Re: Universal Basic Income
Posted: Tue Jul 16, 2019 12:48 pm
Agree measurement would be incredibly difficult.
From a macroeconomics point of view, the theory (as far as I know of the very basics) should be very clear, though. Essentially there is no "government intervention" and there is a "free market" of labor after some barriers to entry (difficult journey with smugglers, etc.), some kind of fake documentation. So the normal forces of supply and demand apply. Macro indicators like GDP and CPI are probably still very, very reliable as far as seeing how the overall economy is doing. Micro indicators at the firm level should also still be extremely reliable. It's the individual worker picture that isn't so clear because it varies so much and hence we have such disparate views and solutions. But with very low unemployment, it doesn't seem unreasonable to say that someone didn't exactly hop a fence to steal "your" fruit picking manual labor job that you desperately wanted. It also doesn't seem like someone hopped a fence to steal "your" amazing high tech manufacturing job making iPhones (because these aren't able to be made here...)
If we stay at the macro level, we know Japan has very slow GDP growth. Japan has little to no immigration and a greying population, which are some of the usually cited factors. There aren't enough younger workers entering the work force to contribute to faster growth. GDP growth in 2017 was about 1.7%. Vs 2.3% in USA and 6.9% in China (China stats may be off due to various reasons). China has been growing fast as it underwent an "industrial revolution" and a "4th industrial revolution" at the same time while also becoming the factory floor for virtually the entire world, so of course its growth has been faster. How does the USA grow faster? Part of the reason is having enough labor, part of the reason is faster adaptation (lots of new technologies introduced and adopted), part of it is the outsourcing/offshoring (cheaper labor, cheaper COGS), part of it is automation (cheaper and much higher productivity), part of it is the removal of "fat" of outdated paper pushing jobs and middle management "re-engineered" and rationalized away (much to the dismay and alarm of Millenials if those managers were their Boomer parents).
The reality is there is a lot going on, so coming back to 1) blaming immigrants or 2) blaming automation is just not a very good explanation from an economics point of view. From a politics point of view, someone somewhere clearly thinks harping on some simpler marketing message must be worth something to some bloc of voters. I'd prefer if voters understood Yang's positions, but I doubt it. Even if they did, like people pointed out above, it's not really so clear that giving everyone 12k extra makes much sense. We can study that to some extent from the tax cuts that have been done (didn't put 12k in everyone's pockets evenly distributed, but did probably help some people disproportionately tilted more toward higher income folks). As far as just simplistically blaming immigrants (and confusing people on immigration vs. illegal immigration), that's even worse as it's just trying to use racially divisive rhetoric with no clear underlying solution - so it's rhetoric for possible political gain, not to try to economically help anyone who could maybe use the help.
From a macroeconomics point of view, the theory (as far as I know of the very basics) should be very clear, though. Essentially there is no "government intervention" and there is a "free market" of labor after some barriers to entry (difficult journey with smugglers, etc.), some kind of fake documentation. So the normal forces of supply and demand apply. Macro indicators like GDP and CPI are probably still very, very reliable as far as seeing how the overall economy is doing. Micro indicators at the firm level should also still be extremely reliable. It's the individual worker picture that isn't so clear because it varies so much and hence we have such disparate views and solutions. But with very low unemployment, it doesn't seem unreasonable to say that someone didn't exactly hop a fence to steal "your" fruit picking manual labor job that you desperately wanted. It also doesn't seem like someone hopped a fence to steal "your" amazing high tech manufacturing job making iPhones (because these aren't able to be made here...)
If we stay at the macro level, we know Japan has very slow GDP growth. Japan has little to no immigration and a greying population, which are some of the usually cited factors. There aren't enough younger workers entering the work force to contribute to faster growth. GDP growth in 2017 was about 1.7%. Vs 2.3% in USA and 6.9% in China (China stats may be off due to various reasons). China has been growing fast as it underwent an "industrial revolution" and a "4th industrial revolution" at the same time while also becoming the factory floor for virtually the entire world, so of course its growth has been faster. How does the USA grow faster? Part of the reason is having enough labor, part of the reason is faster adaptation (lots of new technologies introduced and adopted), part of it is the outsourcing/offshoring (cheaper labor, cheaper COGS), part of it is automation (cheaper and much higher productivity), part of it is the removal of "fat" of outdated paper pushing jobs and middle management "re-engineered" and rationalized away (much to the dismay and alarm of Millenials if those managers were their Boomer parents).
The reality is there is a lot going on, so coming back to 1) blaming immigrants or 2) blaming automation is just not a very good explanation from an economics point of view. From a politics point of view, someone somewhere clearly thinks harping on some simpler marketing message must be worth something to some bloc of voters. I'd prefer if voters understood Yang's positions, but I doubt it. Even if they did, like people pointed out above, it's not really so clear that giving everyone 12k extra makes much sense. We can study that to some extent from the tax cuts that have been done (didn't put 12k in everyone's pockets evenly distributed, but did probably help some people disproportionately tilted more toward higher income folks). As far as just simplistically blaming immigrants (and confusing people on immigration vs. illegal immigration), that's even worse as it's just trying to use racially divisive rhetoric with no clear underlying solution - so it's rhetoric for possible political gain, not to try to economically help anyone who could maybe use the help.