Universal Basic Income

These are my notes from a Tech 2025 Workshop held on January 19, 2017. Tech 2025 was launched 2 months ago, their focus is on emerging technologies, e.g. 3D printing, etc. Where are we headed, and how will tech change us?

These are meant to be non-technical discussions about technology so that we can broaden the discussion to include legislative perspective, politics, social aspects, etc. There is a weekly newsletter.

Upcoming:

  • Workshop in February on driverless trucks
  • Panels - experiential tech tours - places that showcase emerging technology - holographic studio

Seminar Notes

Speaker: Adam Simpson

His focuses include:

Work is often part of our identity

Consequences to being jobless (from audience): 

  • Free time, no girlfriend, how do we get dinner and a roof over our head?

Technological Unemployment:

  • Osborne & Frey: 47% of jobs to be automated by 2033
  • Gartner: 33% of jobs to be automated by 2025
  • OECD: 11% of jobs to be automated by 2030
  • McKinsey: 49% of tasks within jobs could be automated by 2055 (+/- 20 years). Only 5% of jobs completely automated.

Osborne & Frey:

People were surveyed:

  • How do we feel about the likelihood of automation?
  • In the same time period, do you think your job will be automated?

Curiously, Pew Research found that people think the likelihood of automation is high, but they don't think their job can be automated...

  • Bartenders - people like to talk to humans, not robots
  • People do different things in boom times vs. bust times
  • This is not a new problem, so what's different?
  • Source: Abhas Gupta. "AI's Threat to Society is Scarier Than Trump." Medium. August 9, 2016

Replacement vs. Enhancement?

We went to service jobs, then knowledge jobs. What comes after that?

The pace is unique. We had a lot of time to acclimate to the steam engine. But augmented reality, robots, etc. are quickly becoming mainstream.

  • Automation can enhance a doctor's job - e.g. focus on rare diseases
  • It won't enhance a cashier's job - you won't hire more cashiers.
  • Accounting, data management/analytics can all be automated
  • Those who lose jobs: retrain or succumb to downward pressure

What should we be concerned about?

Growing Precariat:

  • British Economist Guy Standing's work
  • Social class marked by
    • Often less than full-time unemployment
    • Often underemployed
    • Lack of access to benefits
  • In some countries, this group is about 45% of the population
  • Automation?
    • Could render more skills obsolete
    • Could lead to large spikes of structural unemployment

Lack of labor power

  • Unionizing workers is very difficult under these new conditions
    • Increasing amount of workers that are competing for fewer jobs
    • Which worker will be enhanced, which worker will be replaced?
  • End of organized labor as a formal bargaining agent

Wealth doesn't translate to better wages. Economist David Autor.

Universal Basic Income - Where did this idea come from?

Famous proponents

  • 15th century Thomas More advocated for utopia (anti-crime)
    • They were hanging thieves who would steal food. 
    • Give them money, they don't have to hang as many thieves.
  • Thomas Paine (fairness)
  • Martin Luther King, Jr (anti-poverty)
  • Milton Friedman, Friedrich Hayek (distributing market demand)

Social Movements and Basic Income

  • Feminists (autonomy, reproductive labor, & care work) - they are more liable to leave an abusive relationship if they know they will have an income
  • The Movement for Black Lives (disproportionately benefits marginalized and underserved groups) - reparations

Current Experiments

  • India (anti-poverty, modernization, development)
  • Kenya (international development program via Cive Directly)
  • Canada & Finland (improving benefits system)

How we view giving money to others: subsidizing, keeps people from getting jobs

Here is the kicker: None of these people or groups mentioned robots.

WSJ: Technology vs. the middle class

Negative Income Tax - Libertarian

  • Use $20K as a baseline 
  • If you make above this, pay tax. Below, get money back. People are still incentivized to work

Guaranteed Minimum Income - MLK advocated

Others are cheaper options - UBI (unconditional basic income) net payers and receivers.

UBD (universal basic dividend) - technological imperative

Doesn't belong to us - open access, get a cut, add to it

Innovators are not that special. If not Steve Jobs, someone else would have done it (controversial)

Universal Basic Income / Dividend

Sounds expensive - how do we pay for this?

  • Cut welfare spending
  • Borrowing
  • Quantitative Easing

Taxes, Old & New

Ending Tax Avoidance

  • Taxes on natural resources
  • Taxes on land
  • Carbon taxes
  • Taxes on automation
  • Tax on the big data sales and purchases
  • Taxes on capital gains
  • Bank bailouts - QE should have gone to people, not the banks

Why do this?

