This is the perfect example -- with a UBI the apprentice no longer needs to get paid to learn. They can live off of the UBI while learning, until they are good enough to charge for their services.
1) We need people to do low level jobs. So if UBI exists, wages will need to rise until people are willing to do them. This will happen along with price raises until an equilibrium is found where poor people need to work in order to survive. No need for narratives about landlords raising rent, though it is possible. The poor people aren't in an overall worse position here though, because although they're still earning just enough to live, a portion of that minimum is now guaranteed. However:
2) By raising your domestic (or local) wages/prices, you've just given yourself an absolute disadvantage against every other economic entity in the world. Anything that is outsourceable is now more appealing to outsource than before. This removes jobs and puts downwards pressure on wages.
If everyone just "lives off UBI while learning" society won't function because the jobs they do are important.
How many appliances do we build to last for a few years and then break? How many economic resources could we save by building fewer products to last longer? If the economic engine were tilted towards quality rather than churn, we could be much more efficient about our use of resources.
Durable products would be nice.
Curse autocomplete/swipe keyboards
Energy crisis in Europe is entirely man-made because, as I said, we are shitty.
Is the idea that it suddenly tips?
https://fred.stlouisfed.org/series/LNS11300001
For women, since about 2000: https://fred.stlouisfed.org/series/LNS11300002
https://fred.stlouisfed.org/series/LNS11300060
The shape is the same, with a peak at ~1999.
There is a large difference between the labor force participation rate and the unemployment rate because the LFPR can’t be gamed. A stark way to think about it is to consider that, if every person currently looking for work were to fail to such an extent that they just gave up, the unemployment rate would drop to zero.
Using your preferred metric, we have about the same LFPR we had in 1980. It has gradually varied since then between about 81% and 85%.
> The shape is the same, with a peak at ~1999.
The trend is up since 2015, apart from the Covid dip.
Automation and AI have not had a dramatic effect yet on LFPR. Maybe there's a tipping point to come.
The entire time, automation people like Yang have been claiming unemployment was already happening, and yet it was constantly going down. Unemployment in the US is now lower than it’s been in decades.
> We need people to do low level jobs
Is solved through automation and immigration (only citizens get UBI). Of course this is a major downside, because you end up with a slave class unless you make sure those immigrant workers are well protected.
Your point 2 has already happened. But the wealth still remains here in the US. So if that wealth were redistributed to the poor it would actually make things better.
Orders of magnitude more than we have now
> and immigration (only citizens get UBI). Of course this is a major downside, because you end up with a slave class unless you make sure those immigrant workers are well protected.
... Uh... yeah I would prefer not to have a slave class
What do you think we have now, where lower class people need to work to survive? If slavery is having the option between work or death, then I don't see how our current economic setup is not producing slaves. Sure, we don't treat the lower class as property (at least not normally), but they are definitely forced to work under any reasonable definition.
People are not property and they are most certainly not forced to work. Wanting things and needing money to buy the things you want is not “being forced”.
It's arguably the most regressive fiscal system one can imagine. A class of people who must earn an entire cost of living paycheck to net zero with their non-working, unskilled citizen equivalents.
Andrew Yang's premise is that those low level jobs are increasingly being automated away anyway - meaning that no, we don't need people to do them.
Even without that premise, this argument presupposes that people receiving UBI will do so in exclusion to working. That doesn't really logically or practically follow; it's just as possible that people will work anyway because extra spending money is extra spending money. They'll work because they want to work, not because they're being actively coerced to work.
> This will happen along with price raises until an equilibrium is found where poor people need to work in order to survive.
With Yang's proposal, the "price raises" part is probably true, yes. However, that has nothing to do with UBI; instead, it has to do with VAT. VAT advocates oft insist that it's somehow "not a sales tax" and therefore "totally not regressive like a sales tax", but at the end of the day consumers are paying more than they otherwise would for goods - and since consumer spending is disproportionately higher (relative to income/wealth) for the working class than the ownership class (or low/middle v. high, if that's the terminology you prefer), that's going to have the same regressive tax effects.
However, a VAT ain't the only way...
> No need for narratives about landlords raising rent, though it is possible.
Not if the UBI is instead funded by taxing the unimproved value of land - a.k.a. a land value tax, or LVT. We Georgists tend to call that a "citizen's dividend", but it's just a special case of UBI: a basic income intended to compensate citizens for occupying less than their equal share of land value within a given jurisdiction. There are a lot of implications of this (I could go on and on about the economic efficiency and ethical justifications), but relevant to this conversation is that the lack of deadweight loss means replacing other taxes with LVT would if anything reduce the consumer-facing cost of goods by reducing the effective tax burden of those producing said goods.
> Anything that is outsourceable is now more appealing to outsource than before.
That has already happened, without UBI. UBI is if anything necessary because of outsourcing - again, because we don't need local people doing those particular low level jobs, because they're now being done overseas.
