Going into the new year is a time for reflection and prediction. We look back in order to look forward, and 2014 is shaping up to be an interesting year. We are now entering year Six or Seven of the “Great Recession”–depending on when you start counting. Personally I mark the beginning of the recession with the Financial Crisis of 2008.
Since then, we have seen the highest unemployment rate since the Great Depression of the 1930’s. The “official” unemployment rate hovers around 11%, but the actual participation rate has dropped to about 60%–meaning that the REAL rate of unemployment could be between 20-40%!
The financial crisis, outsourcing, and automation have decimated entire industries, causing them to slash the workforce dramatically. And while political talking heads continue to argue over whose fault it is, the driving forces of the problem remain unchanged.
Because of all this, we enter 2014 with nearly half of all United States Citizens on some form government assistance, and nearly everyone is carrying large amounts of personal debt.
Are Jobs Coming Back?
Everyone is asking, “How do we bring back Jobs in America?”
Politicians on the right and left argue about whether to increase government spending. or cut taxes. Some want to charge tariffs and punish foreign countries for unfair business practices.
In the mean-time, changes in the energy market are drawing businesses back to the United States. While global energy prices are at an all-time high, a glut of Shale oil and Natural Gas are preparing to flood the American market with cheap fossil fuels. Bio-fuels, Wind and Solar are starting to come online and become cost competitive. In addition, new forms of nuclear power are also making their way into the market.
Companies see what is coming and are returning to the United States to take advantage of this cheap energy. However, this does NOT mean they are creating jobs. To maximize their profit they are also taking advantage of the latest advances in robotics and automation.
Who Needs Workers?
Just how bad is the automation phenomenon for jobs? In 1870 70-80% of the population was employed in agriculture, and the efforts of a single farmer could feed three to four other families. Today less than 3% of the population is in agriculture, and the efforts of a single farmer can feed 144 people.
This efficiency is expected to increase with the use of automated tractors, drones, and vertical farms. There is little need for workers when a single robot can do the job of twenty farm laborers.
In 1903 when Henry Ford started Ford Motor Company, his Highland Park Factory employed over 250,000 workers to build One million cars a year. Today, Tesla Motor can build the same number of cars using only 3,000 people–and 6,000 robots.
Robots are becoming cheaper and more flexible, allowing them to do many jobs once reserved for humans. Whether it’s de-boning a ham, sorting cupcakes, or driving a car, there is little a human can do that a machine cannot do faster, cheaper, and better. However, it is not just manual labor that is being affected.
In 2011, an Intelligent Agent (IA) named Watson, developed by IBM, became the first computer system to win the popular quiz show JEOPARDY–demonstrating that computers are now capable of answering questions better than humans. The program was developed by 24 people over the course of four years and is now being trained to answer questions in the legal and medical fields. Other intelligent agents are being developed to replace stock-brokers, paralegals, and customer service representatives.
Within a decade, it is estimated that 75% of all jobs could be automated–and in 20 years there will not be a single job a machine cannot do better than a human.
How Will We Earn A Living?
Automation is a double-edged sword. On the one hand it leads to massive increases in productivity–sometimes allowing us to produce ten, fifty, or even a hundred times more than by human hands. However, at the same time it puts its customers out of a job. This causes people to wonder, “How will we survive in a world where machines do all the work?”
Some people think that computers will create new jobs to replace the ones they destroy. However, this is not likely. It only took 24 programmers to create IBM Watson. This program can now be copied an unlimited number of times at virtually no cost–and this single program has the potential to MILLIONS of workers. That is the power of digital technology.
We have entered an age when a handful of people can use technology to do the work of thousands or even millions of others. For example, today it only takes 25 people to produce two MILLION tee-shirts a year. Products can be produced at the push of a button–literally rolled off a printing press. Services can be digitized and distributed around the world within seconds.
All of this begs the question, “What will people do for a living?”
Why do we need to EARN a Living?
One of the things that I came to realize during my own bout with unemployment is that just because you don’t have a job does not mean you are unproductive. Millions of people volunteer their time every day to produce products and services that benefit others. For example, my wife and I worked for a non-profit and together we provided meals after school for 750 students.
