Friday, November 28, 2014

Time to Think About the Not-So-Unthinkable - A Guaranteed Income

If the American jobs crisis is permanent, it calls for a permanent solution.  Small improvements such as lower employment taxes for businesses, or even a federal work program, won’t be enough by themselves.

One possible answer is an assured amount of money for all.  It has been described as a “citizen’s income,” a “basic income,” or a “basic guarantee.”  It is as simple as it sounds – all Americans, all citizens, or all residents would receive a certain amount each month.  Although individual proposals vary, it usually involves enough money to assure people of food, shelter, and possibly medical care, but little more.  It’s not a new or exclusively liberal idea, with advocates back to founding father Thomas Paine and from all over the political spectrum. 

The main question about guaranteed income is:  How could we pay for it?  Author Charles Murray determined that, if health insurance were not included and programs such as food stamps and unemployment compensation were discontinued, our federal government could pay each adult citizen $10,000 per year, with those earning over $25,000 from outside sources returning some of it, with no increase in taxes at all.

Others have put together schemes for increasing tax revenue in various ways, with cutting corporate loopholes the most popular.  Writers have proposed many new taxes – a recurring one is a one-half percent fee for stock and other financial transactions, which could raise literally hundreds of billions of dollars. 

So what other disadvantages could assured money for all have?  One is its effect on incentive to work, as some would choose to live unproductively.  That could become a huge social problem, or no issue at all, if those not seeking jobs would only offset declining employment in general. 

As for the good side of a basic national income, there would be renewed security across the land.  Americans would not have to worry about being wiped out if they lost their jobs and could not find replacements.  The cost of administering the program, compared with the likes of welfare, would be trivial.  And the conservatives and libertarians supporting it could see their hope of lower government involvement - realized. 

Over the next year, this blog will have much more on guaranteed income – the theories, the specific plans, and viewpoints on it from all over the political spectrum.  So I want yours as well.  What do YOU think?  Get your comments in!  Because, whether a guaranteed American citizen’s income is justified or not, we need to discuss it – and there is no time like the present.     

Friday, November 7, 2014

AJSN Down Again, As America Is Now "Only" 18.3 Million Jobs Short

October was another good month for United States employment.

The country added 214,000 net new jobs and the headline seasonally adjusted unemployment fell to 5.8 percent.  Long-term joblessness, those looking for 27 weeks or longer plunged to 2.9 million, and unadjusted unemployment fell to 5.5 percent.

Other secondary measures changed little or not at all.  The labor force participation rate and the employment to population ratio came in at 62.8% and 59.2% respectively.  There were 7.0 million people working part-time for economic reasons, or wanting full time work and not finding it, the same as in September.

Two developments were worthy of concern.  Those wanting work but not looking for the past year grew over 150,000 to 3,350,000.  The job groups with the largest gains in employment were food services, drinking places, retail trade and health care, at least 3 of which are full of low-paying positions.

Overall, the American Job Shortage Number, or AJSN was down 135,000, as follows:

Total Latent Demand % Latent Demand Total
Unemployed 8,680,000 90 7,812,000
Discouraged 770,000 90 693,000
Family Responsibilities 247,000 30 74,100
In School or Training 229,000 50 114,500
Ill Health or Disability 131,000 10 13,100
Other 816,000 30 244,800
Did Not Search for Work In  Previous Year 3,350,000 80 2,680,000
Not Available to Work Now 580,000 30 174,000
Do Not Want a Job 85,919,000 5 4,295,950
Non-Civilian, Institutionalized, and Unaccounted For, 15+ 9,514,318 10 951,432
American Expatriates 6,320,000 20 1,264,000
TOTAL 18,316,882

The turtle is still moving forward.

Thanks to my wonderful wife Mary for being my eyes, on which I had surgery, this week.

Monday, November 3, 2014

The Triple Revolution Statement – 50 Years Later, It’s as Perceptive as Ever

In the spring of 1964, a group of scientists, professors, social activists, and experts on technology issued a report and addressed it to then-President Lyndon B. Johnson.  The document, published in Liberation magazine, claimed that mankind was on the edge of not one but three profound historic transitions. 

