The problem isn't a highway it's that we have more labor than we need for society to exist while we simultaneously offer nearly no social safety net for those out of work. This country needs to offer a minimal viable income to all citizens. I'm sure nearly everyone will blast me for how bad this will be and for the inflation that'll surely happen but every study I've seen shows that giving people relatively small amounts of money improves every aspect of their lives. Society pays to incarcerate people, to police people, to heal people, and to try and educate people. I say we take it one step further and just pay our citizens for simply existing.
It's a common misperception that that there is a fixed quantity of labor demanded, and that if more than that quantity is supplied, the result is unemployment.
People are not commodities, and the economy is not a zero-sum game. More people willing to work equals more people willing to consume, so the economy expands.
This "lump of labor fallacy[1]" was used when women joined the workforce. The worry was that with only so much work to go around, the additional workers would cause mass unemployment. But we didn't get unemployment, we got a larger economy with a higher standard of living.
The fallacy is also used to argue against immigration, with the fear that immigrants will "steal jobs". It doesn't work that way. Instead of stealing jobs, immigration expands the economy and most people are better off.
Certainly, that is the theory, but capitalism does not always optimize for worker salaries. You can find examples of what you describe happening, but you can also find examples of the opposite:
For the last few decades, the perception is that the economy is not expanding at a rate required to "float all boats." as it were. In fact, I think your example is a very good one:
>This "lump of labor fallacy[1]" was used when women joined the workforce. The worry was that with only so much work to go around, the additional workers would cause mass unemployment. But we didn't get unemployment, we got a larger economy with a higher standard of living.
I think that most men who are not in our industry would disagree. If you look at the inflation-adjusted income for a man from the '70s and now... and it hasn't grown a whole hell of a lot. One can make a strong argument (supported by the meteoric rise in woman's salaries during the same period) that this is largely the effect of effectively doubling the number of workers available for most jobs over the same period.
I mean, obviously, from a justice point of view, this is righting a very old wrong. It's great that women are on a more equal footing; it's fair. I'm not saying that this is bad overall... I'm just giving an example, that can be tracked with publicly available statistics, of how the average wages of a group that is employed can be pushed down by adding more laborers to that group.
Your example is probably correlation, not causation. Median incomes in the US stagnated at the same time as more women entered the workforce, but that does not mean that the latter caused the former.
Stagnating or declining middle-class incomes in the US is probably caused by (1) exporting manufacturing jobs to Asia, and (2) weakening organized labor. It may also be caused by (3) deregulation which increases the share of income going to capital and decreases the share going to labor.
If you look at the experience in Canada during the same time, median incomes grew faster than in the US, even though Canada was also adding women to the workforce. This is probably because Canada did not weaken organized labor as much as the US did.
>Median incomes in the US stagnated at the same time as more women entered the workforce,
Perhaps I do not understand what you mean by "median incomes". I was breaking it out to median income for men (which did stagnate) and median income for women (which went from next to nothing to almost the same as median income for men)
Hm. Or perhaps I'm not thinking through the implications of 'median' which would dampen the effect of bringing a bunch of zeros up to 'mildly below average'
We're just living with the consequences and are used to them.
The result is inflation. Before new waves of immigrants and women joined the workforce, a single salary had more purchasing power. The effects are offset by certain goods becoming cheaper because of increased production. But other goods require two salaries when they previously required one. And people don't have savings, they have credit which makes up most of the purchasing power, trading it off for indentured servitude.
Salaries have not kept up with profits since the 1970's, but if they did there could just be inflation, not an increase in purchasing power and economic independence. Current regional salary bubbles around Silicon Valley and NYC cause regional inflation, particularly in housing. Its supply is limited by laws and tech. Same old tech housing is not a good that adds anything new to the economy.
If those workers want to enjoy the full benefits of their salaries in the form of goods, they have to save up and move to cheap boring areas. Such consumption is physically or emotionally impractical. I guess that's where Hyperloops come in.
Basic income could also lead to inflation. It's unprecedented and will have weird new consequences. The expectation with adding more workers was that more people would have economic freedom. The result is fewer people enjoy economic freedom, the middle class shrunk so more people have to work. If basic income doesn't remove a large percentage from the workforce or new sectors aren't added, the result will again be inflationary.