How many people have contributed to Wikipedia? WordPress? Linux? And how many others have used these resources? 90% of servers run Linux. Mac OS is built on Linux. Android is built on Linux. How much value has this contributed to our society?
People need money to live, but they don’t need it as an incentive. In fact most recent experiments have shown that people are MORE productive when money is not used as a reward. People work longer and harder when they like what they do, or when they are working toward some higher purpose. In other words, people work hardest when they WANT to. However, they still need money to pay their bills.
Therefore we need to separate employment from the stuff of life. Rather than paying people for work they have already done, people need to be given money so that they CAN work. We could PROVIDE people with a living so that they are free to be truly productive.
How Can We PROVIDE People a Living?
Currently we do this through handouts, entitlements, and loans. Nearly half of people in the United States receive some form of government assistance. More than thirty million people are on social security, and another twenty million receive financial aid for school. Those who do not receive assistance rely on those who do as either customers or low-wage employees.
Having received assistance myself, I know that this is NOT the best way to provide a person with a living. First we had to spend hours proving to the government that we needed assistance. Then my wife and I barely received enough money to support ourselves and our three children. We also had to spend many hours looking for jobs that did not exist, and when we finally did find work (years later) they cut our aid so much that our church had to help us pay the bills for the first few months.
I cannot tell you the amount of anxiety this caused–nor can I begin to calculate the amount of wasted time and productivity. People can be much more productive when they do not have to prove their worth every waking moment of the day. They have more time and energy to be creative when they are not under constant threat of starvation. You cannot motivate a person by beating them into submission.
Once again, this begs the question, “How can we provide people with a living?”
What is Universal Income Credit?
Technology is a double-edged sword, creating incredible abundance while putting people out of jobs. Food gets grown, houses and cars get built, and everything becomes super cheap–but nobody can afford to buy them. One way to solve this problem is to extend credit.
Credit is money given for goods and services YET rendered. It is given to people in good faith that they will use it to be productive. The United States Government has the ability to create money and thus extend credit to its citizens under Article 1 Section 10 of the US Constitution. They could simply create NEW money and distribute it to the citizens of the United States.
However, this will only work if the money is (1) Given equally to everyone regardless of income ON TOP of their earnings, and (2) Enough to live on–between $1,500 and $2,000 each month.
Note that this is CREDIT–not a handout–we expect that people will use this money to do something useful. Thus, there also needs to be a minimum contribution requirement. Once a person receives the money, they are required to contribute 20+ hours in either paid employment, volunteerism, or education.
No person should have to prove that they meet this requirement; if they are a citizen, then it should be assumed that they qualify. If the government suspects that a person is cheating the system, then they need to obtain a warrant and prove it in court. Then, and only then, should a person be forced to prove their worthiness to receive the credit.
Thus people can be free to do whatever form of work they want–paid or unpaid–and not have to worry about proving their worth or how to pay their rent.
Who Needs A Job?
There are plenty of ways for people to add value to society. Some will take up the arts, while others perform humanitarian aid or serve religious missions. There are unlimited ways for people to volunteer and help out their fellow human beings.
With machines to do most jobs, the only thing that remains for people to do the things they want to do–the productive work that people rarely ever get paid for, but which adds great value to society.
There will still be jobs–there will always be some work companies have to pay for because nobody wants to do it for free. And there will always be people who want to earn more than just a minimal subsistence. However, these jobs will become increasingly scarce and require a level of education and experience that few are willing or able to achieve. Most people would rather live a life of voluntary service, or to start their own business.
While jobs disappear, opportunities begin to open up as technology advances and the most of doing business goes down. Eventually anyone receiving Universal Income Credit could afford a computer and 3D Printer. They could invent new products and sell them online. Or they could print and deliver products for others.
We have not even begun to imagine the possibilities for what kinds of work might exist. There will always be work, but that does not mean it has to be a JOB. Who needs a job when machines do all the grunt work and you are free to do what you love?
Walter I. Baltzley January 3, 2014