UBI also might even help correct outsourcing; it's a lot easier to start a business if you know that if it fails (like most businesses do) you won't be homeless and starving as a result, and that's exactly the sort of safety net that UBI enables.
Well Andrew Yang is wrong. That's not what automation does. Automation reduces the amount of skill required to do jobs, reducing both the amount, but also the value. You still need people, and often more people because it becomes economical to employ poor people at a higher scale.
> Not if the UBI is instead funded by taxing the unimproved value of land - a.k.a. a land value tax, or LVT.
A land value tax is a great idea, but irrelevant to what I was saying. We need people to do low wage jobs. If they get some wages for free, we need to pay them more to do the jobs. If we pay them more, then we need to raise prices on the goods in order to not go bankrupt. The natural level of wages/prices is the one where people need to work in order to survive. The tax system and funding of the UBI is a separate problem.
> That has already happened, without UBI. UBI is if anything necessary because of outsourcing - again, because we don't need local people doing those particular low level jobs, because they're now being done overseas.
Economic Comparative and Absolute Advantages are not binary events. Doing things that make domestic businesses less competitive across the board in a globalized international economy is suicidal.
> UBI also might even help correct outsourcing; it's a lot easier to start a business if you know that if it fails (like most businesses do) you won't be homeless and starving as a result, and that's exactly the sort of safety net that UBI enables.
It's just a naive thing to focus on this founder idea.
Which translates to one worker being able to produce the same output as what required multiple workers previously. And sure, you could hire three entry-level workers at $15/hour for the price of one specialist at $45/hour, but chances are high that the same automation that enables those workers to do the specialist's job at all also enables said specialist to do considerably more than merely triple one's output.
Even ignoring the above, automation doesn't cause demand to materialize out of thin air; if you're a widget manufacturer and your sales team is able to sell 10,000 widgets a day, then multiplying the daily output of each widget factory worker from 10/day to 100/day will necessitate one of four things:
1. Figuring out how to multiply customer demand at the current widget price
2. Slashing widget prices
3. Slashing factory headcount
4. Slashing factory wages
1, 3, and 4 all minimize COGS and thus maximize profit margins. Unfortunately, 3 and 4 are both much easier than 1 (since 1 typically entails considerable effort to execute), so those are the options most companies pick. Both represent a severe loss of worker income - and thus, both necessitate UBI to compensate.
> A land value tax is a great idea, but irrelevant to what I was saying.
Assessing where the tax burden lies - and the impacts on that tax burden on spending ability, and the impacts of that on demanded wages - is pretty darn relevant to what you're saying. If you're paying an extra 10% (or whatever) on everything you buy, then you're going to adjust your wage expectations accordingly.
> We need people to do low wage jobs. If they get some wages for free, we need to pay them more to do the jobs.
Good. We should be paying workers a lot more than they're currently getting. The American (and for that matter, global) working class has been chronically shafted under capitalism for centuries now; God forbid we get shafted a little bit less.
> If we pay them more, then we need to raise prices on the goods in order to not go bankrupt.
Or the management could take a pay cut. I have very little sympathy for the "but what about our profits?" argument when C-level execs of even small businesses are skimming enough money on the output of our labor to be able to afford multi-million dollar homes and fancy cars.
> It's just a naive thing to focus on this founder idea.
Doesn't seem any more naïve than the idea that workers will somehow manage to "pull themselves up by their bootstraps" in a socioeconomic system deliberately designed to ensure we're never able to accumulate enough capital to do so (even at all, let alone without significantly impacting our physical and mental health in the process). Entrepreneurship currently skews hard toward those who already have money. That's a problem which in and of itself needs solved in order for a society to actually have any semblance of that "equality of opportunity" to which "laissez-faire" capitalists pay lip service; that maximizing the ability for working class people to start their own businesses (be it as individuals or cooperatively with others) happens to also at least partially alleviate outsourcing-induced job loss is a nice side benefit.
> Is energy really scarce? Currently the entire world consumes about 165.000 TWh (Tera Watt per hour) which is a lot, but it just a tiny fraction of the energy we receive daily from the sun, which is about 174000 * 0.7 * 3600 TWh = 430.000.000 TWh. On top of this there is all the energy stored inside our planet and atmosphere, which has been subjected for billions of years to the sun’s energy transfer.
By this logic energy has never been scarce. Energy is one the most important scarce resources. Much of the world is currently undergoing an energy crisis.
> Is food really scarce? No, as it can be obtained by a mix of energy and chemical elements.
We have the sun, and there is soil, ergo food is not scarce.
> Are chemical elements really scarce? Let’s pick gold, an element which is notoriously considered rare. The total gold mined in all human history is 200.000 metric tons. But if we look at the abundance of elements on earth, even though the mass fraction of gold is just 0.16 part per million, knowing earth’s mass we can estimate the total gold on earth to be about kg * * 0.16 = metric tons. If we only consider earth’s crust, that’s about 100 times less, which is still a huge number.
