Raising minimum wage will raise something else: An army of robots taking away folks' jobs Raising the minimum wage increases the chance employers will automate low-skill jobs away, according to a paper published this week through National Bureau of Economic Research, a non-profit group of econ wonks. In People Versus Machines: The Impact of Minimum Wages on Automatable Jobs, Grace Lordan, associate professor in …
If we could make sure $BIG_CORP paid the tax it owed, at a reasonable rate that doesn't permit it to steamroller smaller competition, that would be a good start. Add to that enforcement of environmental responsibility, a living minimum wage (i.e. no need to be topped up by tax credits, etc), and keeping their grubby fingers out of politics.
The elephant in the room is that even with all the advances in productivity, tech, knowledge, and all the rest... We're backpedalling in living standards and politics. Food banks and homelessness on the rise, house prices an utter piss take. This situation is getting worse and is neither natural nor accidental.
Where's our 4-day week, Universal Basic Income, and personal jet packs with friggin' laser beams? Call me paranoid if you want, but I get the feeling the world's uber-wealthy just might not be running the economy for the good of all mankind.
Universal Basic Income is the way forward i think...
It should be enough to cover the basic needs of
Food
Housing
Utilities
Clothing
Of course this has to be limited to British citizens, it wont work if people can come over and claim it from countries with a lower cost and standard of living, this is part of the issue with the EU, costs are not equal over the whole of the EU.
"Universal Basic Income is the way forward i think."
NO. this is why:
a) if the MOST productive EMPLOYEE (I refuse to use communist-speak) _always_ gets paid the same as everybody else, WHAT is the motivation for being MORE PRODUCTIVE?
b) if the LEAST productive employee gets the same wage as every OTHER employee, what's the motivation for being MORE PRODUCTIVE?
c) If there's _NO_ upward mobility, _NO_ hope for earning more, _NO_ real hope for advancement of your economic situation by HARD WORK, TRAINING, or CAREER SHIFT, where's the MOTIVATION?
If you want a STAGNANT MEDIOCRE SOCIETY, then "subsistence wage" is your answer. JUST! LIKE! COMMUNISM!!!
Or you can do like me, earn as much as you need but charge what you're worth, so you have time to work on what you WANT to work on, besides earning money to live on, but don't go broke or live in squalor in the process. BUT if I were to work HARDER, I'd effectively earn "less per hour" [because, "progressive" tax rates], so why bother if I can't really get ahead by doing it? Why would ANYONE bother slaving themselves out and getting BARELY ANYTHING in return for the extra work?
THAT is why Communism fails. THAT is why "progressivism" fails. THAT is why tax rates need to be flat, minimum wages need to GO AWAY, and wages need to be driven by MARKET FORCES, and INDIVIDUALS have to take the reins of their OWN lives, and "feel the consequences" for both GOOD behavior (work hard, get trained, get educated) and BAD behavior (lazy, assume you deserve a living wage, don't bother getting training/education, live on the dole).
And yeah, I expect "good behavior" to get you economic rewards, and "bad behavior" to throw you out into the street. Unfortunately, those NATURAL forces are heavily weakened, and we are now where we are today.
UBI isn't a wage, it's a baseline income for all, just covering the basics. Unlike a means tested benefit there's (virtually) no administrative overhead, since that balance is naturally 'built in', and it doesn't discourage people from seeking work for fear of losing benefits.
Finland is reporting positive things from a trial.
Oh and don't forget to take UK employment figures with a pinch of salt.
Wow. Thanks for the link.
The stuff in the article is obvious to any numerate person with a clue about the real labour market as distinct from the Westminster-reported spin, but it's the first time I've actually seen it 'in print', as it were.
That link again:
http://uk.businessinsider.com/unemployment-in-the-uk-is-now-so-low-its-in-danger-of-exposing-the-lie-used-to-create-the-numbers-2017-7
The Multi-nationals do pay their fair share of taxes. All that are legally required. The problem lies with the politicians that have created the tax codes with plenty of perfectly legal loopholes that allow large companies to shift money around in a way that minimizes their tax burden. The accountants are earning their salaries. Don't blame Starbucks, Apple or Amazon, blame the elected. If a publicly traded company was found to not be taking advantage of tax loopholes, the stockholders would have the board out on their ear and charged with mis-managing the company to the detriment of those stockholders. In all likelihood, a large stockholder of a company like Apple is a large company themselves and knows all of the dodges too.