Most 'inflation' in our society lately is in buildable land prices within commuting distance of desirable cities, mostly on the coast.
If we increased the amount of buildable land, either by upzoning existing neighborhoods to allow property owners to build apartments and support high-quality transit (my preference) or building infinite freeways and suburban sprawl unto the horizon (Houston/Dallas' model, which while profoundly distasteful and inefficient, is very successful at providing ample detached single-family homes in an areas with growing economies).
You can both be right. It's possible for automation to replace employment, or for people to have the wrong set of skills for what is required by employers.
I wouldn't blast you, this has been our running office conversation for several months, usually brought up by a new article on automation.
We're all doing whatever the terrified version of munching popcorn is at the prospect of what will happen when the last accessible, no-education-required job that can earn a livable income, i.e. truck driving, can be done by robots. Unlike most jobs done by people with few skills, like burger flipping, the vast majority of people don't want humans actually doing them anymore, so the costs will be absorbed quicker by the shipping companies. Plus the cost of human drivers is high, things like insurance, benefits, 401k, etc. all could be used to replace them all with autonomous trucks.
Then you have an entire infrastructure that grew up around trucks, the truck stop (possibly the most American thing that can fit inside one building), all the highway side motels, on and on. All of these things we expect will fold within a decade or so of autonomous trucks becoming viable. With the trucks being automated a lot of what would be needed at a truck stop could then also be automated with little issue.
Then we have all the truck drivers, and all the people who served truck drivers, out of work with no decent career path. If I've ever heard of a plausible apocalypse scenario, that's it.
Throughout the history of innovation, eliminating jobs did not eliminate work. New jobs sprang up. This has happened over and over. If you think that the deprecation of hundreds of thousands of jobs will mean that hundreds of thousands of people can't work anymore, you are sorely mistaken. This is a fallacy intelligent people have fallen into throughout the centuries.
Automation and computers have been doing their jobs for decades now, and America is still at 5% unemployment. I'll keep betting on capitalism while others continue to think, "this time is different".
That's a reasonable bet but so is taking the opposite side of the transaction (at a suitable price). It's not a fallacy to look for reasons why this time might be different. There are some statistics indicating something's going on, like an increase in people taking disability and in long-term unemployment. Also, it's unclear why automation isn't showing up in productivity statistics more.
This isn't eliminating jobs. This is making it so people don't need to do the jobs, but the work gets done anyway. That IS unprecedented, historical examples are where machines made the work easier or more efficient but still required people. We're talking about a TON of blue collar work that's not only possible to automate, but that the vast majority of people would WANT automated.
It used to take many people to plow a field. Then the steel plow was invented, and it only took 1 person. The work got done with only 1 person. Now if a robot can do it, that's only 1 additional job eliminated. It is certainly precedented. It used to take a professional to work an elevator. Then it became so easy that we didn't need an elevator man. The work got done without any person.
Except even in the busiest cities, elevator men weren't a load bearing column of the economy. Your comparison is failing to account for the sheer scale of the truck driving business and the importance of those salaries not just to the individuals, but to the communities in which they live.
Except there were other jobs opening for them to take. This is historically unique because of how quickly the non or less-skilled labor market is shrinking (and even the skilled labor market, to a certain degree).
What is the plausible reaction mechanism such that elimination of jobs automagically creates superior new jobs? If mere elimination of jobs automatically improves the economy, why aren't slums and industrial rust belts absolutely exploding with economic growth? Certainly warfare destroys jobs by physically annihilating workplaces, if job destruction magically created higher standards of living via better jobs, how come the people in literal war zones aren't better off than we are? Insert standard Feynman rant about cargo cult thinking.
I'd propose an alternative that increasing per capita energy use always creates more jobs. It seems realistic, that certain jobs inherently have a "must apply this many KWh to participate" floor. This coincidence is superior in that it has an actual plausible reaction mechanism. My pet theory might be totally wrong, but at least this hypothesis has a realistic mechanism for why it works.
