Tag: UBI

  • DevOps Chat: The Impact of Automation on DevOps and Society, with Bob Reselman

    DevOps Chat: The Impact of Automation on DevOps and Society, with Bob Reselman

    Those of you who have been reading staging-devopsy.kinsta.cloud for a few years are familiar with the RoelBob cartoons, which have a prominent spot on the home page. RoelBob’s creator, Bob Reselman, is also a technologist and creator of other forms of media. Lately, he’s been writing a series of articles about the impact of automation on society as a whole—not just DevOps.

    Bob is a really smart guy and a great interview, as well. Even if you don’t agree with this thoughts on automation, it’s worth giving what he says a listen.

    As usual, the streaming audio is immediately below, followed by the transcript of our conversation.

    Alan Shimel: Hey, everyone, it’s Alan Shimel, and you’re listening to another DevOps Chat. Got a really great DevOps Chat for y’all today. I’m joined by a good friend of mine, a frequent contributor, one of the team at staging-devopsy.kinsta.cloud—none other than Bob Reselman, creator of the RoelBob cartoons, Bright Ideas TV, the creative force and brains behind Shimmy Tunes, as well as a writer in his own right, not only at staging-devopsy.kinsta.cloud, but at a lot of the leading tech companies out there today.

    So, Bob—welcome!

    Bob Reselman: Oh, thanks for having me, Alan.

    Shimel: You know, I hope I didn’t embarrass you at the log-on, but you know, you’re something of a Renaissance man, right?

    Reselman: [Laughter] Right.

    Shimel: I was reading a little bit of your life history, your life story, Bob.

    Reselman: Oh, yeah. Well, I came to tech late. I came to tech in my early 30s, and the reason I got into it is because somebody told me that I could actually compose music on a computer.

    Shimel: [Laughter]

    Reselman: No, it sounds funny, but if you’re a composer—and I don’t mean—

    Shimel: Like in the MIDI days. I hear you, dude. I know people like that.

    Reselman: Yeah, back in the MIDI days, and you know, if you had a string quartet or even something larger, like an octet, to actually hear that going on, to hear it was very hard. You had to go out and either hire a quartet to play or just be really good at imagining, or be able to sit at a piano and be able to pay some stuff. And I’m not the world’s best pianist, so this medium, this technology really opened up a world to me.

    And then one day I’m sitting around and I’m starting to play with this, and I’m writing it, you know, my string quartet and stuff. I said, “You know, I think I could probably do something with programming.” And so, I did. I actually, I learned to program, and I’m one of those people that came in through the back door. Eventually, I ended up at Gateway, at that time, Gateway 2000, and I—

    Shimel: [Cross talk] cows, we remember it.

    Reselman: Yeah, the cows, yeah. I moved from Boston, Massachusetts to Sioux City, Iowa, which was a complete cultural transformation for me. But every day, I went into the future, this big, big building where we were making computers. I learned a lot, and we can talk about that, too.

    And at Gateway, I was really doing a lot of stuff I shouldn’t have been doing, but I did ‘em, anyway. And I mean that, I just, I sort of had to battle my way into technology. And they were very supportive, and I just learned a lot about some real, hardcore tech, working for that company, and for that, I’m ever grateful.

    And so, that was around ’98. Around 2000, I decided to move on, and I had started doing Big 6 consulting, went into Big 6 consulting. I went into New York and I worked in the financial industry for a while, and then I got good at it. Along the way, back around 1995, I published my first book about DB programming, and Wygant has been very good to me. I still get those royalty checks every month. I can’t complain. That’s how I got here—that’s how I got here, you know? And here I am today.

    Shimel: So, Bob, over the last couple years—I mean, look, we’ve been doing, so, staging-devopsy.kinsta.cloud has been around four years. You’ve probably been doing writing and RoelBob stuff for, what, three years, two and a half years—something like that?

    Reselman: I think three. We’ve been together for a while, Alan. It’s been, you know, the “Casablanca” of technology, what can I say? We’re on the runway, walking into the fog, right? [Laughter]

    Shimel: [Laughter] Round up the usual suspects.

    Reselman: There are no usual suspects. [Laughter]

    Shimel: But Bob, you know, certainly with the advent of DevOps and a heavy emphasis on automation, but also, it’s not all DevOps, it’s the world we live in, as you’re fond of saying.

    Reselman: Mm-hmm, mm-hmm.

