(upbeat music)
- Welcome to Ethics Matter.
I'm Stephanie Sy.
Our guest here in the
Carnegie Council Studio
is Andrew Yang.
He is an entrepreneur
and the founder
of Venture for America,
a fellowship program
that's given young
entrepreneurs the
opportunity to start
businesses and create
jobs in American cities.
He's also an author, and his
most recent book is called
The War on Normal People:
The Truth About America's
Disappearing Jobs
and Why Universal Basic
Income Is Our Future.
It is jobs that Andrew
Yang clearly cares about.
Andrew, thank you
first of all, so much,
for being here.
The reason you have written
this book about universal
basic income is because
you worry about automation.
When I read about you, a lot
of times it was associated
with this concern that there
would be some sort of robot
apocalypse, so let's
start there first.
Are you worried that robots
are going to take over?
- I am, but it's not
like walking robots
are going to come in and replace
you and me in the studio.
It's actually the case that
robots started arriving
in the American economy around
2000 and started displacing
large numbers of
manufacturing workers from
then until now.
If you look at the numbers,
American manufacturing
workers went down from about
17 million to 12 million
between 2000 and 2015.
Of those five million jobs
lost, the vast majority,
80% were due to
robots and automation.
It's not that robots
are on the horizon,
they've actually been
here for a while.
The reason why I'm so
passionate about this is I
spent the last six years
in Detroit, Cleveland,
St. Louis, Baltimore, and
other cities that have
really experienced the
throes of automation over
the past couple of decades.
I worked with hundreds
of entrepreneurs in these
regions trying to
create new jobs,
and I learned a number of
things over those years.
One was the impact of
automation on these communities.
It's been very, very negative.
You can see very large
numbers of distressed people
in these communities that
haven't found new opportunities.
The businesses that are
coming up typically do not
employ large numbers of
high school graduates.
They employ smaller numbers
of engineers and college
graduates very typically.
- It's the blue-collar
workers that have suffered.
We have been hearing,
definitely in this last
election cycle, that
that's globalization,
that's bad trade deals.
But you're saying that, based
on the statistics you've seen,
80% of manufacturing
jobs in 2000
were actually lost
to automation.
- Automation's a much bigger
driver of job displacement
than globalization and
certainly immigrants.
That's something the
American people, I believe,
are coming around to.
There was a recent
survey that showed 70%
of Americans believe that
technology, AI, software,
and all of these things are
going to eliminate many more
jobs than they are going
to create over the next 10
years, which is 100% correct.
They're right.
We're waking up to the reality.
We're right now on the
third or fourth inning
of the greatest technological
and economic shift that we've
ever experienced as a society.
It's the greatest
shift in human history.
- That shift, though, again
I take it back to the time
horizon starting from the
Industrial Revolution but
really in earnest in the
'60s and '70s with machines
replacing workers on
the assembly line.
What is different
about this time
that calls for
drastic solutions?
Is it AI and machine learning?
- Part of it and one of the
reasons I'm so passionate
about this is that if
you start digging into
the numbers, you see
that we are in the midst
of this process and
that our society
is not dealing
with it very well.
You see these
misleading numbers about
the unemployment rate
in the headline saying
it's 4.2%, it's
near-full employment.
Near-full employment,
not full-on employment.
Then you think, things must
be good in the labor market.
What that's masking is
that our labor force
participation rate is
down to a multi-decade low
of around 62.9%, which is
comparable to the rates
in El Salvador and the
Dominican Republic,
much lower than it has
been in past periods.
Ninety-five million
Americans are out
of the workforce and
aren't considered as part
of the unemployment rate,
including almost one out of five
in their prime working
age of 25 to 34.
There's a lot of weakness
that our headlines are not
digging into, and a
lot of that is driven
by this progression.
When people talk about
the Industrial Revolution,
I honestly get a little
bit frustrated because it
was a different transition.
It was much less dramatic.
It didn't affect
as many industries.
If you look at it, there
were actually widespread
protests and
problems that arose.
Labor unions came into
existence around 1886
in response to the
early industrialization.
- There was real
social instability.
Are you concerned about
social instability becoming
an issue with automation, or
do you think that is happening?
- If you look at the numbers,
it's definitely happening.
