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DaVo

The End of Work

DaVo's Personal Blog - December 9th, 2016

What if you never had to work again, what would you do with all the free time? Think about about that for a minute. Now I'm not talking about being independently wealthy but a safe net with enough income to cover your basic needs like shelter, utilities, clothing, food, etc... How would you define your life and spend your time?

 

I've been thinking on this one a lot and it seems that we might be at a cross roads where this country and most of the western world needs to consider what happens when technology gets to the point where most of the jobs we currently have are gone. Increasingly as AI improves and automation completely takes over manufacture, just what happens to work force?

 

In the past when new technology even when it made some jobs redundant it tend to open up completely new careers. For example, when the automobile made stables completely unneeded, a completely new need was created in maintaining automobiles. Thus the stable became the local garage. 

 

With automation of existing jobs, there will always be a small amount of maintenance, programming and engineering but not on a level that will ever replace the job loss. Even the jobs that the automation creates at the beginning are often only short term. Meanwhile thousands of jobs are done, gone and over.

 

Over the last year there has been a lot of talk about bring manufacturing back to the US. As great as this may sound the reality is that it would in some cases not create any new jobs. In China there is already significant job loss to automation. So if say Apple moved all it's manufacturing to the US basically the only difference would be an increased in management jobs and a few jobs in maintenance. The fact is if the cost of shipping the materials for manufacturing the product is cheap enough, Apple may see an increase in profit in the US and they could stamp it as "Made In America" though the made part only involved pushing a button.

 

One of the misconception of why so much manufacturing has moved to Asia is that it is only because of cheap labor. The reality is that it has more to do with the supply chain than cheap labor. Just like Detroit boomed because of it's location, China excels because of being close to the supply chain. For this to happen in the US, would mean a complete overhaul of the supple chain which isn't going to happen any time soon.

 

You maybe asking saying to yourself that this doesn't effect me because I don't work in manufacturing. There is a cycle to technology in how it effects jobs. Starting in manufacturing and then the service industry, accounting industry, Transportation, Office clerk, Customer Relations, management and many jobs that are considered White Collar. In other words what would be considered middle class jobs.

 

A report published by The McKinswy Quartely Report estimated that the US could 45% of all work activities in the US being loss to automation. Currently about 5% of the jobs can be replaced by automation but in the near future 60% of all occupations become 30% or automated. That's 15% or more of those currently employed without work and with no chance for future employment. Forcing a large portion of the middle class into lower paying short term jobs or unemployment.

 

Maybe the most frighteningly part of the study is the loss in skilled manufacturing with 59% of their activities having 90% of jobs being automated. With white collar jobs with increase development in speech recognition technology the finance and insurance industries could see a loss of 66%. Professional drives also will see a major drop in employment with the development of self driving vehicle.

 

I'm sure you are think, "Well, I wouldn't mind going back to the services industry." Sorry but in food and other traditional services industry jobs where a majority of those seeking first time or short term employment go, 73% of work could be done by Machines. Retail could see a loss of 53% of current jobs. 

 

Though we just went through an endless election, I don't remember one of the candidates for any party bring this up for discussion. I could be wrong and if I am please let me know who. We are coming up on a point in human history where work for a majority of the population will be unable to find long term stable employment. Just like many tech advancements like steam power and the combustible engine we can try to slow down the advance but we can't stop it. Times are changing and this is a completely new challenge and as I see there is only really three routes to take.

 

The first is what seems to be the general popular response. Which is to do nothing and just deal with it when it happens. We have all seen the footage from the 1930s and most of us have heard stories from older relatives of what it was like to live during a time of up to 23% unemployment. However, I don't think we really understand what that means. 1 in 4 without work and with no means to support themselves or their dependents. This isn't the loss of savings or retirement accounts, this is starving poverty. 

 

You might say, "Well, that is what welfare is for." The reality is since the 1960s the fair deal has been slowly being chipped away to the point where most of the programs can't even support those that are currently unemployed and more importantly are at best short term. There is no way the programs could support 25% of the population and more importantly get them to the point of being self sufficient.