    Shimel: You know, automation and the specter of increased automation over the—you know, not only near term, but long term—is really, it’s a scary thing. It’s scary for me as a parent with teenaged boys in terms of what are they gonna do, but it’s scary for a lot of people, people in the workforce today. And it’s something that you have really given a lot of thought to, you’ve written extensively about it, and that’s what I wanna talk to you about today.

    Reselman: Mm-hmm. Well, I’m happy you do, because I do think it’s important, and I think it’s going to have a growing impact. A lot of people—within technology, we can sort of ________. We’re in the middle of it, and we’re pretty adept at adapting—I don’t know if that’s a real term, but we pick up stuff pretty quickly, and we’re good at getting new stuff onto our fingers very quickly.

    But there’s a whole segment of the culture that has problems with it, to be honest. And, you know, let me be direct. Let me be direct, here. My father, he was a cab driver. He was a cab driver, and when I look at what Uber and Lyft are doing to the cab industry in New York City, it’s pretty amazing. I mean, his first medallion, I think, cost him—I’m making these up, I don’t have the actual data, but I think he paid $250,000.00 for his first medallion. And back then, that was a lot of money. But there were only a set amount of taxicabs on the street, and so, there was a high volume, it was a good investment. Today, because of the ride sharing, share services the value of medallions is dropping dramatically. And that’s just one impact of automation.

    Uber and Lyft could not exist without, I wanna say, two fundamental technologies coming on. First of all, credit cards. The other one is GPS, and the third is cell phones. And you mix all three of those together, and anybody can really be a driver. Why? Because you can pick up qualified customers and bill them without having to worry about being paid. GPS will pretty much tell you where to go, and cell phones provide the mapping technology to get there—all of it highly automated.

    Now, what’s interesting to me is that I wonder about the actual Uber and Lyft drivers now as that automation extends. For example, I take Lyft. I take Lyft all the time, and I’m more of a ride sharer than I am a car owner. And I’m sitting in the back of a car, and I had to go to an appointment, and I started reading a book. And I noticed that we were going in the wrong direction. We were going in the wrong direction. I said to the driver, I said, “You know, we really are going in the wrong direction,” and her response was, “Well, this is where the map is telling me to go.”

    Now, what is relevant here is, how far are we really—what is the purpose of that driver, other than to be an interpreter of map data and to manipulate the technology accordingly? And that’s not that far from robotics, and people—

    Shimel: No, it’s not. And actually, I mean, Bob, Uber and Lyft’s end game is to go autonomous, obviously, right?

    Reselman: Right.

    Shimel: And take the driver out of it altogether. But the interesting thing, I’ve had, specifically around Uber and Lyft, but they’re really poster childs for this, right?

    Reselman: Mm-hmm.

    Shimel: When we start thinking about the future of autonomous vehicles, we start thinking about, what really is—what is the disruption in Uber? You mentioned three key technologies, but is Uber really a technology disruption company, or is Uber a company that, what it disrupted was, by taking advantage of all of the excess vehicles and time that drivers have and putting that to good use? And so, was that the true disruption there, or was it the technology that was the disruption, and part and parcel with that technology is the automation?

    Reselman: Right. I think the disruption—it’s the aggregation of the technology which is the disruptor. Now, what is being disrupted? I think there’s a fundamental social disruption going on. The rules of existing as an employee or a wage earner or a value creator in society is changing. And Uber’s talent in terms of transportation—because it’s everywhere, you see everybody getting into those Uber cars. But that’s really inconsequential compared to the larger impacts of transportation.

    So, for example, container shipping is, Swedes Burkett just released a thorough—and again, people can write me and I’ll give them the exact data, because I don’t have it in front of me—but I believe it’s called the Burkett, and that’s a large container ship that’s completely robotic. So, imagine how much containers get shipped on the open seas that have crews. Now, those crews will go away.

    The same as with trucking. Trucking is really low hanging fruit. There are 3,000,000 truck drivers, and Uber is active in the trucking—automated trucking industry. So, they’re looking to automate that, and that’s gonna have a disruption.

    I wrote—the last article I wrote for you all was called “Coming Apart in the Age of Automation,” and the unintended impact here is that we really are creating a bifurcated society in which one class has, can master the technology or becomes the merit class, and the other class is just sort of hanging on. And it’s a sad thing to say, but it is true. And, as we look around current events, we can see that more and more.