The suicide rate among
middle-aged white Americans
has surged to
unprecedented levels.
Our life expectancy as
a society has declined
for two straight years.
- There's the opioid crisis.
- Seven Americans die of
opioid overdoses every hour.
The social disintegration
is already clear.
It's just we're not paying
attention to it because our
government, instead of
putting up measurements that
we can all understand,
like life expectancy
declining-that's
shocking and terrible
in a developed country.
That's actually
almost unprecedented.
How is this happening?
Why?
Automation has been tearing
its way through the economy
and society already, and we
are coming apart at the seams.
Donald Trump in my opinion
is president today because
we automated away millions
of manufacturing jobs
in Michigan, Ohio, Pennsylvania,
which were essentially the
swing states he needed to win.
- But you don't hear of
Trump talking about that.
There's a lot more focus.
Why do you think there is
less political engagement
on this issue?
By the way, I forgot to
mention that you have
announced your candidacy
for president in 2020.
Why do you think there
hasn't been more political
engagement on this issue?
I don't know of any other
candidate that's made
universal basic income,
which by the way we're going
to get to, his platform.
- Well, one of the reasons
I'm running for president is
that leading up to this-I'm
the CEO of Venture for America.
My organization has helped
create thousands of jobs,
so I'm meeting with
senators, and governors,
the president, and other people.
With a couple of them,
I would say to them,
"According to what I'm seeing,
"we are automating
away millions of jobs,
"and it's about to get
much, much worse very fast."
I have dozens of friends
in Silicon Valley,
and they will tell you in
private that what they are
doing is going to get
rid of many, many jobs.
- I mean Mark Zuckerberg
and Elon Musk,
they've actually come
out in favor of--
- Universal basic income.
- some sort of universal
basic income because they know.
- They do know.
If you put them on a
panel, they might say,
"Some jobs will be created,
some will be destroyed,"
but they know that the
focus of their activities
is trying to save
companies money.
Most of the time that means
taking an activity that
humans are doing
and automating it.
The example that I talked
about in The New York Times
was truck driving.
The incentives to
automate truck driving
are $168 billion per year.
That's why we have
the smartest people
in the country working on
it because they know there's
a giant pot of gold.
That's the way our system works.
I saw that this was happening,
and I would talk to
these government leaders.
I would say, hey guys, this
seems to be the main problem.
It's driving all of
these other issues.
What are we going
to do about that?
I literally had
politicians say to me,
"We cannot talk about that."
The reason why they cannot
talk about it is because the
solutions are too dramatic,
and it makes them seem
extreme and alarmist.
What they'll do is
they'll talk about
education and re-training.
They will say, "We need to
re-train American workers
"for the jobs of the
future," which sounds great.
- Where are the jobs
going to come from?
- Exactly.
Well part of it too is
if you dig into my book
The War on Normal
People talks about this.
If you dig into the data
on the success rates
of government
re-training programs,
they're essentially
entirely ineffective;
there's almost no difference
in outcome between
a re-training group and
a not-re-trained group.
Another study had the
efficacy rate at about 37%,
which in some of those,
37% might have succeeded
without the program.
This is in instances when
the government is spending
thousands of dollars trying
to re-train the worker,
which is not going to be
the case most of the time.
Because one in 10
Americans works in retail,
30% of the malls
are going to close,
and it's not like
when a mall closes,
there will be government
re-trainers around saying,
"Hey you just lost your job."
Most Americans are not
going to go through
government-financed retraining.
Even when it is offered,
it doesn't work.
- Before we get into the
details of your universal
basic income plan, one
issue that I see right away
with it, in other words
giving people a monthly income
without conditions is it
doesn't seem to address
the problem you're describing
in the large, broader sense,
which is there are going to
be fewer jobs for humans.
How does it address an
evolving economy where
the top five companies
in the world by market
capitalization are all tech
companies that don't hire
nearly the number of workers
that AT&T did in the 1960s
when it was the largest company?
How does this really
address an evolving economy?
Or do you just have a
society where people don't
work and it's sort of a
Robin Hood economy in some
ways where you sort of take
and tax big tech that's using
automation and
redistribute to those that
aren't engineers and that
don't get a piece of that pie?
- This is where it
gets really deep,
human, and philosophical.
