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You may think Johnny 5 was cute back in the 80s, but its robots like him that are uprooting the fabric of labor in the United States and Europe.

I recently read an interview with Elon Musk about the future of labor in the coming decades. He’s not the first to mention that automation will significantly reduce the amount of jobs that currently exist.

To see where this trend is heading, let’s consider how many jobs a Ford plant created back in the 50s and 60s and compare that to how many jobs Facebook creates. When you compare the market capitalization, you’ll notice that most emerging technology companies are creating less jobs yet generating similar amounts of wealth. To make matters worse, the jobs these companies do create tend to require a significant level of skills, far more than your average factory worker would require. Take a look at the fastest growing companies in America today and you’ll see they are doing more with less.

As many a meme has pointed out, it’s not the immigrant but the machine that’s causing the problem. We can see these examples in our everyday lives. More self check out machines, automated customer service, fingerprint identification at fitness centers. Hell, a Redbox essentially provides the exact same level of service that a brick and mortar Blockbuster Video could only 10 years ago. If you think this is limited to just DVDs and buying your groceries, you are grossly underestimating how much automation will completely turn the labor markets on their heads.

Despite the many social issues that divide America, do a little homework on any Trump voter and job creation ranks very high in the reason he got their vote. Listen to any of Trump’s speeches in the South, Rust Belt, or other areas suffering economically and his promise was clear as daylight: “I’ll bring back jobs, jobs for America, etc etc.”

I will not turn this into a political discussion, but we must admit that Trump did a far better job tapping into the pulse of the country than Hillary, and that’s why he won. Whether or not he will deliver on this promise is one thing, the point is that what he said worked enough to get him elected.

The sad truth is that bringing back factory jobs was just a campaign promise. I’m saying this not from a party perspective but simply pointing out reality. Even if you were to bring a factory back to America, most of its operation in this day and age is automated to begin with.

Some predict that up to 25% of current jobs could be wiped out within a decade. We can only imagine what the US will look like if unemployment rates start reaching the levels you see in Greece. Mark my word, there will be blood in the streets.

It’s for the reasoning outlined above that Elon Musk suggests a basic universal income, something I am a vocal proponent of and I base upon 2 experiences.

My first argument is based upon the time I spent living in Germany. Having lived overseas, it’s easy to compare and contrast what makes a country better or worse. Unless you are an ultra ambitious, type-A personality, I feel Germany is probably a better country to live in, if you were given the choice. To make my statement very clear, if you prefer to raise a family, have steady work, and place value on your free time, then Germany is a better option, if you had to choose. If you are more of a risk taker, have dreams of being famous, would like to change the world with your ideas, then America opens more opportunities for you.

To be clear, I am not nor would I never look down upon anyone who prefers more stability in their life. A major criticism I have of American culture is that it’s easy to overlook the fact that competition means there can only be a few winners and many losers. Money is finite, so not everyone will be a millionaire, not everyone will be able to afford a home, or drive a nice car, or get that dream job. But when you listen to those who feel most slighted in America, it sounds like they want more equality. When you live in an ultra-competitive country like America though, by the rules of competition you cannot have this, some have to lose.

Where I feel America excels, is that unlike Germany, it’s far easier in America to grow a business, rise to untold fame, and become extremely rich. The taxes and barriers to opportunity in Germany make this much more difficult, which is why I feel America is better for those who want to pursue their dreams.

Although I’d never take the awful history prior German generations were dealt (nor most of Europe for that matter), I think Germany is one of the best countries to live in for those who value stability in their lives over all else. The main reason is that the social standards are some of the best in the world. Germans still have to pay for health insurance but won’t have to go bankrupt if they are dealt a bad hand by fortune. In America this is not the case. A Harvard study found that in 2007 62% of bankruptcies were medically related. I’ve read other articles disputing this fact, but whether it’s 58% or even 30% this doesn’t take away that fact that health care costs in America are a big problem and that they erase the wealth of many people.