    Now, the good news here is that we’re in a—we are in a good position. And what I mean by that is that, if we go back and we look at the history of technology, particularly around the advent of mass production in consumer technology, which is really the automobile. The automobile really was a game changer, because it was intended to be a consumer product once Henry Ford figured out how to do the assembly part. And because it became a consumer product, it really lifted the whole middle class. It became—if you were coming off a farm in Georgia, you could go to Detroit, and without having to learn a whole lot of new skills, become a wage earner in a factory.

    That’s good. Nobody really understood the impact of the internal combustion engine back in 1900 or 1910, that in 100 years, this would have a significant impact. And what I hope we’ve learned along the way is that technology does have an impact, along with sociological and economic. And we can start planning for that accordingly. Sadly, what I’m not hearing is that planning. People hear—the argument is, technology, yes, will always displace people. There are no more people picking up the horse dung on the streets of New York. Those people went to work in factories, et cetera, et cetera. In other words, technology destroys jobs, but it creates more jobs.

    But we’re not hearing any sort of ancillary planning of what the downside might look like, and if there is a downside—which there might very well be—how we’re going to address that.

    Shimel: Yep. I—you know, Bob, maybe I’m cynical in my old age. [Laughter] I—unfortunately, planning is not our long suit, right? We live in a financial world where we live quarter to quarter, week by week, you know? A bad quarter can cost a CEO their job and lose trillions or billions—not trillions, but billions of dollars of market capitalization.

    Reselman: Mm-hmm.

    Shimel: The fact of the matter is, if you believe the media, most people in our age group, Bob, have not put away enough money for retirement.

    Reselman: Mm-hmm, mm-hmm.

    Shimel: We don’t believe in science or truth, [Laughter] and so we can’t even plan around what to do about climate change. Why should this be any different?

    Reselman: Well, I don’t know if I agree with your assessment completely.

    Shimel: Okay.

    Reselman: Because I just got through reading a book by Harari about, it’s an assessment of current conditions and future. And people forget that famine and people dying of starvation even 50 to 60 years ago was a common day event. A lot of people in China starved to death. That really did happen. People in Ireland, in 1840 when the potato famine came along, they starved to death. You didn’t have enough food, and you died. Death due to starvation is still around, but it’s not commonplace—nowhere near the condition that it used to be.

    The other thing is, when we look at warfare—yes, there are wars going on and there are mutual wars, but there hasn’t been a war on the scale of World War II since World War II. So, there’s stuff going on that sorta gets hidden behind all the—what would we say—the fascination with the bad stuff.

    The other thing to think about in terms of us as technologists is that planning is still part of the industrial fabric. What do I mean by that? It takes five years to design and manufacture a car. I learned this when I worked at Edmonds. Pretty much, if you start looking at model years, the big model changes are in the fifth year. Pretty much, if you came out with a Car A—in year one, you’ll have A, then year two, what used to be options become standard and then more options become standard. And then, by year five, you have enough research in place and enough retooling of factories in place to create a new vehicle and put it on the market itself.

    So, industry does have the ability to plan. I mean, just look—I mean, if we look at SpaceX, bringing that rocket back and just being able to send a rocket up, you know, one of those cylinder rockets, right, that you used to imagine from the ‘50s goes up? And we used to just blow ‘em up and leave them in space. Now, we can actually bring them down and allow that piece of pipe with rocket fuel in it to land safely on land. That’s pretty amazing. You can’t plan that in three months. That takes years and years and years of planning.

    So, we have the ability to plan. The question is, in terms of our social imperatives, and that becomes a real question. So, why—what’s stopping people from saving? Why are people afraid? Why is fear so high now? And then also, going back to jobs as, we’ll call them no-skill jobs, start being eliminated from the landscape because grunt work is always the easiest to replace; thinking work is harder. Then, what do we do about that?

    And there are people out there offering solutions, but they are pretty dramatic, and there’s two, and they’re dramatic, and to even start contemplating that really requires a lot of courage.

    The first one is, is that there’s a good case to be made that we are at the end of the consumer based economy. Again, let’s go back to Ford. You know, an automobile for everybody changed everything. And when you look at it, you know, how many cars can Bill Gates drive? Well, if indeed, he had 365 cars in his garage, he could drive a different one every day. The fact is, he probably doesn’t, and he probably takes an Uber. So, really, in the future, you know, we’re all gonna be sharing cars.