From a pure economics perspective, it does create those superior jobs. I.e. the usual tale of the factory worker who was replaced by a robot, then got a new job fixing the robot that replaced him. Unfortunately this makes a few huge assumptions: 1) That the worker in question is able to take on that role, 2) That for some reason the factory would hire 1 person to maintain each robot (not happening), and 3) That the robot's output would be equal to the worker, which is highly unlikely (it would be much more efficient and make fewer mistakes).
Plus, in the new modern automation trend, we're not just talking arms that build cars anymore, we're automating entire company departments. Things like accounting, investing, inventory control, etc. are all being heavily automated. White collar workers aren't as safe as they think.
Actually, war does increase income for suppliers not in the war zone. As an extreme example, World War 2 ended the Great Depression in the U.S.
The mechanism is that there's work to be done and someone is willing to pay for it. As you say, this doesn't happen automatically, but there a lot of people trying to build businesses that increase consumer spending. Sometimes they succeed.
Expanding a business often does require more energy use, but this isn't linear. Today's businesses are much less energy-intensive than they used to be. The bad news (sort of) is that they tend to be less labor-intensive as well.
Let's say some new technology destroys 10000 jobs and in turn creates 20000 jobs. There is no guarantee that these jobs will pay a similar wage or salary. People may even have to work two jobs or now to pay their bills.
In many US states, truck driver is the leading occupation. Admittedly the numbers are skewed by the way various professions are broken up, but as far as semi-skilled labour goes, driving is enormous.
This country needs to offer a minimal viable income to all citizens.
I'm sure nearly everyone will blast me for how bad this will be and
for the inflation that'll surely happen but every study I've seen
shows that giving people relatively small amounts of money improves
every aspect of their lives.
I have followed some of the Universal/Unconditional Basic Income discussions here on HN.
After all is said and done, I think proponents of UBI will find a lot less opposition if this is framed in the context of the progressive taxation debate.
In the context of how the ancestrally wealthy pay so little. In the context of how even the most innovative upstarts & the least innovative & moribund mega corporations alike, dodge taxes using shelters abroad.
The point is this: middle income families - the few that are left in this country - will not be persuaded so easily to give yet more of their hard earned monies away to those who they see as perennially living on the dole - the welfare dependent & the societal deadbeats. Yes, they will blame the already under-privileged & chronically poor. Not their tax-evading ( even negative tax billing ) corporate overlords.
That's the way it has been for decades. It won't change unless the thought makers find fresh ways to help the middle and low income families see the disparity in taxation.
Middle income & low income families have to be weaned away from voting against their own self-interests.
This would also benefit middle income families, by automatically lowering their taxable income. Perhaps along the lines of what you meant by progressive taxation. (I have not personally seen much meaningful opposition to UBI. It would be good to hear more meaningful criticism of the ideas.)
UBI will just be a yet another huge transfer of wealth to rentiers.
Rents will eat up every last dollar of UBI, and we'll be back where we started.
Capital controls, rent controls, and punitive vacancy taxes are needed well in advance of establishing UBI. The chances of this happening on a broad scale in the US are, unfortunately, zero.
>Rents will eat up every last dollar of UBI, and we'll be back where we started.
eh, in high demand areas, yes, that much and more. I think the difference is that a big part of why people live in high demand areas is that they need to do so in order to find work. If there's good work in an area, rentiers can jack up the price of the temporary use of their capital goods. This is where we are now.
But on the other hand, with a UBI that was sufficient to live in a low-demand area, you'd see a lot more people moving to low demand areas. And there are a lot of low demand areas, making jacking up the rents on those places harder.
Many of the mechanisms landlords use to jack up prices (for instance building code restrictions that vary from the standards) are not practical in rural areas, and others, like restrictions on density, are not necessary. If you don't need to live somewhere you can commute to work, fifty grand will buy you a house, septic, and a bit of land.
Also, there are a lot of what you call rentiers - there need to be because jacking up pricing requires democratic support for restricting new housing, and this is usually an issue that votes on naked self-interest.
What would you suggest? I mean we're dealing with the section of our population that either won't (or can't) do anything above the bare minimum. I don't want them to starve or freeze, I'm not a total asshole, but how much should we really be imparting onto people who effectively aren't contributing?
