A Living Wage

A couple of unrelated trends clicked together in my brain this afternoon in an unexpected way and I thought I’d share. In case it needs to be said, this is interesting but wild speculation and not meant to be taken very seriously.

One trend is the gradual dissolution of the nuclear family over the last several decades. Another is the more recent economic anxiety in the era of Brexit and Trump. And finally, we have a push from liberals in the last twenty years to raise the minimum wage to what is known as the “living wage“.

As a single adult with no dependants who keeps a comprehensive budget of my finances, I know both what I spend each month, and roughly what it would be possible to live on if times suddenly became tight for me. Interestingly, a full-time job at the minimum wage where I live would be more than enough for a pretty decent single life, since until recently I was living below that line more-or-less by accident. However, it’s also clearly not enough for a family, nor even necessarily enough for a family with two income-earners at that level given the costs of transportation and child-care.

My core speculation is as follows: what if the gradual dissolution of the nuclear family has increased the “supply” of single workers and decreased the “supply” of workers with families, thus driving down the market price for labour and making it even more difficult to have a family. This would be a very unfortunate negative feedback loop, if true.

Maybe somebody with more economic/demographic expertise can dig into this more or tell me where I’m making an obvious error?

Capital is the New American Aristocracy

Do you know that feeling, when some person or article says something with which you’ve agreed for years but hadn’t ever been able to properly articulate?

It’s one of the delusions of our meritocratic class, however, to assume that if our actions are individually blameless, then the sum of our actions will be good for society.

The Atlantic think-piece that this is from (The 9.9 Percent is the New American Aristocracy) is of course excessively long, but worth reading if you’re interested in that kind of thing, especially if you enjoyed my essay on Brexit, Trump, and Capital in the Twenty-First Century. While the Atlantic piece takes a rather different tack to get there, it ends up at roughly the same set of possible recommendations, and I think the underlying thesis is the same: there are a lot of not-directly-monetary ways in which the future prospects of the working class have suffered over the last few decades.

Money may be the measure of wealth, but it is far from the only form of it. Family, friends, social networks, personal health, culture, education, and even location are all ways of being rich, too. These nonfinancial forms of wealth, as it turns out, aren’t simply perks of membership in our aristocracy. They define us.

This was basically one of the theses of my essay, so maybe the Atlantic article doesn’t tack that far from it after all.

Originally, I focused on the value of unskilled labour as the primary change in recent generations. I still think this is generally true, but the Atlantic piece focuses elsewhere: on the walls that the upper classes are building around the other forms of capital. Education is a form of capital, but with the increasing class-segregation of top university admission processes it becomes less accessible to those at the bottom of the heap. Location is also a form of capital, but as the cost of living skyrockets in prime locations (most notable Silicon Valley) that too becomes inaccessible. It seems inconceivable today that a poor person from the slums of Detroit could fight their way into a good university, then afford to move to San Francisco in order to be able to work a decent job. But if we really want social mobility to be a feature of our economy then that’s the story we have to enable.

Finding A Solution

In 2016, I mentioned a basic income as one possible partial solution, with the caveat that it didn’t seem politically or economically feasible. Things have changed a lot in the last two years. From Finland, to California, to Ontario, a number of organizations and governments have started pilot projects of the idea. Perhaps more interestingly, in the current Ontario election, all three major parties have pledged to continue the experiment, effectively guaranteeing a path forward regardless the winner.

In addition to the political will that has sprung up recently, the economics suddenly seem more favourable as well. The cost of expanding Ontario’s experiment to the entirety of Canada has been pegged at only $43 billion, which is eminently affordable in the context of the many hundreds of billions of dollars that Canada already spends on various programs. And proponents are quick to point out that that number doesn’t even include the expected savings in health care, incarceration, and other government services which typically result from lifting people out of poverty.

The purpose of this essay wasn’t originally to sell people on the idea of a basic income, so I’ll leave it at that, but it does seem to me like an extremely promising approach. I’m looking forward to the results of some of the pilot projects, and in the mean time I’m going to do a bit more research and try to raise the profile of this idea.

I hope you’ll join me.

 

Should Robots Pay Taxes?

I was going to use this as an “other opinions” link but then I started thinking about it and decided to turn it into a proper post instead (my sequence on atheism will resume next Wednesday as usual). Here’s the initial interview: https://qz.com/911968/bill-gates-the-robot-that-takes-your-job-should-pay-taxes/.

It’s an interesting proposal, but it has some weird flaws. For example, how do you define a robot vs. just a tool? Should we be taxing hammers because they let carpenters drive in nails more efficiently, therefore displacing other carpentry jobs? What about one of those fancy smart electric (but still manually controlled) saws? They still seem more like tools, but the line is getting blurry. When you add a CNC module to that saw, does it become a robot for tax purposes? Why? The marginal efficiency of the CNC module itself isn’t necessarily that high.

Another issue is that robots are already getting taxed, albeit indirectly. When a company automates away a job, they do so to save money. That money ends up going somewhere (usually the pockets of executives and shareholders) and tax is payed on it there, usually at fairly high marginal rates. You can argue various counter-points about how much tax those people should fairly pay, but at that point we’ve kind of lost the thread of the argument. It’s not at all obvious that “tax robots” is the right solution to the problem of “rich people are good at tax evasion”, and that wasn’t the original claim anyway.

Of course, if you combine the definitional problems with the tax evasion point then you run into another issue: any reasonable formulation of this tax is going to be trivial to circumvent. You’re going to end up with a single minimum-wage worker pressing a green button once an hour just so the machine at the other end doesn’t meet the definition of a “robot”. I mean sure, your tax has saved a job, so in some sense it’s had the intended effect, but not at the intended scale nor in any way that provides actual quality of life to the person in question.

It’s a neat idea, and it makes for some good headlines, but to me a robot tax just ends up seeming silly.