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OPINION | The Freedom Dividend

HAVE you heard of this Asian man running for the highest seat in the United States who wants to give all Americans ages 18 to 64, $1,000 a month?

Andrew Yang

This presidential hopeful is calling it the Freedom Dividend, and he’s Andrew Yang. Yang is a 44-year-old entrepreneur who has an impressive resume. Most notably, he founded Venture for America, a nonprofit organization that provides capital to young and talented entrepreneurs across the United States to build business start-ups. Why is Yang running for President? And why does he want to give every American $1,000 a month? Because he wants to solve the real problems the other candidates are dismissing. With his connections in Silicon Valley and his experiences as CEO of Venture for America, he discovered that automation and artificial intelligence are on pace to replace mainstream jobs in the United States. According to Yang, these jobs are office and administrative support, sales and retail and transportation and material moving. Unfortunately for millions of Americans employed in these sectors, they will begin to see their work dissipate. Yang calls this the Great Displacement in his book, “The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future.” Companies that have tremendous wealth have the most economic and market incentives to automate repetitive tasks. Take, for example, e-commerce behemoth Amazon. It takes up about 43% of the e-commerce market in the United States and has wall to wall robots in their fulfillment centers to perform routine tasks which results in millions of dollars of savings. These savings are passed on to consumers so Amazon can keep their prices low. What’s mind-boggling is that the e-commerce goliath paid zero in federal taxes last year because of how the U.S. tax code is set up, according to Yang. Yang’s Silicon Valley friends insist that companies just want to increase their bottom line by making routine tasks more efficient and cost-effective.

Moreover, pressure from shareholders and markets play a significant role in a company’s decision to automate repetitive tasks. Think about it, robots can perform tasks 24/7, they do not get tired, and will not call in sick. Companies save millions of dollars in healthcare, and robots do not have feelings (yet). However, the implications in automating repetitive work have economic and social ramifications, according to Yang. He states that malls are closing and displacing retail workers by the thousands as a result of automation, and Amazon is right smack in the middle of this crisis. In 2017, Payless ShoeSource, one of the biggest shoe retailers in the United States, announced that it was filing for bankruptcy. Payless, which built most of their stores in malls was not equipped with the new challenges in the turn of the century — e-commerce and Amazon! Amazon acquired an online shoe and clothing e-retailer giant in 2009. Payless recently closed its store in Saipan. That’s a loss in local taxes (business gross revenue tax, employer’s withholding tax return, excise tax, and the environmental beautification tax). Most disheartening was workers were displaced. Also, the transportation and material moving company for Payless on Saipan and the owner of the space that Payless rented just lost a client which means losses in revenues and local taxes. Yes, it’s a huge saving for those who order online but not so great for brick and mortar retail stores. Retail stores pay taxes, rent, and provide salaries, all of which are contributing factors that significantly puts them at a disadvantage competing with a goliath like Amazon. I wonder how our retail stores will be affected by Amazon and other e-commerce giants in the next 5 to 10 years, especially for small and mid-sized stores.

Yang sees automation and artificial intelligence or AI as inevitable, fast-tracked by the influence of the markets and greedy shareholders. Markets do not care about people. Gordon Moore, the co-founder of Intel, suggested that overall processing power for computers will drastically increase in power, and decrease in cost at an exponential rate. This is known today as Moore’s Law. In his book, Yang provided examples of how artificial intelligence was being utilized. Deep Blue, an AI by IBM, whipped the world champion chess player. Google’s supercomputer AlphaGo clobbered the world’s best Go Master. In China, the first-ever dental implant was performed by an AI. Cafe X’s Gordon the Barista can make a faster and better-tasting latte than a human barista. No more waiting in line! IBM’s Watson Health can recommend a cancer treatment trial to a doctor using its vast knowledge of cancer treatment. Watson Health continues to learn from experience and improves its performance. Due to the increasingly powerful processors (Moore’s Law) engineers are using biomimicry to copy nature’s patterns, processes, and systems to develop Deep Learning. Deep Learning is when a supercomputer is fed massive amounts of raw data and learns without human intervention. Google DeepMind’s Deep Q-learning software is an example of Deep Learning. By instructing Deep Q-learning to maximize a score, it can learn how to play a video game using trial and error and within minutes can play the game at the highest level. Remarkably, Deep Q-learning can take the skills learned from one game and use it to other video games!

