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  • ANNOUNCER: The following is a presentation of the ILR

  • School at Cornell University.

  • ILR, advancing the world of work.

  • LOUIS HYMAN: Income inequality is

  • one of the most pressing questions of our age.

  • And yet the institutions we have to fight that inequality

  • are failing all around us.

  • So says Andy Stern, author of Raising the Floor

  • and former president of the SEIU.

  • Having spent a lifetime in the union movement,

  • he came to believe that in fact unions could not provide

  • the middle-class life that they had in the postwar and that we

  • needed to move in the direction of a new policy--

  • the idea of the basic income.

  • Tonight, Andy will be talking with Steven Berkenfeld,

  • chairman of the Sierra Club and a managing

  • director of Barclays, about what kinds of opportunities

  • there are to reconfigure the rules of the game

  • to create a new kind of welfare state

  • for the 21st century that supports entrepreneurs

  • as much as anyone else.

  • This is the first in a series of talks

  • here at the Institute for Workplace Studies in New York

  • City, where we are researching the future of work,

  • understanding how new technologies and new business

  • models are transforming the economy around us today.

  • And now, Andy Stern and Steven Berkenfeld.

  • ANDY STERN: --the private sector,

  • when I was born, to 1 in 16 today,

  • I could not watch American workers keep working harder

  • and harder and not get a raise.

  • And my job as the leader of the nation's largest union

  • was to do something about it.

  • And it just didn't seem like working harder

  • was actually going to solve the problem.

  • And so I left to try to figure out,

  • you know, what does someone like me

  • who's committed his life to changing other people's life

  • do when everything you knew and everything you tried

  • was becoming more marginal, in terms of its impact?

  • And I began this journey.

  • And I spoke to lots of different people.

  • My most interesting discussion, other than Steven,

  • that really got me thinking-- because my original purpose

  • of talking to everybody was that only in Columbia University--

  • maybe Cornell, they can say this, too-- but all

  • the professorships in the business school

  • that are endowed, and they had a vacancy,

  • and they wanted to know how to fill it.

  • And the idea was, there must be something

  • around labor-market policy that we

  • could do that no other university was doing.

  • And they sent me out on this journey.

  • And I started by visiting a guy named Andy Grove.

  • Many of you know Andy Grove was the founder of Intel,

  • the creator of the chip.

  • And I met him, interestingly enough,

  • in this office that probably looked

  • like it had a single real-estate agent or accountant.

  • You know, I expect to see Andy Grove surrounded

  • by all his little minions, in a beautiful office,

  • in an executive suite in Intel.

  • And here he was in his little office.

  • And the name in the office was SARUS--

  • S-A-R-U-S. And my first question was, you know, Mr. Grove,

  • what is SARUS, thinking it must be some huge think tank or new

  • secret project.

  • And he said, oh--

  • Strategic Advisors R Us.

  • So I had to give myself a name, so I called it SARUS.

  • And we spent the time talking about his view of the future.

  • And he wrote this book called Only the Paranoid Survive.

  • And it basically was, what do you

  • do when you hit what he called a "strategic inflection point"?

  • And he wrote about a strategic inflexion point.

  • It's basically a turning point, a dramatic turning point,

  • for whether a company or a country.

  • He talked about how they appear slowly.

  • They only sometimes are viewed clearly in retrospect,

  • and denial is the first reaction.

  • And I would argue that's where we

  • are in America about the future of work, which I'll talk about

  • in a second.

  • And Andy Grove talked about how, when

  • he was the founder of Intel, he was with Gordon Moore.

  • The two of them were really the people that built the company.

  • And they were sitting around, because all

  • of a sudden the business they had built

  • was not working, because the Japanese were developing

  • a very different kind of chip.

  • And they didn't have the courage--

  • they thought they didn't have the courage-- to really go back

  • to the board of directors and say,

  • we really are not in the right business.

  • We really have to change things.

  • And so they were sitting around.

  • And Gordon says to Andy, well, what

  • do you think the-- they're going to fire us.

  • I mean, they should fire us.

  • We're about to lose money.

  • We don't have a new product.

  • What are new guys going to do?

  • They said, they're going to scrap everything we're doing,

  • and they're going to put all their money into the new chip

  • that they knew had a huge potential.

  • And Andy Grove said, well, why don't we just do that?

  • And they did, and they rebuilt the country,

  • and he wrote a book, Only the Paranoid Survive.

  • And, somewhat, that should be the wish of America,

  • that maybe we could be a little more paranoid.

  • We might do a little better surviving.

  • But, along the way, I learned a lot of things

  • about today's job market, which is where I want to start.

  • So, if you ask most Americans economically

  • what they think about the economy

  • and what they would name the country, the USA,

  • they would say it's the United States of Anxiety.

  • Because people are extraordinarily anxious

  • and scared about the future.

  • Our election, I think, has indications

  • that reinforce that.

  • But 21% of Americans-- only 21%, at a time when the unemployment

  • rate is close to lower than 5%, lower than 4%, where the stock

  • market is up-- only 21% of Americans

  • say the economy is either excellent or very good.

  • 47% of Americans, think about this,

  • don't have $400 in case of an emergency.

  • So that's, one out of two people in America don't have $400.

  • If they have an insurance bill, they get hurt,

  • their heater breaks down, they don't have the money

  • to fix their own house.

  • We now know that 50%, 7%, of Americans

  • don't think the American dream, which is, their children will

  • do better than they do.

  • So you can understand why people are anxious.

  • 23% of low-skilled men in this country

  • have been unemployed for 12 months.

  • We have the lowest labor-force participation

  • in American history.

  • There are more men on disability than working

  • in manufacturing, today.

  • And Larry Summers will tell you that, one generation from now,

  • one quarter of all men 25 to 54 will

  • be unemployed at any one time.

  • So, if you have no hope for the future,

  • if you haven't gotten a raise for 20 years,

  • if all of a sudden you're seeing a world around you

  • completely change, it's no wonder that people are anxious.

  • And the way that it sort of plays out economically--

  • for the economists, like the dean, in the room,

  • we've got to throw in some facts, here--

  • is, if you look at the 20th-century economy,

  • the market economy, people talked about four things

  • and used one word.

  • They talked about productivity increase,

  • wage increase, job increase, and they called it "growth."

  • So when a politician said "The economy is growing,"

  • what they really meant is the economy is being more

  • productive, the economy is creating jobs,

  • and the economy is creating wages.

  • And it was great, because all politicians had to say was,

  • let's just grow the economy and life will be good.

  • And it was.

  • And then, all of a sudden, things changed.

  • And you can see the blue and that light silver line

  • are GDP growth and productivity growth.

  • So they-- I don't think I have a laser pointer, here.

  • But the two top lines, they keep growing.

  • But all of a sudden, wages--

  • which we now know, after 20 years,

  • only looking back because of denial,

  • that American workers haven't gotten a raise, now,

  • for 20 years--

  • we admit to that fact very late but acknowledge that it's true.

  • We won't admit yet to the fact that job growth

  • has fallen off the growth and productivity train.

  • So now in America you can have economic growth, GDP growth,

  • you can have productivity growth,

  • and no job growth or no wage growth.

  • That is the 21st-century economy.

  • Every single new job created since 2007

  • has been in what we would call "alternative employment."

  • The 40 hour a week employer-managed job of myself,

  • my father, my grandfather, the people in our union,

  • is not way the future of work is going.

  • And here's the other sad fact of what's happened since 2009.

  • So the red lines, the middle line is middle-class jobs,

  • midwage occupations.

  • And on the left-hand side of the chart are the jobs

  • we lost when the crash occurred.

  • So we lost a lot of jobs in the recession, in the middle class,

  • a certain amount in the lower, and a certain amount

  • in the higher.

