Bill Gates: People Don't Realize How Many Jobs Will Soon Be Replaced By Software

[mu03eng]

When robots replace policeman, teachers and fire fighters we can only hope the politicians will go the way of the dinosaurs as well and then there would be no need for taxes.

I would, for one, welcome our new robot overlords

[ChicosBailBonds]

The border the border the border.......  As long as there's a wage difference between anywhere and the USA and the better quality of life in the USA people will ALWAYS find a way to get here legally or illegally with the desire to work, and not for handouts.  I know of plenty of people who found a way to get here with the plan to stay here and work.  And none of them speak Spanish.  We can strengthen the border, that's fine, but the people I know would have gotten here regardless. 

The question is whether you make an effort or not, we make a token effort.  The folks we are letting in, only add to the problem long term.  Anchor babies get US citizenship, adds to the problem.  Low skilled workers who will want the benefits that the gov't is going to give them, only adds to the problem.

[ChicosBailBonds]

I was hoping you would focus more on the potential post-scarce economy I had spoken of, but that's ok.

When you talk about people working hard, and enjoying the fruits of their labor, I find that funny. How many people lost their savings and retirement thanks to the recession/housing crash? So much for the fruits of their labor. Similarly to all the pension funds that were raided and then the people who had paid their whole lives were told the states are bankrupt. Problems for everyone: haves, have-nots, lifelong hard workers, etc.

So, what do you think about a post-scarce economy? Would our society and cultural hierarchy be able to handle that situation?

Why did they lose their money?  Are we really going to pretend it was merely a housing crash and ignore a systemic policy change made back in the 1960's, reinforced with Glass Stegall repeal in the 1990's, and then policies of giving out money to anyone with a pulse in the mid 2000's.  Throw in a lot of people making some really poor decisions.  Really poor....and bad things are going to happen.  I remember my wife and I buying a home in the early 2000's for a decent chunk of money.  Within 3 years it had doubled.  It was an absolute joke.  I should have sold and paid rent somewhere and I often joked with my wife that we should do that because it can't go on forever.  So I feel for people that got hurt, I know many of them.  It is also my opinion that the die was cast in the late 1960's and none of this should be surprising.  The best is yet to come.

Fruits of our labor....in our lifetimes, I have zero doubt in my mind that our 401Ks will be partially taken by the gov't in some fashion.  Absolutely zero doubt.  It's revenue and they're going to find a way to grab some of that revenue.  Just wait and see.  That will just be the tip of the ice burg.

Do I think our society will be able to handle a post-scarce economy?  Let me put it this way, there is a reason I'm moving away from California and I believe strongly in the 2nd amendment.  Unfortunately, I think our best days are behind us.  I don't think post scarcity will work....it's a form of socialism or perhaps communism in my view and the corruption from such forms of order are destined to fail.  Some will argue anarchism, but I believe it will just be a different division of the haves and have nots. This idea that everything is free because there are no limits to resources is a pipe dream in my opinion.  It's unicorns, green clovers and fairy dust.  It will collapse onto itself...technology destroys jobs faster than it creates enough of them....that leads to long term problems.  I know the optimists believe the jobs that disappear will open up new channels for new jobs to spring forward.  Some of that is true, but I don't think enough of them will pop up.  To keep society from imploding, the gov't will have to basically pay people off to stay calm, give them food, shelter, etc...that requires massive incremental taxation, but as those people actually able to pay the taxes are literally taxed to death, the money runs out and the shooting starts.

[ChicosBailBonds]

Wouldn't you argue its more equitable if you, and everyone else who works, gets the same check every month, as those who do nothing?

No, how would that be equitable?  Why is equality the goal in the first place?  I don't believe in equitable pay, there are people that deserve more pay than I do and some that deserve less.  This idea that everyone is equal is cute and all, but then there is reality.  "From each according to his ability, to each according to his needs" is a concept I cannot process because of its inherit inequality in an attempt at equality. 

[ChicosBailBonds]

So there is clearly some sort of benefit to both parties, rather than liberals just rounding up "taker" votes.

