Capitalizing on Technology Replacing Jobs
How many jobs will be displaced due to technological innovations? According the the McKinsey Global Institute as much as one third of all jobs in the U.S. can replace technological innovation within 12 years (Franck, 2017). While machines replacing millions of hours of labor is cause for alarm it can also free up people’s time. For example, a job that everyone relies on getting done is oil drilling, and while it would take 20 workers 3 years ago it will soon require only 6 workers (Santens, 2018). This process, automation can be seen as a virtue that frees up people’s time and requires that people do less work. Presidential Candidate Andrew Yang is proposing that we allocate $1,000 a month unconditionally to every citizen so that the beauty of machines freeing up time by replacing so much human labor can be shared more equally. Yet, while enormous companies like Amazon that are valued at a trillion dollars pays $0 in taxes and shuts down stores such as Walgreens that workers rely on for income, making a fair and equal distribution of wealth deserves a real political campaign. Distributing wealth in a more fair system has been done in places like Alaska, Brazil, and Finland. These places have shown tremendous effects like crime reduction, job growth, and various health benefits. Still, while only 3 people in the U.S. own half of its wealth (Bezos, Buffet, and Gates) (Kirsch, 2017), the inequality of wealth is staggering. Over the last few decades taxes have been disproportionately going to the wealthy and allowing them to capitalize on automation while cornering the economy as they become richer at the expense of people losing their income and livelihood. A Universal Basic Income, (UBI) would function as a reverse tax where all citizens can receive $1,000 a month from their taxes. The next President of the United States should campaign on making the tax system work for people to generate equality.
There is a clear beauty to technology reducing the amount of time it can take for people to accomplish countless things and these advancements can enable us to have greater equity and equality. For example, it feels nice that we can order things online from across the world on Amazon and often do. There are so many technological shortcuts that operate in the process. For example, if all the ships in use today were the outdated steam boat this would not be possible. By today’s standard, if an order were to be delivered via steam boat from China, by the time the technology arrived it might be outdated. The importance of the advantages in technological advancement vary. However, no one can argue that technology is growing rapidly. Moreover, in the U.S. since 1975 manufacturing production has grown 20%; but manufacturing jobs have decreased by almost 5% (Santens, 2018). The decrease in workers and increase of manufacturing indicates how trillion dollar companies can exist while more people become unemployed. Furthermore, another statistic shows that in 1978 a typical worker would get paid $48,000 and today that figure is now $33,000 (Kornbluth, 2013). This drop in the typical income means that even while people are employed they have been compensated less and less because while they are accomplishing more, they are actually being paid much less. Thus, weather employed or not people are still being used and treated unfairly. I believe many people do not enjoy politics because this kind of reality goes on with smiling politicians allowing it to occur. Moreover, the current tax system allows for companies to have money that they invest in job displacing technological innovation to be given back to them (Pagano, 2019). Why don’t we share this government give back money? Why not allow the money that is being given to companies for technological innovation also be given to the people that are less well placed? Although many other programs have sprung up as a response to job replacing technological innovation, a UBI of 1,000 to each citizen makes the most sense for equality.
People such as Bill Gates have advocated that we tax the innovative machines that replace workers so that the government may collect the money from their advancement; but a UBI would more directly develop the economy and equality. I think it would seem like we are penalizing the machines and corporations that can be more free to advance our labor saving economy. Time reduction of human labor is a good thing! Remember the story of John Henry who tried to outwork the machine that laid the railroad? Embrace machines that to literal back breaking labor. Bill Gates holds a commonly shared view by opponents of the UBI that if people received a basic income without working that the economy would go down. However, reports show there was an increase of entrepreneurship because entrepreneurs had more money to invest and were less afraid to fail because they had the security UBI to fall back on (Santens, 2018). Moreover, there were more consumers buying things. As a result, people spent much more on goods and services which meant more overall economic activity and even more jobs. Think of how many children don’t receive enough food or attentive care from their parents as their parents are being kept from their children in order to work. At some point wouldn’t tending to their children perhaps be better and more valuable work? Many proponents of UBI see this kind of vital nurturing work of helping disadvantaged kids as a high priority for the economy and society. Ensuring that a child with a rich potential is not left disadvantaged because of the income their parents were born into seems like a basic right. Why don’t we put front and center creating a more equal tax system for our future? A UBI of $1,000 a month to every citizen would utilize the economic endowment afforded us by technological innovation for a basic system of equality.