  • But look what happens after the recovery occurred.

  • The economy stops really producing or replacing

  • the middle-class jobs it was losing

  • and now begins to start the process of replacing

  • middle- and high-wage jobs with low-wage jobs.

  • That trend has now continued.

  • 80% of all the new jobs created are low-wage jobs, in America.

  • Middle class is being hollowed out.

  • Lots of people are now writing about it.

  • Another kind of fact that we want to believe

  • is just a moment in history.

  • But, as those charts before said, it's true.

  • The second thing we now know-- and you're

  • going to speak about it next week,

  • and I won't talk about it too much, because Sarah

  • and the Upwork people know a lot more than I do.

  • But the point is, the jobs that are being created

  • are in alternative employment, contingent,

  • part-time-gig economy, staffing companies, et cetera.

  • Average worker's tenure in job is 4.4 years.

  • My son's going to have 9 to 12 jobs, like most kids his age,

  • by the time he's 35.

  • I had one by the time I was 35.

  • I had one, basically, by the time I retired.

  • And now we see 10 to 42 percent of million people

  • work outside the traditional 9-to-5 model.

  • 30% of the people in the workforce

  • work in some kind of freelance, independent contractor.

  • And Carl Camden, the CEO of Kelly, says it'll go to 50%.

  • So that's a really a different economy

  • than my father, my grandfather, and my economy.

  • And that's the economy of our kids and our grandkids.

  • So, when we begin to think about the future,

  • we have to take into account, what is the current event

  • and not have a mythology that we're still

  • living in the 1950s and 1960s, when

  • a rising tide of economic growth raised all boats, as opposed

  • to now where it's only raising the luxury liner

  • and the rest of the boats are either sinking

  • or in pretty rocky waters, as far as that's concerned.

  • So that would be an interesting observation

  • about where we are today.

  • And lots of people have different ideas

  • of what we want to do.

  • We heard the debate last night.

  • People have their own ideas.

  • Here's the thing that kind of drove me

  • into my thought process--

  • generated a lot by Steven's conversation, which

  • you can read about in my book.

  • So now there is reputable research--

  • reputable research, by the same people that

  • advise companies and countries.

  • So let's start with McKinsey.

  • Let's start with the McKinsey Global Institute,

  • one of the most reputable research institutions

  • in the world, who says that 45% of all tasks

  • done by workers today can be computerized, right now,

  • 13% more with artificial intelligence.

  • Oxford University.

  • 47%--

  • [VIDEO PLAYBACK]

  • - So, according to--

  • [END PLAYBACK]

  • ANDY STERN: Whoops.

  • I've got to get past there.

  • Oxford, 40% of jobs, not tasks--

  • 47% of jobs are at risk.

  • Pew asked 1,900 experts, not a small sample, and the reaction

  • they got was--

  • the question was, will networked,

  • automated artificial intelligence--

  • to place more jobs than they've created by 2025?

  • Half of them envision that future,

  • where robots have displaced significant numbers of people

  • and software.

  • But, interestingly enough, many expressed

  • concern that not only is it going

  • to lead to vast increases in economic inequality,

  • but masses of people who are effectively

  • unemployable pliable and breakdowns in the social order.

  • Now, that's something like a revolutionary thing a union

  • leader would say, not the Pew Research Center

  • would be saying.

  • Deloitte says 25% of all jobs in Europe will be lost.

  • And the numbers go on and on.

  • I talk to you about what Larry Summers said.

  • The hardest thing, he said, in the 21st century,

  • going forward, is not creating growth

  • but producing jobs in the economy.

  • And so, all of a sudden, we have this reputable research,

  • by people who companies rely upon every day

  • about the future.

  • We have people like Steven Berkenfeld, who

  • every day or every week gets pitched new ideas, with one

  • key component of the new idea--

  • how do we have less people--

  • how do we invest more capital to have less people work for us?

  • The goal of capitalism now is economic growth

  • without job growth.

  • And technology, software first, which allowed for globalization

  • to exist--

  • because all that just-in-time logistics

  • and sending jobs from Upwork overseas

  • is all a result of software.

  • All the automated warehouses you see,

  • they're not yet robotics, but a lot of software.

  • Just-in-time inventory is just a lot of software.

  • And Steven talks about, interestingly, about how Y2K--

  • and if you all remember the big hubbub around Y2K,

  • everybody had consultants, and they

  • were backing up their computers, because everything

  • was going to crash.

  • Up until that time, companies were

  • keeping really two sets of books--

  • the computer books, and the paper books.

  • And when nothing crashed, we began a massive conversion

  • to software.

  • Because, all of a sudden, people didn't believe

  • we needed the backup system, because the system had passed

  • its test and was now reliable.

  • And technology then began to increase.

  • So we have a different economy, in terms of how growth

  • results in affecting people.

  • We have a different way that people are working,

  • and will continue to work.

  • And now we have all this reputable research

  • that says the future is far more troubling.

  • So think about the economy today.

  • The largest media company in the world is Facebook.

  • It doesn't produce any content.

  • The largest hospitality company in the world is Airbnb.

  • It has no rooms.

  • The largest transportation company in the world is Uber.

  • It doesn't own a car.

  • The largest retailers in the world

  • are Amazon and Alibaba-- own no inventory.

  • That's today's economy-- that more people are watching

  • this speech sitting at home than being here,

  • it's just all part of an evolution that's going on.

  • And where it ends, no one really quite knows,

  • but there's lots of interesting predictions.

  • But we begin to see all the little telltale signs

  • and think, it's a lot faster than we ever anticipated.

  • So, first of all, we had Watson.

  • If you remember, he beat the chess champion,

  • and then he beat the Jeopardy champion.

  • And that was-- people would say, tell me--

  • oh, that's easy, because it's called "pattern matching."

  • You feed all this data into a computer,

  • the computer does all this pattern matching.

  • And then we got to go, which is, Lee Sedol is

  • the Go champion of the world.

  • There are more Go moves than there

  • are atoms in the universe.

  • There is no book on how to teach people

  • how to play anything other than the basic Go,

  • because it's so complicated, because there's

  • so many variations.

  • And no one predicted that, until 2029, would anybody be

  • able to beat the Go champion.

  • Watson beat the Go champion.

  • He beat him last year.

  • The Turing test, which was a test that was set up to see,

  • could a machine trick a person-- named after Alan Turing,

  • if you saw the movie--

  • that wasn't supposed to be passed till 2025.

  • Last year, a machine pretending they were a 14-year-old kid

  • tricked the judges and won the Turing prize.

  • If Watson, what they were doing in Go, didn't interest you,

  • you should know that Watson is up at Memorial Sloan

  • Kettering, one of the best cancer hospitals in the world.

  • It is competing against the lung-cancer diagnosticians

  • to see who can be more accurate in diagnosing lung cancer.

  • Watson is creaming the doctors.

  • Because you have to download, you

  • have to read 3,000 medical articles a week

  • to keep up with everything that's being published.

  • Watson reads all 3,000.

  • How many of your doctors read 300, or 30, or 10?

  • Robotic surgery, robotic anesthesiology.

  • All these things are in deployment somewhere else.

  • But what is getting people's attention right now,

  • besides Chipotle doing drone delivery at Virginia Tech--

  • if you happen to be at a different school,

  • you've got to get your Cornell Tech

  • people to begin to do drone delivery,

  • to test how we can deliver food to the students.

  • But that's what they're doing in Virginia Tech.

  • Chipotle's being delivered by drones.

  • I think, though, that Uber's deployment of driverless cars

  • in Pittsburgh kind of caught people

  • like, this isn't 20 years from now, you know,

  • this is something gonna happen soon.