In the short term, yes.  In the long term, no.   In the short term, it is cheap labor.  In the long term, stacked voter rolls which eventually will turn every election in this country to one side and when you get one group think way of life, it's over.  Truly over.


There's a reason why I don't belong to either major party and never will again in my life, but immigration is one reason.  I'm all for LEGAL immigration.  It makes the country stronger, brings an influx of talent and producers to the economy.  LEGAL immigration.

[Eldon]

It is truly disappointing that we (Americans) are still debating the merits of a high, or even higher, minimum wage.  Among economists, this debate pretty much died in the 70s.  Seriously.  I know there are 500 economists who signed a letter saying to raise it to $10.10, including several Nobel laureates.  However, recall that many of the pop economists have jobs at blogs, newspapers, and other places where the public opinion of them matters.  Where were these economists before it became popular to argue that the minimum wage was too low?  FWIW, surveys continually show that approximately 80% of economists believe that the minimum wage hikes often do more harm than good.

I only read the first and fifth page of this thread, but if anyone referenced the 500-economists letter, keep in mind that of the economists who signed the letter, only a few actually write scholarly articles on the topic of minimum wage.  All of the others who actually write academic articles on the minimum wage have either signed the other letter (don't raise it to $10.10, as that is too high), or they have kept mum.

One notable economist who did not sign the 'raise the minimum wage' letter was David Card, an economist who is notoriously friendly to increases in the minimum wage, as he wrote an article in 1994 that revived the minimum wage debate from its 1970s coma.  Even David Card says $10.10 is too high.
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Raise the minimum wage, what happens?  Well, who works minimum wage jobs?  Generally low-income people.  And what do low-income people do when they get money?  They spend it.  In fact, lower-income people spend a larger fraction of their income than rich people do.  Spending is what we need to boost the economy right now.  So far so good.

But there are costs to raising the minimum wage.  What are some costs?  In many low-income type jobs, labor and capital are substitutes and in high-income jobs, the two are generally complementary.  Ok.  Well, if you raise the price of labor, without raising the price of  capital, what happens?  Companies substitute.  Companies will either start investing in capital to replace the workers (e.g., self-checkout machines at the grocery store).  Or they will substitute to illegal immigrants and, to the extent that it is possible, outsource these jobs.  Moreover, Pick 'n' Save hiring engineers to build a self-checkout machine has an opportunity cost--that is time that they are not spending developing machines that have a higher value add to the overall economy.  Thus, as these low-income people become unemployed, this decreases aggregate spending in the economy.  And in the current economic climate, we want spending.

Thus, we ultimately arrive at an empirical question:  If we raise the minimum wage, which effect dominates?  

Almost all studies show that at best there is a 0% change in the aggregate unemployment rate and at worst, there is a small increase in the unemployment rate--small, but noticeable.  Other studies show that for every one dollar increase in the minimum wage, only about $0.25-$0.35 actually reach someone in poverty, which is not a large share, but it is at least something.

Do we have a more efficient poverty fighting tool?  That is to say, is there a way to actually get more of that $1.00 increase in the minimum wage to an impoverished person while also having a smaller effect on unemployment than the minimum wage?  The answer, thankfully, is yes, we do.  The answer is the earned income tax credit (EITC).  The EITC gets more of that $1.00 to someone actually impoverished without the corresponding hit to the unemployment rate.  Well, at least not as large of a hit, depending on we fund the EITC.  But that's a separate issue.

Concisely put, we could tax companies some lump-sum and give that money to its employees.  But couldn't that also raise unemployment?  After all, companies may have to lay some people off to afford the new tax.  Yes, that is true.  However, the companies will lay off less people than they would if you raised the minimum wage by a commensurate amount.  How so?  Because the EITC does not raise the price of labor relative to capital.

To my left-leaning friends who have gotten all the way to this paragraph, please understand that I (and other EITC-backers) do not hate the poor.  On the contrary, economic research has actually shown a more effective way to help them.  Keep in mind that the EITC is not a partisan issue.  If we are going to help the poor (that is the partisan issue), we should at least be doing so in the most efficient way possible.

