Tag: Jobs

Andrew Yang’s UBI Plan is No Breath of Fresh Air

Glenn Verasco | Thailand

If there’s one welfare state proposition that makes Libertarians reconsider their anti-government position, it might be UBI (Universal Basic Income). The concept of UBI is simple: every person in a given country gets cash from the government every month. Rather than rationing food, energy, or clothes like a purely Socialist society, a nation with UBI allows those on the receiving end to decide which of their needs should be met the same way people who earn their own money do.

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Germany Is Phasing Out Coal, Moving to Renewable Energy

Othman Mekhloufi | United States

A government-appointed German ‘Coal Commission’ released a recommendation to the German government on the morning of January 26th. The goals of said recommendation are to curb carbon emissions, turn to renewable energy, and take steps towards the deceleration of climate change.

The Report

The 28-member commission represents various German mining regions and utility companies. After 21 hours of negotiations, they reached a decision to fully phase out coal over a 19 year period (by 2038). This move will, in turn, shut down all 84 of Germany’s coal plants. Germany has also moved to fully shut down all of its nuclear power plants by 2022. This decision is part of another report by the commission that was legislated in 2011.  As of now, Germany shut down 12 of the 19 nuclear power plants in the nation.

The progress will be regularly reviewed by the commission in 2023, 2026, and also 2029. The goal is to find out if phasing out coal is possibly by 2035. Nonetheless, 2038 will remain the legally defined date to fully phase out coal pending German government drafting legislation based on the report.

The commission’s report is not legally binding as it still requires the action of the federal government. The report holds a set of guidelines and suggestions for the federal government to legislate accordingly in hopes of curbing climate change and CO2 emissions. German Chancellor Angela Merkel will likely approve the commissions’ proposal.

Coal in Germany

Coal plants in Germany currently account for 40% of electricity and power production. Renewable energy surpassed coal as the leading source in 2018. It now accounts for 41% of energy use. By fully phasing out coal and nuclear power, Germany aims to rely on renewable energy. Ideally, renewable energy will provide 60%-85% of Germany’s power.

Germany is currently #8 in global coal consumption, although the nation only accounts for 2% of such emissions.

The Impact

There are roughly 60,000 jobs with ties to the coal industry. Consequently, phasing out coal would put those jobs in jeopardy. There will likely be negative economic repercussions which will fall upon the companies and workers, as well as the families of workers. However, the commission allocated for $45 billion in aid to ease the economic hardships caused by their decision to end the industry. The aid includes an adjustment fund, as well as pension compensation for all employees aged 58 years or older. Younger workers out of a job will also receive aid in the form of education and training for jobs in renewable energy sources.

As we move towards the future, coal is being phased out on a global scale. Climate change is progressing. Therefore, many believe the shift towards renewable energy sources is a must.


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Universal Basic Income: Ultimately Botched and Inept

By TJ Roberts | United States

The concept of a Universal Basic Income (UBI) comes up as a potential alternative to the modern welfare state. What people don’t consider, however, are the consequences of such a system. A UBI is a system in which the state provides a certain income for all people within the polity. Also known as a Negative Income Tax, a UBI requires a heavily progressive form of taxation. All adults within a polity receive this payment regardless of their wealth and their employment status.

Many proponents see UBI as a means of securing people’s basic needs. In addition, they see this as far more efficient than the current system. This, according to a UBI proponent, alters the incentives toward a more productive incentive structure in the economy. Finally, advocates of a UBI claim that it allows for people to survive after automation eliminates the job market. While on the face level, these arguments all seem to have a point, but some basic economic analysis can show that UBI is fundamentally flawed. This article will first outline the arguments one may find in favor of a UBI. It will then refute the arguments. In addition, it will offer some other problems to a UBI.

Why People Support UBI

People support UBI for many reasons. The most frequent reason that people cite is that it guarantees people a certain quality of life. To these advocates, not all individuals are capable of finding employment, so society must provide for these individuals. In addition to the unemployed, a UBI is claimed to help the underemployed. In essence, a UBI is a living wage for everyone.

Another case that some fiscal conservatives and libertarians make in favor of a UBI is that it is more efficient than the current welfare state. With a UBI, there is no massive bureaucracy to determine who needs what. You receive the same living income as every other person. This drastically lowers administrative costs.

Another case that fiscal conservatives and libertarians make is that a UBI readjusts the incentive structures of society. Since everyone is guaranteed this money with no strings attached, says the UBI advocate, there is no poverty trap that encourages people to work less so that they do not lose their payments. This means that the UBI would replace all currently existing social welfare programs and would allow for commodities such as health insurance to be handled entirely by the private market.

Finally, advocates of a UBI claim that it is the only logical means of continuing human existence in the age of automation. People fear that AI and new technology will make low-level employment obsolete, and will, therefore, knock so many people out of work that they will not be able to afford to live without a UBI.