"During this time automation of jobs has been occurring in other industries, and less new jobs have appeared than have gone."
I would somewhat agree but if that wrong? Disabled people and children used to work from a young age and now they dont, with children particularly freed up for education.
However since 90% of the population used to work in farming and agriculture and we have <5% unemployment accepting the welfare state as a product of our (countries) success/wealth it would seem the jobs have been replaced. Add the product of immigration and the jobs havnt just been replaced but far more have been created.
I think as with most people, automation (in most cases) in retail stores saves lots of time. For example, I love self-checkout at the grocery store. The wage increase is being blamed for employers using more automation but this was going to happen regardless. True, the wage increase may help expedite automation but this trend has been going on for years now. I'd like to see a higher wage for these employees as well, but let's face it, many of these jobs will gone forever in the near future.
Most decisions for low value financial products are already fully automated. Insurance, credit cards, ULOCs, etc.
And in North America, kiosk banking is a big success. Bank branch are closing everywhere.
The executives at the top are, however, keeping their jobs amidst sweeping RIFs. In this respect, banking is the same as all other sectors.
"but oddly enough, these people always keep their jobs."
Look again and compare with 50 years ago. 3/4 of the job descriptions in such places no longer exist. There are a few new ones, but overall, offices employ less than half the staff they used to sometimes less than 1/4
A lot of the positions you're thinking of are gone already, concentrated into a few more powerful hands, but even those are facing redundancy in the medium term.
Evidence seems to show that whenever a consumer is given the option to "buy local, but it will cost you 10% extra and take 25% more time to get to the shop and back", or "buy something manufactured in <insert foreign outsource destination here> where there is a lower standard of living than yours, from <insert mass market retailer>", they will nearly always buy the cheaper option.
They will then proceed to complain bitterly that jobs are going overseas.
The issue isn't the companies really - capitalism will generally give consumers what they pay for and if they stop paying the companies would fold quickly because few hold any significant cash reserves.
The underlying issue is that consumers are not really willing to pay the costs of goods produced where workers have the same standard of living that they think they are entitled to. If people actually stopped buying cheap imported goods, the companies would change PDQ.
And the result makes everyone richer.
Suppose your country/state/city/village had to produce everything it needed locally.
No buying Mercedes fire trucks for the airport, you need to buy trucks built in Seattle. You can't buy wheat from the mid-west so bread is expensive and you cant afford it because nobody outside your state is buying Boeings.
If you want to see the standard of living you get with self sufficiency just look at rural Bhutan.
"If people actually stopped buying cheap imported goods, the companies would change PDQ."
On the other hand those "cheap imported goods" have been a lifeline for 4 billion people to lift themselves out of poverty in the last 35 years. Wages may be lower elsewhere but only for a while (chinese workers cost as much as american ones these days) and as countries collectively upskill, they become valuable bidirectional trading partners in their own right, not just a source of cheap labour.
What you're close to advocating is protectionist policies and cartels - a characteristic of mercantilism, which fell apart about a century ago. That policy concentrates power and wealth into a few hands even more forcefully than "enlightened" capitalism.
The enlightened part about capitalism is ensuring that it is restrained and that competition is fair. if companies get too power they will naturally reassert mercantilist policies and that's what we're seeing in the USA and UK. The effects of that cause people to cry for "protection" and that simply makes things worse for most whilst a privileged few make out like bandits.
Yes, taxing companies means that they charge more to endusers, but it's much easier and simpler, not to mention having far lower overall "cost of collection" issues than taxing millions of low-worth individuals.
Remember that it's not just how much a government collects in taxes, it's also about how much it pays out to get it. There's not much point in collecting £1 in tax if you spend £1.50 to get it. Simplifying tax structures in 1986 enabled New Zealand to lay off more than 2/3 of its Inland Revenue over the next 15 years and increase net taxation whilst lowering gross taxation - which is a benefit to everyone as it means they have more money in their pockets. The problem is that vested interests will always try to game the system for personal advantage and decades of tax exemptions piled on tax exemptions means that there is horrendous waste in the collection system.
“The underlying issue is that consumers are not really willing to pay the costs of goods produced where workers have the same standard of living that they think they are entitled to.”
