Tag: Unemployment

UBI and the Matrix

I’ve been asked in the past about my views on UBI, or universal basic income. This article does a pretty good job of summing up how UBI creates two classes of humanity. I would go further to say UBI takes a large portion of humanity out of the evolutionary process.

When you lose your job to a machine, you are forced to reinvent yourself and find a new way of providing for yourself in a world of limited resources. That’s why businesses are started in garages, why new things are invented, and why people go back and educate themselves in fields that matter to the progress of humanity.

I see it as the Matrix. For younger readers, the Matrix was a movie about a future age where robots have taken over the world and hooked every human into a computer that feeds off of their biomass energy while keeping them satiated with a false virtual reality.

In the Matrix you live in a fake reality, have everything you need, and meanwhile your body slowly is eaten up and decays. Outside of the Matrix life is difficult. You are fighting the very automation that has enslaved the rest of humanity. For a time the food isn’t as good. The living conditions aren’t as good. But you are free, innovative by necessity, and progressing humanity.

We’ve had UBI before. Instead of having a job, we had large populations who lived in provided homes, ate provided food, and performed tasks required by the free class of society. That was slavery. In my mind, UBI equates to slavery because it’s only a matter of time before the working class requires the UBI class to contribute for their government provided paycheck. That will usually come right about the time the Socialists get the difficult reminder that resources are not unlimited.

When the resources to provide UBI run out, the question usually comes down to whether people should be forced into labor camps or systematically starved. Just ask anyone anywhere socialism has actually been tried. When robots figure out how to solve the question of limited resources, then let’s give UBI a shot.


What Makes Up 4.6% Unemployment

The last time the unemployment rate was 4.6% was August, 2007.    Bush was President and Democrats had been in control of Congress for only 8 months.  By October, 2009 unemployment had hit 10%.

However, that number has been steadily dropping since then, falling below 5% for the first time of Obama’s Presidency in January, 2016.  Today, after adding only 178,000 jobs, the rate fell to 4.6% again.  In fact, monthly job growth has been anemic for 8 years while the unemployment rate has steadily fallen.

The reason economists have been cautious is that the drop in the unemployment rate has less to do with job growth and more to do with how many have given up looking for a job. The U-6 unemployment rate is only a measure of the percentage of workers in the market who are employed.  It doesn’t count anyone who is not working and not actively seeking work.

Since January, 2009 the number of employed workers in the United States has increased 11 million.  That is an increase of 8% over 8 years.  On the other hand, about 15 million have dropped out of the workforce since January, 2009.  That’s nearly a 19% increase in the permanently unemployed over 8 years.  4 million more have dropped out of the workforce over the last 8 years than have been hired.

But we are still growing, so that’s good, right?  New hires rose 178,000 in November. On average, they’ve grown about 135,000 a month under Obama. The economy needs a minimum of 145,000 new jobs a month just to keep up with population growth. On the other hand, an average of about 155,000 have dropped out of the labor force each month. No credible economist is cheering 4.6% unemployment this time because it only represents long term economic failure.