Why the UBI is Wrong

These arguments, however, all fall when one considers economic theory and empirical reality. To start, a UBI would not adequately guarantee that everyone receives an adequate quality of life. This is because a UBI would lead to overwhelming price inflation. If everyone is guaranteed a living income, then more people will be able to consume products. Because more people can afford more goods and services, businesses will be inclined to increase prices whereas this surge in the number of willing customers is an external stimulus to the economy caused by outside intervention.

If a landlord knows that their clients are now receiving a monthly check, the landlord then has an incentive to increase rent to take advantage of the new wealth. As prices rise, people become less capable of providing for themselves, so they spend less. When people spend less, businesses will decrease production, which leads to businesses having to lay off workers. These newly unemployed workers then lose the ability to spend as much as they did when they had a job. This leads to an endless cycle of increasing prices and decreasing employment.

Inflation

To add insult to injury, since the money supply is increasing, the money becomes less capable of holding value. The value of the dollar would tank under this system. This inflationary trap would compound, ending in a society in which most people are jobless, most businesses can’t afford to produce, and those who are employed have a money that is so worthless that they cannot afford anything. Such an inflationary policy overturns all the progress the market has achieved for this world.

Right now, the needs of more people are being met than ever before around the world, and no UBI caused this. Rather, it is decreasing prices that has allowed for the cost of living to drop in such a way that extreme poverty is disappearing from this world. Our World in Data illustrates this point beautifully in this slideshow. Declining prices are benefiting the worst off especially; the countries with the highest poverty rates are currently experiencing the fastest growth rates. A UBI and the inevitable price increases that follow would only harm this progress. We need more production, not redistribution.

We Cannot Afford a UBI

In terms of efficiency, while a UBI admittedly leads to cheaper administrative costs, the nominal costs make a UBI far more expensive than the status quo. Suppose the US implemented a plan that guarantees a living salary to all adults based on the cost of living in their area. According to MIT, the average living wage in the United States is $15.12 per hour. According to the US Census Bureau, there are 247,813,910 adults living in the United States. If one does the math, the cost of providing this basic income to every adult in the United States is $7,793,648,343,936 per year (this does not account for inflation and administrative costs). This is nearly $8 trillion. Given that the US spent $4.094 trillion dollars in Fiscal Year 2018, The United States would have to end every government program and more than double taxes in order to pay for this program alone.

UBI Perpetuates Poverty

While UBI may seem to eliminate the poverty trap, this is not the case. First, consider the inflationary effects of a UBI. If prices increase so dramatically that goods become unaffordable, then poverty increases. Also, the UBI does eliminate the incentive not to work that some means-tested welfare programs do have, but it also has negative incentives of its own. UBI gives businesses an incentive to slash wages.

If everyone working for a business is guaranteed a living salary, then businesses feel empowered to slash wages and keep the profits. UBI is just another form of corporate welfare. It allows for businesses to outsource the cost of having employees to the taxpayers. This makes it more likely for people to be content with what they are receiving from their guaranteed income and not pursue work at all.

In Defense of Automation

Automation is happening. But this is a good thing. Automation does not cause unemployment. Rather, it frees people to pursue other forms of work that individuals are more passionate about. The entire purpose of work is to satisfy humanity’s endless wants and needs. Since people are still poor in this world, it is clear that there are inefficiencies in the status quo. Automation allows for labor to become far more efficient. In the same way that the strides in efficiency that humanity accomplished in the industrial revolution of the 18th and 19th centuries did not eliminate the ability of regular people to find work, so too the automation revolution of the 21st century will not eliminate the need for work. Rather, it provides even more opportunities.

This is not to say that everyone will keep the jobs that they have right now. Some people will lose their jobs as automation makes the labor more efficient. But let’s consider what happens to people who lose their jobs due to automation. First of all, no one starved to death as a result of the milkman becoming obsolete in the late 20th century. People that worked as a milkman simply found other means of employment. They adapted to their times. They moved to new jobs that met consumer demand and often made these workers more prosperous

Automation Creates Jobs

But let us consider why someone would lose their job to automation. Resources are finite, but human desires are virtually unlimited. While at the face level, someone might lose their job in one area, that is because the consumer demand is being met more easily through automated processes that decrease prices and the cost of production. Automation brings prices down. This is why the cost of living has dropped so significantly that most Americans can afford something as complex as a smartphone. If people can produce more for less, prices go down.

When prices go down, consumers spend less on what they buy. When consumers spend less, they have more money. This allows for consumers to buy even more products. Since consumers can buy more, businesses have to produce more. This means that businesses need to hire more people in order to produce. Automation does not directly cause unemployment. Rather, it makes it easier for displaced workers to find new work.