Actually, it depends heavily on where those workers are located and whether the consumer can afford the higher price. Most people I've encountered will quite proudly pay slightly-higher prices to support locally-owned stores if they can afford it and all else is equal. They're uninterested in paying prices they can't comfortably afford, however (which is why shops like Wal-Mart are a huge hit with the rural poor), or supporting people that aren't from the same general region.
> "On the other hand those "cheap imported goods" have been a lifeline for 4 billion people to lift themselves out of poverty in the last 35 years."
Oh yes, I definitely agree. I was really just pointing out the hypocrisy of people who buy goods from overseas where there is a lower standard of living (e.g. no pensions, longer working hours, less holiday, lower pay, less heath and safety law, fewer worker rights), insist on higher pay and better conditions for for their job, and then complain in the Daily Mail that all the jobs are going overseas. As seems to popular in politics these days, they "want to have their cake, and eat it".
> Most people I've encountered will quite proudly pay slightly-higher prices to support locally-owned stores if they can afford it and all else is equal.
In my experience it's never equal. Supermarkets and Amazon are easier and faster than treking around 5 smaller indie shops. Most people (including myself) fall into the "I'd love to buy local in principle, but I don't have (or am not willing to make) time" camp. I'll admit I'm lazy - in my case it's a "not willing to make time" rather than a "don't have time".
"We have to legislate for companies to have a social conscience and responsibilities to ALL stakeholders - shareholders, workers, customers, government."
The UK already headed down that legistlative road. Section 172 of the 2006 Companies Act (below) specifically says company Directors must consider the interests of employees, suppliers, community, environment etc, and not just in a short term context either.
Obviously few people are aware of this legislation and even fewer bother about it, maybe because the consequences of ignoring it are nil, but this is The Law as it has been in the UK for a few years.
So, given that legislative action on this subject has clearly not benefited the general public, what other mechanisms besides legislation might be relevant?
From e.g. http://www.legislation.gov.uk/ukpga/2006/46/section/172
172 Duty to promote the success of the company
(1)A director of a company must act in the way he considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to—
(a)the likely consequences of any decision in the long term,
(b)the interests of the company's employees,
(c)the need to foster the company's business relationships with suppliers, customers and others,
(d)the impact of the company's operations on the community and the environment,
(e)the desirability of the company maintaining a reputation for high standards of business conduct, and
(f)the need to act fairly as between members of the company.
(2)Where or to the extent that the purposes of the company consist of or include purposes other than the benefit of its members, subsection (1) has effect as if the reference to promoting the success of the company for the benefit of its members were to achieving those purposes.
(3)The duty imposed by this section has effect subject to any enactment or rule of law requiring directors, in certain circumstances, to consider or act in the interests of creditors of the company.
'Section 172 of the 2006 Companies Act (below) specifically says company Directors must consider the interests of employees, suppliers, community, environment etc, and not just in a short term context either.'
I would have thought the main problem with that well intentioned law is how do you prove they aren't considering the interests of employees etc? After all they may feel it's in the long term interests of the employees that the company is still there in 10 years time which means not giving them a 100% pay rise, cutting the price to consumers, and running the factory solely on solar power.
"'Section 172 of the 2006 Companies Act (below) specifically says company Directors must consider the interests of employees, suppliers, community, environment etc, and not just in a short term context either.'"
I think this Act was a result of Tony Bliar's Stakeholder blether before he was elected and was passed so that if up against the wall as a non-practising socialist he could point to the act to show that he was.
I doubt if the act was ever intended to be enforced.
"We have to legislate for companies to have a social conscience and responsibilities to ALL stakeholders - shareholders, workers, customers, government."
HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA HA *cough*
Oh, you actually BELIEVE that? You have my pity.
yeah how are the cops going to be able to tell you have a "social conscience"? how are judges and juries going to decide? so much for 'rule of law', now substituted by 'rule of feelings'. *VOMIT*
That's just another example of people *FEELING* instead of thinking. Again.
<FACEPALM> [see icon]
Actually, you are not totally correct. It is true capitalism is a concept, and not capable of caring.
However, if a political system fails to enable a significant portion of the population to eat, history teaches us that a lot of people will die - and mostly not of hunger. (See ISIS, French Revolution, etc) Te people that won the robots are top of the list for being lined up and shot when the revolution comes. However, history also teaches us that the collateral damage will be huge.