    So, this notion of ________, and I didn’t do a good job explaining it. In other words, what I’m saying is that, for a lot of people, having devices and technology is what makes the economy run. Everybody needs a cell phone. Having mass distribution of cell phones makes the economy run. Having mass distribution of food makes the economy run. Mass distribution, mass distribution, mass distribution.

    Well, at some point now, what’s happening is, we can produce as much as we like. Production is no longer a problem. Two hundred years ago, production was a problem. The factories couldn’t make the stuff fast enough. Now, the factories can. So, now we have infinite production, which means we have infinite consumption, which means we have a problem with too much plastic in the water, and too much carbon monoxide in the air.

    Shimel: Bob, I’m gonna butt in here, if you don’t mind.

    Reselman: Okay.

    Shimel: So, I just got back from China last month.

    Reselman: Okay.

    Shimel: There’s a real problem there, right? Because this is—they’re living it, right? And, you know, we look at the world’s steel market and tariffs and all that stuff, a lot of it is being driven by—China has built over capacity in terms of what they can actually use and even sell at a decent margin in terms of steel.

    Reselman: Mm-hmm.

    Shimel: But not just steel, they are producing solar panels, cellular phones. They just—in other words, they are the kings of this, “Hey, we’ll produce as much as we possibly can produce because we’re gonna, if we’re not gonna consume it, we’re gonna sell it in the world market, and if we can’t make a profit on it, well, we’re not capitalists, anyway, right?”

    But an interesting dichotomy that I saw there was that they still are manually labor intensive in certain things. So, their streets are pretty clean in the cities, and the streets are clean because, on every street, there’s a cadre of people walking around with bamboo poles and palm fronds, kinda thing—literally sweeping the streets. And they sweep it into a pile and then some other person comes by and they have all these uniforms. And it comes by on a machine, like a Zamboni machine excepts it a vacuum, and sucks up what that people sweep.

    Reselman: Mm-hmm.

    Shimel: It’s almost like busy work to me, but what was fascinating to me is that, on one end, I took the bullet train from Shanghai to Beijing, right, and 300 and something kilometers an hour. And all I could see out the window, Bob, were endless cranes and towers going up, right? Not just a building, but cities and towns being built one after the next, and all built around factories. They’re like old factory towns, they kinda looked like, right?

    Reselman: Mm-hmm, mm-hmm.

    Shimel: So, they got the infinite capacity to build things, but I really question the infinite capacity to pay for things, to consume these things.

    Reselman: Right. Well, you hit it on the head. It’s the notion of payment. That’s sort of like, it’s like an assumption that we might have to start questioning, which leads into the second point that I was gonna bring up. You read my mind, Alan—and do my a favor, when you’re reading my mind, please clean up after yourself.

    Shimel: [Laughter] Okay.

    Reselman: Right, so the first point is, we have to start examining the role of consumption as a driver of an economy. We just gotta start looking at that. That’s a big question with incredible ramifications.

    The second one becomes this notion of paying for stuff in order to get what you want. And to—let me share a real life funny. My wife has decided that she needs—she wants to get rid of a chair we never use. It’s a nice leather chair that we never, ever use, and we paid, I think, $600—whatever it was, it was too much. I’m not a decorator, but she paid it, and now she’s saying, “I wanna sell it for $200.”

    And so, she puts the ad out on Craigslist and nobody’s biting, nobody’s biting. Why isn’t anybody biting? Because my suspicion is, it’s a good price for a $600 chair, but they can get ‘em for free. They can get probably an equal chair for free. And, if you look at the cell phone, I mean, we’re giving away cell phones. We’re giving it all away, we really are.

    And so, this notion of, what you’re saying is, how are people gonna pay for it? Probably they’re not. Either one of two things are gonna happen. Either the buildings are gonna be left unoccupied and it’s gonna be, there’s a downward recession—or the alternative is to blast credit into the economy to create money and to have that money become a purchasing agent. Is there wealth created? Is there value created? I don’t know about that. I don’t know about that. But are there transactions created? Yes.

    So, I’m being long-winded by saying that it might be coming time to start looking at a serious examination of universal basic income. And let’s just sprinkle the fairy dust for a moment, and let’s sprinkle the fairy dust and say that we’ve just—everything is great, everybody’s just calmed down. They understand that automation is great and if we let machines have their way, the machines can do just about everything now. And every week, you know, you get a check in the mail that allows you to go down to the grocery store or, better yet, interact with Amazon Prime, and the drone shows up with your food. And you go to your TV set and there’s your streaming TV. And some people decide they wanna be philosophers ________, so there are brain surgeons, and other people just decide they wanna sit around and play video games all day.

