¿Will become Andrew Yang, the best-placed candidate at the moment, in the next mayor of New York? And if he wins, will he perform his job well? I have no idea, although I am skeptical of the latter. I sense that the mayor’s office needs an effective political fighter, not an intellectual, and Yang, who has never held political office, owes much of his prominence to his reputation as a theoretical leader, someone with great ideas about economics and politics.
What I do know is that Yang’s big ideas are demonstrably wrong. Shouldn’t that be cause for concern? Yang has become famous for arguing that we are facing a social and economic crisis because rapid automation is destroying quality jobs, and that the solution is a universal basic income, a monthly check of $ 1,000 for all Americans. Adults. To many it seems like a compelling argument, and you can imagine a world in which Yang’s diagnosis and prescription were correct. But it is not the world we currently live in, and there is little indication that we will be heading to it anytime soon.
Let’s check the facts: are we really experiencing rapid automation, that is, a rapid reduction in the number of workers required to produce a given quantity of things? That would mean that there is a rapid increase in the things produced by each worker still employed, that is, a rapid increase in productivity.
But it is not what we are seeing. In fact, the main article of the new edition of The Monthly Labor Review, published by the Bureau of Labor Statistics, is an attempt to understand the slowdown in productivity, the historically low growth in productivity since 2005. This slowdown has been especially pronounced in the manufacturing sector, which has hardly seen a rise in productivity. productivity in the last decade.
I made similar arguments in 2019, eliciting a furious response from Yang, who accused me of using “incomplete statistics” and declared that he had “done the math.” But if he had, he did not share them with others; all he offered us were anecdotes. Yes, at any given time there are always some workers displaced by technology. The question is whether this is happening at a faster rate now than in the past. And the figures say no.
For what it’s worth, I suspect Yang began preaching about the dangers of automation without even looking at the economic data; it was too good a story to check. But even if we don’t think Yang is right about the problem, what about his solution? Is the universal basic income proposal a good idea? No, it is not. It is too expensive to be sustainable without a huge tax increase, and unsuitable for Americans who do need help. And I have done the math.
First of all, we are really talking about a lot of money. The newly approved American Rescue Plan has given most adults a one-time payment of $ 1,400, and the expense has risen to $ 411 billion. These payments make some sense, considering the lingering economic consequences of the pandemic, although other components of the plan, notably increased unemployment benefits, are being more crucial in limiting economic misery. But Yang’s proposal to pay $ 12,000 a year would cost eight times more every year, well over three trillion dollars a year, in perpetuity. Even if debt or inflationary overheating are not of much concern to us right now, one has to think that sustained spending of this magnitude would cause problems and conflicts with other priorities, from infrastructure to childcare.
But these payments would also be grossly inappropriate for Americans who actually lose their jobs, whether due to automation or any other cause. The average full-time worker in America today earns about $ 1,000 a week.
The point is that, for now at least, the best way to provide an adequate safety mattress is to condition aid. We can and must provide generous aid to the unemployed; we can and must provide help to families with children. But sending checks to everyone, every month, is looking too bad at the real issues.
Now, you can imagine a world in which yangism would be appropriate. If in fact robots were taking over all quality jobs and inducing a huge pass-through of earned income to capital, it might make sense to offer large universal payouts, financed by creating high estate and corporate taxes. But today we are not in that world.
So what is all the fuss about robots and other forms of automation due to? Part of the answer is that it sounds sophisticated and edgy, especially among techies. But it is also, as I argued in that 2019 article, a form of centrist escapism. The true story of inequality and wage stagnation in the United States has a lot to do with the decline of unions and the loss of workers’ bargaining power; But some analysts find it uncomfortable to talk about power relations, preferring to blame technology. You could tell me that none of this is very relevant to governing New York City, and in a direct sense, they are clearly right. But if Yang becomes mayor, it will be because voters have a vague idea that he is a man of deep knowledge, proposing smart progressive policies. Unfortunately it is not.
Paul krugman He is a Nobel Prize in Economics. © The New York Times, 2021. News Clips translation
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