- Sorry.
I got there a little earlier
than you probably expected.
- No.
I got there too.
I was writing this book,
and I consider myself
sort of like a
practical economist type
but then you end up heading
to the human and philosophical
very quickly because you
realize, hey what should
people be doing if so using
the truck drivers as an example,
there are 3.5 million of them.
Number-one job in 29 states;
94%, male; average age, 49.
So you start imagining, okay.
Let's say we automate
significant numbers of those
jobs in the next 10 years.
What does the new
world look like?
It can be shocking
and frightening.
Because let's say that
transition goes poorly,
and then the ex-truckers
riot in large numbers
and block highways
with their trucks,
because a lot of them
own their trucks,
which is another problem.
The reason why our
politicians struggle so much
with this is that
there is no quick fix.
Universal basic income is a
huge part of the solution,
but it's only one facet of it.
The great thing about
universal basic income is
that it may allow us to
redefine work because right
now, we have this model of
work that essentially is
a subsistence model.
You should work to survive.
You must show up.
We'll pay you based upon
how much time you spend,
and you'll get enough, maybe.
There are actually very
few great things about this
entire technological shift,
but the one potential bright
spot is that it may
allow us to redefine
why we do what we do.
My platform has a
few main components.
Universal basic income is
one, but the second one,
which is as important,
is that we need
to change how we measure value.
GDP did not exist
as a measurement
until the Great Depression.
Then things were going so
badly that the government
was like, "We have to have
a measurement to see how
"things are going and
then try to improve it."
that's now a terrible
measurement for our society
because with automation
and software, and robots,
GDP can go to the moon
and more and more people
can be completely excluded
from that and left behind.
Instead of GDP, we should
be measuring things like
childhood success
rates, mental health,
freedom from substance abuse,
engagement with work
broadly defined,
proportion of elderly
in quality situations.
- One might put environmental
quality in that.
- Environmental sustainability.
Journalism, because
not everyone's here
in New York working
for organizations
that are still vibrant
journalistically.
In small towns
around the country,
there's actually no--
- We could have a whole
discussion just about that.
What you're describing is
what I have heard CEOs that
I've interviewed describe
as a triple bottom line.
It's a version of that.
It's a different way to measure,
but it's really quite
radical, Andrew,
what you're suggesting.
By introducing a
universal basic income,
you're really talking
about transforming society
and transforming the
way culture views value.
Where do you think we are
right now as a society
in accepting that?
I will say, what were
very academic discussions
on the Carnegie Council stage
about universal
basic income seem
to have gotten more and
more in the mainstream.
- Oh yeah.
- I mean are we getting there,
and what's propelling that?
- I'm where I am because
I believe that this is
inevitable and we
don't have a choice.
The sooner we get there, the
better off our society will be.
If we go too late, it's
actually catastrophic.
If we go too early, that
just gives us more time to
build the new institutions that
are necessary to complement
and get us through
this transition.
The truth is we are
the richest and most
technologically advanced
society in human history,
and we can easily afford $1,000
per American adult per month.
- I've heard that would
be 10 to 12% of GDP.
That's expensive.
- The great thing is that
every dollar goes into
the hands of an
American consumer,
and then the vast majority
is going to be spent
and circulated
through the economy.
- [Stephanie] It would
actually grow the economy,
that's the hope.
- Well, the Roosevelt Institute
tried to model it out,
and you probably saw this.
They found that universal
basic income at $1,000
a month, which is what I'm
proposing in my campaign,
which we've called
the Freedom Dividend,
would grow the economy
by 4.6 million jobs.
- $2.5 trillion by 2025.
- 2.5 trillion, yes!
- I pulled the information
from the left-leaning
Roosevelt Institution,
who is, to their credit,
doing a lot of research
on how this will happen.
- I want to say
it's common sense
that most Americans
are struggling.
If they got $1,000 a month,
what are they going to do?
They're going to spend
it in their town,
on their children, paying bills.
You can imagine Walmart, AT&T,
every major consumer
company, all of a sudden,
their consumers would
have more to spend.
That's where the
money is going to go.
It would clearly
grow the economy.
I've worked with
hundreds of entrepreneurs
around the country.
Entrepreneurs have
their heads up
and are trying to
solve problems.
