Tax the Robots or Face the Pitchforks

By David R. Wheeler, Editor

Right now our nation is at war with itself over the loss of manufacturing jobs. These jobs began a steady decline in 1980, which accelerated in 2000, leading to our present predicament. Trump supporters and Hillary/Bernie supporters may hate each other’s guts right now, but if there’s anything we can all agree on, it’s that we need more decent jobs for people.

Back in 1970, about 25 percent of the workforce had manufacturing jobs. Today, it’s less than 10 percent. That means that when today’s fortysomethings were born, about one in four people worked in manufacturing. And today, less than one in 10 has such a job.

And, as we’re constantly reminded, those were solid, status-affirming, full-time jobs with great benefits. Great health care. Great pension.

Anybody think we’re going to go back to the days when a quarter of the population worked in manufacturing?

No?

Okay then. Can anyone see a way forward?

Bill Gates can. His idea? Tax the robots that replace human labor.

By implementing Gates’ idea, we’re facing reality. We’re coming to grips with the fact that fighting outsourcing, as the Trump administration is trying to do, is fighting exactly the wrong battle.

Today, the problem is not outsourcing. It’s automation. Two recent examples perfectly illustrate this fact.

First, remember those Carrier jobs that Trump saved? Guess what Greg Hayes, the CEO of Carrier’s parent company, is going to do with the $16 million they were getting out of the deal. Just guess. Hire some extra people? No. Put it into a fund that collects interest so that they can eventually hire more people? No.

It’s going toward automation technology that will eventually allow them to cut even more jobs.

“Automation means less people,” Hayes told CNN, very matter-of-factly. “I think we’ll have a reduction of workforce at some point in time once they get all the automation in and up and running.”

So let’s get this straight. Carrier gets $16 million to save 800 jobs in 2017, so that in the near future, we can cut way more jobs than we ever saved through the deal.

Got it.

Okay, so maybe we can’t expect the private sector to be philanthropic. Businesses exist to make money. So maybe pragmatist Trump, who goes against GOP orthodoxy on free trade, has some unorthodox ideas about using government power to save manufacturing jobs.

That’s where the second example comes in. Let’s just take a look at Trump’s original pick for Labor Secretary, Andy Puzder. This is a guy who openly talked about replacing his own Hardee’s employees with robots. Here’s Puzder extolling the virtues of robots to Business Insider last year:

“They’re always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall, or an age, sex, or race discrimination case.”

In this view, human employees are to be vanquished. And he almost became our Labor Secretary under a president who campaigned on saving blue-collar jobs.

And let’s not kid ourselves. It’s not just manufacturing jobs that are in danger of automation. Your fearless editor has seen examples of software that can write articles as well as a human writer. Here’s an excerpt from a sports story written by a robot:

“Tuesday was a great day for W. Roberts, as the junior pitcher threw a perfect game to carry Virginia to a 2-0 victory over George Washington at Davenport Field. Twenty-seven Colonials came to the plate and the Virginia pitcher vanquished them all, pitching a perfect game. He struck out 10 batters while recording his momentous feat. Roberts got Ryan Thomas to ground out for the final out of the game.”

Do I need to mention that this technology is getting better and better — at a faster and faster rate — with each passing day?

I know what you’re thinking. “It won’t happen to my job.” But if humans are good at anything, it’s refusing to see the writing on the wall. In this case, the factory wall. While a majority of people acknowledge that automation will eventually replace most jobs, a majority also believe a robot could never do their job.

“Even as many Americans expect that machines will take over a great deal of human employment, an even larger share (80 percent) expect that their own jobs or professions will remain largely unchanged and exist in their current forms 50 years from now,” notes the Pew Research Center in a recent report on public expectations for workforce automation.

So most people are remaining steadfast in the belief that their own job is special, requiring distinctly human abilities and talents, and therefore immune to automation. Furthermore, some still believe Trump can magically bring back the manufacturing jobs of the 1960s. Meanwhile, Bill Gates — kind of an expert in predicting what computers can do — is planning for a different kind of future.

“Certainly there will be taxes that relate to automation,” he tells Quartz. “Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”

Gates is already being savaged by certain columnists for his idea. It’s emotionally difficult — okay, scary — to contemplate a future in which human labor is needed less and less. And yet we still need money to live on.

The entrepreneur and venture capitalist Nick Hanauer brought up a good point in a forum at the Brookings Institution recently. If robots take all the jobs, where will the customers come from? Who will have money to buy the hamburger that your robot creates?

Taxing the robots that replace human labor will allow us to put more money toward the safety net, toward government-subsidized jobs, and eventually toward a universal basic income when hardly anyone has a full-time job.

What’s that you say? People can always find a job? The unemployment rate is 4.8 percent? Well, that unemployment number is really good at hiding things. It doesn’t count the people who are retired, out of the workforce, or underemployed. The workforce participation rate is hovering near historic lows of 62.7 percent. It’s not hard to imagine a future in which only half the people in the country have jobs.

So we could implement a radical new idea like Gates’, or we could continue down the road we’re on — a road toward even more polarization than we’re seeing now. Wanna see what that future looks like? Yeah, me either.

David R. Wheeler is the editor of AliveTampaBay.

 

 

 

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