  • And now the Department of Transportation

  • has actually issued regulations about what

  • the safety requirements are for driverless vehicles.

  • And the last thing I'll say about how fast technology's

  • coming and what its implications are on jobs--

  • the largest job in 29 states, and

  • the second- or third-largest in the others, is driving a truck.

  • There's 3 and 1/2 million truck drivers in America.

  • There's 6.5 million people that work

  • in rest stops, parts, insurance, supporting truck drivers.

  • Large-- it's not like steel or auto,

  • where there were parts of the country.

  • This is the largest job in 29 states.

  • I was with someone who runs a private equity company that

  • owns lots of things that need to be moved by trucks, who

  • was yelling at me, saying, your union members-- not mine,

  • but-- union members are telling me

  • they want to fix their pension.

  • Don't they know, in five years I'm

  • going to have a driverless vehicle take things

  • from the distribution center and bring it to the stores?

  • They should be worried about their jobs.

  • They shouldn't be worried simply about their pensions.

  • And then you read--

  • and watch, if you'd like to, online--

  • one truck carry-- not "carry"--

  • lead four other trucks--

  • the other four are driverless.

  • One truck has a driver, so there's

  • five trucks, one driver, went from one side of Europe

  • to the other.

  • Convoy is a company created by Jeff Bezos and the founders

  • of Amazon to do for trucking what

  • Uber did for cars, with the same intention, which

  • is to make the trucks driverless and be the distribution

  • system that can tell you, pick up something here, drop it

  • there, you have another load.

  • So they've created a lot of big-time investors,

  • and successful entrepreneurs have created Convoy.

  • Uber bought Otto.

  • Otto allows a truck driver to retrofit their truck

  • to make them initially not completely

  • driverless but eventually completely driverless.

  • So all those truck drivers will have an asset,

  • but they won't have a job.

  • The job will be renting out their asset,

  • until enough fleets of other trucks are built,

  • driverless from the beginning.

  • But this is Uber's play to be the conversion entrepreneur,

  • as opposed to be the ultimate, you know, Mack-truck creator

  • in the world.

  • At all this is happening at warp speed.

  • So here's what I say.

  • What should we do?

  • So the one thing I refuse to do--

  • but I will do it, if anybody wants

  • to-- is have the debate about, is this time different?

  • Because I don't know.

  • And anybody who does know, please tell me

  • what stocks are going to go up in the future,

  • tell me where to make investments, what baseball

  • team is going to win.

  • Because no one knows.

  • And the truth is, up to now every time we've

  • had economic revolutions and disruptions more jobs--

  • or the same number of jobs, at a minimum-- have come back.

  • So the past is a terrific guide for the future,

  • except it's not working for the economy,

  • it's not working for the way that work works,

  • but why are we going to count on it when it comes to the past

  • being a good predictor of the future?

  • And even more importantly, anyone who runs a business,

  • or anybody who is involved with the military,

  • knows you do scenario planning.

  • You don't have to know everything that's

  • going to happen, but you need to be prepared for anything

  • that's going to happen.

  • So, if someone told us that, for the first time in history,

  • a storm as powerful as Sandy is going to come and wipe out

  • not just parts of lower Manhattan,

  • it's going to flood the entire city,

  • now, we could do one of two things.

  • We could have a big debate and say, you know,

  • those forecasters, they didn't get it right last time,

  • so they're not going to get it right this time.

  • Or, you know, it's never happened before in Manhattan.

  • Or you could get the hell out of town,

  • or build sandbags, or at least go to the store

  • and buy supplies in case it happens to be true.

  • The last thing you would do is disregard

  • reputable, scientific evidence by people

  • we rely upon all the time.

  • And that's the situation we're in.

  • There are all these people telling us,

  • there is a chance, there is a reasonable chance,

  • that this scenario could be true.

  • And we have no plans, as a country,

  • to determine what it's going to do.

  • Now, middle-class people are living a plan,

  • because they have what's, I say, "parental basic income."

  • If you're like me, and you have a kid who didn't quite

  • get out of the house, or--

  • first of all, there's more kids living

  • at home who graduated college than at any time in history.

  • For those of us who believe in the American dream,

  • that is the American nightmare, for parents.

  • So, that is the truth.

  • But a lot of parents like me help my kid.

  • I take them on vacation.

  • If he has a bill, I help pay for it.

  • I'm providing stabilizing economic floor for him,

  • to know he can take some risk or do some things

  • or go back to school or whatever it

  • is, because he has a basic income called "his father."

  • The dirty little secret of Silicon Valley

  • is, most of the entrepreneurs in all those garages

  • are not the sons of my janitors or kids

  • who were sons and daughters of child-care workers.

  • Not that they aren't just smart.

  • [INAUDIBLE] those kids can spend two years in a garage,

  • with no income.

  • These are the sons and daughters of wealthy people.

  • Because money gives you a chance to take risks,

  • to be an entrepreneur, to do things that, otherwise,

  • if you're trying to eat and meet the basic Maslow's need

  • hierarchy, you can't do.

  • So what's my idea?

  • So I happen to believe we need a plan for America.

  • I hope we never use the plan.

  • I hope we put it on a shelf.

  • I hope all the jobs come back.

  • I hope that everybody laughs at me and calls me an idiot

  • and, you know, I was crying wolf and tells me,

  • you know, this is why they never let you into academia,

  • because you don't know what you're talking about.

  • [LAUGHTER]

  • So I hope that's true.

  • But if it's not true, I'm not having

  • my members and your kids and your grandkids

  • end up poor in a country with the greatest amount of wealth

  • in the world and not having a life that they

  • should be able to live.

  • I'm not willing to accept that, either.

  • So here's my idea.

  • This is the oldest idea in American history

  • that is going to become the newest

  • idea of the 21st century.

  • Because this idea is Thomas Paine's idea.

  • It's called the "universal basic income."

  • This was Thomas Paine's version.

  • We won the Revolutionary War.

  • All the land that was owned by the crown, we have it now.

  • We threw them out; it's our land.

  • We know we're going to turn it into private property,

  • but this was the community's land.

  • It was the country's land.

  • So we are going to give everyone,

  • this was this proposal, 15 pounds sterling,

  • for the rest of their life, in compensation

  • for the fact that you are an American citizen

  • and we have all this wealth and the wealth is being turned over

  • to private hands and you're in essence getting a dividend.

  • The country that came closest to a universal basic income--

  • and that's the idea that every citizen--

  • and you can decide whether it's zero till they die,

  • you can decide if it's 18 to 64, you

  • can decide, does it replace social security

  • or is it in addition to so--

  • there's lots of ways you can design the program.

  • But the basic idea is, it's universal,

  • meaning everyone gets it, it's basic,

  • it's not living a life of luxury,

  • and it's an income, without any requirements necessarily to do.

  • The number I pick for universal basic income

  • is a very simple number.

  • It's $1,000 a month.

  • Why $1,000 a month?

  • Because the poverty level in the United States,

  • whether you want to believe this or not, isn't $11,994 a year

  • a person, it's poverty.

  • If you want to get people above poverty,

  • you have to pay them $12,000 a year.

  • My proposal is, let's just get everybody out of poverty.

  • Martin Luther King, in his last book, From Chaos to Community,

  • condemns the welfare system-- that I

  • started working in as a public employee-- hated it!

  • He said, we didn't ask for all these categorical programs

  • for housing and food.

  • We asked you to end poverty.

  • And if you want to end poverty, give people money.

  • And in 1968, the country that came

  • closest to passing a universal basic income

  • was the United States of America.

  • And it was promoted by a guy named

  • Milton Friedman, a prominent conservative philosopher,

  • and put forward by a man that you may think

  • would be odd for him to do, called Richard Nixon, who was

  • the president of United States.

