Guaranteed basic income is not happening – Attack your debt and multi generation and multi-family living

Switzerland has rejected the policy of guaranteed basic income by 77% to 22%. It will years before it comes up for a vote again and it will likely take at least 20 years before the vote would flip from a huge loss to a victory. It would take longer if ever for countries like the United States to vote for anything like a basic income.

An unconditional basic income (also called basic income, basic income guarantee, universal basic income,or citizen’s income) is a form of social security system in which all citizens or residents of a country regularly receive an unconditional sum of money, either from a government or some other public institution, in addition to any income received from elsewhere.

An unconditional income transfer of less than the poverty line is sometimes referred to as a “partial basic income”.

A common argument for guaranteed basic income is the fear that automation, artificial intelligence and robots will create massive unemployment.

A frequent objection to basic income is that it would create a disincentive to work since the availability of the income is unconditional. In one study, even when the benefits are not permanent, the hours worked—by the recipients of the benefit—are observed to decline by 5%, a decrease of 2 hours in a typical 40-hour work week.

  • Switzerland is one of the wealthiest countries in the world and in Europe has socialist leaning policies. They rejected the guaranteed basic income nearly 4 to 1.
  • Technology job losses and pay reductions are probable if not for the world as whole, this is likely in many fields at some point
  • Since basic income will not be implemented for decades, then people must take the action to protect themselves

Even before massive technological job loss and pay reduction – americans are in a financial mess

David Ramsey is a financial advisor and radio talk show host.

The 7 Baby Steps to money management
Step 1: Save $1,000
Step 2: Pay Off Debt
Step 3: 3-6 Month Fund
Step 4: Invest 15%
Step 5: College [NBF – this makes less sense if there is a massive robot automation scenario]
Step 6: Pay Off Home
Step 7: Give

Debt snowball

List your debts in order from smallest “total payoff” balance to the largest.
Attack debt by paying as much as you can on your smallest payoff balance. You need quick wins.
Once you’ve paid something off, move that entire payment to the next item on the list.

Reduce expenses and create passive income that would exist if there is technological automation

Massive expense reduction is possible where more people live in the same household. This was a strategy used by many of the vietnamese boat people when they came to the USA in the 1980s.

There are other examples of two couples buying one house together

Multiple generations can live together so that debt is reduced or eliminated while buying assets

Is Technological unemployment coming and how soon and how much ?

The third industrial evolution appears to have resulted in an intensification of trends already fledgling in the first two:
a hollowing-out of employment,
a widening distribution of wages and
a fall in labor’s income share.

The key question is what happens next?

A re-run of the 19th century, with productivity gains eventually boosting wages and the labour share?
Or, different than in the past, a permanent re-shaping of the labor landscape?

A number of authors have recently argued, persuasively, that it is a permanent re-shaping of the labor landscape. Based on past patterns, it is argued that information technology may be poised for exponential growth, as its full fruits are harvested. Indeed, we may be on the cusp of a fourth Industrial Revolution or Second Machine Age (Brynjolfsson and McAfee (2014), Ford (2015)).

Its defining feature would be that new-age machines will be thinking as well as doing, sensing as well as sifting, adapting as well as enacting. They will thus span a much wider part of the skill distribution than ever previously. As robots extend their skill-reach, “hollowing-out” may thus be set to become ever-faster, ever-wider and ever-deeper. Or that, at least, is the picture some have painted.

How much wider and deeper? Research by Carl Benedikt Frey and Michael Osborne has tried to quantify this hollowing-out, by assigning probabilities to certain classes of job being automated over the course of the next few decades. Their work was initially done for the US, but has recently been extended to the UK (Frey and Osbourne (2013), Deloitte (2015b)).

Using this methodology, the Bank has recently done its own exercise for the UK.

All of these projections, like those of Ricardo and Keynes previously, may be far too pessimistic. The lessons of history are that rising real incomes have ridden to the rescue, boosting the demand for new goods from new industries requiring new workers. During previous phases of technological growth, workers have moved up the income escalator by “skilling up”, thereby keeping one-step-ahead of the machine.

And some have argued that this pattern is set to repeat itself in future. Humans will adapt their skills to the tasks where they continue to have a comparative advantage over machines.

There is a fundamental reorientation in the nature of work could be underway. We may already be seeing early signs of that in the move towards part-time working, temporary contracts and, in particular, self-employment.

Various jobs that still exist are seeing substantial wage decreases. Cloud based versions of analytic software have substantially reduced the skill requirements for financial analysis jobs and seeing wages drop by 20-40%.

Some have speculated that these seismic shifts could result in the emergence of a “new artisan” class : micro-businesses offering individually-tailored products and services, personalized to the needs of customers, from healthcare and social care, to leisure products and luxuries.

SOURCES- David Ramsey, Switzerland, Wikipedia, Bank of England

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