They are often not people
that are desperately trying
to scramble to pay their
bills month to month.
If we implemented a
universal basic income,
it would be the
greatest catalyst for
entrepreneurship and
creativity we have ever seen.
They would create,
tens of thousands,
hundreds of thousands
of new businesses.
- Two questions, the
first being the downside,
some have said, is just
human psychology is whether
for a lot of people giving them
free money, $1,000 a month,
would take away their
incentive to work.
What's your explanation
for how we wouldn't end up
in a society that would
be less productive
and less innovative?
- I consider myself
a facts-driven or
data-driven person.
The data just does not show
a reduction in work hours
when you have income support,
either here in the U.S.
or Canada or in the
developing world.
In the U.S. when they
ran large-scale trials,
a slight reduction in
work hours for two groups:
Young mothers and teenagers
who stayed in school longer.
So universal basic
income of $1,000 a month,
it's not enough to prosper.
It's enough to take the edge
off of your need to survive,
but virtually no one is
going to look at that
and say, "Oh, I'm all set."
- But let me ask you
the other, I think,
really important question.
In your plan, how
would you pay for this?
- It's actually much
more affordable than
most people think.
The headline number
is about $2 trillion.
Our economy is
about $19 trillion,
so that seems like a lot.
But if you dig into the numbers,
you find that we're spending
about $500 billion right now
on income support in various
ways: In-Kind, food stamps,
welfare, housing, Social
Security Disability.
This would be overlapping,
so if someone's receiving
$700 in benefits right now,
then you go to them and say,
"You can keep your
current benefits or go to
"the Freedom Dividend to get
$1,000 a month free and clear."
- So they would have the option.
- They would have the option.
But, because we're already
spending $500 billion,
this thing is 25% paid for
before you even get started.
So, the big problem we're
facing as a society is that
more and more work is
being done by machines,
robots, AI, software.
Income tax is a terribly
inefficient way of actually
harvesting that
value for the public.
If you look at it,
who are going to be
the beneficiaries of this
transition to automation?
It's going to be large tech
companies who are excellent
at not paying a lot of tax.
- Very good at
offshore tax havens.
- Yeah, they just move it over
and say it all went
through Ireland.
Small tech companies,
which often not profitable,
and then if they
do get acquired,
it's maybe a one-time thing.
They might have to pay
acquisition at a certain
point, but even then it's
at a capital gains rate.
There's just not a lot
of money that's gonna be
coming to the public even as
more and more work is going
to be done by
robots and software.
That's what we need to change,
and that's the way we pay
for universal basic income.
The way we pay for it is we
implement a value-added tax,
which right now is in
practice in every other
industrialized country in
the world except for us.
And through a value added tax.
So Amazon now it's
43% of e-commerce,
largest market cap.
Jeff Bezos could be
the first trillionaire.
There are periods when they say,
"We didn't even make
any money this quarter,
"so no income tax," where
with a value-added tax,
they pay based on transaction,
and that's inescapable.
It's one reason why other
countries use it is that it
is a much more effective
way to get revenue.
If you're a self-driving
truck company,
you might not have many
humans making money,
so there's not much
income tax coming.
With a value-added tax,
we get our fair share.
A value-added tax would
generate between $700 billion
and $800 billion if we
were to implement at half
the European level.
The European average VAT is 20%.
Our economy is so vast that
if we added a VAT of 10%,
it would generate $700
billion to $800 billion.
That is my primary mechanism
to pay for the universal
basic income because
you have $500 billion
plus $800 billion with VAT.
Then you're at about
65% of the $2 trillion.
This is the beauty of
universal basic income.
We are already spending
hundreds of billions on
health care, incarceration,
homelessness,
all these services for
people that are falling
through the cracks.
Those expenses would go down
if these people were able to
stay out of the emergency room.
- Well that's interesting.
The Peterson Institute,
I was looking at some
of their research.
Apparently in the '70s
in Manitoba, Canada,
there was an experiment done
with several thousand people
that looked at
universal basic income.
There is some empirical
evidence of what happens.
I found it interesting that
once a universal income
was provided, there were
better outcomes when it came to
things like health
and education.
What's happening there?
- This is the most powerful
stuff of universal basic income,
it that it's very human.