  • And Richard Nixon proposed giving

  • every single American citizen $10,000 a year,

  • in lieu of some of the welfare system

  • that had been built up to that time.

  • And it passed the House of Representatives.

  • And it stood-- only thing standing in the way

  • was a Democratic Senate.

  • And the Democratic Senate didn't pass a universal basic income,

  • or the world might be very different

  • the way we think about how our social benefits work,

  • because they thought they were going to beat Richard

  • Nixon in the next election.

  • We'd get a Democrat in office, and we'd make it $12,000!

  • So why would we pass $10,000 and let Richard Nixon get credit?

  • It's the same thing we did with health care, by the way,

  • on pay or play.

  • And so universal basic income disappeared

  • in the United States.

  • A bunch of left- and right-wing philosophers

  • kept it alive in Europe.

  • And all of a sudden, it's back.

  • Because technology is creating a real fear.

  • The World Economic Forum at Davos this year, the convention

  • was called the "fourth industrial revolution."

  • They talked about millions of jobs being destroyed,

  • so that you can't go out to Silicon Valley

  • and not hear them tell you how many jobs will be limited

  • by the work that they're doing.

  • And universal basic income, for their purposes,

  • is just a way to solve the problem without them having

  • to worry about anything other than making sure everybody gets

  • paid off, so to speak.

  • So here's the thing.

  • Now Finland is doing an experiment

  • on universal basic income.

  • Switzerland had a referendum on universal basic income.

  • Utrecht, in the Netherlands, is doing an experiment.

  • Today, the Trade Union Congress of the UK

  • voted in favor of universal basic income.

  • Jeremy Corbyn and the Labour Party have adopted.

  • And Justin Trudeau, north of the border,

  • 's father ran a universal basic income--

  • Pierre Trudeau, in Manitoba, his son Justin

  • had it in his Liberal Party platform experimentation

  • on universal basic income.

  • It's now in Montreal and Ontario it will be tested.

  • And there are many people in the United States--

  • not "many."

  • There are people in the United States

  • beginning to talk about a universal basic income

  • for children.

  • Because, if you believe all the brain research,

  • that zero to three is the most formative

  • physiological development for kids' brains,

  • and if you realize we have no programs for kids who

  • are zero to three, particularly if you're poor,

  • then people are starting to say, why

  • don't we just have a universal basic income

  • and give some parents who don't have

  • money resources to be able to take care of their kids?

  • And that will be probably, you know,

  • a way that people begin to think about it.

  • So that's my book, and that's my idea.

  • And, as I say to people, if you don't like my idea,

  • I'm OK with that.

  • Like, what's your idea?

  • If your idea is, like, let's take a chance

  • and hope it doesn't happen--

  • like, we're trying that with climate.

  • It hasn't really worked well yet.

  • You know, maybe it will reverse itself.

  • But I don't think we gamble with our families.

  • I don't think we gamble with our country.

  • I don't think we gamble with our future.

  • I think there's a lot we can do about it.

  • And I think universal basic income is--

  • like Winston Churchill said about democracy,

  • it's a terrible idea, until you try everything else.

  • Thanks.

  • [APPLAUSE]

  • STEVEN BERKENFELD: Thanks, Andy.

  • So it's kind of remarkable that you

  • can take hours and hours of discussions

  • and distill it down to about 20 minutes.

  • But let me start with, the statistics are compelling.

  • The trends are clear to you and I and maybe some others.

  • But what's the tipping point, where

  • there's a general acceptance that we

  • have a really urgent and very serious

  • problem about both the availability and the security

  • of jobs?

  • Is it driverless cars?

  • Is it autonomous vehicles?

  • Is that the thing that people say, wow,

  • that seems so implausible, and now it

  • feels like it's inevitable?

  • ANDY STERN: So I think there are two possibilities.

  • One is probably improbability, which

  • is the President of the United States

  • stands up and gives a speech similar to mine, surrounded

  • by his or her council of economic advisors, Advisers

  • having set the idea in motion.

  • Because I think people have a sense

  • that something is going on.

  • They just can't put the pieces of the puzzle together.

  • And parents really know life is-- like, when I grew up,

  • if your kid got a union job or your kid

  • went to college they were fine.

  • Now, neither-- the union job doesn't exist as much,

  • and college is no guarantee anymore.

  • I think the second is driverless trucks.

  • I think it's so much faster than people understand.

  • I mean, driverless cars are personal decisions.

  • Driverless trucks are business decisions.

  • And we know, when people make business decisions,

  • there's money attached to it.

  • And having less people, you know,

  • means you tend to make more money.

  • And capitalism does work well.

  • And I think driverless trucks, and the speed of them

  • arriving, and the dislocation it's going to cause, you know,

  • is going to be a total disorientation.

  • And it's this similar group of people

  • that are very disoriented already,

  • in terms of how angry they are that the world doesn't

  • look the way it used to.

  • STEVEN BERKENFELD: Yeah, it's been interesting to me,

  • as we've had these discussions, that it's

  • the economists, the labor economists, that say,

  • you're a Luddite, you're afraid of technology,

  • these jobs will come back.

  • But when you talk to the technologists

  • and the futurists, they say, no, we really

  • have the ability to automate a lot.

  • And they're much more concerned about this issue.

  • So we need, I think, before we can

  • have this serious discussion about UBI,

  • to continue to push the consensus that we've got

  • a real risk of a problem, here.

  • So I think the question that everybody wants to ask,

  • I'll ask for them, is how much might this cost?

  • And how do we pay for it?

  • ANDY STERN: So, A, just because there are really

  • smart people in the room, there needs

  • to be a lot more research done.

  • OK?

  • So, in my book I do the best I can, from everything I know,

  • and I say it will cost $1.75 trillion,

  • to give everybody 18 to 64 $1,000 a month.

  • I don't have enough sophistication

  • to figure out how much the tax system claws back.

  • You know, there's just lots of implications.

  • You know, I don't know how much money

  • is put in the economy that's then gotten back

  • in other kinds of revenue.

  • So I don't know all those details,

  • but I'd say $1.75 trillion is a fair number.

  • Here's how I'd pay for it.

  • So, conservatives and I agree on basic income.

  • In fact, I'll be at the Cato Institute,

  • a place started by the Koch brothers, and not

  • my normal stomping grounds where I get drinks.

  • I like your wine a little better.

  • But I'll be at the Cato Institute,

  • with Charles Murray, who wrote a book I also had some trouble

  • with, called The Bell Curve.

  • But we are on the same side of basic income, except for this--

  • he wants to eliminate every single welfare

  • program, including Social Security, Medicaid,

  • and Medicare, to pay for basic income.

  • I say we can't touch health care,

  • and people are invested in Social Security, so maybe

  • another generation we can think about Social Security,

  • but not for people that have paid in.

  • It's somewhat like a pension plan.

  • So I take 500--

  • there's one-- in case you want to know,

  • there's 122 cash transfer programs in the United States,

  • of one form or another.

  • Which makes you understand why poor people are so crazy,

  • trying to deal with the bureaucracy of surviving

  • with a family, dealing with 122 different possibilities.

  • So I take $500 million--

  • $500 billion-- now I've got to get big numbers-- $500 billion,

  • to get up to $1.75 trillion.

  • I think $500 billion, from that--

  • no more EITC; it's just another cash transfer--

  • food stamps, unemployment, there's

  • a whole series of things that you can eliminate.

  • There's $1 trillion of benefits, so it's half.

  • I don't think that's that hard to do.

  • Everybody who has a favorite program won't like it,

  • but it's kind of it for the greater good.

  • And we need to understand, $1,000 a month ends poverty.

