Talk about partnering with companies to create a dedicated retraining program as part of the cost of replacement by machine. A commitment to communities and not just the bottom line (without breaking the profit motive). Job retraining/community commitment/then company based UBI and finally government based UBI. This theory is based upon today’s historically low unemployment rate. In other words, people in the work force are attached to companies NOW, let’s us that to minimize government involvement at the outset and maximize corporation’s responsibilities to this problem.
Look, I understand why everyone is turning to Universal Basic Income and Robot taxation. We look at a massive problem and throw our hands up and say “only the government can tackle this one”. I find the government isn’t very good at most things that it does and we seem to be getting worse and worse. Take Social Security, a solid concept, built in the 1930’s and legislators didn’t have the foresight to see rising average life spans. That’s a forgivable mistake. The unforgiveable mistake is the decades of time where this problem has been OBVIOUS and nothing is done about it because of politics (raise the age limit). So forgive me, if I may suggest some other avenues for us to turn and we leave government to the true backstop role that it ought to play.
So, in this blog post, let’s begin with the premise that government is available only as a last resort. The problem we are looking to address is that AI & Automation may eliminate between 40% and 80% of the jobs known today. So we have jobs today that we know will be replaced. For example, WalMart. WalMart employs approximately 6,000 truck drivers. Within 5 to 10 years those truck drivers will be replaced by autonomous drive vehicles. Now What?
Here’s what I propose, and ideally it is a model for all other companies that will likely choose to go down the path of automation (it will be more profitable). Now these things don’t happen overnight, so it won’t be a one and done kind of thing. I’d like to see Walmart choose or maybe be required by law to follow the following protocol:
- No layoffs from automation (that’s the equivalent of a robot tax btw). I am not suggesting that layoffs are illegal. Layoffs may be the only thing that keep an entire company from going bankrupt.
- Required internal retraining. The onus on the company, at their expense to make that employee useful to them
- Required external retraining. Here is our “robot tax”, but rather it is a layoff tax and is a one time charge, payable over 4 years. This 4 year payment could be funded through private insurance, federally mandated insurance or simply from profits. However the first two, if legislated and funded in advance are still forms of pre-Robot Tax.
- Federally supported retraining and Federal work fare
- Federal Universal Basic Income as a last resort
So let’s break these out. McDonald’s just announced 2500 automated kiosks replacing cashiers. They also announced those cashiers will become customer service reps and front of house staff. So this accomplishes number #1 , no layoffs. However there is a hidden consequence here and we will see it down the road. McDonald’s will hire LESS people over time. They will let attrition be their layoff mechanism. This is the hidden nature of technological unemployment.
McDonald's hits all-time high as Wall Street cheers replacement of cashiers with kiosks
McDonald's shares hit an all-time high on Tuesday as Wall Street expects sales to increase from new digital ordering…www.cnbc.com
This also highlights #2, McDonalds will have to retrain those cashiers to be customer service and front of house people. We can all recognize this isn’t the equivalent of a GED in terms of education, but they will certainly get new skills. For other companies, this can be the model, even if it requires more high end learning. I advise that companies begin to implement the Lifetime Learning model I wrote about here and they will be well on their way to creating the dynamic workforce that they want and need.
I envision companies working closely with universities to incorporate cutting edge learning into the daily JOB of all employees. Technological improvement is happening so quickly, that unless you are constantly learning, you are falling behind.
Once we get to #3, we find a system that is fairly broken and ineffective. Which is why I’d prefer to have it handled at the corporate level. Micro level solutions always function better than large macro programs. At this level, we introduce our “layoff tax”, a one time charge to provide the employee with the funds he requires to retrain himself. We can call this money towards a new degree, or a 3 to 4 year severance package, but the result is that the employee knows they must find and learn a new skill to remain in the workforce.
#4 Often that employee won’t know where to turn for both education and new economy jobs. So now we begin the federal system of education guidance and work fare development. This is a dynamic effort from the government to meet directly with companies and continually identify the skills, education and jobs that are being filled by humans NOW. This marketplace of jobs and skill development will be applied directly to each individual worker once they enter the “work fare system”. The tax is no longer payable if the former employee becomes employed elsewhere.
#5 Finally, there simply aren’t enough jobs left. If you take the minimum numbers that many people are quoting we are talking about a 40% reduction in the jobs of today. If 10% of those are replaced by new HUMAN jobs, I’d be shocked. So minimum 30% net new unemployment. If you take my high end number the unemployment is 70%. In either case, here is where Federal Universal Basic Income (UBI) steps in.
Steps 4 and 5 can be iterative, as workers may choose to enter and exit the workforce, based on motivation and demand for their skills. Remember in my previous work, each individual has already earned their right to their UBI in the form of their dedicated government service.
I believe that this combination of changes (from UBI — a working roadmap Parts 1 & 2) is a reasonable way to step into our new world of technological unemployment and provide the support and back stop required to give everyone who wants to work the best opportunity to do so while ensuring that we are not leaving many unemployed and impoverished in a world of AI & automation.