    There’s our future, right? Is that so bad? Is that so bad? And people say, “Well, how will we innovate? How will we go forward?” And my question—and I don’t have an answer for this—is, I wonder if somebody who gets into something like brain surgery for the money or curing disease for the money? Maybe the recognition, we don’t know. But the notion of universal basic income, if you take away the moral reservations about—what would they call it? The moral risk, right, becomes buyable.

    The sad thing is, is that any—the experiments that are being ________ aren’t real world. And what do I mean by that? They tried in Canada to ________. And I forget the details; I’ll mail it to your listeners if they want it. They’re running UBI on $1,000 a month. The test group got $1,000 a month. Well, gee, I mean, can you really live on $1,000 a month? That’s one thing. Whereas, if you go to another country that has universal basic income, and the poster child is Cyprus. Cyprus gives every citizen 500 Euros a month. The reason it’s relevant here is that a rent of an apartment in Cyprus is only 520 Euros a month. So, 500 Euros a month becomes, between—with two people, 1,000 Euros a month becomes a viable amount and a reasonable standard of living.

    That’s where UBI needs to be. We need to be starting to talk about UBI numbers in the area of $40,000, $50,000, $60,000 a year per family, and then we have to deal with the ramifications. And the ramifications really aren’t so much economic as they are social. What happens when you move the social structures that work bonds? In other words, what happens when a whole society no longer has to get up in the morning and go to work? What happens then?

    And that becomes the danger point, because most people have no idea.

    Shimel: Huh. Excellent. I think—yeah. I don’t disagree with you, there.

    Reselman: Well, again, I’m not looking for conflict or disagreement. This is a great discussion, but for our listeners out there, the point is—we are in technology. We are the people that write the scripts. There are other people that do the automation. We are the people that are making the robots. We’re doing all this. And we’re in a good position now, because unlike Henry Ford, who really didn’t think it through with regard to what an automobile would do over a period of 100 years, whereas one of the engineers at Sony did in terms of television. A friend of mine’s wife’s father worked at Sony, and he raised a question to one of his engineers back in—I think it was in the ‘80s. And he said, “You know, we’re selling a lot of Trinitrons. What are we gonna do when these all come back?” At least he posed the question.

    So, if anything, for the listeners out there that I hope they consider is, what do we do when we’ve become very good at all this? What do we do when we’ve created a framework and a fabric of automation where—and labor almost becomes unnecessary? What do we do, then? And what are the ideas behind that? And that’s where I wish there was more conversation, at the least. And not be on, “There will always be more jobs” or the fantastic stuff, but real, concrete, well researched conversation.

    Shimel: Excellent. Bob, I’d love to continue this conversation, but we are so way over our time. [Laughter]

    Reselman: Oh, I’m sorry, I’m sorry.

    Shimel: That’s okay! We’re gonna need to pick it up on another DevOps Chat.

    Reselman: Okay.

    Shimel: Which is great. I bet next month, we’ll do it again.

    Reselman: Sure, sure. Yeah. I’ll do that. I’ll make the coffee. The dog’s been very good here, he’s been very quiet. He understands that he’s being recorded, so.

    Shimel: Otherwise we’ll automate him out of a job. [Laughter]

    Reselman: Yeah. [Laughter]

    Shimel: Anyway, Bob Reselman—RoelBob, author, futurist, commenting on the state of the world today—thanks for being our guest on this DevOps Chat. We’ll continue this conversation on another DevOps Chat soon, but for now, this is Alan Shimel, and you’ve just listened to a DevOps Chat. Have a great day, everyone.

    — Alan Shimel

  • UBI: Facing the Reality in the Era of Automation

    UBI: Facing the Reality in the Era of Automation

    Those of us working in DevOps make a good living. According to Glassdoor, the national average salary for a DevOps engineer in the United States is $100,000. Are we worth it? Of course we are; DevOps is hard work. The value we add to an organization more than justifies the salaries we can command. Nobody is giving us the money. We have to earn it every day.

    Considering that high school teachers earn on average $48,000, a restaurant manager averages $46,000—about the same as a paralegal—and a forklift driver makes $26,000, DevOps engineers are doing A-OK.

