This article is a work in progress…
It’s 2015 and unemployment is at a staggering 25%. You sit in your synthetic leather couch in front of your ten pound 75 inch nano emissive HDTV that you bought for $25. You don’t make any money but you don’t pay any taxes either. Your roomba kindly asks you to lift your feet so it doesn’t miss a spot.
People who misunderstand business fear robots and the unemployment they will soon create.
ots become available, they will allow the fast food industry to dump all the minimum wage workers. The executives will make even more money, and who can blame them? We would all like to get bigger paychecks. The goal of a business owner is to make more and more money, not to create jobs or raise wages.”
That quote is at the heart of the issue. The author doesn’t understand the basics of free market economics. If costs go down, the assumption is that mean guys in overpriced suits will get raises. The problem is that the next fast food place will lower costs instead of increasing pay because customers will go to the establishment with the best deals as evidenced by the success of Walmart.
Low prices don’t fix the unemployment problem but if you’re unemployed it doesn’t hurt to have ridiculously low priced food at every turn. If 50% of the cost of selling a burger is from wages and employee related costs then the price will go down roughly 50% if there are no more employees. At first glance it looks like a wash. People lose jobs but being poor gets a little bit easier for everybody.
The wealth divide increases. One man and 100 robots are running the store and only one guy is getting a paycheck. Every person that loses a job to automation will increase the standard of living for the poor by roughly the same amount or possibly more depending on the productivity of the robot. The wealth divide won’t increase because the rich are getting richer, it will increase because the poor will get very poor while the rich have money in the bank.
But being very poor is going to be very nice in the future. Another assumption is that wealth and standard of living are one in the same. What if wealth was defined as the amount of stuff you can buy instead of the number of green things in your wallet. What if in 10 years you can get a big flat panel HDTV and a stupid fast computer in a bundle for under $200? Gigabit Internet connections will cost next to nothing.
The only thing that will really cost anything will be food and water. There
Time is money. We will have more time but less money. If wealth is money then our wealth will be the same except we’ll have more gadgets and amentities, raising everybody’s standard of living.
Everybody else will be unemployed so rent is going to be very cheap, unless you live in Manhattan. Link to “Small is the new big”.
Start with this –
Productivity – Worst case scenario. A guy making $15 an hour shows up to work late. Hungover. Plays solitaire and reads ESPN.com for a couple of hours. Sexually harasses a co-worker. Steals some office supplies. Slips on a puddle in the bathroom. Sues and get workers comp. $15 an hour is not the cost of this employee.