  • If we don't, pitchforks, bad PR, etc.
  • Care may get cheaper, less institutionalized
  • Welfare - getting a job, lose welfare
  • Ethics
  • Tech companies may get more workers - education, more coders
  • Political power

Qatar - world's richest country

  • They don't work, they have to bring people into the country to work
  • India - they pooled money together (2K a month) to collectively grow a business, it worked
  • In Canada they ended up working more

So why the different results? e.g. Qatar - cultural issues? They created a serving class - residency vs citizenship

Guaranteed jobs - government employer of last resort

  • Grants to get people back in school
  • Regulations against automation - Luddites - protect those truck driving jobs
  • Voucher system? For housing, food? Itemizing necessities - bureaucracy

We created a false middle class - soldiers came home and got VA loans, education

  • By 80s the benefits of this program were wearing off
  • Veteran program is the greatest socialist system
  • Private debt also takes off in the 80s
  • Student debt, predatory lending practices
  • Eisenhower, Nixon, etc. - they didn't call it socialism but it was.

Workshop Exercise

Break up into equal groups - precariat, middle class, policymakers, or upper class

Each of the groups will read through their sheet (info below) and discuss

  1. After the discussion, build new groups with four people (one precariat, middle class, policymaker and upper class). E.g. Group A, B, C, D, E, F, G, etc. and each group talks to their policymaker about their needs, and negotiate with each other.
  2. The policymakers stand in front and speak to their "constituents'" concerns, and tells what they will do for their constituents
  3. The constituents in their group vote whether or not they will re-elect their policymaker. 

Group #1: The Precariat

You and your group are ranked low on the economic totem pole. Your wages have gone up and they've gone down; you get benefits and then you lose them, and you're generally uncertain about both your short and long-term economic outlook. Most of the work in your group tends to be part-time work and temporary contract work. Some of your group has worked in unskilled labor for a long time, others have recently discovered that the skills and knowledge they acquired at universities are no longer relevant in the modern work place and hence you're now competing with other unskilled laborers.

Consider:

  • How do you think the group would diagnose their current economic woes?
  • Within this context, how do you view the following actors?
    • The middle class (they may be friends/family!)
    • Policymakers
    • Private sector elite (you may work for them!)
  • What policies would you hope to see policymakers take to address the economic difficulties that you perceive?
  • What steps would you hope to see the private sector take to address economic difficulties that you perceive?
  • If this group alone got to make policies, what do you think they'd choose? Why?
  • What could you compromise on?
  • If you were negotiating with other groups, what do you think would be your "red lines?" What types of policy ideas would you not be able to tolerate?

Group #2: The Middle Class

Your group is doing relatively well overall - for now. Though wages have mostly stagnated, technological advances have also made goods cheaper. Your group is mostly college educated and their skills are still relevant in the workplace, however you've heard about technologies that might soon impact your work, whether it be automated accounting systems or self-driving cars. Many in your group are concerned that your skills could soon become obsolete. You've had decent job security and reliable benefits for a long time, but yu're unsure if that will last another decade.

Consider:

  • How do you think you'd diagnose the economic trouble you're seeing?
  • Within this context, how do you view the following actors?
    • The Precariat (some might be your friends / family!)
    • Policymakers
    • Private sector elite (some might be your boss / company!)
  • What steps would you hope to see policymakers take to address the economic difficulties that you perceive?
  • What steps would you hope to see the private sector take to address economic difficulties that you perceive?
  • If this group alone got to make policies, what do you think they'd choose? Why?
  • What could you compromise on?
  • If you were negotiating with other groups, what do you think would be your "red lines"? What types of policy ideas would you not be able to tolerate?

Group #3: Policymakers

Your constituents range from concerned to angry. They are clamoring for more jobs and better jobs, and saying that the economy isn't working. Put in a kind of awkward position, you see that jobs are low but economic growth and output are strong. You can see that the economy is working, it's just not working for everyone. Trends in automation are concerning to you - especially some of the more radical predictions concerning skills and professions that will be impacted by technology over the next ten years. You want to find a way to help your constituents, but you're concerned that overreach will alienate the business community and private sector that have enabled these innovations and made the economy more productive. On the other hand, no matter what policy you choose, your political status will inevitably be put to a vote. Your constituents will obviously have many more votes than the country's business elite, and you can't help anyone if you get voted out of office.