    That’s the good news. The bad news is that our average salary, combined with our commercial isolation from others, puts us in a bubble. I am the first to admit that I live in that bubble. I don’t interact with a lot of paralegals, restaurant managers and forklift drivers in my day-to-day work. Most of my interactions are with people who do what I do and live the lifestyle I live. It’s nice to live in the bubble; I’ve done countless all-nighters to be here. But I am very aware that it’s a place that few people live. Keep in mind, the average income in the United States is $51,272.



    It takes a lot to get into our bubble. You need to be really smart and you need to be well-educated. Most programmers have a college degree. Yes, there are few of us that are part of the 70 percent of the population that does not have a college degree, but those people are rare. And, for as long we keep delivering and learning the new stuff that comes down the pike, we’ll be living in the bubble for the foreseeable future.

    However, for those outside our bubble, it’s going to be a different story. As the evolving landscape reveals, those who do predictable, repetitive work are going to be automated away. And, most of the jobs that do remain are going to be on the lower end of the income scale.

    So, what’s to become of those outside the bubble? How will they survive?

    One solution that has been bantered about is Universal Basic Income (UBI). UBI is income that you get by virtue of being a citizen of state. There are no strings attached. Every month a deposit appears in your checking account and you are free to do with it as you wish. If your refrigerator is empty, you buy food. Should you earn a good salary, you can give the money to a favored charity or buy your kid a new video game. As I said, it’s no strings attached. The intention is to provide financial security to the citizenry without means testing.

    UBI has been in play in Alaska since 1976 as implemented under the Alaska Permanent Fund. Every permanent resident of Alaska gets money from the state just because they live there. In 2014 every resident of Alaska got $1,884 from the fund.

    Other governments are trying or have tried out UBI. Finland has a limited experimental program that pays €560 ($630) a month to participants. Cyprus pays out  €480 a month ($546) to qualifying citizens. Canada had an experimental program back in 1974 that ran for four years in Dauphin, Manitoba. The program was called Mincome. It dispersed $1,200 a year to people living below the poverty line.

    UBI has it supporters. Former U.S. president Richard Nixon supported it for a while. Milton Friedman supported it via the negative income tax. And tech leaders including Mark Zuckerberg and Elon Musk, men who have a keen understanding of the impact of automation on human employment, are proponents.

    I am a supporter, too, if for no other reason that I believe in the promise of technology—that we will automate our way to a life in which we are free to do the work that brings meaning and purpose rather than going through the motions of existence, laboring away to put bread on the table.

    But, for as much as I think UBI is valuable, there is a part of me that finds the notion to be a farce. It’s not so much because I think people will take the money and go down to a riverboat casino to gamble away their monthly allocations while the kids go hungry, but rather because the dollar amounts being considered for allocation are a joke.

    Let’s do the math.

    The table that follows illustrates how much income is required to support a family of two adults and one child on state-by-state basis. This data is provided using the MIT Living Wage Calculator by way of Mental Floss.

    Table 1: A listing of minimum income by select states

    State Minimum Income per Year Per Month
    West Virginia $45K $3.75K
    Iowa $49K $4.09K
    Montana $49K $4.08K
    Tennessee $47K $3.91K
    Alaska $54K $4.50K

     

    The states I choose—West Virginia, Iowa, Montana, Tennessee and Alaska—don’t contain any big cities on the order of New York, Los Angeles, Houston or Chicago. Let’s just say they’re states not subject to a large amount of urban impact. These are states that I can image might find UBI a useful program, particularly as industries—manufacturing, agriculture and energy—become more automated and the employed workforce experiences more displacement due to automation.

    As you can see in Table 1, according the the MIT Living Wage Calculator, it will cost a family of two adults and one child residing in any of these states about $4,000 a month to live at a comfortable minimum.

    Let’s apply some UBI numbers. As mentioned above, in 2014 the Alaska Permanent Fund distributed $1,884 a year to each permanent resident in the state. That comes out to a monthly allocation of $157. Compare that $157 a month to the $2,250 each working adult in the Alaska household has to earn to achieve a modest standard of living. That $157 is 7 percent of the amount needed. It’s a joke. The reality is that the allocation from the Alaska Permanent Fund will buy about a week’s worth of groceries, if that.

    On the other hand, there is Cyprus. As mentioned above, that country is paying out $546 per person in guaranteed income, which is an OK allotment given that the rent on a three-room apartment is about $500 a month and a McDonald’s Combo Meal goes for around $7. Multiply the per-person allocation of $546 by two adults and you have a situation where life is sustainable. But then again, the population of Cyprus is 1.2 million people, a little more than the size of the population of Montana. Still, the Cyrus UBI amount is a viable number. But, what about here in the United States? If we were to implement UBI, what is the dollar amount each person is to be given?