 

The second is delaying automation and in some cases this has already being done. Did you know that the reason that the tax code is so complicated is because tax prepares and accountants lobbied the US government into make the Tax Code so complicated to make it more complicated to do yourself using a computer program? How is that working out for everyone?

 

As much as we will try the reality is there is money to be made and if we don't increase automation we will be limiting our hold on the economy on a global level. No level of adjusting trade levels will reduce the profit that can be gained from automation. Even taxing automated products heavily will not offset the cheaper cost vs hand made goods.

 

Third is my choice and it's simple, begin to look at Universal Base Income. I know what you are going to say, a welfare state and the fall of Rome, Blah, Blah, Blah but short of the US government becoming a major employer in the form of New Deal style public work programs, just how are you employ the unemployable? The free market will not supply jobs just for the sake of giving people jobs. Though Henry Ford gave workers a living wage because he understood that if he wanted to sell cars, he need wage earners that could afford them. I really highly doubt that most of American companies and more importantly their share holders would follow this thinking.

 

Now I'm not talking about anything beyond enough income to supply basic needs as I mentioned at the start of this blog. If you wanted more out of life and to have a better life, than do what it takes to make a better life for yourself. Now you would have the time. Start a business, write a novel or work on that invention.

 

How would the government pay for it? Well, by shifting the cost of government to where it used to be, those that could afford it. it goes without saying that there would be an increase in profit at companies. Think about the amount of income could be generated by laying off half their workforce or more. Creating an Automation Tax for companies that have replaced workers would cover the majority of the jobless. Yes there would be a back lash but if a company wants to do business in the US, it would be a cost of doing business. It's safe to say that the rest of world would follow.

 

Other sources of income would be raising the individual income tax of those making over $350,000 to close to the levels that it would before 1986 when it went from 50% and slowly was dropped down to the current level of 33%. Over the last 40 years if anything has been proven it is that trickle down economics doesn't work. The reality is that during the golden age of the American Middle Class between 1945 and the mid 1970s, the rate was 70% or more for anyone making more than $100.000. In fact it was as high as 96% in 1944 and over 90% for all the 1950s and early 1960s. During this period the US saw huge economic growth and huge gains in standard of living, security and health. 

 

The other income generator will be the US Government and the US Military. As both become increasingly automated there will become not only more efficient but there will be a huge saving on wages. This will also be felt on the state level. Understand that a majority of the government employees for the most part are office clerks and most of their jobs can be done with a computer. The military uses of Droids has increased greatly with mixed results but the reality is that over time there will be less need for a standing army. 

 

Now I know all of this might seem far off in the future and a little nutty but the alternative is millions of unemployed Americans taking to the street. One of the biggest lies of the 20th century was the idea that this country was founded on Capitalism. The fact is that it was regularly used until the 1950s as a reaction to Communism. If anything this country was founded in reaction to the two major big businesses on the planet at the time, The Church and The English Empire. They felt that both had too much control in their lives and that they had limited say in their own personal life. It wan't because they wanted free commerce free completely of government control. That's crazy and when we have tried that in the past the outcome was child labor, 80 hour work week, and countless other horrors. As a product of the Middle Class I hold most of those involved in the Labor Movement on the same level as the Founding Fathers.

 

Yes many of them were rather radical and might have had some odd ideas but the reality is they fought for a living wage and a say in their future. You might think that a Universal Wage is communism or socialism. To a degree it is but I'm sorry but we have adapted many ideas from both. Just like the US is a Democratic Republic, we are a hy-bred with the structure to adapt to the change of time. The problem is that we as Americans usually don't adapt until we have to. It took the great depression for us to consider things like a 40 day week, Welfare, Unemployment Insurance, and Social Security. 