Germany could never be America nor America Germany, they are simply completely different countries. In fact, I intend on writing another post about those 2 sentence memes floating around Facebook that make the blanket suggestions that America should be more like Denmark, or some Scandinavian country. I would never be able to drive my point in 2 sentences. I don’t think America should be more like Germany or a Scandinavian country; simply look at how these countries handle immigration and I rest my case. The point here is to use Germany as an archetype for why I feel a basic universal income in America would work and that most Americans would be better off, although not necessarily want it.

Getting back to health angle, I would guess though that Germans don’t experience the kind of stress Americans do when it comes to health care, which ironically leads to a better standard from a mental health standpoint. This isn’t to mention that Germans get far more vacation time than Americans and work less hours.

In terms of other social benefits, any German not able to find a job is given enough money to live. It’s not alot but just enough to cover life’s necessities: food, rent, and clothing. On that note, let’s be realistic. In any developed country, we now live at a stage that food is not an issue, it’s the rent that gets most people. Nearly every town I’ve visited in Europe has some sort of clothing donation project and one can find clothes at a 2nd hand store for quite a bargain. Food is also quite cheap. When it comes to poverty in the “developed” world, it’s being able to have enough money to shelter yourself.

To continue along this note, my views swing very liberal (conservative in Europe) when it comes to social welfare. Based on my experience in Germany, I feel the whole welfare/laziness argument stands on very loose legs and I’ll explain why. Those in Germany who cannot find work over a long period of time collect a series of social welfare benefits known as Hartz IV.

The interesting thing is that those in Germany who collect these benefits are socially stigmatized. The above link will explain that soap operas during day time television are even referred to as Hartz IV. Consider that Germany is a far less competitive country than America. No high school or college sports for example, no other popular national sports besides soccer, and although Germans enjoy a nice standard of living, you don’t see them complaining about the near 30 days of vacation they receive each year. Germans even tried to pass a law forbidding emails to hit servers after work hours. Compare that to the ultra competitiveness of America, where at a young age we compete on the sporting field, in entertainment and academically. When it comes to work, Americans are the complete opposite as studies have found that because of technology, Americans tend to work more by answering an email at 9PM in hopes of getting a promotion or praises from the boss.

The argument I’m making is that collecting welfare entails a social stigma for most people. Not all but most. If it does in a far less competitive country like Germany, I would hedge a bet that it would also apply in the US.

To further bolster my point, once again, listen to the people who voted for Trump that are out of work. They didn’t want Sanders, and he was promising many more benefits. Americans by and large want to move up; it’s a part of American culture. The reason I lean liberal (conservative in Europe) is because I feel we should all start on a level playing field.

Once again, America should not be like Germany, I just use the country as a model to further my argument.

As a final point, the current welfare system in America is so clogged by bureaucracy, that many have concluded that the poorest people would actually receive more aid if they were simply cut a check. As the above article explains, because states are allowed to dole out the benefits as they see fit, the money ends up getting funneled into projects which often don’t help people. In essence, it’s money going out the window.

The second reason is far more personal and comes from my life experience. I’m a big fan of Gary Vaynerchuk. I find him inspirational to listen to and if you pay attention to his message, he wants his audience to be those who are not content with their life. Whether it’s because they want more money or the autonomy that having a business brings, he offers very blunt advice as to how you can make that happen.

For about 2 years now I’ve had my own business because I felt very much like the audience that Gary speaks to. I spent around 10 years working in the corporate world. I have no regrets, I learned so much but there was always a nagging feeling in the back of my mind that I needed to do something. I chose to take the plunge and try a business. It wasn’t so much the opportunity of making money that appealed to me, rather having autonomy and only answering to myself. Since we all need to work, I’d rather be my own boss than work under one.

 

Art, be it in form of writing, music, or other entertainment is my true passion though. The issue is that I’ve never been the starving artist type and don’t feel I’d be particularly happy with a Bohemian lifestyle. One of the biggest incentives for me in running a business is to do one day be financially secure enough that I could pursue these passions. So in a way I did start a business so I could make money but mostly because down the road I hope it can buy me some time.

The kicker is that if I lived in Germany, I’d be pursuing this passion right now. The main reason is that I could probably scratch a living with my art and feel stable enough doing it because the biggest things one needs to survive in developed countries are healthcare and shelter, both of which would be provided to me.

