The unemployment rate for the United States hovers around the 4% mark currently.
But that number represents only the amount of people who are unemployed and also actively looking for work.
Meanwhile, the workforce participation rate was 62% in 2015, meaning that almost 40% of Americans were unemployed but have completely given up on looking for new work.
They either don’t want to work, are too old to work, are infirm or disabled, or are too young.
The desire and ability of a person to work is usually viewed through preconceived biases people have concerning certain races and ethnicities. Yet, the unemployment rate doesn’t contend with the fact that many people are employed in low-paying or entry level jobs.
Nor does take into account the almost 40% of Americans in the “gig economy” to compensate for lost full-time work and to take advantage of the online work opportunities.
At the same time, rapid increases in technological innovation and the rise of automation will soon create a new era of humanity where the inability to work won’t be based on biases about race or federally sponsored unemployment numbers.
Human beings won’t be able to work because their livelihoods will be completely taken over by automation. Low-skilled jobs and jobs held by minorities and immigrants may be replaced first but, in decades to come, almost every area of industry will be automated to some degree.
The robots are coming
Over 60% of all business industries will experience some level of automation within the next five years.
The United States is investing more than $700 billion a year in automation innovation, along with other powerful countries. Yet no one is preparing for what waves of job obsolescence will do to human beings in the future.
Most will have to settle, and compete, for jobs that are too insignificant to automate — until they won’t be.
One idea to solve this problem, which has been around since the 16th century, is the concept of Universal Basic Income (UBI), a set payment for everyone regardless of employment status.
The idea is being advocated anew by technology proponents. They believe that human beings will need UBI as they cope with massive unemployment waves in the future.
UBI may help human beings as they learn job skills for vocations less likely or slower to be overtaken by automation.
Critics of UBI complain that it will be a disincentive to work, cost too much money, and may drain financial resources from worthier federal programs.
There have been pilot UBI programs conducted or planned in several countries in the past few years. While early results made participants happier, increases in employment didn’t occur.
UBI thus may not be the answer to increasing employment per se. But it seems to be the only solution offered to the inevitable rippling effect of mass job obsolescence.
How universal basic income works
A universal basic income is a monthly or regularly recurring cash payment. Any citizen, regardless of race, financial status, ability, or work skill receives money.
It is not a new idea by any means. One of the founding fathers, Thomas Paine, was a proponent of UBI, primarily as a way for disenfranchised people to find work.
UBI ideals were the inspirational blueprint for the social welfare programs that were instituted in the United States in the 1960s and 1970s.
Many countries, including the United States, Finland, Scotland, India, Canada, and many more, are currently experimenting with UBI as a way to offset poverty and incentivize people to look for work.
In February 2019, Finland completed a two-year UBI study that paid people about $630 a month, no strings attached. The Finnish study found that people were happier, but more employment was not the result.
Stockton, California, also known as the home foreclosure capital of the United States, recently began a $500-a-month UBI pilot program to test its potential against poverty and social inequality.
Criticism of UBI
Critics of UBI complain that it will disincentivize people to look for work, especially those already prone not to do so.
Additionally, UBI payments to every American might cost as much as $2 trillion to $4 trillion dollars a year. Such payments would probably be sourced from taxes or siphoned from other social programs.
Critics also say that UBI will adversely affect economic growth.
Regardless, almost 52 million American jobs will be lost to automation in coming decades. In three decades, UBI may be the only viable idea to help human beings survive an economy driven by robots.
The rise of automation and the decline of the human workforce
The tech companies currently planning to institute automation predict that human beings will be left with nothing to do.
Some more optimistic analysis estimates that human beings might compete for the few jobs that businesses might deem unworthy of automation. Still, people don’t appreciate how dramatically automation will change the idea of work.
As automation steadily advances, more and more kinds of jobs simply will disappear.
More than 60% of businesses will institute some level of automation within the next five years. Some analysts believe that the idea of the typical job, with promotions and pay raises, could become obsolete.
Automation is still in its early stages. Yet it will become so commonplace in a few decades that waiting for humans to sharpen skills at normal speeds which an algorithm can master at the speed of light will be even more impractical.
Automation cares not for race or bias
The beginning stages of automation may take over low-paying work and jobs traditionally held by minorities. Still, higher paying white-collar jobs won’t be safe either.
Bus drivers, teachers, doctors, lawyers, insurance actuaries, journalists, and every other job aren’t safe from complete automation. According to Michael Lewis, associate professor at the City University of New York. Our biases about race, status, and the ability to work hard won’t save any human job.
“Automation and A.I. and robots, they’re taking over jobs across the economy,” said Lewis.
“If that’s happening then I think it becomes more difficult to sustain this idea that ‘people are not working because they’re lazy.’”
For example, more than 90% of American journalists are white. Yet, the Associated Press now uses an A.I. algorithm to write some of it financial news pieces. This a process that will become more commonplace in the future.
Short-term solution for a longer-term problem?
Billionaire business mogul Sir Richard Branson advocates for UBI as a possible solution to automation job displacement in the future.
“Obviously AI is a challenge to the world in that there’s a possibility that it will take a lot of jobs away,” he said. “It’s up to all of us to be entrepreneurially minded enough to create those new jobs.”
Still,what will the automation-displaced humans of the future do when there is truly no work to be found?
The UBI experiments of today are basically just that — experiments. The human participants of today know that robots aren’t taking over their jobs tomorrow.
In the end, federal spending on UBI payments to help humans with job loss in the future probably won’t last forever. UBI payments can only offset massive job losses as a short-term solution.
Small-cap winners galoreThe big stock market winners share one common attribute: Near the beginning of the ascent of their shares, the companies offer revolutionary products or services, are market leaders in their respective industries, or both. Some big stock market winners that possessed the attributes outlined above are Netflix (NFLX), which we recommended to investors in October 2002; Intuitive Surgical (ISRG), which we bought and recommended in July 2004; Baidu.com (BIDU), which we bought and recommended in August 2006; and MercadoLibre (MELI), which we recommended to investors in October 2010. Get up-to-date small-cap stock picks from David Frazier, editor of Small-Cap Profit Confidential.
Smarter cryptocurrency investmentsThe stock market crash of 2008 was the catalyst for his journey into alternatives. And interestingly, it was the impetus behind the creation of Bitcoin and the blockchain technology behind it. Keene Little wasn’t ready to risk his money yet but he was very curious, so he began charting Bitcoin’s technical patterns. What finally convinced him to dip a toe into digital currencies was seeing that they followed familiar price patterns that could be analyzed and successfully acted on. Now he shares those insights with subscribers to the Crypto Wealth Protocol.