    Let’s go back to Table 1. For the residents in those states listed to enjoy a standard of financial security on the order of Cyprus—one in which no matter what, you will have your basic needs met—it seems that we will need to come up with a UBI allocation of about $20,000 a year per adult. Of course, this is assuming that the person does absolutely nothing in the way of earning money beyond the UBI allocation. However, as was reported in the study of the Mincome Project in Dauphin, Canada, once UBI kicked in, only two segments of the workforce worked less—new mothers and teenagers.

    Granted, this is very limited study of a very small sample of people from over 40 years ago. But, still the inference may be valid. Also, as we’ve found from people in retirement or forced unemployment, after a period of welcome inactivity, at some point we need something to do. Thus, there is a good chance that those on UBI will want to earn money beyond the allotment. Given that we can project that most people on UBI will want to engage in income-producing work, if such work is available, then maybe that $20,000 a year number is excessive. Maybe a reasonable dollar amount for UBI is between $12,000-$15,000 per year, per person. That number could work in less-expensive areas of the country.

    How would we pay for it all? Honestly, at this point, I don’t know. Maybe the same way we paid to put a man on the moon? To quote the old saying, “Where there is a will, there’s a way.”

    Sadly though, no matter what the allocation number is and no matter what the consequences of not doing UBI may be, the will to do UBI currently is limited to a bill before the Hawaiian Legislature. The general will is not there for a variety of reasons: politics, moral distaste manifested as a fear of Netflix-induced sloth in the general population, or just plain greed. The notion of having enough money show up in a citizen’s checking account to ensure a modicum of financial security has limited appeal.

    I can accept such reluctance. UBI is far afield from where we are culturally or where we have been historically. But, what I cannot accept is formulating a UBI program that is dumb; one in which we create stories that say financial security can be had for $157 a month. UBI allocation needs to be proposed in real, livable numbers. Otherwise, the risk we run is that when we can somehow sell the idea to a willing buyer, should UBI fail due the stupidity of not allocating enough money per recipient, we will be hard-pressed to get a second chance to do it right.

    The notion that the impact of automation on human employment will be severe is a tough one for many to accept. While it is true that history shows that advances in technology have led to new forms of employment for those displaced, history does not accommodate thinking machines. Thinking machines are new to the landscape.

    Just as automobiles replaced horses, maybe thinking machines will replace humans. Horses did not find new forms of employment when the automobile came along. Rather, their number diminished to levels required for their remaining purpose: providing entertainment. Such an analogy might sound harsh. After all, a human life is worth more than its commercial value. If this is the case, then unless humanity can implement ideas such as UBI as a way to sustain life independent of commerce, the alternative might very well be about the bubble—a place where those on the inside live well, in secure isolation from the less fortunate ones suffering on the outside.

    — Bob Reselman

  • Rethinking Unemployment in the Age of Automation

    Rethinking Unemployment in the Age of Automation

    In my last article concerning the impact of automation and robotics on human employment, I asserted that commercial job loss is more a result of automation than outsourcing. Also, I asserted that this trend was going to continue at an accelerated rate. I said we need to address three areas of concern to mitigate the impact:

    • Income
    • Birthrate
    • The meaning of work

    In this installment, I am going to look at income—specifically, the need to rethink how we approach unemployment insurance.

    Let me share a piece of personal information with you. A while back I lost a gig and was eligible for unemployment benefits. The amount I was eligible to receive back in 2012 was $300 a week. (Today, the maximum benefit is $450 a week for up to 26 weeks.) In the scheme of things that’s not much money. In a major metropolitan area such as Los Angeles, $1,200 a month does not even cover my housing costs. Luckily, I was able to get another gig in no time at all. But, I am a tech worker. Others are not so lucky.

    Unemployment benefit in California is calculated by using the following formula:

    highest quarterly earnings/25

    Thus, the average programmer makes around $75,000 a year, which comes out to $18,750 a quarter. So doing the math:

    $18,750/25 = $750 a week

    But that $750 number exceeds the maximum allowance. So, if you are a programmer who has been “let go” in California, the most you’ll get is $450. Also, any benefit you receive is subject to income tax. If you find a part-time job to make up the difference, your benefit will be reduced.

    The calculation is not special to California. Arkansas is pretty much the same. In Texas you get a little more.

