Those who sell us a universal basic income as a total solution, could just be wanting for it to fail

Sir, I refer to Tim Harford’s “Basic income or basic jobs?” June 29. The theme has become more fashionable because of robots and artificial intelligence, but the lack of jobs is not a new concern.

In 2003 in an Op-ed I wrote: “There’s a hint of all coming to a standstill in the theory about how globalization will optimize the world economy, by ensuring that merchandise will always be produced at the lowest marginal cost. What good does it do us to have products where the cost of the labor component gets smaller by the minute, if workers can’t buy the very products they produce?”

I ended that in jest with “Friends, let’s give one another jobs, scratching each other’s backs—paying each other good salaries of course.”

In 2012, while I was still not censored in Venezuela, in another Op-Ed titled “We need decent and worthy unemployments” I began it with: “What politician does not speak up for the need to create decent and well paid jobs for young people? But, if that's not possible, and the economy is not able to deliver that on its own ... What on earth do we do?”

In search of the answer I there asked: “Which is better: educating for a source of employment likely to be absent and therefore only create frustration, or educate for unemployment, and suddenly perhaps reaching, when on that route, the pleasant surprise of some jobs?”

Therefore Sir, in the choice between a basic income and a basic job, I clearly go for the first. The waste that could result, especially in uncertain times like these to develop guaranteed jobs, would surely be too big.

But that does not mean I consider that a Universal Basic Income either can or should be designed to satisfy all needs. For the time being it should just be a tool to help people get out of bed and reach up to whatever job opportunities might be around.

How much? Start with little. For instance, if there are pressures to increase the minimum wage $3 per hour then, for a fulltime 160 hour per month that signify $480. So why not start a UBI at that level and let time tell us where it can go? The additional demand that could be generated will, at existing salary levels, generate many jobs too.

What I most fret though are the redistribution profiteers. Concerned with seeing the value of their franchise erode, they might sell UBI’s promises excessively, both in amounts and purpose, so as to make the whole idea of a social dividend collapse, in order for them to get back in the saddle again. It behooves us all to stop them.

@PerKurowski

We need worthy and decent unemployments

Sir, I refer to Martin Wolf’s “Work in the age of intelligent machines” June 27.

In 2012 (while I was still not censored in Venezuela) I wrote an Op-Ed titled “We need worthy and decent unemployments”. In it I held “The power of a nation, and the productivity of its economy, which so far has depended primarily on the quality of its employees may, in the future, also depend on the quality of its unemployed, as a minimum in the sense of these not interrupting those working.”

That is the reason why I am absolutely sure our societies have to start urgently, even if from a very low level, to implement an unconditional universal basic income (UBI).

And referring also to Sarah O’Connor’s “Minimum wage laws still fall short for those on the bottom” June 27, let me point out that while minimum wages raises the bar for the creation of jobs, UBI is a stepping stool that allows you to reach up to the mostly low paying jobs of the gig economy. 

PS. You want to increase the minimum wage $2 per hour? Better pay $2x40x4 $320 in universal basic income to all.

@PerKurowski

Solving problems by raising taxes and having bureaucrats have a go at these, only risks to complicate matters further

Sir, Rana Foroohar writes: “College students who manage to graduate do so with the highest average levels of debt in the country, since state funding has been so dramatically cut over the past several years. Meanwhile, roughly half of the population has only a high-school degree, which guarantees them a $15-an-hour future.” “New Hampshire: a tale of two Americas” July 29., strangely in that FT’s Weekend Magazine I do not receive as a subscriber in Maryland, USA.

That begs two sets of questions: First, is not ample availability of student debt a much larger driver of high student debt than lack of state funding? Would university fees be nearly as high if these were not so easily financeable? Is not student debt a business driven more by financial profiteers than by pure educational considerations? If students already find it hard to repay their debt, is it logical for taxpayers to foot that same bill? In short should not higher education be reorganized more in terms of being joint ventures between students and universities?

Second, in these times of robots and automation, how on earth can Foroohar presuppose having more than a high school degree would guarantee the young a more than $15-an-hour future? And if she supports the idea of a $15 an hour minimum wage, what does she suggest to do with all those who with or without high school degree cannot reach up to that bar.

Sir, much of this easy talk of solving coming problems the usual statist way by raising taxes and having bureaucrats have a go at it, only risks to complicate matters much more. As a Venezuelan I know that to prevent social order from breaking down is always better than trying to reconstruct it. We are facing a new world, we now already need decent and worthy unemployments. A universal basic income, funded with real money, which provides a step stool to reach up to the gig economy, seems like the only real, peaceful tool at hands… though of course the redistribution profiteers hate it as it diminishes the value of their franchise.

