The unemployment problem and the basic income solution
March 21, 2016
Youtuber xkcdHatGuy in his video "there is no unemployment crisis" proposed a brilliant example. A supermarket with 100 people who each works 40 hours a week is run effectively creating a self-sustaining profit. Now some technology is introduced, whereby each supermarket staff only needs to work half of the time, that is 20 hours weekly, to produce exactly the same work as before. The supermarket makes exactly the same amount of money and profit, so its employees receive the same wage, only now they are required to work less. I'm pretty sure no-one would complain about this scenario. This would certainly not be called an unemployment problem, in fact possibly an unemployment solution.. as employees now have more free time to dedicate to whatever they want, while still keeping the same quality of life.
Why then, does the introduction of machines and automated processes seem to worry workers so much, to the extent that taxi drivers, for instance, are opposing technological progress with automated-driving cars and labor unions are looking at technology as a threat?
Well, let's look at the supermarket scenario again. Let's say that, instead of receiving this technology for free, it is actually one of the supermarket employees that creates this technology. However, he is only willing to share it with the owner at one condition: that he will receive 20 times his previous salary. The owner accepts his proposal, and to implement his solution he fires 19 employees, whose salary will be given to the technology inventor. Moreover he choses to fire another 30 employees as he realises that with this new technology he only needs 50 people working full time, and by keeping their salary the same he further saves more money, making more profit.
Now we have an unemployment crisis. Only now you can see that it is not caused by machines, it is caused by humans. Greedy humans to be precise.
As Stephen Hawkings puts it: "We Should Really Be Scared Of Capitalism, Not Robots"
Nowdays we already have so many machines doing our labor that virtually we could all work just a few hours a day and live a wealthy life. Yet a great part of the population is still in poverty, some are even starving, and most are struggling to make it. Why is that? Wealth distribution is the answer. While the world has enough wealth - if evenly distributed - to happily sustain the entire world population, this is far from being the actual case. In reality 1% of the people in the world possess 50% of the wealth.
In this sort of society, machines can add to the problem, giving rich people a chance for further wealth inequality, instead of giving the entire society a chance for a better, richer, freera and more creative life. By appropriating themselves of the rights of the power of the machines, the top rich can keep even more wealth for themselves, while forcing the rest to work even harder in order to keep up.
The solution to this problem is the basic income implementation. As Swiss a economist propsed, by cutting away from social services and by adding a bit more tax to the wealthy, a budget is available to create a stunning basic income of 2500 chf per month per person, way beyond what is proposed in most European countries. Taxing the rich will redistribute some of the wealth, while taking obsolete and inefficient social welfare out of the system will provide funding for a decent basic income for all. This not only will take away the stress for people to survive, but it will allow them to follow their passion, their creativity, thus to better investing their time and resources in a more productive and better growing society.