Do me a favor and let me bounce this off you. I just finished reading "Rise of the Robots" by Martin Ford. Though not likely to win a Pulitzer Prize, the eBook edition of "Rise of the Robots" leaves nothing to be desired. It is well-researched, fully indexed (like mine) and includes informative graphs.
Big industry and major governments have long told us that automation will replace low-paying, unskilled jobs with better paying and less boring jobs. As nations embrace new technologies, the average wage and standard-of-living of its workforce will rise in tandem.
This mantra was followed according to script from the end of WW2 to 1973, which coincides with the Arab Oil Embargo. Since 1973 the US productivity has continued to rise, but worker compensation has gradually fallen behind. Since 2008, worker compensation has been flat, even though corporation have garnered greater profits. Their profit margins have come from cost-cutting, not from increased sales.
The fact is automation is good for producers, but it doesn't spin off wealth for buyers who are still being laid off and replaced with machines. Even if you grant the remaining workforce higher wages, it doesn't make up for the dwindling numbers. You have plenty of goods for sale but not enough buyers. Neither Wall Street nor the Fed can jumpstart the economy without pent-up consumer demand. There just aren't enough Golden Parachutes to empty the shelves at your local Walmart.
Mr. Ford points out that corporations are repatriating their overseas branch plants. Even ultracheap labor can't compete with robots that work 24/7 and never complain. Donald Trump and Cruz talk a lot about Mexican wetbacks stealing American jobs. They don't say peep about InfoTech companies outsourcing their helpdesks and call centers to Asian eager beavers. But even cut-rate labor can't compete with Microsoft's robo-chatters. If the paperless society ever gets off its butt, 90% of the white-collar slots will go the way of Tesla's assembly-line grunts.
I believe the trend toward automation keeps the US dollar strong. Think about it, the DOT-COM debacle of 2000 threw the country back into deficit spending. Then W. Bush started Gulf War 2, and his financial wizards convinced Wall Street to play a shell game and to juggle the colored balls. They did so until the high tides of debt swamped their dinghy in 2008. They blamed it on 1st-time home buyers. Bullshit!
When Obama handed Wall Street a trillion dollars to cover their losses, I thought the US dollar would sink to the bottom of the swamp. It didn't. Instead, small nations, which had jumped on the bandwagon of cheap money, got caught with their pants down. US dollar is stronger than ever. The only problem is that corporation don't have enough domestic buyers for their crap; they need to sell stuff to the Chinese and Indians.
The truth is the US can afford to subsidize its farmers, even pay them to keep their fields farrow. The US can afford to subsidize its cotton growers and even pay Brazilian growers compo. The US can donate a trillion dollars to Wall Street, so the financial whizzes can bet like crazy without worrying about losses. Oddly enough, the US cannot or won't give its wage earners a decent wage. Whenever they get a raise, inflation gobbles it up. Is it any wonder there aren't enough Christmas shoppers? Is it any wonder that the electorate is worried and distrustful of government?
Mr. Ford proposes a minimum income for all citizens. Everyone would get (let's say) $12,000 in $1,000 per month installments. Any income citizens made beyond $12,000 would be added to the basic income. They could make an extra $3,000 tax free. Earnings above $15,000 would be taxed at 50% flat rate. Married couples could claim $30,000 per year tax free, but they'd have to earn $6,000 above their basic incomes. Mr. Ford talks a lot about incentives. Personally I think if governments awarded merit badges to overachievers that would be incentive enough. Workaholics and genius innovators don't care what they earn; they just want recognition for their efforts.
If the US threw out all its subsidies for Wall Street crap shooters, for cotton growers, for small-time farmers, for forestry conglomerates, for steel producers, for car manufacturers, for oil and gas corporations, for bandit drug producers (I mean biotechs as well as illicit drug czars), and so on... Then the government would have plenty of cash to pay the universal Basic Income for all citizens.
As a stop-gap measure, the next government could double the minimum wage and send the executives of Exon-Mobile to Iran as special ambassadors. Just don't give them the return airfare.
