Tuesday, June 27, 2017

UBI The Good, The Bad, and How I See It.

Recently on my sparse viewing of FaceBook, I saw a man who is an advocate of Modern Monetary Theory, lamenting people's love of the UBI, or Universal Basic Income; aka: Guaranteed Basic Income, Mincome, Living Stipend, etc. etc. etc. In his mind, robotics is something that we should not be concerned about for the next ten or twenty years or so. Ironically enough, his constantly advocating for a Federal Job Guarantee, is missing the mark of what he wants to see happen.

His premise is sound, the Federal Government comes in, guarantees that there are tons of good paying jobs rebuilding and updating infrastructure across the land, improving this and that, and generally things that we have ignored for far too long will boost the economy, put us at full employment, and allow wages to naturally increase. In a sense, it would force a living wage while keeping prices near the same, as fewer people would be looking for more work. It at its core is a compromise, people will work, be able to make a decent living if they don't go insane spending their newfound paychecks, and many people will be able to get off the government dime. Liberals should love it, because it means a living wage for the majority, if not all people. Conservatives should love it because it cuts welfare, people are not being “lazy,” it should be “cheap to administer, and the government wouldn't grow, providing that we re-task certain positions into this Jobs Guarantee. Win win situation, at the moment anyway. I can get behind this kind of compromise, as long as there aren't shenanigans at the local levels of government, or at the administration level of the companies.

But here is where his premise falls, and this is what he isn't taking into account. To show an example of this we are going to have to pile into the “Way Back Machine,” and look at various industries that were the backbone of the American Economy. We are going to look at three of them today, two that I admit to not being intimately familiar with, the last I am fairly familiar with. He does not take automation into account, not fully blown AI that does everything with no human input, but automation that requires minimal human input. Automation that allows for one person to do what typically took more people to achieve.

So, lets pile in, and go look at Ford Motor Companies first assembly line. Way back in the early 1900s, specifically 1913. Back in that day, when the first moving assembly line came online, you would find that it took roughly 13,000 people to make over 260,000 Ford cars, where before the assembly line it took over 66,000 people to make roughly the same amount of cars. The breakdown in 1913 was something like 963 people for every 100 cars assembled. Okay, so where do we stand today, remember it took 963 people for ever 100 cars assembled on the Ford assembly lines in 1913, and here we are 114 years later. Okay, so we hop on Google, and BMW pops up with information on an assembly plant in South Carolina. It employees 9000 people, and produces four of its models (The X3, X4, X5, and X6), a total volume of 36,904 cars assembled a year at this single plant. Not as many cars, but remember that some 80% of the cars off this line are tailored to customer design (Build you BMW), basically special ordered cars, something Ford did not do at the time, and only a single plant. It also makes note that the body shop, the portion of the shop that actually builds the car is fully automated. The welding, the assembly of body panels, and the like are all done by machine. There are a few people who make sure that everything is running as intended, whereas before, a few machines were used to assist the people building the car. Sorry, but BMW does not say how many people are required for every car assembled.

Lets get back into the Way Back Machine and look at our clothing, shall we? We have all seen the pictures of sewing shops from the 1900s, there were rows upon rows of people sewing together bits and pieces of cloth to make clothing. Back in the day, that was a huge part of the workforce. Even today, in some countries, these people still make up a large chunk of the workforce, gluing shoes together, sewing bits of cloth together to make the cloths we wear. Now, well, now most of our cloths are created in massive lines, like our cars. They have people along the way to ensure that the cloths are put together according to a template. Have you noticed when buying that cheap pair of pants that there are, at times, a large amount in the pile where the stitching isn't quite right? The seems are slightly off kilter, its because the machine was off center, and it either fell within the margin of error or the quality control people just ignored it. Oops.

Finally we having a staple of our infrastructure, something we see, drive or ride on every day. That is our roads, and how they are made. Now, generally speaking most of us have been riding or driving along and got caught in the dreaded traffic jam induced road work. The noxious smell of freshly laid asphalt, the burning heat of it as we pass by the paving machine. I'd hate to do that for a living, but my Dad loved it, he lived for that job, spent most of his life doing it. Ah, the stories he would tell, the things he would do. The truth of it is, some seven years after he retired from the business of paving, things have changed drastically. You see, back when he started, most jobs required 15-20 people. You had the person who ran the paving machine, the roller operators, the tack truck driver, and people who would run the screen, others who would sweep up excess asphalt, people who would shovel the excess asphalt into the screen or would toss it in front of the roller. By the time he retired, that number was down to around ten people. The paving machine operator would also run the screen from his perch, set the depth of asphalt, do everything and anything that needed to be done to ensure a level pave. As the technology improved, the number of people needed to shovel and sweep decreased. Today what took 15-20 people, now takes 4 or 5. That's right, when they repaved the street I live on, there were four people total on the job. One operator for the paving machine, one roller operator, one tack truck driver, and one guy in a broom tractor to sweep up any excess which was then either dumped into the paving machine, or mowed over by the roller. On large jobs, like major interstates, you might have two or three small crews (consisting of four or five people) spaced out along the course of the job, rather than one thirty man crew.