  • There are 50 million people in poverty right now.

  • Right?

  • There are 50 million people who don't have $12,000.

  • So whatever we might do to influence some people here

  • and there, and we got to think about that,

  • we need to understand there's 50 million people that

  • will immediately be better off than what they are.

  • There's $500 million easily in what are called--

  • and we learned this in Simpson-Bowles-- "tax

  • expenditures."

  • They're the way we shelter retirement savings and IRA

  • and second and third house or second houses

  • and other stock options and things, that are just ways--

  • instead of giving people money, people don't pay money.

  • And those are mostly wealthy people and corporations who

  • don't.

  • So I say there's $1.3 trillion of those, which is interesting.

  • We have $1 million for our social safety net

  • but $1.3 trillion in tax expenditures.

  • Take $500 billion there.

  • Now we're up to $1 trillion.

  • Now we're getting closer.

  • So, most people don't know-- this is my formula.

  • Most people don't know this.

  • We had a financial-transaction tax

  • in this country for 50 years.

  • So anytime you hear of Tobin tax in Europe

  • or financial transactions, this not a new idea;

  • we just got rid of it.

  • It's worth about $200 billion.

  • Now we're at $1.2 billion.

  • Then you can decide where you want to go.

  • We're the only country in the OECD who has no VAT tax.

  • 5% VAT tax would get you a long way, almost home.

  • We have no carbon tax.

  • People say we can't give the carbon tax back to people.

  • Alaska gave all the oil resources from the North Slope

  • back to people.

  • They didn't give it to the government.

  • They gave it to the government as an intermediary,

  • before the government pays a dividend to every citizen.

  • We could do that with a carbon tax,

  • and then we wouldn't worry about your energy prices

  • quite as much.

  • You know, there are people who have some issue--

  • STEVEN BERKENFELD: Two birds with one stone.

  • Climate change--

  • [INTERPOSING VOICES]

  • ANDY STERN: Right.

  • And some people have issues with the military budget.

  • We have no asset tax.

  • Thomas Piketty talked about an asset tax.

  • Maybe we should change the giving pledge,

  • where wealthy people give half away their income when

  • they die.

  • We could turn it to the living pledge.

  • So don't give it away when you die.

  • We get rid of the estate tax.

  • Give it away while you're alive, because we need the money now,

  • not later after all the accountants and trust lawyers

  • get in charge of things.

  • So there's lots of-- it can be done.

  • It's not the easiest thing in the world,

  • but, you know, it's not a hard thing to do.

  • It's political will, not, is the money there?

  • STEVEN BERKENFELD: Right.

  • So, following up on that, Social Security to me

  • doesn't seem that challenging.

  • It's more of a transition.

  • Right?

  • People have paid in, and you can get people to,

  • through attrition, come off of it.

  • And new people get the UBI, instead.

  • But health care does.

  • And even if you have $1,000 a month, how do you pay?

  • If you have any kind of medical issue,

  • that's going to eat up a lot of that $1,000 in that month.

  • ANDY STERN: That's why I don't do anything with health care,

  • because I think it's impossible for an individual

  • to manage your health care.

  • Because your genes and so many other factors, poverty,

  • have a huge impact on it.

  • But here's what I would say.

  • It we paid the same amount of money in health care

  • as every other major industrialized country,

  • we could pay for UBI.

  • We pay, what, 17% of GDP for health care.

  • Most countries pay from 11% to 13%, at the high end.

  • Right?

  • That's 4% of GDP.

  • That pretty much will pay for a universal basic income.

  • So, to me, we just need to get employers out of the system,

  • do what everybody else around the world does, which is,

  • get government more involved in the system,

  • whether it's Switzerland, which has private insurance,

  • or the National Health Service in UK.

  • You can have any model.

  • The truth is, no model works unless someone bargains

  • with providers.

  • And individuals have no power to bargain with providers, which

  • is why everybody uses the government

  • to bargain with doctors, pharmaceutical companies,

  • and everyone else but us.

  • Because our market economy loves to pay people

  • more money than they need.

  • STEVEN BERKENFELD: So, to sound-bite

  • this, if UBI can be described as social security for all,

  • [INAUDIBLE] you'd need a Medicare for all to go with it.

  • ANDY STERN: Yeah, you would.

  • STEVEN BERKENFELD: Right, OK.

  • Big discussion, this political season, is on immigration.

  • So, how does that factor into it?

  • It's already a big challenge.

  • And entitlement to this, I would assume,

  • requires US citizenship.

  • So-- discussion of a path to citizenship,

  • and what to do with people in this country who

  • aren't citizens, becomes all that more--

  • ANDY STERN: Yeah, it does.

  • So, I happen to believe that all the people in this country

  • need a pathway to citizenship.

  • I also believe that countries have a right

  • to set their own immigration policies.

  • But it's not up to people to set immigration policies.

  • Countries set immigration policy.

  • So, in my calculation, I assume the whatever many

  • you want to guess, 11 to 13 million people, that are here

  • are included in UBI, and no other undocumented person

  • will ever be entitled to UBI, from this point.

  • But I'm just making that presumption

  • that that's going to occur, at some point.

  • Because you don't want to create an incentive to attract people

  • simply on the basis of money.

  • I would say this is the bigger problem with immigration,

  • which is a whole different discussion if you--

  • immigration has been justified both on moral grounds, which

  • is not doing so well these days, when you look at the refugee

  • crisis and other things.

  • We're not quite as welcoming a nation as we once were.

  • But then it was also, people were doing jobs

  • that no one else wanted to do.

  • But there are not going to be any jobs

  • that no one else wants.

  • There's not going to be any jobs!

  • You know, farming is not going to be by people

  • picking things in a field.

  • It's all going to be done vertical farming

  • or by machinery.

  • I mean, what are those jobs that no one--

  • restaurants?

  • They're going to have touchpads.

  • They already are beginning to them.

  • eatsa-- if you're in Washington, DC,

  • you can go to the eatsa, the first robotic restaurant

  • in Washington.

  • There's already one in San Francisco.

  • You can have your quinoa balls ordered on your iPad,

  • and you pick them up.

  • There's no people.

  • There's, like, two guys in the back of the restaurant--

  • STEVEN BERKENFELD: We don't know what's in the back.

  • They wouldn't let us in the back.

  • [INTERPOSING VOICES]

  • ANDY STERN: [LAUGH] But I've read that--

  • [LAUGHTER]

  • STEVEN BERKENFELD: All we know is, your food appears.

  • ANDY STERN: Exactly.

  • You may not want to know what's in the back, but, you know.

  • So I would just say, what are we going

  • to do if the motivation was that we needed people

  • to do certain kinds of work, and we

  • don't have that kind of work?

  • I think we have a whole different discussion

  • about immigration.

  • STEVEN BERKENFELD: Yeah.

  • And I think, as Andy gives these examples,

  • it's important not to think of it as binary--

  • that the job just goes away, that there

  • are no people working on farms.

  • It's just that technology allows you to do so much

  • more with so much less.

  • So it's a continuous trend of, you know,

  • eliminating 5% this year and 10% next year and 20% the year

  • after that.

  • And you take away the jobs that way.

  • It's better to actually think of it in terms of the activities.

  • ANDY STERN: Yeah.

  • It's a downward pressure on employment.

  • And in my book, since I know Cornell does a lot of work

  • with human-resource professionals,

  • Dave Cote uses his HR department at Honeywell

  • as his example of where you had 1,000 people when he first

  • became the CEO.

  • He's down to 300.

  • He expects to go under 100.

  • You ask him why-- technology.

  • Everybody's more efficient, plus people

  • want to interact and get the answers themselves.

  • They don't want intermediaries-- any more,

  • call up your HR person and ask them a question.

