technological unemployment and the basic income guarantee

James J. Hughes Ph.D.Executive Director, Institute for Ethics and Emerging TechnologiesPublic Policy Studies, Trinity College, Hartford CTJames.Hughes@trincoll.edu

We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come - namely, technological unemployment. This means unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor. (Keynes, 1930)

Institute for Ethics and Emerging Technologies 2014

John Maynard Keynes

As women entered the labor force in pink and white collar jobs, men were leaving farm and manual labor

Institute for Ethics and Emerging Technologies 2014

Compensation via new machines and products.

New machines require new occupations to build and service them.

New machines make possible the production of new goods and services.

Compensation via decrease in prices.

Innovation reduces the cost of inputs and goods, stimulates greater demand, creating more employment.

Compensation via new investments.

Innovation increases the profit margins of the owning class, who then invest in the creation of more employment.

Compensation via decrease in wages.

If wages are allowed to find their equilibrium point, all unemployed workers can find new jobs at lower wages.

Compensation via increase in wages.

Keynesian policies distribute some of the increased profitability to workers as wages, with a consequent demand stimulus on the economy and employment. (Vivarelli and Pianta, 2000)

Institute for Ethics and Emerging Technologies 2014

Institute for Ethics and Emerging Technologies 2014

Paid labor force has declined since 2000

Jobless recovery since 2008

Aging of population and technological unemployment

The percent of 18-65 year olds in paid labor

Institute for Ethics and Emerging Technologies 2014

Institute for Ethics and Emerging Technologies 2014

All jobs are potentially automatable, done cheaper and better than by human workers

ICT makes it more profitable to invest in machines than to hire workers

Probability of Computerisation

Recreational therapists 0.003 Dentists 0.004 Personal trainers 0.007 Clergy 0.008 Chemical engineers 0.02 Editors 0.06 Fire fighters 0.17 Actors 0.37 Health technologists 0.40 Economists 0.43 Commercial pilots 0.55 Machinists 0.65 Word processors/typists 0.81 Estate agents 0.86 Technical writers 0.89 Retail sales assistants 0.92 Accountants 0.94 Telemarketers 0.99

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Frey, C.B. and M. Osborne. 2013. The Future of Employment: How Susceptible are Jobs to Computerization? Oxford Martin School, Programme on the Impacts of Future Technology, University of. Oxford.

ICT reduces number of workers in supply chains

Since the 1980s the fastest declining occupations had the highest rates of unionization, and the fastest growing occupations had low rates

Redistribution of wealth to the top 10%

Professional core with growing hierarchical management

Complex product resistant to measurement, “efficiency” and automation Learning outcomes and

standardized tests and curricula

Health outcomes and standardized testing, treatment and care plans

Even diagnosing, prescribing and surgery can be automated

Robot nurses aides

Telepresence doctors

Robot home care Robotic surgery

Expert diagnostic and treatment systems used by nurses and PAs do better than doctors for most conditions

Home and medical telemonitoring of heart, blood pressure, blood sugar, urinalysis, prescription compliance, etc.

Online and hybrid models growing

The cost bubble in higher education is about to burst

K-12 Courseware • University of Phoenix is largest in US

• MOOCs at Stanford, Harvard, MIT

Half of all employment is involved in production, transport or sales of things

Diffusion of desktop manufacturing could be very rapid

Computer power doubles every two years

Jobs requiring human empathy and insight are probably going to be the last to automate

But still..

Robot prostitutes

AI Counseling Smartphone confession

So far, education has determined who is most vulnerable

But un- and underemployment of college grads is rising

At least those with education and affluence are

Life expectancy for poor females is declining

Older workers staying in labor force longer

Crashing fertility rates

Reform of pension and social security systems

But where will seniors find jobs if retirement age raised?

The policy debate in US has not caught up

Austerity is macroeconomic dead-end

IMF 2012 on “longevity risk”: If average life spans by 2050 were to increase 3 years more than now expected aging-related costs would increase by 50 percent

Longevity Dividend if therapies slow aging, reduce disease and disability

But we still need to address insolvency of pensions and inequity of dependency ratio

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Protecting Employment Re-distributing Employment Creating Employment Enhancing Human Workers Techno-Utopian Proposals Basic Income Guarantee

Machine bans will be proposed

Agricultural subsidies & protectionism

NJ’s ban on self-serve gasoline

High costs

Lower quality and convenience

Reduced competitiveness

Ming Dynasty Seapower

Tokugawa Isolation

Higher costs

Lower quality

Reduced international competitiveness

Geopolitical vulnerability

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1853 - Comm. Perry enters Japan

In egalitarian countries technological change has led to prosperity

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Re-distributing employment with job-sharing Administrative costs

Longer educations with subsidization

More vacations, or a shorter work week Either higher costs or reduced productivity

Lower mandatory retirement ages Loss of skilled workers

Higher old-age dependency ratio

Most public sector jobs are also automatable

Make-work jobs that are easily automated are politically unpopular

If income taxes decline, expanding public employment may be impossible

Current recession has seen shrinking govt payrolls

US and European militaries have been shrinking

U.S. Army projects that military robotics will displace a quarter of combat soldiers by 2030

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Could we every catch up?

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Post-scarcity super-abundance

Free molecular manufacturing

Universal stock ownership in post-Singularity stock market

Charity from the super-rich

Imagining the liberation from toil since Condorcet

Hans Moravec 1995: “When industry is totally automated and hyper-efficient, it will create so much wealth that retirement can begin at birth. We'll levy a tax on corporations and distribute the money to everyone as lifetime social-security payments."

Tom Paine: Annual payments should be made "to every person, rich or poor…in lieu of the natural inheritance, which, as a right, belongs to every man…”

Expanding social wage

Universal basic income guarantee

Economies need consumers even more than workers

Tom Paine

Increase progressivity of the income tax

But with shrinking employment and dependency ratio…

Carbon taxes

Consumption taxes

Public ownership of resources (Alaskan citizen’s dividend)

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