As is said in the profession of economics, the minimum wage is the "5th best poverty fighting tool that we have."

And for those who would like an appeal to authority, I present Christina Romer, the former chief economic advisor to President Obama, as quoted in the NYT, to boot

http://www.nytimes.com/2013/03/03/business/the-minimum-wage-employment-and-income-distribution.html?pagewanted=all&_r=0

For those who don't want to click, I give you the key paragraph:

"If a higher minimum wage were the only anti-poverty initiative available, I would support it. It helps some low-income workers, and the costs in terms of employment and inefficiency are likely small.  But we could do so much better if we were willing to spend some money. A more generous earned-income tax credit would provide more support for the working poor and would be pro-business at the same time."

[Coleman]

No, how would that be equitable?  Why is equality the goal in the first place?  I don't believe in equitable pay, there are people that deserve more pay than I do and some that deserve less.  This idea that everyone is equal is cute and all, but then there is reality.  "From each according to his ability, to each according to his needs" is a concept I cannot process because of its inherit inequality in an attempt at equality.  

You are twisting my words around. So I'm not going to engage in discussion with you on this any further.

[ChicosBailBonds]

You are twisting my words around. So I'm not going to engage in discussion with you on this any further.

That wasn't my intent.  Please clarify, if I didn't interpret your question correctly that is my fault. 

[Coleman]

That wasn't my intent.  Please clarify, if I didn't interpret your question correctly that is my fault. 

well you started quoting Karl Marx in response to what I wrote. This is not a Marxist proposal. It is being floated by one of the most capitalist countries in the world....Switzerland.

In my opinion it is more equitable because it actually balances it back towards high earners...it gives them the same benefits the poor and non-working are already getting, but still leaves a safety net for those at the bottom.

[ChicosBailBonds]

I appreciate the clarity.  Are you referencing the 1:12 initiative in Switzerland?

[classof70]

He s 100% correct, raise the minimum wage and these jobs will be automated away.

Quote from a letter from 600 economist to Obama, Boehner, Reid, Cantor, McConnell and Pelosi.

In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.

[ChicosBailBonds]

Quote from a letter from 600 economist to Obama, Boehner, Reid, Cantor, McConnell and Pelosi.

In recent years there have been important developments in the academic literature on the effect of increases in the minimum wage on employment, with the weight of evidence now showing that increases in the minimum wage have had little or no negative effect on the employment of minimum-wage workers, even during times of weakness in the labor market. Research suggests that a minimum-wage increase could have a small stimulative effect on the economy as low-wage workers spend their additional earnings, raising demand and job growth, and providing some help on the jobs front.

Battle of economists....over 500 oppose it, including nobel laureates.

What's interesting is that the economists that are for it sure got a lot of billing on CNN, CBS, ABC, NBC, PBS, NY Times, etc.   Yet those that oppose it, well you have to find that on sites like Daily Caller, Fox, and just a few others.

Weird.     


http://dailycaller.com/2014/03/13/over-500-economists-against-federal-minimum-wage-increase/

[Coleman]

I appreciate the clarity.  Are you referencing the 1:12 initiative in Switzerland?

No this is something else

http://www.businessweek.com/articles/2014-01-16/inequality-fight-swiss-will-vote-on-minimum-income

[Eldon]

Battle of economists....over 500 oppose it, including nobel laureates.

What's interesting is that the economists that are for it sure got a lot of billing on CNN, CBS, ABC, NBC, PBS, NY Times, etc.   Yet those that oppose it, well you have to find that on sites like Daily Caller, Fox, and just a few others.

Weird.    


http://dailycaller.com/2014/03/13/over-500-economists-against-federal-minimum-wage-increase/

O-M-G!!!

Guys, READ MY POST!!! It's like six posts above this!!

David Card is not on the "raise the minimum wage to $10.10" letter.  

