Robots are Taking Over the World (ubi part 3)

Our world is becoming increasingly automated, with robots quickly becoming a part of our everyday lives. Although automation may seem like a good thing, it's important to note that it brings with it many other consequences on the economy.

Between 2000 and 2010, automation eliminated 6 million jobs from the manufacturing industry. Now, automation is on the rise again. A study by the McKinsey Institute finds that as many as 375 million workers globally will need to completely switch industries and learn a new set of skills in order to find new employment by the year 2030 because their previous positions will have been automated. Further, the McKinsey source writes that 47% of jobs in the United States are at risk of being automated by 2030.

What this new wave of automation teaches us is that the labor market is perpetually changing. When considering what industry to go into in the future, it's important to weigh the opportunity costs of automation as well. After all, it wouldn't make logical sense to study and begin work in an industry that will most likely be taken over by robots soon.

This results in labor-intense and busy work positions decreasing, as those are the jobs most likely to be automated. In fact, a common analysis finds that any mental task a human could complete in less than a second will most likely be automated in the future. As we as high school students near the time of our lives where we enter the job market, it's crucial to keep in mind the looming proximity of automation and how it will affect our jobs in the future.


https://qz.com/1140956/automation-may-require-as-many-as-375-million-people-to-find-new-jobs-by-2030/
https://medium.com/age-of-awareness/universal-basic-income-is-an-inevitable-part-of-our-automated-future-3cc181d4778d
https://www.smartdatacollective.com/7-jobs-humans-can-do-better-than-robots-and-ai/
 

How does a Universal Basic Income affect wages?

There has been a lot of hype around the topic of a universal basic income lately, and for good reason too. A free thousand dollars every week is an appealing number and sounds like an extremely beneficial program. However, such a shift in the economy will undoubtedly bring with it a slew of consequences, one of the most controversial of which is whether working wages will go up or down.

On one hand, the argument is posed that by removing their desperation for income, a UBI would give workers the ability to decline job opportunities that pay poorly, which would cause wages to rise. The economy depends on money to circulate in a number of ways, the most important among these are consumption and investment (Stollery). Essentially, the demand for work will go down with a UBI, which forces employers to offer more money in order to hire workers.

However, the other side argues that wages will actually decrease with a UBI. An empirical example comes from Finland, where a UBI experiment that was run revealed that an unconditional income caused wages to decrease by 21 Euros (Howgego). The argument is that since working for income with a UBI in place would be making "pocket money" on top of the subsidized money that pays for essentials, people will be more inclined to accept lower paying jobs because the extra income is a want, not a necessity.

With strong arguments for both sides, it's impossible to conclude which of the two results will occur when and if a universal basic income is implemented. However, the potential of both is still an important factor to consider when deciding whether or not to implement a UBI (or perhaps, whether or not to vote for Yang in 2020).

Sources:
https://medium.com/age-of-awareness/universal-basic-income-is-an-inevitable-part-of-our-automated-future-3cc181d4778d
https://www.newscientist.com/article/2193136-universal-income-study-finds-money-for-nothing-wont-make-us-work-less/

 

Coronavirus: the mask panic

The coronavirus outbreak which was first reported in January shows few signs of slowing. As of February 6th, there have been more than 28,000 cases in China, 45 cases in Japan, 30 cases in Singapore, over 20 in Thailand, Hong Kong, and South Korea, and even 12 cases in the United States. More and more people are being diagnosed every day, and the demand for protective face masks have been on the rise. However, because many people are unable to return to work, the supply and production of the masks are far below the demand.

In many Asian countries, the government has taken measures to try to ensure that the prices of the masks do not increase and is available to as many people as possible. For example, in Taiwan, the government has started a system where each person could only purchase 2 masks a week. They would be able to get the masks at pharmacies and hospitals based on the number of their medical card. This policy occurred because people were willing to go to automatic dispensaries which charged increased prices and encouraged hoarding. The worry is that by hoarding masks, those who actually need it (medical professionals, elderly, workers in crowded areas) would not be able to get it.