    If you are accustomed to making $75,000, which after taxes is about $1,100 a week, making ends meet on $450 pre-tax dollars is going to be a stretch.

    This is not a pretty picture in a few ways. First, there is the built-in incentive to not work legally. You are not encouraged to use your creativity to launch your own business. Forfeiting earned money does not encourage you to take on small jobs that allow a company to get to know you. (Try and buy has led to many a full-time position.) So what do you do? You go into the shadow economy. You work under the table: Have the check made out to your wife on her W9 or have it show up on Paypal as a gift. Is the practice shady? Yes. Is it necessary? Yep, particularly as the end of the month rolls around.

    Now, if you are in a major city such as New York, San Francisco or Los Angeles and you are in prime employment age, between 25 and 45 years old, getting another tech job quickly is usually not a problem, provided you know what you are doing. But, what do you do if you are a 50-year-old Visual Basic programmer in Glen Falls, New York, with two kids still in high school and a housing market that is anemic? You just can’t get up and move. And, learning programing technology is going to take time.  Now, imagine the same scenario, only this time you work in a small furniture factory in Alabama and your job lathing table legs has just been replaced by a robotic CNC machine. The picture is now a nightmare.

    So, what do we do?

    I am a supporter of the notion of Universal Basic Income (UBI). UBI is a system in which citizens of a given nation are provided with enough basic income to meet the essentials of life. Typical in just about all the plans for UBI is the stipulation that there are no strings attached. Under UBI, if you want make more money you can. Your UBI allowance is not decreased. UBI can be more about developing your value in society rather than living off the dole.

    Still, I am a realist. I am not of the belief that one day a magic wand will be waved over state and the national capitals, that politicians will come to their senses and amazingly we will have UBI. Big change does not work that way unless something gets blown up (Think Pearl Harbor and 9/11). I am of the thinking that when it comes to large-scale change, the best thing to do is focus on one thing. For me, that one thing is to eliminate the “payback” clause in unemployment benefit policy.

    Given that many, if not most, jobs will be automated before the end of the century, the notion that unemployment is a benefit that tides us over until the next job comes along is outdated. There might not be any next job. Rather, unemployment might be a time to reinvent ourselves. Reinvention means using the unemployment benefit as a baseline of income upon which we can build more income. We should not be penalized for making money on top of the unemployment benefit. Rather, the benefit needs to be a subsidy from which greater income grows. Once a livable level of income is achieved and a trajectory of reliable, personal revenue is established, we can revisit the size and limit of the benefit allowance. Until that time, the allowance remains in place.

    Think of eliminating the “payback” clause as training wheels for full UBI. Removing the ““payback” clause in unemployment benefit policy is a concrete first step to having realistic policies about labor and income in the Age of Full Automation. The legislative debate and public education that will happen in the course of eliminating the “payback” clause of unemployment insurance will put Universal Basic Income on the social and political agenda.

    UBI is not the stuff of fantasy. It is already has an experimental implementation is Finland. The National Digital Council of France recommends testing UBI. UBI exists in a modest way in the United States in the form of the Alaska Permanent Fund.

    As I mentioned in the previous article, using automation to replace human labor is nothing new. But, what is new is the rate at which the human labor is being replaced. If we do not start implementing concrete ways to address the long-term ramifications that result from the ongoing elimination of human labor from the commercial landscape, the storming of the Bastille in 1789, the bread riots of 1863 in the southern United States and the removal of the Bonus Army from Washington, D.C., in 1932 will look like a warmup act for what might very well transpire. Removing the “payback” clause from current unemployment benefit policy is but a small step toward addressing the issue at hand. However, put a lot of small, achievable steps together and after a while you’ve made significant progress solving a big problem.

    So here is something we can do.

    Take 15 minutes out of your day to copy the following and send it to your local and state representatives as well as your representative in Congress:

    Dear Representative _____________
    Please initiate legislation immediately to remove the practice of deducting money earned while receiving unemployment benefits from a recipient’s payment. Also, make it so that unemployment benefits are no longer taxable income.

    As automated labor continues to do more jobs formerly done by humans, unemployment insurance benefits need to be adjusted in favor of empowering unemployed workers to participate in the modern economy, not penalizing them for using any and all available resources to improve their condition.

    Thank you,

    YOUR NAME HERE

    The problem of automation replacing human employment is real and it’s not going away. The 15 minutes you spend will be well worth the time invested.

    — Bob Reselman