[Eldon]

There are only a few labor economists on that "$10.10" letter.  Not all economists are the same.  Just as not all doctors are not all the same.  Each has his own specialization.  How much stock would you put into a letter signed by a bunch of dermatologists and pediatricians with respect to cardiovascular surgery?  Well, that's fine, but my first question would be: Where are all of the cardiovascular surgeons?

Labor economists, the guys who devote thousands (yes, thousands) of hours researching things like the minimum wage at the highest level possible (peer-reviewed journals like Econometrica, AER, QJE, etc.) have not signed the letter. 

Again, even David Card is not on that letter.  That should tell you something.

[ChicosBailBonds]

O-M-G!!!

Guys, READ MY POST!!! It's like six posts above this!!

David Card is not on the "raise the minimum wage to $10.10" letter.  

I did, I was responding to the other post about the validity of raising the minimum wage because 600 economists says so.  Yup, and about that many say not to.  What I find interesting is that those saying to raise it get a lot of buzz, ink space, time on the tube, etc.  Those that don't....very little.  But remember, the media isn't liberal. 

[ChicosBailBonds]

There are only a few labor economists on that "$10.10" letter.  Not all economists are the same.  Just as not all doctors are not all the same.  Each has his own specialization.  How much stock would you put into a letter signed by a bunch of dermatologists and pediatricians with respect to cardiovascular surgery?  Well, that's fine, but my first question would be: Where are all of the cardiovascular surgeons?

Labor economists, the guys who devote thousands (yes, thousands) of hours researching things like the minimum wage at the highest level possible (peer-reviewed journals like Econometrica, AER, QJE, etc.) have not signed the letter. 

Again, even David Card is not on that letter.  That should tell you something.

Yup, agree. 

It's like when Obamacare came out and they couldn't wait to say the AMA supported it.  Of course, actual surveys of doctors opposed it, but because the AMA is an organization, the media and the administration ran wild with telling people how great it is because even the AMA backs it.  The little tidbit about how many doctors don't even belong to the AMA any more or the surveys after surveys done with actual doctors saying what a f'ing disaster it would be....totally ignored.

[ChicosBailBonds]

No this is something else

http://www.businessweek.com/articles/2014-01-16/inequality-fight-swiss-will-vote-on-minimum-income

Well, this article does talk about the 1:12 initiative, so it is partially linked.  The Swiss voted that down.


Fundamentally, paying someone a minimum amount whether they work or not is a recipe for disaster in my opinion. It will breed contempt from those that are footing the bill and those on the lower end of the scale will all too gladly say I'd rather get a check than work this crappy job.  Once you keep adding more and more people to that list, you're going to have a hard time getting them off and actually doing something for themselves or the community if the time comes and the whole idea totally tanks, which I suspect it will.

[Spotcheck Billy]

Battle of economists....over 500 oppose it, including nobel laureates.

What's interesting is that the economists that are for it sure got a lot of billing on CNN, CBS, ABC, NBC, PBS, NY Times, etc.   Yet those that oppose it, well you have to find that on sites like Daily Caller, Fox, and just a few others.

Weird.     


http://dailycaller.com/2014/03/13/over-500-economists-against-federal-minimum-wage-increase/

I have no horse in this race but reading your post that implies that 600 economists pimp themselves on CNN, CBS, ABC, NBC, PBS, NY Times, etc.  seems like those channels sure must have a lot of guest economists if they feature anywhere near 600!

[ChicosBailBonds]

I have no horse in this race but reading your post that implies that 600 economists pimp themselves on CNN, CBS, ABC, NBC, PBS, NY Times, etc.  seems like those channels sure must have a lot of guest economists if they feature anywhere near 600!

That's not what I'm saying.  The articles, stories, reports about 600 economists signing a letter in support of the minimum wage that POTUS is pushing is receiving a lot of coverage on CNN, CBS, NBC, PBS, etc.   The flip side, over 500 economists saying they think it is bad news, has very few outlets carrying their views.