This shortage has become apparent all over the world. Even in the United States, online purchases of masks are also severely limited. How should the world regulate hoarding and combat facemask shortages? Should the government even be involved?

Hui, Mary. “The Scramble for Masks amid the Coronavirus Outbreak Is a Crash Course in Econ 101.” Quartz, Quartz, 4 Feb. 2020, qz.com/1793749/wuhan-coronavirus-mask-shortage-illustrates-basic-economic-theory/.
https://previews.123rf.com/images/kongvector/kongvector1906/kongvector190603389/124797384-silent-surgical-mask-in-a-cartoon-wallet.jpg

How I am Inevitably Contributing to the Globalization Crisis on the Robotics Team

A subsystem on this year's robot: a "climbing" gearbox with a disc brake (one you could find at your local scooter shop). This gearbox alone will require seven parts from out-of-house manufacturers.

When I was talking to one of our robotics team's mentors the other day, he brought up the idea of globalization. This particular mentor works in a machine shop that manufactures computer boards for local technology companies as well as doing other odd jobs. In a previous blog post, I recommended machining as a “future-proof” job that does not require a bachelor's degree. However, after a conversation I had with this mentor last night, I realized that I should rethink my stance.

“We used to have twelve engineers in the house that would set up CAM files ten years ago,” he had said, “Now, we have one.” For those who don’t know, CAM is basically a set of instructions that a machine follows in order to machine parts. CAM isn’t easy to do. There are a plethora of certificates that one can get at the associate's degree level in order to “certify” oneself for particular machines. However, although CAM is a learned skill, it is a skill that can be easily outsourced.

Tonight, I will send out over twenty different aluminum parts for our robot to Beam On Technology, but the files will not actually be read by someone in the United States. The files will be sent to India for outsourcing. Since CAM-creation software is something anyone can download on their computer with a license, it becomes more resource-efficient for a manufacturing firm to pay twelve engineers from India to create the CAM programs. Then, the United States’ machinists can run the CAM programs on Beam On’s machines.

I thought this was particularly interesting because it reminded me of our in-class documentary on globalization. Obviously, the opportunity cost of keeping United States engineers in house create code that could easily be outsourced outweighs the benefits of outsourcing them. Lower wages mean that the company can exert more resources on other endeavors-- that’s the basic economic principle. With the rise of the internet came the ease of global communication. Files that once had to be transferred over the wire could now be transferred in a matter of seconds. Outsourcing these things makes sense.

But what is the cost? United States’ jobs for sure. The United States’ Bureau of Labor predicts that mechanical engineering as a field will grow 4 percent in the coming decade. This is lower than many other engineering fields’ outlooks, probably because of the same reason Beam On’s employees experienced. With the rise of licensable CAD and CAM software, mechanical and manufacturing engineers are finding themselves being outsourced simply because wages in the United States are higher.

Obviously, I’m still going to send the parts out tonight. To me, the consumer, it does not matter who actually creates the CAM file. All that matters to me is getting the part in my hands in a timely fashion. That’s the thing about people. We’ll keep prioritizing our self-interests over the needs of others, even if our consumer habits create negative externalities.

I’ll be signing off now. I still have more part files to create.

Works Cited:

“Mechanical Engineers : Occupational Outlook Handbook.” U.S. Bureau of Labor Statistics, U.S. Bureau of Labor Statistics, 4 Sept. 2019, www.bls.gov/ooh/architecture-and-engineering/mechanical-engineers.htm.

Oil Spills and Negative Externalities

April 20, 2010. The BP’s oil drill exploded, leading to the pollution of the gulf. One of the largest environmental disasters seen by the U.S, Deepwater Horizon and the accident that occured has left its mark on the world. From an economic standpoint, the vast environmental risks taken through drilling did not beat the marginal benefits of opprotunity. The economic benefits that come from oil drilling help the economy in many ways without a doubt. However, when the explosion occurred, the BP was certainly not the one that met direct suffering. 