Automation Creates Entrepreneurship

Another benefit of automation is that as prices go down and people become capable of affording more, people have more resources which allows them to engage in entrepreneurship. As people develop new industries (some of these industries will come directly from automation), new employees will be needed. As technology grows, the ability to acquire the means of learning new skills that improve your standing on the job market (take Skill Share as an example of this).

Automation enriches the labor force, allows for workers to find new and better jobs, allows workers to learn how to boost their resume, and brings new innovation that will create more prosperity at a lower price which especially benefits the poor. Automation does not justify a UBI. Rather, it shows why we need to avoid a UBI by any means necessary: the price increases caused by a UBI will offset the gains in human prosperity automation is causing.

How a UBI Takes Your Power Away

The greatest harm that a UBI causes is that it rips power away from the common person in the market. In a system with a UBI, people are capable of ignoring the law of supply and demand and pursue their own interests without regard for its marketability and at the detriment of those pursuing profitable work. Once again, someone has to pay for the UBI. If person X chooses to create products that they are passionate about but no one else is willing to buy, they still get the UBI and other people are forced into subsidizing their illegitimate industry.

In a truly unhampered market, person X would realize that their entrepreneurial effort is yielding no fruit and would therefore adjust their strategy to meet consumer demand. Under a UBI, the incentive to do this greatly diminishes. This is another proof that UBI is another form of corporate welfare. There is no sense in propping up industries that consumers do not want. Doing so only encourages behavior that sucks resources away from those who have an eye for what people desire. This is theft from the market and from all of us.

The Road to Hell is Paved With Good Intentions

On the surface level, Universal Basic Income comes across as an alternative to the welfare state that would make the world a more productive and prosperous place. But when one considers basic economic theory, UBI collapses under its own weight. UBI increases prices, decreases wages, and decreases productivity. This system undos the progress we have made in eliminating world poverty and causes runaway inflation that would make the current living standard unaffordable.


This article was originally published in LIFE.

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It’s Time the United States End its Saudi Arabian Alliance

Shiam Kannan | United States

The murder of Saudi journalist Jamal Khashoggi is only one more entry in a long list of human rights abuses by the Saudi Arabian Government, which also includes their suppression of religious freedom, sponsorship of terrorism, and complicity in the ongoing humanitarian crisis in Yemen. However, Khashoggi’s murder is significant because it has brought mass attention to Saudi Arabia’s actions, and has given the United States a window through which to exit its relationship with them. Now is the time to utilize this window and end our partnership with the Saudis. Due to the Saudi Government’s involvement in some of the most abhorrent human rights violations present in the modern era, it is imperative that the United States terminate its friendship with Saudi Arabia if it wants to remain a nation looked up to by the rest of the free world.

Unfortunately, President Trump has refused to censure the Saudi government for its actions and has seemingly taken it for its word that the Crown Prince, Mohammed Bin Salman, had nothing to do with the assassination, despite the fact that the CIA has concluded that Salman had indeed ordered the killing. Essentially, Trump’s utilitarian view on foreign affairs has led to his favoring a foreign regime over our own intelligence agencies. President Trump’s cozying up to Saudi Royalty merely punctuates his view of foreign relations as business deals, rather than interactions with moral implications.

However, regardless of the Khashoggi assassination, there are many, many, other reasons why America ought to terminate its alliance with the Saudis, not least of which is the Yemeni Civil War. Over half of all the civilian deaths in Yemen have been due to Saudi airstrikes, and a recent UN report has concluded that the Saudi-led coalition in Yemen has been responsible for recruiting child soldiers, some as young as 8 years old, and even raping civilians. Saudi Arabia indiscriminately conducts bombings throughout Yemen, which have hit targets such as hospitals, funerals, and even refugee camps. And worst of all, Yemen is on its way to experiencing the “world’s worst famine in 100 years” if the Civil War continues. Saudi Arabia, in coordination with the US, is engaging in a blockade of food and supplies to Yemeni civilians. Approximately 12 to 13 million people are at risk of famine in Yemen right now, which could begin as soon as 2 to 3 months from now if the war does not end.

The airstrikes in Yemen are, for the most part, conducted using weapons purchased from the United States. Indeed, Saudi Arabia is America’s number one arms customer, as they give the US billions of dollars in exchange for laser-guided missiles and other destructive technologies. American-made bombs utilized by the Saudis have led to the deaths of many innocent people in Yemen, such as the 40 students on a school bus in Yemen which was bombed by the Saudis earlier this year. Essentially, this means that by selling the Saudis the weapons they want, which they subsequently use to murder Yemeni civilians, the US is just as complicit in their slaughter as the Saudi pilots dropping the armaments. The blood is not merely on Mohammed Bin Salman’s hands, but America’s as well unless it stops providing the Saudi Government with the tools they seek to massacre civilians in Yemen.