McDonald’s recently bought an artificial intelligence company, Apprente, to develop its drive-through automation. Eventually, self-order kiosks and mobile app will be produced. UPS, one of the leaders in the transportation and material moving industry, recently announced that it has a minority stake in TuSimple, a start-up company developing autonomous trucking. UPS is quietly testing its autonomous trucking. According to Yang, there are 0-5 levels to autonomous driving, 5 being full automation. Right now, the autonomous vehicle industry is at level 4. As technology continues to improve, Level 5 or full automation is not too distant. UPS is also developing drone deliveries to compete with Amazon. With these rapid developments in automation and artificial intelligence occurring in the United States, one can imagine the imminent future of blue and white-collar jobs. Yang recognizes that white-collar jobs, especially in the medical industry, have influential lobbyists in government which will probably slow-down the AI take over with government regulations. Unfortunately, blue-collared jobs are not so lucky. In his book, Yang reckons about three million truck drivers will be affected from the looming automation of trucks. As such, establishments at truck stops that offer lodging, food, entertainment (about seven million workers) will be affected as well. What about retraining the affected workers? According to Yang, the U.S. government is terrible at retraining programs. When the manufacturing jobs were automated, and millions of workers were displaced, the government created and funded retraining programs that had a 0 to 15% success rate according to Yang.

Yang has more than 100 proposed policies in his website, from legalizing marijuana to colleges paying their athletes. But his three major policies are Medicare for All, Human-Centered Capitalism and the Freedom Dividend (the centerpiece of his campaign and my personal favorite). With technology getting better and better and slowly taking over jobs, Yang proposes a universal basic income or what he calls, the Freedom Dividend. If elected President, he will give $1,000 a month or $12,000 a year to all Americans ages 18 to 64 no questions asked! Yang plans to fund the Freedom Dividend by issuing a value-added tax or VAT on companies such as Amazon, Uber, Facebook, Google, and other companies enjoying the benefits of automation, AI and people’s data. Staple goods will be spared from the VAT, according to Yang. The universal basic income is not a new idea, in fact, it is a profoundly American idea. Thomas Paine, one of America’s Founding Fathers, was a proponent of the concept and proposed a Citizen’s Dividend. Dr. Martin Luther King Jr. advocated a Guaranteed Income for all Americans. American economist Milton Friedman was in favor of the idea of a universal basic income. In 1969, President Nixon introduced his Family Assistance Plan to millions of Americans tuned in to their television set. The plan would have provided marginalized families with a monthly minimum income guarantee. His Family Assistance Plan passed the House of Representative 243 to 155 but failed to pass the Senate. Former President Barack Obama speaking at the Nelson Mandela Annual Lecture in South Africa suggested that a Universal Basic Income be considered in the advent of technological advancements. Other prominent figures who are open to the idea of universal basic income include Elon Musk (Tesla and SpaceX), Mark Zuckerberg (Facebook) and Yang’s mom. Musk recently announced his support for Yang.

What would you do with $1,000 a month? According to Yang, 78 percent of U.S. workers are living paycheck to paycheck, and 57 percent say they would struggle to pay an unexpected $500 expense. This creates stress and clogs the brain’s bandwidth. Yang goes on to say that 2/3 of our children’s education is determined by outside of school factors such as family time, stress levels at home, the type of neighborhood, etc. Teachers, on the other hand, account for 1/3 of a child’s academic performance. If we are serious about improving kids’ academic achievement, families need economic resources in their hands which a Freedom Dividend will provide, according to Yang. A Freedom Dividend will decrease the stress level at home, parents will spend more time with the family, etc.

Yang’s theory is that when we receive $1,000 a month, we will spend the money right in our communities. We will be spending the money on a much-needed car or house repair that we have been putting off, have an occasional night out with the family, or save it for a family vacation. This will create a trickle-up economy creating local jobs, and providing hope for those who had none, according to Yang. The Freedom Dividend will not affect existing welfare programs. Those currently receiving welfare programs can either choose to continue with what they have or select the Freedom Dividend. The Freedom Dividend does not create additional bureaucracy and give the resources straight to the people who know exactly what to do to solve their problems.

One state has been enjoying a form of universal basic income called the Permanent Fund Dividend since 1982. In Alaska, every year, every Alaskan receives an oil dividend of $1,000 or more, and according to Yang, Alaskans love their oil dividend. In his campaign speeches, Yang explains that tech industries are using our data and that our information is worth more than oil. He is calling technology the oil of the 21st century and asks, “Have you ever received a tech check in the mail?”

What would you do with $1,000 a month?

The writer is a resident of Chalan Laulau, Saipan.