[WellsstreetWanderer]

I'm not as smart as most of you guys on Scoop and my experience veered away from finance but when I look at raising the minimum wage I can't help but wonder if you are paying each person in a shift over $10 plus benefits and Social Security, etc. how many burgers do you have to move per hour to pay employees, insurance ,supplies, utilities and debt service  before you turn a profit?

[Eldon]

That's not what I'm saying.  The articles, stories, reports about 600 economists signing a letter in support of the minimum wage that POTUS is pushing is receiving a lot of coverage on CNN, CBS, NBC, PBS, etc.   The flip side, over 500 economists saying they think it is bad news, has very few outlets carrying their views.

And there are over 700 PhD'd scientists who have signed a letter saying that evolution is 100% false.  The other side has come back and said "oh yea, well have a letter with 700 PhD'd scientists named Steve who say evolution is 100% correct."

My point of this is that surveys have already been done on economists and the vast majority say it's bad and is an at best inferior policy (EITC, among others, being superior)  Look in Greg Mankiw's macroeconomics textbook (the most popular macro book in the world, BTW).  It has a survey saying that 80% of economists agree that the minimum wage does more harm than good.

To be sure, I don't even think surveying ALL economists is relevant.  If you are absolutely serious about the minimum wage at the highest academic level possible, then survey labor economists...that is, the guys who study the labor market.  You will find that they do not like the wage hike.  David Card.

Note: Chicos I quoted you, but am speaking in general

[Eldon]

I'm not as smart as most of you guys on Scoop and my experience veered away from finance but when I look at raising the minimum wage I can't help but wonder if you are paying each person in a shift over $10 plus benefits and Social Security, etc. how many burgers do you have to move per hour to pay employees, insurance ,supplies, utilities and debt service  before you turn a profit?

Exactly.  Eventually you get this


If the minimum wage continues to increase, the guy back there pouring the salt on the fries will also be replaced by a robot.  Worse yet, there is a threshold where it will be more profitable to higher an almost all robot crew and the real kicker is that the engineers who are building these robots are not doing other important things like building clean air technology for the EU (sup Keefe).  In other words, there is a high opportunity costs to have our engineers building burger-flipping robots.

Finally, we rob low-income people from valuable work experience.  Many of these people went to public schools or dropped out of school altogether.  Often times, the only way that they can prove themselves as a reliable person is to get a job, keep it, and advance.  The advent of these machines, prompted by an arbitrary increase in the price of labor, precludes that possibility.  You end up doing more harm than good.

I want to help the poor.  They spend a bigger fraction of their income than rich people do.  The aggregate economy could use spending.  But the minimum wage is the most inefficient way to achieve that goal.

[ChicosBailBonds]

Exactly.  Eventually you get this


If the minimum wage continues to increase, the guy back there pouring the salt on the fries will also be replaced by a robot.  Worse yet, there is a threshold where it will be more profitable to higher an almost all robot crew and the real kicker is that the engineers who are building these robots are not doing other important things like building clean air technology for the EU (sup Keefe).  In other words, there is a high opportunity costs to have our engineers building burger-flipping robots.

Finally, we rob low-income people from valuable work experience.  Many of these people went to public schools or dropped out of school altogether.  Often times, the only way that they can prove themselves as a reliable person is to get a job, keep it, and advance.  The advent of these machines, prompted by an arbitrary increase in the price of labor, precludes that possibility.  You end up doing more harm than good.

I want to help the poor.  They spend a bigger fraction of their income than rich people do.  The aggregate economy could use spending.  But the minimum wage is the most inefficient way to achieve that goal.

BINGO....but they just don't get it.  Sigh

[ChicosBailBonds]

I would, for one, welcome our new robot overlords

You might even fall in love with them

http://www.gmanetwork.com/news/story/375028/scitech/technology/robot-sex-workers-may-be-commonplace-by-2025-pew-research


All I ask, have them learn to drive a little better and avoid hitting the dog (allegedly)

http://www.businessinsider.com/google-street-view-car-hits-a-dog-in-chile-2014-8