This improvement in technology, and automation extends far beyond those three trades. These improvements extend to all aspects of our lives. Today, I can walk into some restaurants and only meet a waiter when they bring my food, if I am having a bad day, and don't want to talk to a cashier, I can use the automated check out, I can order my food online and have it brought to my house, and those are all things brought about by automation and technology. I can go online and find out where a specific item is in some stores, so I don't have to ask an employee.

This is where his logic falls, not fails. As time goes by, these things are going to start becoming the norm. Minimal human input for various items and services. This is why, while I agree with a Federal Jobs Guarantee in the short term, I am pushing for something like a UBI. He claims that a UBI will do nothing about involuntary unemployment, that it will not end people wanting work, but being unable to find it. He is mistaken on that. You see, until full automation is achieved, where 100% of everything is made by machine, and the machines can repair themselves, you will always need a handful of people. A UBI gives people a choice, do I want to spend my nights stocking shelves, or do I hold out for something I find more stimulating or suits my personality better. Sorry, some of us are not exactly cut out to be a fry cook at McDonald's. Our personality types just do not allow for us to be proper waiters, dealing with the general public for eight hours at a time, until that Big Mac you ordered is done via touch screen and a machine throws it together in the back. It was hard enough to be social as a sales rep, dealing with the insanity of people on a daily basis for ten hours a day at a part time gig. “Yes I want a Super Cheesy Big Mac Deluxe supersized with no cheese because I'm allergic to cheese, and no onions because they give me gas.” Um, don't they make something similar to that without cheese and onions? But hey, when you work at McDonald's, you have to take that with a smile on your face, several times a day, and god help you if the person in the back is having a craptastic day and says screw that, you're getting the Super Cheesy Big Mac Deluxe, with all the bells, whistles, and a special addition to the special sauce. That guy in the back (who would probably be someone like me) isn't going to catch the fall out from that, its the poor cashier and the manager who likely doesn't care anymore because they make so little, they have to be basement dwellers (side note, always be kind to the people where you eat, its safer for you that way).

Look, a UBI offers a ton of benefits. Unfortunately here comes the next aspect of falling logic. He believes that unlike a UBI, the Jobs Guarantee will be an immediate boost to the economy. Sadly, with as many people being behind the eight ball as we have, its all going to lag*. I'm sorry, but either plan is going to run afoul of people like me. My first concern is not running out to buy a new PS4 and a ton of games, its going to be paying bills, becoming secure in a various aspects of my life that have been severely lacking in this last decade. A new(er) ride because I like to go places, a secure home (where I don't have to worry about the kkk burning my house down with me in it), being free of debt. Lots of us are thinking that way, we want to have nice things, and be it a UBI of a job guarantee, we are going to spend our money in such a way that ensures that we don't have bill collectors calling everyday, before we put that money into a useful portion of the economy. That money is going to slowly trickle into the economy, after a year or so, depending on how much wages increase, then the economy will get its boost. Remember, student loan debt is currently over a trillion dollars, the used car loan market is also running out of control, and all the while mortgages are still an issue. Now, I'm sure two of them can tank the economy, but one would put a serious hurt on it. Both plans ultimately would help the problems in time, both together would cure faster, but one is thinking short term while the other is a long term solution. Technology is coming, and we shouldn't stop it, or be afraid of it. What we should be doing, as far as I can see it, we should be playing long ball here, and allowing people the ability to work a part time job if they want, full time if they choose, or ultimately not in a conventional line of work. If someone has dreams of becoming an author, they should be allowed to explore that, without having to choose between their attempts at art, or eating, even if they suck at it. Who knows, maybe the next Stephen King is waiting in the wings, unable to put pen to paper because he or she simply doesn't have the time between working two or three part time jobs, or outright working themselves to death.