Mincome in that Canadian
town you are describing,
what they found was that
hospital visits went down 9%.
They found that domestic
violence went down.
Mental health went up.
Children stayed
in school longer.
In another study
in North Carolina,
they actually found that
children's personalities
changed to become more
conscientious and agreeable,
which are both very
positive traits for academic
and professional success.
This is what we're talking
about at the human level.
Right now, do you know
what is really expensive?
Dysfunction.
People coming to the
emergency room and having
massive problems that we as
a society end up paying for
in various ways.
Functionality is actually
much less expensive.
We're going to get hundreds
of billions back from things
we're currently
spending on health care,
incarceration, and homelessness.
Then, as the economy grows
because we're putting money
in the hands of
American consumers,
we get 25% of the
growth back because
that's the ratio of revenue
to GDP growth in the U.S.
With a VAT of 10%, you
essentially pay for
$1,000 a month per American
adult in perpetuity.
- You bring up this
notion of improving lives
with economic security.
It reminds me that this show
is called Ethics Matter,
so we talk a lot about
what rights are and what
human rights are.
I feel like this country
is not in a place yet where
there is a sense that it's
government's responsibility
that everyone has
economic rights,
and environmental rights,
and economic security.
What do you think?
- I think America has been
very fortunate for a very
long time, but I think our
economy and society are
progressing to a point where
the absence of a government
point of view or action is
actually going to greatly
diminish individual
economic rights
and our quality of life, really.
If we just let this thing go,
we can all see what's
going to happen.
The value is just going
to get gathered up
in a relatively small
number of hands of people,
generally at the heads of
major technology companies,
and the people that work
in those organizations.
I'm friends with those people.
They are generally good people.
The thing that I think is
ridiculous is when people
imagine that it's somehow the
innovator's responsibility
to figure out all
of the downstream
economic and social impacts
of their innovations.
They have their heads
down just trying to make
the thing work.
It is our government's job
and our leaders' job to figure
out all of the downstream
effects and make
appropriate policies
and changes.
That's where we've fallen
asleep at the switch.
Our government has become very
backward and dysfunctional.
We've lost faith in it.
Over the last 50 years,
we have just been stuck
with this '60s-era bureaucracy,
having food fights from
decades ago, instead
of a government
that's appropriate to the
challenges of 2018 and 2020.
That's why I'm
running for president.
About universal basic income,
the social benefits, and
it was a lot of fun reading
the studies, some
of which you cited,
But I go through it
in my book in detail.
It's clear to me that
universal basic income would
improve the lives of
millions of Americans,
that we can easily afford it.
The thing most people
do not realize,
and I didn't realize
it until I dug into it,
we actually came
this close to passing
a universal basic
income in 1971.
Martin Luther King was for it.
- That was under Nixon.
- Nixon was for it.
A thousand economists
signed a letter
saying this would be great.
It passed the House
of Representatives.
Then it stalled in the
Senate because the Democrats
wanted more money.
It wasn't that
conservatives tanked it.
It was that Senate
Democrats thought
that it should be more generous.
It's not even very radical.
We came this close, and it's
been implemented in Alaska
for 25 years in essence
through the petroleum dividend.
- How do you change the
narrative around it being
a government handout that
will lead to a lazy society?
I can just see that's what
you're going to be up against.
- You're probably right.
- You said that you've
met with lawmakers
throughout your career.
How do you sell it?
- I'm actually very
confident that people are
over the welfare/handout
framing in large part
because the suffering
is so widespread.
The welfare framing was
often about the other.
It was like oh you're going
to give them the money.
- Now it's a lot of us.
- Yeah.
It's enough people now.
The most recent polling
shows that support for
universal basic income
is about 50-50 right now,
and it's just going
to go up from there.
- Andrew Yang, what an
interesting and fascinating
and, I think, relevant,
perspective you bring.
Thank you so much
for joining us.
- Thanks for having me.
It's been a pleasure.
(upbeat music)
- [Announcer] For
more on this program
and other Carnegie Ethics
Studio Productions,
visit carnegiecouncil.org.
There you can video
highlights, transcripts,
audio recordings, and
other multimedia resources
on global ethics.
This program is made possible
by the Carnegie Ethics Studio
and viewers like you.