 

I'm a bit of a socialist and I will admit it. I feel that basic rights should include a college education, health care and public held high speed networks. I would love to see the insurance industry and the cable industry burn to the ground. Why? because it would improve the quality of the life of the citizens of this country and it's completely doable. As is Universal Basic Income but we are faced with many other options short of a period in western civilization that can only be compared to Economic Black Death. The social uprising will make the French Revolution look like a Black Friday at Walmart. Plus the US Government have been giving payments to citizens living in Alaska for decades in with residence receive $2,072 in oil revenues. So it isn't that new of an idea.

 

Just so you don't think I'm one lone nut, some of our greatest minds have come together to found the Economic Serurity Project and raised 10 million dollars to fund a two year research project. Also Finland, the Netherlands, Switzerland, the United Kingdom, Canada and Holland are researching Universal Basic Income. 

 

I'm sure the first thing that pops in to most people's mind is the welfare state, UK dole queue and the fall of Rome. With a majority of the population just sitting on their collective asses and doing nothing. However, you need consider that a majority of those that retire with no income stress, tend to seek out some form of work. Whether it be volunteering, becoming care givers for family members or exploring their passions.

 

Well, what about the fall of Rome? There is a great deal of different factors that ended Rome. First off it was a dictatorship lead republic that relied heavily on the favor of the people to centralize power. Rome emperors did this by giving the citizens grain. Over time it became a standard practice and the theory is that because citizens didn't have to work to earn grain that they refused to fight for the Empire. This is a bit of a jump, the reality is that Rome only had an army when it was at war and the issue might have been during a majority of it's existence Rome was at War.

 

When at war only land owning citizens were required to join the military. Usually the first to be chosen would be the most wealth and then lastly the poor. The motivation to go into the military for a Rome Citizen was money, fame and land. In other words bettering their status. As less and less of the higher and wealthier part of Roman society saw fit to serve in the military, increasingly the army was filled with pay soldiers. Part of their motivation was to get a lower form of Roman citizenship. The problem was that often these mercenaries were in fact ordered to battle against their own people. Not sure who thought this would work. Of course, they joined their country men and turned their sights toward Rome and sparked the dark ages.

 

By this time the Roman Empire had been in decline for years. The reality is that it lasting as long as it had is amazing. When you expand to control the known world it tends to create internal rest for a number of reason. One of which is the influence of new ideas that undermine the centralized power. For example Christianity which had a lasting effect on Rome culturally. Also as many of the early followers believed the return of Christ was right around the corner it tended to undermine the idea of long term plans. There was also pressure sickness that came from trade and civil war. So, to think that because citizens no longer needed to work to get food brought down the empire is narrow sighted.

 

It's odd that the US and Rome are compared at all. Yes both were a Republic and a world leader but the comparison ends there. The US has not been in a continue state of war it whole existence. Other than the Spanish American and Mexican American War, the US hasn't obtained territory from war. Of course the US has gained influence in nations we have invaded but we have always returned the country to self governing.

 

The point that most people miss is that because the Romans no longer had to focus on getting food, it created in the first time in history Free Time. The benefit to this free time is the mass technological advances that happened during the period. As technology advanced it only increased the amount of free time and thus increased not only the quality of life but the advancement of art, science and culture. America has also seen the same effect over the last 125 years. As more Americans devoted less time to simple staples like food, clothing and shelter, we have seen American culture influence the rest of the world through arts, entertainment, music, and tech. 

 

Imagine if 45% of the population suddenly had free time to explore their interests in productive ways. Consider the renaissance that could happen if a majority of the population wasn't working two jobs to make ends meet. Imagine the children that would come out of parents that actually have time to spend with their child. Think of all the public works that could be built. Think of the energy that is focused on ending poverty was focused toward other social issues like drug addiction and metal health. Think how much more you would feel fulfilled if you could take that year off to join the peace corps or Mentor kids in your neighborhood. 

 

It's going to take a lot of thinking out of the box and a redesign of how we view government in our lives. Also a reworking of capitalism but this is not something we can avoid and if you don't believe think of how many times you have used you internet connected device to book a hotel, order pizza, ordered a ride service or accessed your bank account. All of those used to involve interacting with someone that had a job. 

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