This last weekend I wasn’t able to catch much of the Sunday political talk shows, and maybe that is because I’m beginning to tune out further election coverage to save my sanity. But I briefly caught a blurb on one show about universal basic income, which is something I had wrote about before in a previous post I made here: http://pactola.com/blog/2016/7/1/how-many-jobs-will-be-lost-to-automation
The idea behind universal basic income is that it provides guaranteed payments to everyone, to protect against large-scale social strife that may result from people losing their jobs to automation. I feel this is a grandiose idea that could have only been hatched in the 21st century, and in way it is socialism reinvented. I can say that, because I spent time in the former Soviet Union and I’m not casting political aspersions.
I understand the intentions are well meant, but does the mere fact you exist entitle you to a basic level of income, for not even working?! I strongly believe in assisting those who have lost their jobs, but I’m not sure handing everyone a free paycheck is the best way to wash our hands of the problem of a changing job market. I wonder what our ancestors would say. Imagine the immigrants that poured through Ellis Island, the homesteaders who constructed sod houses on the barren prairie, or the families who built businesses from the ground-up. None of these people felt they were owed a paycheck just for existing, and all they wanted was a chance. What happened to that sense of seeking out opportunity?
It’s not that we shouldn’t dream about a more comfortable and easier future, but the idea of universal basic income makes the assumption that people aren’t seeking opportunity or they simply can’t. It also seems to make the assumption that people cannot adapt. It basically assumes that if someone is a teller at a credit union or bank, that they will be fired if their job is automated. And worse, they will no longer be able to do anything else, because all they have come to know is life as a teller.
We can already see how these assumptions will not hold true. I think it is unlikely institutions would fire tellers, but rather move them to other tasks that need done, and even finding more valuable tasks the institution wants to address. And even if larger, less caring institutions did layoff tellers, surely they will be able to find other jobs that may or may not be related to banking. This is what automation has always effectively done in society; free up people from less productive activities so they can occupy themselves with more productive actives for society.
This talk show had someone providing an astute counterargument to universal basic income. When we were an agrarian society, we had over 60% of our workforce devoted to agriculture. Now, we have 2% or less. Talk about massive job losses, right? And yet, that isn’t what happened at all. All of these people who were engaged in farming had their time freed up to find different jobs. And the same technologies that improved agriculture also created additional jobs for those people.
In the long-run, I don’t think automation will lead to any serious shift in unemployment, but rather continue to contribute to “natural unemployment.” This is a phenomenon largely attributed to the disappearance of old jobs that are no longer needed, and we believe it holds relatively steady around 3-4%. Of course nobody likes to see job losses in the short-run, but holding onto the old way of doing this is not healthy for the economy in long run. Should we really have fought to keep manufacturers of buggies and buggy whips? The workers today who will have their jobs automated will be working in positions that don’t even exist yet, but I think ingenuity will likely give them something even better to do.