of four (it is hard to estimate individual poverty line income, but it's more than $22,000 / 4. Let's say $12,000, which is $1000 / month).
Total cost of universal basic income of $1,000/month for the US: $3 trillion per year.
Total US income tax revenue: $1.8 trillion for personal income tax, $0.4 trillion for corporate income tax.
For instance, if the cost of "basic life necessities" was somehow $5/yr, but incomes (and tax revenues) similar to today (... presumably people are spending an awful lot on luxury goods?), it could certainly be all three of those things.
It may be the case that that is somehow impossible, but that's a case that you need to make in some way other than listing off what the current numbers happen to be.
Everyone gets the UBI, but the more money you make, the more you're paying in additional taxes to support the UBI. At some threshold you're paying as much in additional taxes as your making in UBI payments. Past another threshold and you're paying more in additional taxes than you're taking in.
Effectively you only need to provide the full UBI for people making very little per month.
In fact, most of the productivity increases are in industries where the value produced is not directly coupled to the resourced consumed. The software industry is a great example.
If production is not limited, then we can instantly transform our solar system into a Dyson sphere, right now. What am I not understanding, of this theory?
To produce a two ton truck, you need to use more than two tons of resource, that much is obvious. But how many resources go into the production of my copy of GTAV? Or my blue-ray of The Lord of the Rings? Or my viewing of a show on Netflix? The marginal resource usage is pretty much nil, just some electricity, paper of plastic. The resources expended in producing the work itself can be significant, but they are amortized among the many millions of copies.
Now obviously there are limits. Humans need physical stuff to survive, that's not going to change any time soon. There's a limit on the amount of actual stuff we can make. But there's no clear limit on the value of that stuff. We keep finding new ways to make little pieces of plastic or bunches of electrons in wires valuable all the time.
Those limits are constantly being pushed outwards, but they are not disappearing. Eventually, we might have cities and data centers covering the entire Earth, à la Coruscant. At that point, we will still be constrained by our ability to cool the system, by our ability to efficiently power it all with minimal waste heat, and by the speed of communications through congested networks.
That's the 2nd law of thermodynamics.
Corollary: accounting of costs, prices, and values is badly flawed.
Thermodynamics does not address value.
You might also want to consider Georgescu-Roegen.
There are two ways you can get that though:
1. You can harvest current-cycle solar, as captured or availed by PV, solar thermal, wind, hydro, (pipe dream / ineffective) wave energy, or biomass.
2. You can draw down an existing store of solar energy input deposited, with some inefficiency, as hydrocarbon fuels: coal, oil, gas (including methane hydrates, should you choose to go there).[2]
The difference is that in 1) you're deriving value from a continuing series of deposits, of approximately 84 terawatts,[3] or roughly 2,000 TWh (170 billion mtoe, 1 billion barrels of oil equivalent), an allowance shared with all other life-forms, and ecological / biospheric processes on the planet (we might care to consider those requirements before hiving of yet more for ourselves). The practical value derived remains a small fraction of the influx.
In the case of 2), you're spending down what is effectively an inheritance, at the rate of approximately 5 million times its initial rate of accumulation. This suggests that the spending-down is not particularly sustainable, even barring consideration of any other issues presented.
Of which I'm informed there are several.
The point remains that as you process that energy chain, each stage of the process leaves less useful or usable energy going out than came in, the balance being waste energy (entropy).
________________________________
Notes:
1. There's a very small contribution from non-solar sources, principally geothermal energy, a roughly 50-50 mix of gravitational potential energy of formation and radioactive decay, which could be considered sourced from the supernovae which enabled formation of the Solar System.
2. https://dge.carnegiescience.edu/DGE/Dukes/Dukes_ClimChange1....
That might or might not be the case depending on the behavior of the people but given that universal basic income proponents argue that people would not get lazy and exploit the system I am happy to make that assumption. In case that turns out to be false, it is certainly possible to tweak the scheme in such a way that there remains an incentive not to become lazy, for example by lowering the 100 % tax rate but still keeping it high.
Even if that were enough people, you also remove economic feedback about the effectiveness of peoples' actions. That feedback is critical for an economy to efficiently allocate resources.
You can try to tweak the incentive structure here and there to make it unlikely that you will end up in the worst case scenario but you can not really get rid of it. Unless you advance technology and automation to the point where you can provide for basic needs without any labor at all, a universal basic income scheme is a promise you can not keep unconditionally.
I mean, of course the scheme will fail if everyone stops working. But if not enough people are working to make enough stuff to satisfy demand, you'll see inflation, the BI will fall below someone's comfort level, and they'll get to work. This assumes you don't peg the BI to actual or expected inflation - don't do that!
(Another way of phrasing this - In theory a scheme can be unconditional in nominal terms while allowed to float in real terms, and ideally the feedback will allow us to keep real value distributed at some optimal level based on what society can bear. Whether that can translate into practice is an open question.)