Stability requires not just limiting the excesses - a tactic quite popular in Europe, but manipulating the system to achieve a stable state - changing the entire public's understanding of the consequences of their actions. This would probably involve public humiliation of anyone pushing for extremism of any kind (not executions - that makes them martyrs).
It also requires explaining that paying fortunes to footballers (by paying silly money to watch sport on TV) also, "celebrities" and "pop idols" is the reason why you have no pension and can't afford medical care (including can't afford the NHS in the UK). Yes, Joe Blow - it IS your fault, not Trump's).
Of course, the age old tradition of putting thieves in the stocks and pelting them with rotten fruit and vegetables would be a good way to handle boards of directors involved in tax dodging too. Think of the satisfaction value!
What's this capitalism of which you speak? Neither the US nor the UK have had capitalism for a few decades. They've got corporatism with added kleptocracy.
http://www.economicpolicyjournal.com/2009/11/explaining-difference-between.html
If there'd been capitalism, then e.g. the failed US auto industry wouldn't have been rescued by the TARP program, and the UK casino banks would have been allowed to fail (leaving the lower risk retail banks still surviving - if there'd been any).
"explaining that paying fortunes to footballers (by paying silly money to watch sport on TV) also, "celebrities" and "pop idols" is the reason why you have no pension and can't afford medical care (including can't afford the NHS in the UK)"
Interesting. Where can people read about that then? Of course, it'd be grand if they already understood it, but an education system that produced people who were readily able to follow concepts like that would probably not produce the readily malleable wage slaves that are required to sustain the wants of the 1%.
Neither the US nor the UK have had capitalism for a few decades. They've got corporatism with added kleptocracy.
That's simply the degenerate case the capitalism converges on, as it concentrates wealth in smaller numbers of hands. An essential part of the game of capitalism is that money helps you win, so those who start winning tend to keep on winning. Above a certain level this is totally unrelated to skill; look at Paris Hilton, or Donald Trump.
"They've got corporatism with added kleptocracy.
That's simply the degenerate case the capitalism converges on, as it concentrates wealth in smaller numbers of hands"
Yes and no. Concentrating wealth (and *power*) in smaller numbers of hands? Absolutely yes. The recent shorthand for that is "the 1%", and in principle it seems to accurately describe recent history.
On the other hand, some (many?) clearly capitalist countries are really a long way from being as corporatist or kleptocratic as the US and the UK. A true capitalist state would have let the US auto industry fail, rather than rescuing it with the TARP program.
certainly not. _I_ don't care either. Quitcherbitchin, git off yer butt, and go earn yourself a living. You have the same opportunities as everyone else in the 21st century. what YOU do with them is YOUR business, and NOBODY ELSE has ANY obligation to bail you out, lift you up, or even feel sorry for you if you do NOT do your best in the pursuit of success.
The world REALLY needs a giant "ass swift-kicker" instead of bleeding hearts and false "compassion".
You have the same opportunities as everyone else in the 21st century.
This is very obviously not true*. But even if it were, the point of this discussion is those opportunities are shrinking as the list of jobs that can be replaced by automation grows. If there's too many people chasing too few jobs, there's a problem even if everyone starts out even and does their best. Not everyone can win the game of musical chairs.
* I'm pretty sure Donald Trump Jr. had more opportunities than me, and I'm pretty sure I had more opportunities than people I know who grew up poor in abusive families where no one had ever gotten a college degree.
The problem isn't automation.
The problem is outmoded thinking that's a holdover from days when resources were extremely scarce, and people who could not or would not contribute economically or agriculturally were a genuine burden on society.
Automation should be freeing people up - and it is! The problem is that there just isn't a higher-paying skilled labor/intellectual position that that freed-up laborer is qualified for which is open. They may not be qualified for anything skilled/intellectual, or the positions for those they are don't exist.
Is there a solution? That depends on how you cast the problem.
If the problem is "those lazy bums won't work!" then it's hopeless.
