America sits at the precipice of a crisis.
Automation has resulted in significant job losses — 47 perent of existing American jobs remain at high risk of being lost in the future. And at least some voters may have been reacting to automation in casting their ballots for Donald Trump in 2016. Yet, with the American politerati fixated on the theatrics of the Trump presidency, voters could be forgiven for not realizing that automation-induced unemployment is such an existential threat to the country’s well-being.
As a physician, I am frequently reminded of the potential of emerging technologies to wreak havoc on American society. I routinely see patients in clinic whose jobs have been automated away — former checkout cashiers, factory employees, and warehouse workers. Many of them have not returned to the workforce.
Unfortunately, governments at all levels in the United States have been slow to respond to the challenge of automation-induced unemployment. This is worrisome. Not only does unemployment obviously entail the loss of financial certainty, but it also damages the health of affected workers.
The traumatic loss of identity that comes with losing one’s job can have profound and long-lasting consequences. Workers who lose their jobs experience poorer mental health, higher rates of substance abuse and increased mortality. Unemployed workers are also more likely to commit suicide.
As artificial intelligence matures in the coming years, the pace of automation is likely to increase. Governments must focus more on developing proposals to protect the financial security and health of American workers whose jobs fall prey to technology. A central goal should be to minimize periods of unemployment.
But of the 21 individuals running for president, only Andrew Yang has made automation a focus of his campaign. His signature” freedom dividend,” a form of universal basic income (UBI), would guarantee all American citizens a monthly $1,000 payment to help them adapt to technological change. UBI, which would undoubtedly have many benefits, may one day ultimately prove to be a part of the solution to the automation crisis in America.
But there’s a problem with Yang’s plan. With an annual price tag of nearly $3 trillion, it is not likely to be adopted by an incrementalist American Congress anytime soon. Given that America’s displaced workers are suffering now, a feasible alternative is needed in the near future.
Fortunately, such an option may exist. For years, America has had a limited wage insurance program. The Alternative Trade Adjustment Assistance program helps replace the lost wages of older workers who are displaced by trade. As it stands, displaced workers lose unemployment benefits if they accept another job, even if it pays less than the job that was lost. In the process, these benefits may act as a deterrent against reestablishing employment for some workers. Expanding wage insurance to all Americans would combat this problem by increasing the financial benefits of working, thus minimizing periods of unemployment and providing workers with some degree of financial security.
Former President Barack Obama proposed such a plan in 2016. Under his proposal, an expanded wage insurance program would benefit displaced workers who had spent at least three years at their former jobs and whose new, less lucrative positions paid less than $50,000 annually. The program would replace up to half of the difference in wages between the two jobs, up to a maximum of $10,000, for up to two years.
In contrast to UBI, expanding wage insurance would be affordable. While the costs of such a program depend on the precise details, they are likely to be similar to the modest nationwide costs of unemployment insurance in 2018.
Most importantly, expanding wage insurance might actually stand a chance of enactment at the federal level. Nearly all of the states most vulnerable to automation voted Republican in the 2016 presidential election, and Democrats consistently profess their commitment to protecting and improving the welfare of American workers. While the possibility of impeachment and the looming presidential election are likely to consume Washington’s attention over the next year, there may be some room for the parties to compromise on this issue after the results of the 2020 presidential election are known.
UBI is a good idea, but it is enormously expensive and does not yet enjoy the political support necessary for its implementation. Wage insurance, on the other hand, would be more affordable and may stand a chance of enactment at the federal level. An expansion of the United States’ existing wage insurance program would also be easier to implement than UBI and would thus help protect American workers sooner. Our presidential candidates should spend more time talking about it.
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