Foroohar also writes: “My husband… employs cleaners, plumbers and tradesmen, some of whose parents worked in the same jobs for his mother. It’s hard not to think of this as a kind of neo-serfdom, given the lack of other options for those without a college degree.”

Well I am sure that there will come a day, quite soon, when many with a college degree will deeply envy the income of plumbers, especially if these are serving the one percenters.

PS. This article strangely appears only in that FT’s Weekend Magazine I do not receive as a subscriber in Maryland, USA.

@PerKurowski

The right of an unemployed to find a job, even if the job is not that satisfactory, does it not count for anything?

Sir, you agree with the “Taylor report” that in order to pay Uber drivers the statutory minimum wage entitlements, these should be paid with “adjusted piece-rates such that an employee working averagely hard earns at or above the minimum wage level”, “A judicious adjustment to the gig economy” July 12.

Really? Is that an incentive for an Uber driver to work more or less than average?

What will, what must happen, is that a lot of not really interested in earning a lot drivers will be asked by some out-of-workers-to-represent unionist, to sign up to Uber by those who want to earn more, so as to get those work averages down.

If any Uber driver works, and is not satisfied with his earnings, then he can always go and work someplace else for a minimum wage.

Sir, why do you agree with artificially raising the bar for people to reach up to the gig-economy? Is it not better to instead of raising minimum wages to start thinking about implementing a universal basic income that could function as a convenient step stool to help people reach up to the gig-economy?

When are you to wake up to the fact that as much as we need to think about the rights of the employed, we must think of the rights of the unemployed to at least work somehow?

Does it really have to be all or nothing? Don’t forget that besides jobs we will also need worthy and decent full or partial unemployments.

Sir look around, have you not noticed that many of those who would not use regular taxies, are now calling up Uber drivers? Does that not mean anything? You really want us to go back to how it was?

@PerKurowski

Do we want to settle for working or middle class robots? I want the 1% top ones to work for my grandchildren

Sir, Sarah O’Connor while discussing the issue of jobs, for humans or robots, sensibly concludes that it is not “the routine jobs” taken over by robots that should bother us but “the basic stuff — homes, security, prospects — that we lost along the way” “The middle class is not shrinking as much as it thinks” July 11.

O’Connor brings up an interview from a 1974 book “Working” written by social historian Studs Terkel. In it a steelworker says: “I want my kid to be an effete snob . . . If you can’t improve yourself, you improve your posterity. Otherwise life isn’t worth nothing.”

I sure agree with this steelworker’s general concept, but, if my grandchildren must turn into effete snobs, I hope it is not because they have been replaced by some low or middle class robots, but by the 1% absolutely best ones… or the smartest ever artificial intelligence.

Sir, it should be clear that the better the robots that work for us the more they could produce for us. The marginal contribution of robots that substitutes for bank tellers must surely be less than that of robots that substitutes for bank CEOs.

Just as an example, let us suppose current bank regulations had been carried out not by Basel Committee technocrats, but by some smart artificial intelligence. Then the 2008 crisis and the ensuing slow growth would never have happened. Mr. AI would of course first have looked at what causes major bank crisis and so determine that excessive exposures to something ex ante perceived as risky, never ever did. He would also have understood that allowing banks to multiply with different leverages the net risk adjusted margins, would completely distort the allocation of bank credit to the real economy.

So what can we do? I would say first to make sure to keep the competitive pressure up on robot manufacturers. If we increase minimum wages for humans and do not begin taxing what the robots produce, we will not get the best robots we want.

An updated Chinese curse would be: “I wish your grandchildren live attended by 3rd class robots and dumb artificial intelligence.” And Sir, I would hate for that to happen to my grandchildren, because of something that I did or did not do.

Of course then we would come to the very delicate issue of how do we redistribute robot and automation productivity to humans. That is going to be awfully contentious. The only thing that occurs to me, before social cohesion breaks down, is to being by trying out a universal basic income.

That UBI should start out low and be very carefully designed. That is so because an UBI would become de-facto the robot that substitutes for the current redistribution profiteers, and so these would love to see it fail.

@PerKurowski

Higher import tariffs and minimum wages are superb news… for robot manufacturers

Sir, Richard Waters writes: “Pace of automation will depend on how easily workers are displaced” January 13.

And that partly depends on how much robot, driverless cars and similar automation options, will lobby the governments for higher import tariffs and higher minimum wages.

Or on if we will impose some payroll and minimum wage taxes on these, in order for the humans to compete on a more level playing field.

PS. http://teawithft.blogspot.com/2016/10/let-robots-make-us-offer-we-cant-refuse.html

@PerKurowski