Why the UK Needs a Tax on Job-Stealing Robots Now
Q: Why does the UK need a tax on job-stealing robots?
A: To pay Universal Credit to millions of soon-to-be-replaced workers.
And why do we need Universal Credit in one of the richest countries on the planet?
Because unemployment skyrocketed due to the recession in the 1980’s, it skyrocketed again when millions of UK jobs began to be offshored in 1990, and again when millions of immigrants arrived in Britain looking for work.
And because automation and robotics are about to change the world more than all of the above combined!
Bye Bye UK Jobs (Offshoring)
Since 1990, but beginning in earnest around 2000, UK businesses began outsourcing much of their manufacturing to Asian and non-Asian countries that offer low-cost labour.
This had an immediate and positive effect on company profits in Britain and resulted in just as immediate job losses in the UK as millions of ‘man-hours’ shifted to Asia. Consequently, the unemployment rate shot up, and eventually, many of those formerly employed people ended up on some kind of social assistance, or moved back home to Mom and Dad’s house, or they lived a precarious life staying with friends until they could land a job.
Those who didn’t find a job or who weren’t able to stay at Mom and Dad’s house, or weren’t able to mooch off their circle of friends any longer, ended up homeless; either on social assistance or not.
And as some of you already know unemployment insurance benefits only last for so long.
A sad thing about homelessness is that it causes a dramatic rise in crimes like theft, vandalism, hooliganism and other social ills as the homeless watch those fortunate enough to have a job/a home/a warm bed, etc., and resent their success. It’s not evil you’re seeing, it’s human nature.
You’d feel the same way if your company terminated your employment and by the time you got out looking for work there were millions more job applicants than jobs available.
But for UK companies, offshoring jobs scored a solid 6 out of 10 as a means to improve profit.
Enter, The Immigrant Workforce
Some UK companies decided to hire the immigrant workers that arrived on Britain’s shores by the millions and were willing to work for a lower hourly rate than native Britons.
For many companies, this was an even better solution than offshoring jobs which sometimes resulted in questionable quality or problems related to timely delivery of products that were produced offshore and then shipped to Britain.
Some British companies were able to lay-off hundreds of workers on a Friday and have their immigrant counterparts start work on the following Monday without skipping a beat. Of course, there may have been language barriers or quality control issues at first, but on the main cutting their labour costs by one-half (or more) worked wonders for profitability, if not always productivity.
For UK companies, hiring low-cost immigrant workers, probably scores around 8 out of 10 as a means to improve profit.
Rise of the Machines (Job-Stealing Robots)
In the corporate world, the quest to lower costs and increase profits never fades.
That is why cars replaced horses, ships were fitted with powerful engines instead of sails, it’s why jobs were (and still are) offshored to countries that can manufacture items at the lowest cost, and it’s why jobs were taken from British workers and given to low-cost immigrant workers in the UK.
But the big daddy of them all is just around the corner as human workers are replaced by machines.
For companies, this cost savings/quality improvement represents the greatest business opportunity to arise since the Neolithic Period when Trog first sold Grok a bag of salt he’d dug out of the ground.
Once Human Labour Becomes Redundant, Then What?
In robotized factories, labour costs are almost microscopic when compared to the other costs of doing business. Quality can improve by orders of magnitude and companies can devote even more time, money, and effort to sales and marketing to keep all those machines busy 24-hours per day, 365-days per year, without sick days, arguments with superiors, or paid holidays.
Almost any job can be done by robots, even policing can be done via millions of cameras set up around the country and monitored by small groups of people in a control room hundreds of miles away. In the case of a stolen car for example, as soon as the theft is reported to a website, the website programme can then steer the stolen vehicle to the side of the road and shut off the engine, and an automated tow truck could go out to recover the vehicle. We’re almost there now…
And robots never go on strike for better wages.
Companies that replace most of their workers with automation represent the best way yet to improve build quality, to lower costs, to operate 24-hour production runs that last 365-days of the year, and to increase profits.
Hey, who needs a large Human Resources department when only 5 employees work in a 5 million square foot factory and all executive positions are hired via a points-based website?
For UK companies, hiring robots scores a perfect 10 out of 10 as a means to improve profit.