In reality, I guess, people would just overthrow your shitty system or circumvent it with black markets. So after thinking a bit longer about this, the requirements given in the initial comment seem not to be as straight forward as they may appear at first. What does sustainable mean? Is it sustainable if we make use of hunger to convince people to work? Is it implementable at the current population level if it entails something that the current population would never accept, say for ideological or religious reasons?
Free-rider problem, and the black (or gray) market.
If all the value I capture from working is one/population of the value I produce, there are probably other things I can do (in an environment with a population bigger than "really small village") that will do substantially more to improve my circumstances, whether legal or not (and some things are bound to be legal - consider a kind of analog of the "man who marries his housekeeper" objection to GDP). And when people are desperate, they are more likely to focus on the things that will most improve their circumstance (especially in the shortest term).
The unconditional in unconditional basic income has a softer meaning than you use; it mostly just means that the payments are made regardless of wealth and other income (of course in a large number of cases it would also be completely recovered by taxation).
People in the US need to let go of a lot of the ideas we cling to (taxing the rich slows the economy, UBI is communism, wealth redistribution == USSR) if we're going to live through the coming automation boom.
Health care is tougher, due to stricter regulations (rightly so) and reluctance from doctors but I think the transformation there is about to begin. Look at what is happening with (open source) prosthetics.
Prime reason for rent and mortgage that I can see is wealth generation and in a society where wealth is less important perhaps these will also decrease. You can see more and more interest in open source, not just in software but also other fields, is this a shift away from wealth accumulation?
From another angle, people are beginning build homes with recycled plastic and by 3D printing this hopefully will reduce build cost. And hopefully that will filter down to the end consumer.
The 2015 average income per capita was $57,540 [0]. The 2015 poverty guideline for a family of five was $28,410 [1]. Clearly there is more income per capita than required to keep everybody out of poverty.
A second source, the Census, is pretty reputable too: "Median household income in the United States was $56,516 in 2015." [2] Edit: This statement isn't helpful since it is a median, not a mean. A better source from the Census is [3], which lists the mean average as $75,738. As a reply pointed out, the heavy income inequality in the USA is expected to cause this sort of skew in the median.
Either way, I propose that taking everybody's income away and then splitting it evenly would apportion enough money to keep everybody out of poverty, that it would be sustainable (based on trends of past amounts of income per capita and poverty guidelines), and that it would clear the poverty guideline, a well-known bright line for "basic life necessities."
Is this a good solution? Maybe. There's probably better ones. But they do exist.
Edit: Specifically, would this system remain stable? It's hard to say. We can imagine that anybody on the sad side of the Pareto curve, which is a majority of the typical employed people in the USA, would not mind effectively having a big check from Uncle Sam raising their income to healthy levels. At the same time, we could also imagine that the wealthy few who are hit hardest in this scheme would try to find some way to get their income to be non-taxable, whether by lobbying for a proportional tax or inventing new capital transfer techniques. I'm not going to claim that this scheme is in any way socially workable over the long term, though. I personally feel that any UBI scheme is still socially unworkable; we need more small-scale evidence that UBI works.
Still edit: As an example, imagine that the UBI payments were only sufficient to bring the impoverished up out of poverty, and not necessarily any higher. That means that over half of the income marked in my original scheme would not be needed, so the wealthy could keep it. This would effectively be a two-tax-bracket system, with the brackets labeled "below" and "above." Does it still work on paper? Yes. Do I think that people will like it? No. Do I think that people like taxes? Not really.
[0] http://data.worldbank.org/country/United-States
[1] https://aspe.hhs.gov/2015-poverty-guidelines
[2] https://www.census.gov/library/publications/2016/demo/p60-25...
[3] https://www.census.gov/data/tables/2015/demo/cps/hinc-06.htm... (Warning: XLS sheet!)
For your convenience: US Gini index is ~41%, and, correspondingly, the alpha parameter of Lomax (Pareto type II) distribution is ~1.71. If you plug the median in [1], and try to run any income redistribution scenarios, it doesn't work.
Peoples' behavior is not a constant. When you change the incentives, the behavior changes. This is one aspect of the "Law of Unintended Consequences" that has wrecked so many fine-sounding ideas.
I linked to some of my favourite entries here:
The historical precidents he, I believe, refers to were less messy and more bloody.
Well, that only works as long as many businesses don't do it.
See, business models tend to require people with jobs and money to spend. You can rip profits by catering to those still working if you automate your restaurant or supermarket first.
But it gets increasingly harder to make money for any businesses when those whose jobs got automated away get increasingly many.
http://www.intelligencesquaredus.org/debates/universal-basic...
I'm not sure. During the great depression the USA did not embrace communism. Why should it be different with automation?
2. Basic income gives impetus to Social mobility
Part 1: http://freakonomics.com/podcast/earth-2-0-economics-edition-...
Part 2: http://freakonomics.com/podcast/earth-2-0-income-inequality/
Come on, you're making an argument for universal basic income, but you obviously aren't educated enough to make an argument for or against it if you think only religious bigots and those lacking your level of sophistication are the majority of the opposition. Learn some opposing views, Buddy