The second shift was “the weaponry revolution.”   In the center of the Cold War, fears about nuclear bombs, which per the report “cannot win wars but can obliterate civilization,” peaked.  The third was “the human rights revolution,” fueled by the American black equality movement, which it described as “only the local manifestation of a worldwide movement toward the establishment of social and political regimes in which every individual will feel valued and none will feel rejected on account of his race.”  Both of these were highly accurate, though with different outcomes.  Nuclear weapons, for various reasons, especially as Sting put it that the Russians did indeed “love their children too,” have not been used in war since.  In America the civil rights revolution has erased maybe 90% of the legal, structural, and major social inequalities – hardly complete, but a very admirable result given the difficulties in changing human behavior.   However, the country, and other developed ones, has done less well on the second part of Martin Luther King’s march – the need for jobs.  That brings us to the first upheaval – “the cybernation revolution.”

It may seem hard to imagine that in 1964, only 18 years after the first true computer was released and few existed outside governments, the military, universities, and the largest companies, that people were concerned about the effects of automation, but they were – and well before then.  Mathematician Norbert Wiener had published The Human Use of Human Beings:  Cybernetics and Society in 1950, and Kurt Vonnegut’s novel Player Piano, about a future where machines had made the great majority of work unnecessary, had arrived two years later.  The Triple Revolution paper called cybernation “a new era of production,” following the agricultural (extraction) and industrial phases.  For the revolution, it credited “the combination of the computer and the automated self-regulating machine,” which would result in “a system of almost unlimited productive capacity which requires progressively less human labor.” 

If that doesn’t seem predictive enough, we can look at what else the article foresaw:

  • Machines would use most resources, leaving more and more humans dependent on government handouts.  (We now have 3 million officially long-term jobless.)
  • “A growing proportion of the population is subsisting on minimal incomes, often below the poverty line, at a time when sufficient productive potential is available to supply the needs of everyone in the United States.”  (That reflects the rising gap between mean and median individual or family income, and the ever-growing piles of money in the hands of the 1% and the largest companies.)
  • “The general economic approach argues” that demand for goods and services is understated, and that all of the capacity in workers and other resources will be needed again.  (That is still the largest reason for observers not seeing the jobs crisis as permanent.)
  • “The underlying cause of excessive unemployment is the fact that the capability of machines is rising more rapidly than the capacity of many human beings to keep pace.”  (Rising prosperity and demand prevented the jobs crisis from really taking effect until 1973, with various booms and bubbles slowing it down for 36 years after that, but automation, along with globalization, has been the main cause of the work shortage.)
  • “A permanent impoverished and jobless class established in the midst of potential abundance.”  (Exactly what has been happening here; see “The American Rasta Class” in Work’s New Age.) 
  • “The number of people who have voluntarily removed themselves from the labor force is not constant but increases continuously.”  (The article didn’t anticipate the mass influx of women, which allowed the labor force participation rate and employment-to-population ratio to keep rising for decades, but both measures are now at or near the lowest ever since that trend was only halfway finished.)

The document contains many recommendations for dealing with the jobs crisis.  They include, as “the traditional link between jobs and incomes is being broken… to provide every individual and every family with an adequate income as a matter of right,” as a replacement for welfare, unemployment compensation, and other similar programs.  It also advocates, among others, the following:

  • A huge public works program (which I have supported since 2011, and columnists from Paul Krugman to David Brooks have since called for)
  • Much more low-cost housing (a lot has been built since 1964)
  • A new public-power system based on coal (actually, in the case of anthracite, an almost  pollution-free fuel)
  • Repurposing old military bases (has been done a great deal since then)
  • More of an “excess-profits tax.”

For various reasons, especially within the service-sector phase which the committee either played down or missed, truly widespread joblessness has not happened yet.  The majority of adults are still working, with most of those getting the bulk of their income that way.  It is not true, though, that because the worst effects of automation did not come to pass as quickly as this committee expected, they never will.  On this planet we have probably run out of labor-intensive work areas.  Large online servers, for example, employ less than a hundredth of those once working for the auto industry.  The Triple Revolution authors also did not anticipate competition from foreign workers, with at least ten times as many suitable for American-style jobs as in 1964. 

Sometimes prophecies don’t take effect for a while.  Christians, whose spiritual forbears were Jews waiting for the son of God for millennia, will tell you that.  And there are frankly no good reasons to think we will have full employment any time this century, which will bring, and is bringing, new problems we must solve.  As this visionary statement said, history will record that – even if it takes fifty years longer than expected.