Almost HALF of all UK Jobs Lost to Automation by 2033 (PwC Report)
This is a lot closer to happening than most people think.
“A 2017 report from PricewaterhouseCooper predicted that 30 percent of jobs across the nation will be automated in the next 15 years.
Predictions for outside of the U.K. aren’t any better. In the U.S., job loss estimates range from 33 percent of jobs by 2030 to 47 percent of jobs by 2033. Around 137 million workers in Southeast Asia could lose their jobs to automation within the same period.” — Futurism.com
Shall We Prepare For That Eventuality or Wait for Something Magical to Happen?
Waiting until then to do something about it isn’t responsible leadership. Neither is hoping that something magical will occur to solve our self-made problems.
If the 1% own all the automated factories and services but nobody except the kids of the 1%’ers have jobs, to whom will those companies sell their goods?
As more and more people are replaced by machines and as their unemployment insurance runs out and as fewer and fewer humans are required to operate a company, more and more people will find themselves on Universal Credit in the UK — so we better start NOW to make it sustainable!
The benefits for companies to automate are such that automation is coming no matter what, therefore, taxing job-stealing robots to support people on Universal Credit is the only relevant option.
Yes, the Protestant work ethic; A truly great thing.
But if machines are doing all the work, humans will become largely redundant insofar as work is concerned and companies will still need people to purchase their wares — otherwise what’s the point of all that automation?
Avoiding a Societal Crash Bigger Than the 1929 Stock Market Implosion
It’s almost too late to address this looming crash. But if politicians got energized this societal catastrophe could be managed, if not quite averted.
Automation WILL happen, it’s not something that can be ignored. Change is coming. And we’d better be ready.
For now, it’s a relatively simple fix;
Theresa May’s government needs to increase Universal Credit payments to (the anti-poverty standard metric of) £1088 per month, to include full medical and dental coverage, and provide full prescription medicine coverage — with no barriers to enter the Universal Credit system other than applicants must be adults who reside in the UK and earn less than £1088 per month.
This monthly amount and the healthcare benefits that go along with Universal Credit should also automatically apply to the country’s senior citizens to ‘top-up’ their pension to that amount, if they report less than £13,056 (from all sources) on their annual tax return.
In this way, every automated vegetable farm can sell its produce, every automated dairy can sell its milk, every rancher can raise their livestock, and every automated delivery company can get paid for their investment in all that amazing technology, because, well, at the end of the day, people need to eat and producers need to get paid.
And the UK can pay for it all without changing the existing tax regime other than adding a 5% tax on the daily output of every robot and automated system in the country.
Will companies go for it? You know they will.
How to Pay For It
Once people see they can exist without starving to death courtesy of their £1088 per month+benefits, people may decide they can earn a (taxable) living from their own home-based business — hand-painting landscapes on canvas, or running (taxable) Airbnb accommodations from their home, or becoming a (taxpaying) tour guide. Who knows. But artists, lodgers, public speakers, or those who create anything desirable or those who sing or play a musical instrument (well) may become well-rewarded for their unique and creative talents and pay taxes once again.
A 5% tax on robots and other automation devices or systems that work 24-hours per day, 7-days per week, 365-days per year without labour strife, without complicated accounting, without employer contributions to pension plans etc., without sick days and so much more — or pay a number of humans to fulfill that task?
It’s really a no-brainer. Humans can’t begin to compete with automation. What matters is keeping all those consumers alive and purchasing which after all, is what makes the economy function.
Companies will make so much more profit they won’t mind paying a 5% tax on the daily output of every robot and other automated device. Quality will improve, production and productivity will go through the roof, and companies and countries that get on it first will find the largest possible benefit.
Here’s to automation and to artistic endeavors!
Austerity Has Changed How the World Views the UK
Why, for the love of God, don’t governments utilize the most obvious solutions to solve their budgetary challenges whenever a global financial crisis hits, instead of defaulting to budget cuts that can appear either inept or mean-spirited?
Finance Ministers don’t set out to craft inept or mean-spirited policies during times of economic crisis, but that’s how it plays out in the media and in living rooms across the country or wherever people gather to discuss the economy.
In the UK, this manifests itself in the names that people call their political parties.