Consider:

  • How do you think you'd diagnose the economy's current troubles?
  • Within this context, how do you view the following actors?
    • The Precariat
    • The Middle class
    • Private sector elite
  • What steps would you hope to see the private sector take to address economic difficulties that you perceive?
  • If there was a "grand bargain" or a 21st century new deal, what would you propose?
  • What kind of solutions do you think other groups (the 3 mentioned above) will want the most? What solutions will they hate? What will they agree and disagree on?

Group #4: Private Sector Elites

You're doing great. You've got one or more successful business ventures that are doing well, and you're even investing in "life-extension" start-ups and booking tickets to Mars! You want for nothing; the world is yours. Well, for now. The broader economy is going through some trouble adjusting to this new, increasingly automated economy and many of your fellow citizens aren't happy with the results. On the one hand, you resent the idea that the innovations you and other business leaders have achieved are to blame for harming the economy - just look at the rising productivity and GDP! But on the other hand, some economists are noting that business profits aren't what they are because consumption is low - a product of flagging wages. Some are talking about a wide range of new policies - and taxes to go along with them - to act as a pressure valve to some of the economy's broader troubles, but you're concerned about how these policies (including regulations) might affect your business.

Consider:

  • How do you think you'd diagnose the economic trouble that others are perceiving?
  • Within this context, how do you view the following actors?
    • The Precariat
    • The Middle Class
    • Policymakers
  • What steps would you hope to see policymakers take to address these economic difficulties?
  • What steps do you think the private sector can take to address these economic difficulties?
  • If this group alone got to make policies, what do you think they'd choose? Why?
  • What could you compromise on?
  • If you were negotiating with other groups, what do you think would be your "red lines?" What types of policy ideas would you not be able to tolerate?

Results

I was part of precariat group discussion

We were willing to trade education in exchange for national service.

Interesting discussion: one person thought education would raise everyone - I loved optimistic idealism. Since I lived in Birmingham, AL and was a real estate investor with hood, working class, and high end homes, I learned that it doesn't work that way in reality. Those who are first in their family to go to college tend to break away from the family as they become culturally different, and a group of people who didn't go to college will drag down the person who did. One woman who was first in her family to go to college concurred. She said her family thought she had a fantastic life, and she said she has her share of challenges, but different from the rest of her family.

Policymaker results after group discussion and negotiation:

1. Government education as free as possible, for fields where jobs available.

  • Universal income
  • Minimal income level if not educatable
  • Cataclysm is likely needed to effect these changes

He's getting re-elected

2. This group didn't think a guaranteed basic income was a good thing, people would take advantage

  • Universal healthcare financed through taxes, richer people get intellectual property protection
  • Expanding social safety net, tightening patent laws to keep innovation

Getting re-elected

3. Precariat pair had interesting arguments

  • Working in military or national service for 4 year degree, volunteerism also eligible
  • Elite concerned about businesses and money, intern program to empower people, businesses get tax breaks or grants
  • Tax breaks for veterans, volunteers, business discount incentives
  • Education on sliding scale based on income - astronomical tuition - credits and volunteer
  • Not in favor of $15 minimum wage, negotiate based on region, state income, livable and workable

One hold out (elite) but re-elected (our group)

4. Education in different forms: precariat - receive free education, payback in community work, public works

  • Is that a job guarantee? Or public spending? Public ways to work to pay back tuition, doesn't imply job guarantee
  • Private sector talked about education helpful, guaranteed better trained people, willing to pay to some extent
  • Middle class jobs extinct in certain amount of time, able to re-educate, can't tell what's coming down the pike
  • Maintain economic position or improve through education
  • Funding - got rocky
  • Whole tax system has to be reconsidered, more on model of Europe

Basic income - separate work ethic. There are a lot of cultural issues built around the idea of working. We have trouble accepting working less hours and not having a job.

  • Middle class - better off than before - will likely get more education
  • Shorter work week, job share with families with children

Norway - work shorter hours and child care

East / West - inclusive, collective. Protestant - we're masters of our own domain

Shorter work week - unions are getting weaker

India - railroads publicly owned, not profit or productivity. Job program, bloated

  • Why not just give them the money
  • Publicly owned utilities, work co-ops

John Henry - steel driver, machine takes his job. He wins a contest with the machine, then dies of stress.

  • We want to be masters of the machine
  • Sci fi writer - future already here, not evenly distributed. 
  • San Fran - poor people pushed out of their homes. 
  • Friend in Seattle: growing tent cities
Eileen Sauer