The Soviet Union had more of the opposite idea: you must work to earn a living. From the 1936 Soviet constitution,
> In the USSR work is a duty and a matter of honor for every able-bodied citizen, in accordance with the principle: "He who does not work, neither shall he eat."
If you want to analogize it to a left-wing movement, an unconditional UBI is closer to a the Scandinavian social democrats' ideas of a universalist welfare system.
It seems likely that there will be other effects. For example, an income that isn't tied to a job makes it easier for people to move to places with a lower cost of living. (Think about why so many retirees live in Florida.)
"This country needs to offer a minimal viable income to all citizens"
It's called "welfare": Various government programs (SNAP, edicaid, EITC, SSI, CHIP, TANS CSFP, Obamacare, etc.) do provide minimal viable income to US citizens.
Social Justice types may bemoan the situation; but throwing middle class tax money at the problem is not a guaranteed solution.
Well, in the US, sure. And I don't see anyone here proposing doing a UBI program globally...
There are a number of problems with the current system. One is the "welfare cliff" that severely demotivates someone who can take (or not take) the option of signing up for a marginal wage job. We all know that ladders start at the bottom, but we keep removing rungs. If someone is getting benefits, I'd also like him to get a job or training to slowly work up to not needing those benefits - not go backwards. Not many people will choose to go backwards.
Another one (to me, because I tend minarchy), is the obscene bureaucratic overhead. Of course this is because of our complex array of rules and means-testing. But, if we could eliminate the disincentives to work that come from the way that welfare programs are constructed today, do we really need to means test? I'd rather Bill Gates gets a free two thousand dollar check than hire someone to make sure he doesn't.
At some point, I suspect this can only be resolved by some sort of limited behavioral experiment. While I like to think that most Americans, given a choice, wouldn't choose to sit around and watch Jerry Springer - our current system's construction has given me little confidence that this is necessarily true.
If we have a labor surplus, how does a basic income solve the problem? The money has to come from somewhere. Moreover, the population will age, and as demography and technological advancement increases the (stipulated) surplus, there will be fewer and fewer sources of revenue to fund the basic income. It seems like magical thinking.
I often find myself thinking that invocations of "basic income" are really just excuse-making: if we could just re-engineer the entire economy, we wouldn't need to confront this tangle of systematic racism and 1950s-era civil and social engineering. But in fact, we do need to confront it, or resign ourselves to networks of large US cities that serve primarily as a poverty trap for African Americans.
It's also a way to avoid engaging with the actual article, which is what happened here.
More like "An equivalent amount of US dollars has to be taken out of the economy in order to keep the money supply in balance with the amount of real goods and services and thus prevent higher-than-desired inflation." I don't know if the tools available to the Federal Reserve are sufficient to do that indefinitely like taxation does, but my real point is that it's a mistake to think of Federal fiscal/monetary policies as moving money from one place to another when the important part is creating money (spending, including transfers like Social Security checks or a basic income; lowering banks' reserve requirements or the discount rate; buying Treasury bills on the open market) versus destroying it (taxation; Federal fees and fines; raising reserve requirements or the discount rate; selling Treasury bills).
For example, the national debt isn't a problem because we might not be able to afford to pay it off, it's that it creates constraints on our ability to manage the money supply. Over time, we're obligated to pay back all the bills that make up the national debt, and each one we pay back increases the dollars in the economy, reducing the Federal government's ability to perform necessary spending (which also creates more dollars) without causing inflation. So we sell more Treasury bills (destroying dollars in the process, albeit temporarily) to create room for spending.
Point being: a basic income is possible, but we'd have to get real creative about destroying dollars. The US dollar economy is a big, arbitrary game with rules and mechanics made up by humans; there might be some way to change the mechanics to make a basic income work elegantly. Demurrage, maybe? https://en.wikipedia.org/wiki/Demurrage_%28currency%29
Edit: I just threw demurrage out there because it was a cool, strange monetary thing I remembered reading about, but it got me wondering and apparently Robert Anton Wilson conceived of a basic income system funded by an unlendable demurrage currency at least 40 years ago: https://www.reddit.com/r/BasicIncome/comments/3h89tn/demurra...