  • You want your FAQ and your information online.

  • And so there will always be HR people,

  • just less and less and less.

  • Same with lawyers, same with doctors.

  • STEVEN BERKENFELD: So, on to cultural issues, values.

  • How do you address the American aversion to money for nothing?

  • And how do you reconcile this with the criticism

  • that UBI's almost un-American, as contrary to some

  • of our fundamental values of hard work

  • and individual accountability?

  • ANDY STERN: So the one thing I say is,

  • the one job we need lots more of is philosophers.

  • Because we set up Maslow's need hierarchy,

  • and we said self-actualisation was the highest thing.

  • I don't think we meant work was self-actualization only,

  • for everyone.

  • So I think we need to--

  • and I think that we should not allow anybody

  • into this discussion who's over 30, because those

  • of us who grew up loving work, who our work gave us meaning

  • and purpose, are not in the right position

  • to explain to people coming up in a very different employment

  • world that we discussed what value work is going to have.

  • So those are my two starting places.

  • I'm really curious about these experiments

  • that are being run in other countries, of what people

  • do with time.

  • Now, we do have somewhat of an experiment here.

  • No one wants to--

  • it's EITC, which is, people get a once-a-year check.

  • And at least we know that the bars aren't full and, in fact,

  • most people use the money to pay off debts

  • when they get their EITCs.

  • So we shouldn't think that now, when

  • people get a monthly check, they're

  • going to do all the things that people worry

  • that people are going to do.

  • ] always say to people that it's always funny,

  • because I go out to lunch with very successful people,

  • who are very wealthy.

  • And they want to talk about policy.

  • And, after the third martini, they're asking me,

  • aren't all these people going to drink their money away?

  • [LAUGH] And I say, I don't know-- what have you

  • been doing all lunchtime?

  • [LAUGHTER]

  • So I think there's a lot of things we need to learn.

  • I don't know if-- you know, some people say we redefine work.

  • But there's a series of wonderful things about UBI.

  • It pays child-rearing parents, men

  • and women, money for the first time,

  • gives a value to that work.

  • Prisoners who leave prison on reentry,

  • who end up going back a lot because they

  • don't have the economic ability to get by, can do that.

  • People who want to go back to school.

  • Workers who want to go on strike.

  • I mean, there are lots of additional advantages of UBI

  • that make it--

  • compensating things that we haven't done,

  • sometimes, before, in the past.

  • But I think this question is the biggest question.

  • Because, then if you say, OK, work is fundamental,

  • then tell me what the work program is that we're

  • going to have everyone do.

  • And there are things now that you and I have talked about,

  • people can do for a while.

  • Like, there's lots of what I call "mitigating policies."

  • It's kind of Uber now versus Uber later.

  • Uber now, Sarah and everybody will talk to you

  • about all the wraparound benefits we could do,

  • and Elizabeth Warren will talk to you about Social Security

  • and how we could provide for it in a different way [AUDIO OUT]

  • later, we have a different problem.

  • So I think there's lots of Uber-now things.

  • I think this philosophical question

  • of what people are going to do with their time, forget--

  • you know, when there's not enough work to do.

  • And I would argue, the opioid crisis in parts of this country

  • is a bad example of what people do with their time

  • when they have no money and no hope and they're 55 years old

  • or their voting patterns are somewhat

  • of an expression of that.

  • So I think this is a really important question.

  • But I don't think anybody's figured out how, long-term,

  • the work's going to happen.

  • You know, I said to you earlier, if one more person says to me

  • the WPA--

  • and I say, the WPA was 80 years ago,

  • in a very different economy.

  • It was never meant to be permanent,

  • it was a temporary transitional program.

  • And a lot of people sent their--

  • were out in the woods, digging trails and whatever.

  • So, when you're ready to let your kids go out, that's

  • their life, is going and living in a camp

  • and working in the woods, you know, OK, call me.

  • Or when you think that the men are all

  • going to be in infrastructure and the women, usually

  • the women of color, are going to be

  • home-care and child-care workers,

  • I say, fine, that's not how it's going to work.

  • When your male kid is ready to change my feeding tube,

  • as his job, call me.

  • Because then I'll be for guaranteed jobs.

  • Because the only jobs anybody can think of

  • are care jobs, energy-related jobs and infrastructure jobs.

  • STEVEN BERKENFELD: Yeah.

  • You talk about research and discussion,

  • and there'll be a lot on the economic side of it--

  • how much will it cost, how we pay for it.

  • But I think, as you just talk about that,

  • there's all sorts of things that come into your head.

  • What do people do with their time?

  • How do we engage them in society?

  • I was thinking about, if everyone's

  • getting $1,000 a month, what does that do the crime,

  • for instance?

  • Is that reduced incentive?

  • Right?

  • Because there are people who are at a certain level.

  • But I have heard that comment, of, won't people just

  • drink it or use drugs?

  • Maybe for the first month, but then they'll

  • realize that they have to eat and have a place to live.

  • So there is an element of, stop being so paternalistic.

  • [INAUDIBLE] Except for the most challenged,

  • mentally-ill challenged in our society,

  • we let people make that decision.

  • ANDY STERN: Yeah, and you do wonder how dignified

  • it is for people to have to go to welfare offices

  • and unemployment offices--

  • STEVEN BERKENFELD: Disability--

  • ANDY STERN: --and take drug tests, now,

  • when you're [? unemployment. ?] You know,

  • that, all of a sudden, because you can't find a job,

  • you're a derelict and you have to take a drug test?

  • I mean, you know, we're just going in the wrong direction.

  • STEVEN BERKENFELD: There's the stigma,

  • and I think there's also the uncertainty, the anxiety,

  • of knowing how long those benefits will continue,

  • that you continue to get disability.

  • And this, by having it dependable and guaranteed,

  • actually allows people to make different decisions.

  • But let me just ask one more question.

  • Then I'll turn it over to the audience.

  • We discussed a lot the element of national service.

  • And you can make a lot of, I think, good arguments

  • that there should be mandatory, or let's call it

  • "universal," national service.

  • Just as an example of that, when someone turns 18

  • and they become eligible for the UBI,

  • they spend a couple of years doing

  • something for the community, for the country.

  • Could be military service.

  • Could be taking care of the elderly.

  • Could be teaching pre-K, rebuilding our infrastructure.

  • We can come up with dozens of ideas.

  • But on the issue of money for nothing,

  • I like the idea that some sort of national service

  • creates a quid pro quo.

  • You spend a couple of years--

  • and think in terms of veteran benefits and all that.

  • But you spend a couple of years giving, and then you become--

  • it's a bad word, but-- "entitled."

  • Or you've earned the right to receive this.

  • Just your thoughts on it.

  • ANDY STERN: So, because I knew so little about this idea,

  • and then because the more you read

  • everybody has all kinds of different permutations

  • on the idea, I decided to just do a clean cut.

  • Right?

  • So I don't include children, which I would like to.

  • I don't include national service, which I'd like to.

  • Because I don't want to keep imagining what everybody else

  • wants to add on to it.

  • Right?

  • OK, you get universal basic income,

  • but you have to volunteer 10 hours a week,

  • you know, to take care of people after your national service.

  • Or you have to recycle your household goods.

  • Or you have to walk, you know, 100, 500 steps every day,

  • so that you're healthy, so you're not [INAUDIBLE]----

  • sort of leave it limited.

  • I just [AUDIO OUT] would say, the first question

  • for me is, is it a reasonable scenario for people to have

  • to think about a world where there's not enough work, where

  • maybe UBI is not a substitute for work

  • but a big supplement to work, because there's

  • only so many hours and it's divided differently.

  • So the first question is, is it a problem where

  • we should have a solution?