To some the UBI may feel too foreign, untested, or perhaps unrealistic; however, places across the world such as Alaska and Brazil are actually receiving forms of this program. Alaska’s program is called their Permanent Fund Dividend and they get their money from the state’s oil. There on average they receive $1,500 a year. Brazil’s program is called Bolsa Família where they give just 178 reais, ($57) per family a month. While it is a small amount it goes to families with per-person incomes of less than 170 reais ($54). This goes to 13.6 million Brazilians and has helped significantly reduce poverty (Satens, 2018). Some of the other places implementing a form of UBI are Ontario Canada, Finland, Kenya, and Uganda. In these places homelessness and hospitalization rates went down because people could afford to take better care of themselves. Another factor that is a moral on is hard to measure. It is the “Einstein cost”, which is the cost of not allowing someone that could have been an Einstein to become an Einstein. Allowing such children to be swallowed by the disadvantages that go with an economic system wherein poverty is common is costly not just to the family, but also the society. These cases provide evidence that UBI is vital, politically viable, and would bring about more equality.
The current tax system that is the Tax Cuts and Jobs Act ushered by Trump has created a faster direction of inequality while showing no success and a UBI looks like its reasonable opposite to that direction. To illustrate the current state of inequality the U.S. is home to over 11 million millionaires. That is more people than reside in many states of the U.S. and more millionaires than some countries have people. Also, to provide a bit of history on it in 1978 the top 1% used to make $393,000 and today it is $1.1 million (Kornbluth, 2013). Nevertheless, on the other side we have 2.2 million prisoners which is more than any other country in the world. An example of how The Tax Cuts and Jobs Act exacerbates this problem is that it devotes 2 trillion in tax cuts to the top 1% (Stewart, 2018). There is a cascading of tax cuts that is at the top for individuals. It also adds new tax cuts for roughly 240,000 businesses in the vain attempt to boost economic activity (Harvey, 2017). However, without the money going to people that need to spend the money it is being given to those who see spending the money as more of an an option. Thus, the economy did not show any significant signs of growth as a result. Instead there will be trillions of dollars in lost revenue. Furthermore government programs such as after school programs are likely to take cuts as a result. In this way at risk youth are more likely to end up in jails from extreme economic neglect. A UBI would allow more people to have free time and essentially get paid for doing the vital work they would already like to do. Weather spending time with their family, or more money on their family or other important things, it can bring the U.S. closer to equality. The Trump program favored fruitless tax cuts and favored inequality while the UBI can provide essential equality.
The UBI can also be funded with a Value-Added Tax (“VAT”) and higher taxes on the super-rich. The VAT is where goods or services a business produces are taxed. Currently, 160 out of 193 countries including all of Europe have a VAT or something similar. Europe has an average VAT of 20%. Andrew Yang is calling for a realistic and politically viable move of a VAT of 10%. Although Amazon is valued at $1 trillion Amazon has managed to pay no taxes and this can fix it. A tax on the super-rich through the 60’s used to be 91% on anything above $2 million. That is, today’s equivalent, anything above $2 million would be taxed at 91%. Today, the highest tax rate is 37% on everything above $500,000. This dramatic change in tax policy is a key way the rich have been enabled to become richer (Kornbluth, 2013). This way the Federal Government can have an immediate growth in revenue that allows for better tax allocation like funding the UBI which provides vital equality.