This is impossible in America due to the lack of safety nets. Many people take jobs in America for no other reason than to get health insurance. Now you might argue that [Insert Celebrity] had to suffer poor for many years, working 2 or 3 side jobs before making it big and that everyone should go through this ringer before reaching success.

Here I completely disagree. I bet there are thousands of extremely talented artists right now who will never get the chance because like all of us they have to go to work everyday and don’t have the energy or time to pursue these goals. I’ll also follow this up by saying that it’s not about being famous, rather getting your message out, whether that’s music, a canvas or a book.

My message comes across as very idealistic and self serving in 2017. The first issue I would raise is that why should someone be allowed to pursue their artistic passions when I have to go out and work. This I won’t disagree with, but based on where technology is heading, most likely that job you are doing now won’t exist.

The reason a basic universal income is gaining more attention is that nobody seems to be offering a better solution. Who knows, maybe there will be some new Industrial Revolution equivalent that we can’t foresee and everyone has jobs. If that’s the case then this essay can be considered nothing more than idealistic pondering. But if that doesn’t happen, there are going to be alot of people sitting around with nothing to do. As Musk said in his interview, we all need to feel like we have a purpose. I agree here. Even when people grumble about their jobs, it defines them in many ways. Consider how many of those who retire in their 60s often voluntarily go back to work because they want to feel that level of purpose again.

I would welcome a basic universal income because for a person like me, I would feel free to pursue my artistic passions. Whether that makes money is not the point; a world without art is quite a bland one.

Now another argument might be those who aren’t artists. That’s fine. Let’s look at social workers or teachers. Currently these professions pay very little because they don’t generate capital, yet they are badly needed. It’s a shame that so many young adults have to get overpriced degrees just to help other people, it’s thankless work. Under a basic universal income, a social worker or teacher would earn more than they do right now as they would get their job salary plus the basic income. I imagine there are many who would prefer this type of work but are currently in a different field because the pay is better or there are benefits. With a basic income that wouldn’t change, but at least those who felt helping others was their calling aren’t punished financially for it.

For those who want to be rich and make money, I once again come back to Germany. There are plenty of hard working, ambitious Germans who make alot of money. They pay more taxes than one would America, but nothing stops them from being rich besides contributing more of their earnings back into the system.

In addition, I think a basic universal income could actually encourage entrepreneurial thinking since an ambitious person could focus on their concept or idea without having to work a job that takes them away from pursuing their goal. If the business fails, they can still shelter themselves, but if it works out, then more jobs are created which otherwise wouldn’t have.

I also have to address the laziness argument, which I somewhat alluded to when I was discussing Germany but will get into more detail here. There are always going to be lazy people, just like there will always be criminals, greedy people, etc. Lazy people exist in economic booms and depressions, so yes some will abuse this, just like it’s abused in Germany. I feel though that the social stigma you see in Germany would apply even more so in America.

It’s in the American fabric to want more than your parents had and to hope your children have more than you. Technology is rapidly changing the world and for the first time in 100 years this isn’t happening. Baby boomers did better than their offspring, more children are staying at home longer with their parents, student debt is enormous. It now seems like even more basic jobs are disappearing.

In many ways it may sound like I am arguing for socialism or communism. There’s no room in this piece to define these terms properly as they are freely abused but to be clear, if you look at the former Soviet Union, it was essentially an authoritarian government that controlled all economic decisions, that’s not communism. Neither is my argument. If technology is going to deliver a major blow to how the world operates, I am trying to offer a positive outlook.

I’ll reiterate that my proposal falls under the assumption that automation decimates more and more jobs at a pace faster than people can keep up with. Although I argue for more safety nets in America, I don’t feel a proposal as radical as this is appropriate right now. Should my prediction and that of many others start becoming more and more realistic, I offer a solution that would be the least disruptive.

It’s very clear from the rise of populism in both the US and Europe that people are frustrated, and when you boil it down to the most basic element, I feel it’s economic insecurity. If automation puts 25% of the population out of employment and there is no clear solution in place, watch out. The consequences will be disastrous to say the least. My proposal is a potentially peaceful solution to what could be a major problem in the coming years.


Category: Opinion

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