The economy was greatly impacted as the fishing injury met with polluted seas and dying fish. Marine wildlife were dying and getting sick, infecting the entire food chain, damaging ecosystems. These spills also have damaging effects on human health. The humans, animals, and other wildlife impacted by these oil spills had no part in the oil drilling. This is called a negative externality, a third party being negatively impacted. This is a common occurrence in the economy as corporations fail to consider, or consider but ignore, the risks of negative impacts associated with their possible gains. 

Works Cited

https://www.britannica.com/event/Deepwater-Horizon-oil-spill

https://response.restoration.noaa.gov/oil-and-chemical-spills/oil-spills/how-oil-harms-animals-and-plants-marine-environments.html

Globalization

With a growth in global interactions, an important thing for the US to consider is balance. With technological improvements and changing political perspectives, global communication can be a very helpful tool in bettering our economy and affairs. Countries who have historically distanced themselves from globalization, like Japan, have often struggled economically. However, their concern being keeping their culture and traditions consistent, and avoiding “americanization” has been successful through keeping things traditional. 

Pros:

• Technological Innovations: Being able to interact can connect many great minds and ideas to further our advances globally. Less collectively, the increased competition also sparks new innovations. 
• Improved living standards: these innovations lead to higher living standards, less poverty, easier communication, and assistance to developing nations.
• Lowered Prices: Cost reductions have made living around the world cheaper
• Connection: Culture is more easily exchanged, from movies, music, art, food.

Cons:

• Loss of identity: the challenge Japan avoided, was losing the identity of the country with the introduction of a more connected world. 

• Interdependence: Depending on countries could lead to national or global instabilities. 
• National Sovereignty: Some see globalization as a threat to sovereignty. Some belief more focus should be placed domestically. 
• Equity Distribution: Unfairly skewed towards richer developed countries, particularly the west. 

With the increase in innovations, globalization is inevitable, with that new challenges are faced. However, countries are also benefiting from this in many ways. 

Works Cited

https://www.thebalance.com/globalization-and-its-impact-on-economic-growth-1978843

https://velocityglobal.com/blog/globalization-benefits-and-challenges/

There is no such thing as a free [blank]

In 2004, Oprah Winfrey gave her audience of 276 each a new Pontiac G-6 Sedan. It came out of the advertising budget for the G-6, meant as a replacement for the Pontiac Grand Am. Good deal, right?

However, many people in the audience, who Winfrey specifically selected as they were in desperate need of a car, turned it down, opting instead to sell the $28,500 "gift". This phenomena isn't uncommon. Many shows such as "The Price Is Right" or "Jeopardy" oftentimes see contestants win a car, take a picture, then immediately sell the car. The reason? Taxes.

Even with Pontiac offering to pay the licensing and state taxes for their cars, contestants still had to pay around $7,000 in Federal taxes and registration if they wanted to keep their cars. Considering that many of the audience members were "in desperate need of a car", most didn't have the spare $7,000 in their bank accounts. Even if they did sell the car, they would still end up $20,000 ahead.

Normally, the donee is responsible for paying the "gift tax" (only if you give away more than $15,000 in a year). However, Oprah's cars aren't "gifts" in the eyes of the IRS, instead they are considered "prizes" as the audience members essentially "won" a car. Some shows managed to get around this issue by including enough cash in the car or alongside the prize to cover the tax(for both the car and the cash). Oprah herself learned from her mistakes, and when she gave her audience members an all expenses paid trip to Australia, she included taxes as well as a CPA to avoid repeating the issue.

While this advertising stunt did prove successful, leading to the promotion making its way onto the Top 25 Oprah's show moments, Pontiac as a whole did not. The branch of General Motors was discontinued only 4 short years later.

All this goes to show that there really is no such thing as a free lunch, car, or trip to Australia.

https://www.forbes.com/sites/kellyphillipserb/2016/09/13/a-look-back-at-oprahs-ultimate-car-giveaway/#322b7ae360ff

https://mynorthwest.com/24363/tacoma-woman-wins-biggest-price-is-right-prize-but-faces-huge-tax-bill/?