If government austerity cuts don’t affect you, you continue to call the Conservative Party by its rightful name. But if austerity hits you hard, then you’re one of those who’ve taken to calling the Conservatives ‘The Nasty Party’ — and they’ll never get your vote ever again, etc., etc. (Yes, I do empathize, BTW. But that’s not what this blog post is about)
It just depends upon which side austerity hits you.
And budget cuts (at least budget cuts perceived as unfair by a significant percentage of the population) almost always result in either a lost election or loss of parliamentary majority at the next election. Check out those stats! (You’ll see how true that statement is)
Theresa May’s ‘hung Parliament’ election result in June 2017 is 100% attributable to the UK austerity budgets that have been in effect since 2010, and hers is just one example out of many majority governments around the world that have suffered as a result of their austerity policies.
There IS a Better Way!
Due to market conditions, about every 25-years a recession comes along in the capitalist countries. You can almost set your clock by it. It’s the ‘nature of the beast — carry on’ is how recessions are described by economists, and nobody tries to prevent recessions, as such ‘resets’ help to prevent even worse economic crashes in the future.
Still, there’s a way for countries to survive economic downturns WITHOUT shooting themselves in the foot every day of the recession. (A novel idea!)
The public knows an economic downturn when they see it. In fact, they have enough experience in their own lives balancing family finances when times are good, let alone when domestic financial challenges appear such as a job loss or (suddenly) another mouth to feed. Therefore, they know the government must compensate whenever the country faces a financial challenge.
The question for governments is how to do it and not lose the next election. Or the one after that.
And the answer is; To do it fairly.
That is; Apply cuts that will be perceived as ‘fair’ by a majority of the public — instead of deep cuts to some departments while other departments see no cuts at all, or worse, are able to increase their spending.
Does it seem fair to you while in recession that Health or Education should receive deep cuts, while spending on the military or the environment is unaffected? (I’m just using hypotheticals here for an example. Every Briton knows their military is chronically underfunded and few begrudge the UK military being exempted from budget cuts)
Back to the subject at hand; Every department in practically any organization on the planet has 5% ‘fat’ built-in to it. It’s just the way of organizations.
Budgets tend to be tightly managed in the first few years, then, over time, surpluses accrue or unused properties aren’t sold off as quickly as they could be, or in other ways there’s potential for either budget savings or revenue increases. Or, depending on the department, perhaps a combination of selling off unused assets and departmental savings could meet the new budget targets set by the government.
If you’re a large organization like the UK government and you expect your revenue to fall by 7% (for example) here’s the way to do it fairly!
Simply inform your departments of the 7% budget exigency, and instead of arranging deep cuts for some departments and zero cuts to others which sets the seeds for future electoral defeat, inform all departments to cut their budget by 7% — or alternatively — tell them to find ways to increase their revenue by the shortfall amount.
Let me be clear, if former Chancellor of the Exchequer George Osborne had simply told every government department in 2010, “We’re facing a 7% (or whatever percentage) cut in revenue, therefore, each government department must cut 7% from their annual budget until further notice,” each department would’ve done exactly that and hardly anyone would’ve noticed. (Remember, every organization/department already has 5% ‘fat’ in their system, so only a 2% budget challenge remains in this hypothetical example. At that point, accounting for the final 2% equates to selling off surplus real estate assets until that amount is obtained)
On the other hand, some departments might be real estate ‘heavy’ and could counter their entire 7% budget challenge by simply unloading their surplus real estate, thereby meeting the government’s directives to cut costs by 7% or increase revenues by 7% (or any combination thereof) to hit their departmental budget targets.
Wouldn’t that have been much better than the pain inflicted on the bottom-two economic quintile people in Britain (and which cost Theresa May a parliamentary majority) all of which has conspired to cheapen the ‘British brand’ around the world?
Read here, in the New York Times just how ‘fairly’ or ‘unfairly’ (depending on your worldview) the United Kingdom’s austerity plan has been portrayed around the world.
A country’s fortunes (fairly or unfairly) can rise or fall based on the perceptions of large numbers of people. Let’s hope that future UK budget cuts will not only be fair, but be seen to be fair by large numbers of Britons and by people around the world.
Letter to Britain 