  • And then the second question is, what's the solution?

  • And then, within the solutions--

  • you know, whether it's work or basic income--

  • you know, what are the moral and other questions?

  • You know, I think the country needs national service, period.

  • Because I think we don't live in the same community.

  • We can sit at home and watch things.

  • We don't have to interact with people.

  • I mean, I think there's lots of reasons you want to do it.

  • You could tie it to lots of things,

  • and I think universal basic income is a fair one.

  • The other nice thing about tying it to national service

  • is that, if you put all the two years of life--

  • 18 and 19, let's say--

  • out of the labor market, you will delay the loss of jobs,

  • because you'll take that many people

  • into a different arrangement than this arrangement.

  • And so I think it has also labor-market

  • potential positive consequences.

  • STEVEN BERKENFELD: It kind of helps pay for it.

  • ANDY STERN: Yes.

  • STEVEN BERKENFELD: Because, if you

  • had to spend government money on pre-K, for instance,

  • you have the workforce, so you're already

  • giving $1,000 a month, too, to actually do a lot of the work.

  • Louis?

  • LOUIS HYMAN: All right, well, let's take some questions

  • from the audience.

  • Who's up first?

  • Of course, the guy at the end of the row.

  • [LAUGHTER]

  • You can pass the mic down.

  • AUDIENCE: Hey, good evening.

  • And, first off, I just want to say, as an [? ILRie ?]

  • in finance, I'm very grateful that ILR puts on events

  • like this and that we get such intelligent and meaningful

  • discourse supported in New York City,

  • for all of our enlightenment.

  • So thank you for being here and for supporting this.

  • But my question was on the economic consequences of UBI,

  • as a subject that is still kind of on the frontier

  • of economic policy and monetary and fiscal policy.

  • What do you imagine being the kind of inflation results

  • of a policy that would give guaranteed income

  • to all citizens of the United States?

  • And then also, what do you think will

  • be the consequence on voluntary unemployment, as a result?

  • Do you think that fewer people would choose

  • to enroll in the workforce?

  • And also, would prices go up in our economy?

  • ANDY STERN: So I hope Steven's going

  • to join me in answering these questions,

  • since he knows more than I do about most of these things.

  • So, on the first question of inflation,

  • there's a big debate.

  • No one knows.

  • Everybody can point to different factors and say yes, no.

  • No one really knows what's going to happen.

  • In terms of what people will do, I

  • think that's exactly why we're going to do experiments.

  • They actually did five experiments

  • in the United States.

  • So, if any of you need your PhD dissertation

  • and you haven't figured out the subject matter,

  • I imagine somewhere in boxes is the results of all of that.

  • Because it was true in Canada, and someone

  • who did get their PhD has computerized all their records

  • and learned what happened in Canada.

  • None of that happened about--

  • in fact, the health results were better for people,

  • the graduation rates were better for people,

  • the mental health was improved in the community.

  • They did it for a couple of years, universal basic income.

  • They did it in the US, no one really

  • knows exactly what happened on some of those characteristics.

  • But we're going to find out shortly

  • in some of these countries.

  • Finland is actually doing it to test the work question.

  • Because they really want people back in the labor market,

  • but they think people aren't coming back

  • for five- and seven-hour jobs because their social benefits

  • are high enough that, when people

  • are making the calculations, they

  • say it's not worth working.

  • They're trying to make work worth working.

  • And so they're going to test that.

  • And I just think no one knows the question,

  • but all the indications are, it does not

  • deter people from working because there's not

  • enough money.

  • STEVEN BERKENFELD: Yeah, I get that response a lot, too.

  • Give them universal basic income, how many people

  • will still want to work?

  • And then you say, it's only $1,000 a month.

  • And if you want to take vacations,

  • you want to go out to eat, you maybe want a car--

  • you might not need one--

  • you want to send your kids to a private college, for instance,

  • you need more than $1,000 a month, a lot more.

  • But everything starts to change when

  • you think about financial aid in colleges

  • and how that's approached.

  • I think, in many cases, people might

  • decide to work as supplemental, as you referred to it.

  • It might be that the part-time job is good enough.

  • It might be that a TaskRabbit or Uber

  • driver is enough to add a little bit more to what I need.

  • People make different decisions about where they live.

  • I mean, you made a very interesting point out

  • that the ghettos that form around

  • all the current programs, you need

  • to have stores that accept food stamps

  • and places you can cash these checks.

  • You know, if everybody gets this check,

  • it kind of allows you the flexibility

  • to choose your path.

  • You may just want to start a business.

  • You may want to be an entrepreneur.

  • So my sense is that it will be interesting

  • but that most people will do something beyond just

  • collecting the check.

  • I think one good way to think about this issue--

  • and I can turn it over to you--

  • is, will we need a minimum wage anymore?

  • Because people will have a little bit more bargaining

  • power to decide whether or not they want to take that job.

  • ANDY STERN: Spoken like a true Wall Street economist.

  • [LAUGHTER]

  • So my research assistant, who very sheepishly,

  • at one moment after I had gotten to the conclusion

  • that some big technological tsunami of labor disruption

  • was going to occur, and had no idea what to do about it,

  • came to me and said--

  • he told me later he had stayed up all night, talked

  • to his wife before he did this.

  • He said, I'm about to tell this labor guy that, like, work--

  • we're going to give people money for not working,

  • and there aren't going to be unions,

  • and there'll be no minimum wage.

  • Because, he said, there's no reason have a minimum wage.

  • And so he wrote me a-- it was very nice.

  • He wrote me a 12-page syllabus that I actually

  • used from then on and a whole explanation of it,

  • to show me that this is something

  • that's been well thought about.

  • So, you know, I think there's lots

  • of things we need to figure out, along the way here.

  • LOUIS HYMAN: One part of that question

  • I think is a really important question

  • to talk about the basic income is thinking about, well,

  • won't this just cause inflation?

  • Won't this just be eroded by an increase in--

  • ANDY STERN: Is that true for Pell grants and college

  • tuition?

  • LOUIS HYMAN: Well, I'm curious how you respond to it.

  • ANDY STERN: Yeah, I don't know.

  • I mean, people say to me, do colleges raise tuition extra

  • for then what they would when the grants, Pell grants, got--

  • I don't know.

  • There's no research on it, I can tell you

  • that, because I've tried to find the research.

  • I'm just at a university, so I get to make a little fun, here,

  • about universities.

  • So I don't know.

  • So far, the Alaska experiment and things have not shown,

  • you know, price gouging or other things.

  • But I don't think anyone knows.

  • The interesting thing about housing

  • is that people with money have more mobility.

  • Albert Wanger is a big investor, early investor,

  • in technology, and a libertarian, would say,

  • if you look at the housing stock in Detroit,

  • there's lots of housing stock to be fixed up.

  • No one wants to fix it up.

  • And why don't people move to Detroit and just go fix it up?

  • Right?

  • Because you could have a house for $1.

  • But, he says, people don't have transportation.

  • Then, if they get there, they have to eat.

  • Then they have to buy building supplies.

  • So they have plenty of sweat equity, but they have--

  • He said, now, give them a universal basic income,

  • give four guys or two women and two men

  • a universal basic income, now they got $4,000 a month.

  • Maybe they'll get in the car and go to Detroit.

  • Right?

  • They'll have money to eat, they'll have asset--

  • and they'll build a house and build an asset, just

  • like you were saying, being entrepreneurs.

  • So, you know, I think lots of things

  • are going to change when people have a guaranteed floor

  • to think about things differently,

  • which is what the kids who live in Silicon Valley

  • do because of their parents.

  • LOUIS HYMAN: Next question?