The political support and and economic viability in the U.S. is more real than one might imagine. Presidential Candidate Andrew Yang has helped push the discussion closer to the forefront. Legislation back in 1970 a when a UBI was referred to as a guaranteed income it was pushed into a bill and passed by the House of Representatives. However, it died in the Senate as Democrats wanted a higher guaranteed income. Ultimately, the UBI provides a floor on how low one can sink economically in a capitalist society. Far right Nobel Prize winning economists Milton Friedman F.A. Hayek also endorsed the UBI. Other highly respected people of note who have promoted this include Robert Reich, Elon Musk, the conservative Cato Institute. Moreover, Martin Luther King Jr. was backed by 1,000 economists from over 125 universities, all of whom signed a letter to President Nixon requesting income guarantees. Recently, Mark Zuckerberg said, “Today, we have a level of wealth inequality that hurts everyone, when you don’t have the freedom to take your own idea and turn it into a historic enterprise, we all lose” (Floyd, 2019). This underscores the potential of people that might have the know how to be entrepreneurs but do not have the means of taking themselves or the society further. One reason Trump’s Tax plan received so much backing is because it tapped into the idea that it will help small business owners and people really trying to make it in our entrepreneurial economy. A problem was there were high standards on what a “small company” really was. However, it still carried some political clout because of this American entrepreneurial sentiment. Today Presidential candidates including Trump have called out Amazon on not paying taxes but have done nothing. By Presidential candidates fighting to implement the VAT on companies there can be a fair and concrete program implemented. A Presidential candidate can also throw the failure of the Tax Cuts and Jobs Act in Trump’s face and bolster their effort by promoting a UBI for fairer taxes that will help the people in the economy. This way the candidate can be viewed and voted for as just the person fighting for them to replace Trump and bring equality.
In conclusion, with so much rapid technological development and growing wealth it is vital that people see the opportunity to utilize technological innovation for our future by creating a tax system that allows us to live more equally. By implementing a UBI of 1,000 to each citizen a month we could build a humane floor so that society would be safer, healthier, more entrepreneurial, happier, and better off. Also, the U.S. could no longer be known for having the highest amount of millionaires, prisoners, and disparity. The political landscape needs strong leadership that makes sense. The next President of the United States should embolden leadership by campaigning on a tax system that will bring equality to the U.S.
Works Cited
Floyd, David. “The Long, Weird History of Basic Income — And Why It’s Back” Investopedia, 25 Mar 2019, https://www.investopedia.com/news/history-of-universal-basic-income/
Franck, Thomas. “McKinsey: One-Third of US Workers Could Be Jobless by 2030 Due to Automation.” CNBC, CNBC, 29 Nov. 2017, www.cnbc.com/2017/11/29/one-third-of-us-workers-could-be-jobless-by-2030-due-to-automation.html.
Harvey, John T. “The Disastrous Trump Tax Plan.” Forbes, Forbes Magazine, 8 Nov. 2017, www.forbes.com/sites/johntharvey/2017/11/08/disastrous-trump-tax-plan/#19bfc814dd3d
Kirsch, Noah. “The 3 Richest Americans Hold More Wealth Than Bottom 50% Of The Country, Study Finds.” Forbes, Forbes Magazine, 25 Jan. 2018, www.forbes.com/sites/noahkirsch/2017/11/09/the-3-richest-americans-hold-more-wealth-than-bottom-50-of-country-study-finds/.
Kornbluth, Jacob, director. Inequality For All. 2013.
Santens, Scott. “It’s Time for Technology to Serve all Humankind with Unconditional Basic Income” Medium, Medium 13 April 2018 https://medium.com/basic-income/its-time-for-technology-to-serve-all-humankind-with-unconditional-basic-income-e46329764d28.
Pagano, Alyssa. “Amazon Will Pay $0 in Federal Taxes This Year — Here’s How the $793 Billion Company Gets Away with It.” Business Insider, Business Insider, 14 Feb. 2019, www.businessinsider.com/amazon-not-paying-taxes-trump-bezos-2018-4.
Stewart, Emily. “America’s Getting $10 Trillion in Tax Cuts, and 20% of Them Go the Richest 1%.” Vox, Vox, 11 July 2018, www.vox.com/policy-and-politics/2018/7/11/17560704/tax-cuts-rich-san-francisco-fed.
“What Is Universal Basic Income?” Andrew Yang for President, www.yang2020.com/what-is-ubi/.
