The Future of Work

1) 4 day work week

2) Alternative workforces
3) Less working hours in a day
4) Flexible schedules

Social and Economic Implications of Automation

Accelerated automation presents two problems:

1) A revenue problem
2) A human problem

The revenue problem

Problems:

1) Psychological implications on lack of work

a. the loss of a job is not merely the loss of a paycheck but the loss of a routine,
security, and connection to other people
b. Phsychology of Working theory defines a decent job as
i. Work is an essential aspect of life and an essentaial component of
mental health
ii. Work includes effots within the marketplace as well as caregibing work,
which is often not sanctioned socially or economically
iii. Working has the potential to fulfill three fundamental human needs
survival, social connection and need for self-determination
c. Procarious work, insecure, often part time and time limited
2) Income gap
a. Low-wage workers currently hold a majority of at risk-jobs
b. Increased automation is likely to exacerbate income inequality
c. A human welder today earns an average of $21 per hour which the equivalent operating
cost per hour of a robot is around $8 dollars per hour
d. Economic inquality to become much worse
1) A revenue problem
a. Tax systems are designed to tax labour more heavily than capital
b. Capital Is taxed more lightly because capital is mobile and can escape taxation
c. Tax systems are meant to serve the people, create stronger economies, improving
aggregate social welfare maximizing aggregate happiniess within a society (Jeremy
Bentham – father of utilitarianism)
d. Until 1940, the US government obtained its revenues primarily from tariffs and excise
taxes
e. Before this, income taxes remained low and were primarily affected the wealthiest
American’s
 f.That was until World War II, where the need for revenue to fund the war effort
transformed the income tax from a “class tax” to a “mass tax”
g. Today over half the revenue collected by the federal government come from individual
income taxes and payroll taxes
h. This poses a problem because if labour does not earn income, they pay no tax
i. Of course, corporations and business owners that employ robots may make profits and
pay taxes on those profits. However, as the next part describes, business profits and
income derived from those profits, such as dividends and capital gains, bear a lower tax
burden than earnings from human labour.
j. Efficient taxation means that taxes can be collected without stimulating evasive
behaviour or changing business decisions.
k. Classic econcomics literature artures that the most efficient rate of taxing capital income
is zero
l. Changing the taxation of capital to make it more like the taxation of labour would
i. Increase government revenue
ii. Reduce the incentive to make investments in robots
m. Captial wins
i. Accelerated depreciation
ii. Lower corporate taxes = higher earnings for shareholders
n. Labour loses
i. Moving is difficult for employees (in the US moving expenses are not deductible)
2) A human problem
a. Humans need income to survive
b. Maslow’s heirchy of needs  survival is the foundation of the heirchy of needs, work
satisfies the higher order needs of social identify and self-esteem
c. Work keeps at bay three great evils: boredom, vice and need
d. Job loss resulted in 50 to 100 percent increase in death rates the year folling the job loss
and 10 to 5 percent increased in death rates the next 20 years
e. Children of unemployed workers face increased family stress, lower family incomes,
porrer education and work outcomes
f. Link between reguional unemployment and drug use

Potential solutions

1) Universal basic income

a. Tesla’s Elon Musk believes that providing a UBI will become essential,
because “there will be fewer and fewer jobs that a robot cannot do better.”
b. Facebook’s Mark Zuckerberg believes that a UBI could spur innovation
c. Virgin’s Richard Branson said, “I think with artificial intelligence coming along, there
needs to be a basic income.”
d. “no string attached”
e. Programs in Manitoba, Namibia, and India were found to have increased
education, reduced medical problems, and increased economic activity, as well
as reducing poverty.
 f. Although UBI can clearly address a persons survival needs
g. How will it address their psychological needs?
h. Is Silcon Valley biased in their support of UBI in an effort to keep people
consuming their products?
2) Enhancing EITC
a. Earned income tax credit
b. The EITC equal a fixed percentage of earned income up to a maximum amount.
It reduces the amount of taxes owed and can result in a
refund for eligible taxpayers
c. Complexities of EITC lead to errors (qualifying taxpayers
failing to claim the benefit and unqualifying taxpayers
receiving the benefit)
d. Bernie Sanders suggested introducing a corporate tax of
100% on all government credit their employees receive
called the “Stop BEZOS Act”
3) Providing Jobs
a. New Jobs Tax Credit
b. Government itself could directly create jobs, thus avoiding some of the
inefficiency of using tax credits for private employers
i. Civilian Conservation Corp. which employed about two million men
between 1933 and 1942
ii. The CCC workers built roads, trails (including the Appalachian and Pacific Crest
Trails), and structures. A new CCC could address both the long-term unskilled
unemployment problem and the backlog of deferred maintenance in the
National Parks, Forest Service, and Bureau of Land Management.
iii. The CCC was “wildly popular” during its existence, and many of the roads, trails,
and structures built by the CCC are still in use today
4) Funding solutions
a. A robot tax
i. What is a robot?
ii. Stabing off progress
iii. Slow technological progress
iv. Impair the competitiveness of workers (may encourage business in foreign
entities who embrace robots)
b. Consumption tax
c. Wealth tax
d. Increasing marginal rates on the wealthy
e. Equalizing the taxation of capital and labour

Gates wants a robot tax to pay for humans doing the jobs that humans are best at: those
requiring human empathy and understanding, like reaching out to the elderly and helping
special needs children. He notes that there is an “immense” shortage of people doing those
jobs that are uniquely human