  • AUDIENCE: I was wondering, how do you think more developing

  • countries will react to the loss in jobs,

  • as well, given that, I imagine, the issues that we'll

  • face they'll also face?

  • Do you think that universal basic income will also

  • be something less-well-off countries will also

  • have to implement, maybe just at a lower level?

  • ANDY STERN: So, the ILO just put out a report that says--

  • this pretty--

  • STEVEN BERKENFELD: Just explain what the ILO is.

  • ANDY STERN: The ILO is a United Nations organization,

  • the International Labor Organization,

  • that's a tripartite labor, government,

  • and worker organization.

  • It just did a study about the garment industry,

  • which is the major industry in the Southeast Asian area.

  • And it said that 88% of all the jobs in Cambodia

  • and 86% of all the jobs in textiles, footwear,

  • and clothing will be eliminated in the next decade

  • by sewing bots.

  • And the jobs will be reshored to the United States,

  • just like manufacturing's being reshored--

  • not because the jobs are coming back,

  • but because technology might as well put the jobs closer

  • to the consumer and avoid some of the logistical costs.

  • And the reason that's going to happen,

  • in case you want to know how to buy your clothes,

  • go down to Bloomingdale's right now

  • and you can stand a little machine,

  • and it measures your 360 degrees.

  • And then it tells you which clothes in the store

  • will look good on you.

  • And if you don't like that, the next step will be,

  • which is why they're all coming back to the United States, is,

  • you will pick out the style you want and it will individually

  • manufacture each garment separately.

  • That's how much technology will make this cheap.

  • So you have personalized clothing for every individual.

  • That's why they're moving back, because the sewing

  • bots will be able to do that.

  • So I don't know what you do.

  • In Rwanda, they've been trying to give

  • 60,000 people [INAUDIBLE] a group, nonprofit, called

  • Give Directly has been trying to give 60,000

  • Rwandans a basic income, at a very low level,

  • to see what will happen.

  • Interestingly enough, they're having a hard time

  • getting people to take the money, because they're very

  • suspicious of what's going on.

  • So there's, like, a totally counterintuitive--

  • it's not like they're taking the money and getting drunk!

  • They won't take the money, because they're not sure

  • what it's going to mean to their culture and who's giving it

  • and what's the purpose.

  • So there's all kinds of unintended consequences here.

  • But I think developing countries,

  • as we're seeing, I used to think when Apple had all of its,

  • you know, electronic parts made by Foxconn,

  • which is a huge company--

  • employs 1 million factory workers in China

  • and makes most of the component--

  • I used think, this is--

  • OK, I don't like American workers losing their jobs,

  • but I'm really glad 1 million people in China

  • just got lifted out of poverty.

  • Until I learned that Terry Gou, the president of,

  • has now ordered a million robots.

  • Because he's realized the price of wages

  • compared to the cost of machinery

  • has gotten to the point where it's cheaper

  • to have the machinery.

  • So now I wonder, what's going to happen to China when

  • all those Foxconn workers, in 5 or 10 years,

  • are reduced by 90%?

  • STEVEN BERKENFELD: I mean, when you talk to a robotics company,

  • the biggest market is China.

  • And it's not just that it's cheaper,

  • it's just managing 1 million people.

  • Right?

  • There's all sorts of issues around managing people.

  • And it's just easier to run your business

  • if you take out all of that uncertainty and risk

  • that people present.

  • LOUIS HYMAN: I think we're going to have one more question.

  • It's from the web.

  • So this is from Don.

  • "Why not include only people who need the income?

  • Why give rich people money?"

  • ANDY STERN: Well, there's a sociologist from UK who said,

  • any policy for the poor is poor policy.

  • Because the history of the country has been,

  • A, things like social security are much more enduring when

  • they're universal, welfare programs have historically

  • been under attack, you can use the tax system

  • quite effectively to take the money back rather

  • than not giving people money.

  • You could reorganize how the tax system works and claw it

  • back differently.

  • And I think what we've learned is

  • that there is a sense in social security

  • and programs like that that these are American programs.

  • They're not poor-people's programs,

  • they're not lazy-people's programs.

  • We don't have to worry about, why

  • are people taking the money.

  • And so I think it is just a design

  • question and a sociological and moral question of,

  • is the right thing to do to change the tax system?

  • Is the right thing to do is put a group of people

  • into a welfare system and then constantly

  • be trying to cut that back?

  • If you could do that, you would ask yourself,

  • why do we have 50 million people in poverty, right now?

  • It's because, somehow, welfare programs are not seen as things

  • that countries want to support.

  • STEVEN BERKENFELD: Yeah, it's interesting.

  • Because the question I have, do you expect more challenge

  • from the right, who says here's another big government

  • program, even though you're eliminating others, and higher

  • taxes--

  • on the wealthy, probably?

  • Or from the left, from progressives,

  • who want to hold onto a lot of the programs

  • and can start making a list that, you know,

  • we have to provide school lunches and housing supplements

  • and on and on, and who also think there

  • needs to be kind of need space?

  • Right?

  • There needs to be an element of equity.

  • And I do think, in response to that,

  • that universal basic income, part of the appeal

  • is that everybody gets it.

  • If the rich get it, if Bill Gates gets it,

  • that money just goes right back into the system.

  • So it's all going to be taxed.

  • For the ones who are just receiving

  • universal basic income and don't have any supplemental income,

  • they're not going to pay any taxes at all, I'd expect.

  • So, when you really look at the economics of it,

  • I don't think that giving it to everyone

  • will change that much, because of tax policy that

  • will go along with it.

  • But it does really change the nature of the discussion

  • when you say, this is something that we guarantee

  • to all of our citizens.

  • ANDY STERN: So let me just end by saying--

  • if that's where we are here--

  • so my goal in writing this book was,

  • I don't mean to be Paul Revere or Johnny Appleseed

  • or something.

  • But, like, there is a tsunami of potential disruption

  • about to occur.

  • The ILR School is probably as good a place--

  • and I really appreciate what you're doing, Louis--

  • to kind of think about this, particularly given

  • the technology relationships you have across--

  • you know.

  • But I think we are foolish, as a country,

  • and we don't have enough courage yet, as a country,

  • to have this discussion in a public place.

  • That there may not be enough work for people

  • that want to do it, and what are the solutions?

  • And what we always have learned in history

  • is that, when the tsunami hits--

  • and I don't mean to say this in class warfare,

  • because I'll put myself in the--

  • people who find higher ground are not poor people.

  • They're not working people.

  • They're people with resources.

  • And we have a tsunami potential coming,

  • and we should not let it destroy the very basic fabric of most

  • Americans.

  • We are seeing the opening act, in some--

  • and I'll say this-- in some of the Trump voters,

  • of what people do when they're really mad because they think

  • their dreams and their families cannot live the life.

  • That is a problem right now.

  • Amongst a certain group of people, it is going to grow.

  • And people who spend a lot of money sending

  • their kids to college, who did everything right,

  • are going to find their kids don't have a future.

  • And we are insane, as a country, to not

  • have this discussion when there's a chance

  • to do something about it.

  • That's why I wrote this book.

  • LOUIS HYMAN: Great.

  • On that note, on a very happy note, I'd like to say--

  • [LAUGHTER]

  • --thank you to Andy and Steven for leading this discussion

  • tonight, and hope to welcome you all back next week, when

  • we discuss the future of freelancing the online economy,

  • and to encourage people who are online to join us

  • in person, here on 34th Street in delightful Manhattan,

  • where we're going to have free wine.

  • That's how we're going to spend our basic income.

  • All right.

  • Thank you so much for coming out tonight.

  • [APPLAUSE]

  • ANNOUNCER: This has been a production of the ILR School

  • at Cornell University.

ANNOUNCER: The following is a presentation of the ILR

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