If the problem is "there aren't jobs for people to take," then perhaps it's time we simply accepted that being employed is not and should not be considered the measure of a person's "worth." The simplest solution to this is basic income - the government simply provides to everyone, from the wealthiest of the wealthy to the poorest of the poor, a minimum, livable income. You could finagle it other ways by not "giving them cash they didn't earn" and instead providing them with Government-Issue Housing, Government-Issue Food, Government-Issue Entertainment, etc, but frankly, people are, generally speaking, pretty smart at using cash-in-hand to work out how to get by on their own. It also neatly sidesteps the problem of creating a "welfare class" of people wearing the Government-Issue Clothes and living the Government-Issue Lifestyle, as well as doing what trickle-down economics purported to do but failed to do: keeping cash circulating at the basic level.
I favor that one, personally. Even people who can't find traditional or nontraditional employment often "contribute" to society in ways which are useful, but are not traditionally-paying; imagine a young person in a family full of pensioners, whom they all call upon to do errands at any random time and day. That young person holding down a traditional job would preclude them being available to, say, run to the shops for nana, or do uncle arthur's laundry, or what-have-you.
Please do automate away the crappy jobs so us humans can work on better things. I've worked at a Radio Shack and I've worked at a VHS rental store. I would have gladly accepted a minimum wage job installing robots in those stores. Tump's coal miners would probably rather be maintaining robots too, though at least they don't have to deal with customers trying to rent porn while high on huffing.
That was the old theory about what would happen. But we've never found a good way to retrain people for higher-skilled jobs, nor have we figured out how to deal with the inevitable eventual result of not having enough economically-positive work to go around. We decided long ago that someone's worth was measured by their contribution to GDP, and we have a whole moral/religious structure that enforces this. ("He who does not work, neither shall he eat," to paraphrase the Bible.)
We're in for some really rough times ahead. I fear a lot of us lower on the economic ladder may starve.
Before starving people might grab some weapons like they did in Russia a century ago and start a revolution. On long term this will fail of course but on very short term it looks it's a handy way to reboot things and hope for a better outcome.
What were they saying history is teaching us ?
Before starving people might grab some weapons like they did in Russia a century ago and start a revolution.
Yeah, but these days the robots have guns too. The wealthiest among us could be quite well defended if they wanted to be. Some of them are already thinking in that direction, constructing self-sufficient luxury bunkers.
We're also very divided as a populace, at least in the US; we've been encouraged to blame our problems on immigrants, or "urban" people, or foreign governments that trade with us. I think in a revolution we'd end up shooting each other over the crumbs instead of going after the people who took the biggest slices of pie. And I think that's by design.
"But we've never found a good way to retrain people for higher-skilled jobs"
lemme tell ya a little secret... closer... closer...
PEOPLE! MUST! TRAIN! THEMSELVES!!! It's not ANYONE ELSE's responsibility.
YOU get the education. YOU go to the trade school. YOU take the entry level "trainee" position, work hard, and get promoted to a regular "experienced" position.
If there is FAIL, it will generally be YOUR fault.
Except I'm mostly talking about people who had good jobs, where they'd built up considerable seniority. Then those jobs went away. I'm not talking about people who spent their whole lives working for 7-11, here. These were successful people right up until the rug was yanked out from under them.
In Michigan displaced auto workers tried going back to school for all kinds of things. Some got help, some dug into their retirement savings to pay for it. Some were successful in starting new careers. But in many cases the jobs they retrained for were next in line to be eliminated. For example, lots of them retrained to be medical transcriptionists, because medical was supposed to be a growing field -- but those jobs were soon outsourced to India.
"they don't have to deal with customers trying to rent porn while high on huffing."
This must be in the past. Why would anybody spend money renting porn these days. There is so much for free online that there is no way to even make a wildly inaccurate estimate of how much. There are even live shows on Ryan Air if you are in the right seats.
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The political ideology of outrage about people not being required to do anything, has let to a whole raft of working for free or below the minimum wage: work for the dole, apprenticeships, unpaid internships, new blends of working below minimum wage government subsidised. Conveniently reducing the cost of paying unemployment benefits, and lowering the official stats.
But how is this ideology different to the mindset of slave owners?
Did some slave owners think they were doing a good thing by saving the slaves from idleness, giving them work experience, and providing them with 'free' food.
"The political ideology of outrage about people not being required to do anything, has let to a whole raft of working for free or below the minimum wage: "
That political ideology has direct and deep roots in Calvinist thinking: "The devil makes work for idle hands"
Or in other words, it's a religious point of view overlaid on politics.
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