Despite all this, then, why is Trump so ardently supportive of the Saudis? One claim he frequently makes is that arms sales to Saudi Arabia boost American jobs in the defense industry. However the American private defense industry, which only accounts for 0.5% of the American labor force, does not rely on Saudi money; rather, its main client is the American military. Only approximately 8,000 workers in the United States make bombs, including the ones sold to Saudi Arabia, and it does not seem like their jobs are dependent on Saudi sales. Nonetheless, even if arms sales to Saudi Arabia are economically beneficial, the benefits are not worth the lives of innocent women and children on America’s conscience.

Another explanation for Trump’s warm relationship with Mohammed Bin Salman is merely the reason why America has been a Saudi ally for over 80 years: oil. Saudi Arabia has a great influence on global oil prices and thus is of great significance to American foreign policy and the US economy. But our addiction to foreign oil has clouded our moral judgment. Khashoggi’s murder should spark a moment of self-reflection at the very least: we should ask ourselves if cheaper gasoline is truly worth the betrayal of every single one of the values we seemingly espouse. We should ask ourselves if cheaper gasoline is worth the assassination of a journalist for exercising his right to a free press. We should ask ourselves if cheaper gasoline is worth the 7,000 civilians killed in Yemen since 2015. And if we reflect deeply enough, we should all be able to realize that the answer is “no.”

America has been regarded as the leader of the free world for the last century for only one reason: our values of liberty, equality, and democracy make us uniquely morally qualified to lead. We cannot maintain this moral authority so long as we remain allies with a government which openly and brazenly shows contempt for the very ideals we stand for. America’s soul should not be sold in exchange for cheap oil. Our ideals are worth more than the extra dollar at the pump, or the extra workers employed at Lockheed Martin. It’s time that we sent a loud-and-clear message to the Saudi Government that its egregious assaults on human rights, dignity, and equality will not be tolerated by the United States. Khashoggi’s murder has given us the perfect opportunity to end this relationship. It is now up to the President and Congress to do it. Let us all hope they make the moral choice.


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Trade School: Why You Don’t Need to Go to a University

By Adam Burdzy | United States

“Trade school? Is that, like, a place where you learn how to trade things?”

Every parent thinks that his or her child is smart in their own special way. This leads to Mom and Dad pushing Johnny to go to a nice university, where he will learn how to think, how to be a productive citizen, and most importantly, how to be a lawyer, doctor or even a professor.

Johnny decides to apply for a school that he seems to like, and is lucky enough to get accepted. Little does his parents know, Johnny doesn’t have what it takes to become a doctor, he can’t argue his way to become a lawyer, and he has no people skills, so there is no way that he will become a professor. But he tries anyway, and in his third year, he drops out. Not only did he waste three years of his life, but now he is in massive debt. After realizing he isn’t good enough for these kinds of careers, Johnny becomes depressed and has to work two jobs, the McDonald’s morning shift and the Taco Bell night shift, just to make enough money to get by.

This is something that occurs too often. About half of the people who enlist in a college or university will graduate. Johnny should have gone to trade school. Trade school is the university for people who aren’t good at the career choices offered by colleges. With the rise of labor jobs in the United States, we need more people to fill these shoes. These people are the backbone of society. Sure, some of the jobs offered may not seem that pleasant. In the end, however, the positives of attending a trade school are higher than attending a college.

To graduate from a trade school, you need about two years of schooling. To receive a bachelors degree, you need to have four years of schooling. And to make matters worse, most students will then apply to another school to get their masters degree, which takes another two years. Most people with a bachelors degree won’t be able to find a job as easily as a person with a masters degree. So you just wasted six years of your life, compared to two.

Not only do you save time in a trade school, but you also save money. Lots of money. To graduate with a bachelors degree, you will spend anywhere from $100,000 to $200,000 in those four years. Most of this money will come from student loans, or from outside scholarships. Trade school, on the other hand, costs about $33,000 to attend for 2 years. This is the average amount that students pay for one year at a university.

At a trade school, you get more opportunities to become whatever you want, and you focus in on one specific career. These career options are vast and can vary from construction work to being a commercial pilot. The wide array and the fact that you focus on one certain skill allows for you to dedicate your time to become what you want, and you don’t need to take all those classes that universities require you to take, even if they don’t relate to your major or minor. If you are going for a biology major, there should be no reason as to why you should be required to take an intro the 1700’s literature, unless you really want to.

Before you go to college or send your kids to college, take into account the benefits of attending a trade school. I am not against universities, and if the job you want requires a masters degree, then, by all means, go to college. However, if you are undecided like many college students are, then visit a trade school, find out about their work programs, and inform yourself before you make a decision that could cost you hundreds of thousands of dollars.


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