Minerals that require more energy to retrieve than value they provide.
You state
> Now I’m going to state something which may either hit you as a profound insight or as an obviousness. Basic resources are not scarce per se, what’s limited is the ability to transform them and make them usable. The fact that we need a human to perform the job is what creates scarcity.
It's a really poorly reasoned thesis and your arrogance to call it a profound insight is just bad. If you have one human and you have a water pump that requires two humans' labor to retrieve one human's water, it is nonsense to say you have a labor shortage. You have a water shortage.That one resource can be used to acquire another does not meant there's only one resource on the board. Everything you've said about labor could be restated as useable energy.
Energy, food, materials, labor, land, time. It's all scarce.
A UBI also opens up the possibility of removing the minimum wage which not only allows for more people to obtain jobs, but also raises the competitiveness with other countries, potentially (it depends on whether the minimum wage is actually effective in raising wages above the market rate).
How do you incentivize people to work? Pay them more.
If mass unemployment was a substantial problem, this may well be an acceptable tradeoff, but in the current economy it is not.
If you get just enough to survive from the government, and employers try to reduce wages because you'll net out the same, you probably won't accept the job. It's not worth your time. Even as a dirt poor person, your time is valuable. An employer needs to pay you more so that it's worth your effort again. You have much higher freedom to shop around too.
If the government does not pay you enough to survive (non basic income), you're still in a precarious position, but you are still in a BETTER position than you were without the funds. This will RAISE wages, which will in turn RAISE prices, until the equilibrium is found where the UBI is distinctly not sufficient and you need to work to survive. You will still be poor. You will make more wages, but have about the same level of real wealth. You will be a bit safer due the guaranteed portion of income.
Until globalization kicks in and makes your specific local circumstances much worse.
If you want a living, earn it. If you want wealth, earn it. Might not happen with your favorite school of craft, but the vast majority of people don't/can't make money doing something they are passionate about.
So far every experiment in UBI has shown that almost everyone getting it does something useful with the money and doesn't just sit on it.
And frankly, I have no problem with paying someone to sit on their ass drawing lines, if it means they aren't starving and homeless.
Why don't you? I am sure that you can support at least one such person with your income
Please don't expect everyone else to have the same generosity
When "earning it" takes much more than it used to due to technological shifts or otherwise, the only ones who can afford to walk the path toward mastery are the very well-off. This of course violates the modern western liberal ethos of equality for all, particularly in regards to educational pursuits.
We end up with a McDonald's worker class, their menial profession determined from birth, and their noble masters.
Maybe c'est la vie and there's nothing we should or even can do about it. But it's unpleasant, to say the least, knowing there's an entire class who's destined from birth to perform cheap menial labor their whole lives, without the slightest hope of doing anything else. After all, slavery is necessary for civilization, always has been.
I can accrue money doing what I'm doing - they can't.
Even if that only kill half the positions, we're still looking to a situation where humans overall don't have anything attractive to the market, if you can't earn a living wht would you do?
Quite a few of us already do that for people who don't even so much as draw lines on paper. (cough cough landlords cough cough)
No I don't. I receive a temporary lease to something of value that is fundamentally necessary for meaningful existence in modern society. Landlords are pure middlemen - and while there's a place for middlemen in society to provide initial capital, at some point that value dwindles down to zero as that initial investment is repaid, and then dwindles past zero as the landlord continues to parasitically rent-seek despite contributing nothing that the tenants themselves could accomplish for far cheaper.
Your retort to my retort would be valid (or at least actually equivalent to your cheeseburger analogy) if - in exchange for my rent checks every month - I received ownership stake in the property and/or the company that owns it. Such an arrangement has more in common with a housing cooperative than with a typical landlord/tenant relationship.
A lovely principle. We can start by taxing all inherited wealth and using it to compensate people who do essential but underpaid jobs, like teachers.
Cool, now that we all have $250/mo[1] for the rest of our lives, our problem is solved.
1. This is to a rough approximation what we can maybe sustain in the US now.
We aren’t even close to automating basic needs. We can certainly automate the manufacturing of some complex individual items though. Seems like a pretty fundamentally flawed assumption of UBI.
UBI is the solution, not the problem - and on the topic of Native Americans, funding it can and should start by taxing the unimproved value of the very lands we conquered from them.
Just to illustrate what the problem is using an extreme example: Oh good, we made it so anyone can turn the whole of the earth's crust into paperclips with a push of a button in a fully automated way that doesn't require any human labor and the energy to do it is completely sustainable. Hmm... Maybe that wasn't such a good idea.
I'm not so sure it would actually happen though. We already give support to a lot of poor people through various programs like EBT and Medicaid. This just converts that help to cash, which gives people more freedom on what they want to spend on.
That is, I don't think UBI adds a new problem beyond "how do we make sure that humanity properly accounts for externalities" and "how do we make sure that AI does what we want it to do".