I am more or less with Keynes because a demurrage ( demi-urge?) currency would distract with all that arbitrage.
The general debt problem is that there must be sufficient growth to eclipse the debt over time. This is the only way that it can work.
If increases in the money supply are not sufficient to enable/support an increase in GDP, then that's rather a Catch-22. This depends on one hairy bit of psychology - either create value, you value-creators or we'll have inflation. No slacking, as they can now do.
It does not help that QE{I,II,III} were "we are increasing the money supply, but we are not really increasing the money supply."
> If we have a labor surplus, how does a basic income solve the problem? The money has to come from somewhere. Moreover, the population will age, and as demography and technological advancement increases the (stipulated) surplus, there will be fewer and fewer sources of revenue to fund the basic income. It seems like magical thinking.
If we have a labor surplus (due to robotics) it is because we have a more efficient and wealthy economy and we can afford to pay people not to work. It's not a question of money, but of the distribution of wealth.
I'd rather see the development of an employer of last resort, though; not a basic income. FDR put people to work so: 1. They could eat. 2. They would be too busy to revolt over the fact they couldn't eat. But we still reap the benefits of his programs today. And while some of those were unconstitutional as hell, the lessons learned could be incorporated into programs that are constitutional.
If it means that the economy is sufficiently productive without everyone working, a basic income solves the problem that some people have no access to the economy (by dictating some basic level of access).
(Of course the economy isn't sufficiently productive today, there are huge swaths of Americans that would like to increase their consumption, never mind less wealthy areas of the world. The reality is probably that we do have surplus labor at some levels of per job productivity though.)
I really wish urbanists would stop blaming transportation infrastructure for poverty and racism.
The article itself mentions that this poverty is systemic to dozens of issues in the area (zoning rules, poor public transit, suburbs not having section 8 housing, loosing 10,000 jobs in three years, and many more).
Eliminating a freeway does nothing to address any of those issues.
---
And everyone knows this. What "ReThink81" really wants is to take that public infrastructure land, sell it to developers for cheap so they can make a lot of profit off building luxury condos and luxury retail/commercial spaces.
It will be a happy accident when the rise in property values "just so happens" to displace a number of the existing poor residents.
Tearing down a freeway doesn't necessarily lead to 'luxury condos and luxury retail/commercial spaces' when there's no demand for such property in the neighborhood. There's vacant land at the edge of downtown Milwaukee from the teardown of a freeway spur almost 15 years ago.
That said, in a rust belt city like Milwaukee or Syracuse, the real risk is full-scale abandonment of the city in the style of Detroit or Flint— which is best prevented by having a diverse array of people invested in, and fighting for the city. If that doesn't happen, it'll decay into a zone of concentrated poverty that major employers flee for the suburbs, trapping people in a worsening cycle of poverty because they can't get a job without a car and can't get a car without a job. And a car often costs the better part of $5,000 a year to maintain, and potentially much more if you can't scrape together that $5,000 upfront for something decent used and have to deal with scammy low-end car dealers.
And, of course, some rich people and expensive property are a necessary part of a city's tax base if it's to pay for decent schools and transit and social services and libraries and all the services that enable social mobility.
The highway thing is mostly a side effect of unlimited funds being available to build highways 50-60 years ago. The engineers went mad.
But the reason Syracuse is a dump is that industry evaporated and went to Mexico and later China. If you want to look at a more depressing place than Syracuse that doesn't have a highway cutting through it, check out Utica, about 45 minutes to the east. It's like a neutron bomb hit in 1988.
This story mirrors and extends another story from the Atlantic, by Ta-Nehisi Coates[1], about racist housing policy in Chicago. Here, evidence that Chicago's redlining policy was the norm throughout much of the US, and further, consideration of how --- in some places --- it contaminated urban planning. Syracuse, then, is a city that was (choosing words carefully) destroyed by racism.
This reminds me of another Atlantic article, In Defense of Gentrification. Essentially, Syracuse has segregated itself by income level. Areas with a high density of poverty continue to suffer. The gentrification of neighborhoods generally elevates the quality of life of for its lower income residents. Those that are displaced are more likely to move to a neighborhood with a higher median income than their own.
