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Tim O'Reilly has advocated for the idea of algorithmic regulation - reducing the role of people and replacing them with automated systems in order to make goverment policy less biased and more efficient. But the idea has been criticized as utopianism, where actual implementations are likely to make government more opaque and even less responsive to the citizens who have the least say in the operation of society.
Now, as part of New America's annual conference What Drives Innovation Around the Country? Virginia Eubanks has written an essay examining such automation in the cases of pre-crime and welfare fraud. Is it possible to automate away human judgment from the inherently human task of governance and still achieve humane results? Or is inefficiency and waste an unavoidable part of the process?
(Score: 1) by khallow on Saturday May 09 2015, @01:43AM
Those are outcomes *YOU* expect, but you haven't demonstrated a connection.
Well, I don't know what you mean by "demonstrated a connection", but I believe I have. Perhaps an elaboration of the argument would help?
First, I have the obvious observations that minimum wage precludes jobs that earn less than minimum wage by definition and the basic model of supply and demand. If you make low income labor more expensive via a high minimum wage and a variety of other obstructions to employ low income people, then the model implies that demand for that labor will decline. Second, we have known correlations between low income labor and youth, low education, and being African American. Thus, we should see correlations between these characteristics and higher unemployment, if the model is correct. We do. Hence, evidence for the connection and it is as demonstrated as it'll be under the circumstances of an internet argument.
I'll throw in a chart of CEO compensation increasing and prove to your apparent standard that high CEO pay causes poverty.
You would waste your effort here since I already provided a chart that shows two thirds of humanity greatly improved their wages at the same time that relatively high CEO pay occurred (over the 1988-2008 period). It is not true. I would also point out in your charts that you are ignoring somewhere on the order of 80-95% of the world, depending on the size of the grouping of developed world countries you use.
There is a very simple explanation for this which doesn't require some silly narrative about CEO greed. Due to globalization after the end of the Second World War, the effective pool of labor (with good enough support infrastructure such as transportation and industry to make and ship things competitively to other parts of the world) available to global industry and business has increased from crudely around half a billion people in 1945 (basically North America and Western Europe) to around 4 billion people today. When you increase the supply of something, then the price of that thing goes down. Fortunately, demand for labor easily expands when the available labor pool becomes cheaper. That still means that developed world labor just can't command the premiums of the past.
OTOH, what of the CEO? Most of their wealth comes from capital. Capital has experienced the same massive growth as labor, but as the price of labor available to global industry and business declined, the relatively price of capital increased. That led to everyone whose wealth comes from capital, becoming wealthier relative to people whose wealth comes from their labor. And hence, the extreme wealthy became richer compared to the rest of developed world society while the developing world societies saw a large increase in their wealth due to the increase in wages from the insertion of global trade.
(Score: 2) by sjames on Saturday May 09 2015, @04:43AM
I guess you never heard that correlation doesn't prove causation? You showed a few correlations, I showed a few others (deliberately silly ones but just as strong from the standpoint of proof).
Part of what you are missing is inelastic demand. Double the cost of floor sweepers and shops will still be hiring floor sweepers. They have to since otherwise nobody will shop there and eventually they'll get shut down for health violations. You also ignore that more people with more money tends to produce more business. Not so much at a yacht showroom, but at exactly the places that tend to pay minimum wage.
(Score: 1) by khallow on Saturday May 09 2015, @11:37PM
I guess you never heard that correlation doesn't prove causation?
How do you "prove" causation? My view on that is that you develop a model which describes the supposed cause/effect relation and make observations which confirm or falsify the model. The causation isn't a result of the observed correlations, it's described by a model which describes the observations well and in a parsimonious way. You also have to pay attention to what reality is actually doing. Here, we have most of the world thriving and growing while the developed world, particularly the US, is not. A greed-based model doesn't work because all parts of the world experience the greed, but most of the world doesn't experience the alleged decline in quality of life which is predicted to accompany that greed. Similarly, claims that automation are finally replacing jobs don't work because global labor continues to be employed better, continuing a centuries old trend.
Part of what you are missing is inelastic demand. Double the cost of floor sweepers and shops will still be hiring floor sweepers.
We can already see that's not true since so much labor has been exported to China and elsewhere. Further, as I noted earlier, there has been a vast increase in the pool of labor available to global employers. If labor were inelastic, we would have seen a large drop in the price that workers could command. I don't mean the modest decline over decades apparent to developed world workers, but a huge drop. Employers would have long ago employed everyone they could have employed and we would have the numbers of unemployed and employed reversed, with the vast majority of people unemployed.
If you have a large pool of persistent unemployed, your country is doing something very wrong. In a normal economy, employers will snap up those prospective workers. For example, if one looks at job recovery from the US recessions after the Second World War, one notices a remarkable thing. The majority of them fully recovered from job loss in two years.
Not so much at a yacht showroom, but at exactly the places that tend to pay minimum wage.
Funny you should mention yachts [fee.org]. Pardon this detour, but I think this is relevant due to a historical policy taken in the name of the poor which backfired spectacularly. The linked story describes what happened in the US in 1990 when Congress decided to punish the rich again.
With so many benefits “trickling down” to middle-class and poor Americans, it’s hard to understand why Congress would seek to destroy the boat-making industry. Yet that’s exactly what it did in 1990 when, according to a Wall Street Journal report, “Congressional Democrats [were] eager to show they were being tough on the rich.” A ten percent tax was added to the cost of luxury yachts. Since a yacht today costs anywhere from $100,000 to $200,000, this means that at least $10,000 had to be paid to the government before a potential buyer could get his first whiff of salt air. With the economy already heading for trouble, this was the proverbial straw that broke the camel’s back. Ocean Yachts in Weekstown trimmed its workforce from 350 to 50. Egg Harbor Yachts entered Chapter Eleven bankruptcy, going from 200 employees to five. Viking Yachts dropped from 1,400 to 300 employees. According to a Congressional Joint Economic Committee Study, the boat industry nationwide lost 7,600 employees within one year. As Bob Healy, president of Viking Yachts explained on NBC News, “Every six or seven years, you have a down cycle. You might be off 20 percent, 30 percent, or 40 percent at maximum. Our industry is off 90 percent nationally.”
Despite all the talk about stimulating the economy, and the clear evidence that both the luxury taxes and higher taxes in general have pretty much destroyed the yacht-making industry, the tax did not generate any significant revenue, and has only cost taxpayers money by forcing workers onto the government dole. Congress originally estimated that the luxury tax on boats, aircraft, and jewelry would raise $5 million in taxes a year. Instead, the Treasury has lost $24 million through lost income-tax revenues and higher unemployment and welfare payments.
The luxury boat industry is heavily dependent on a good economy and they apparently were even worse off [nj.com] after the 2007-2008 recession, but consider this 2009 quote:
Since the recession hit, Leek's payroll has dwindled from 150 people to 30. His production has gone from 70 boats a year to just four. He declined to release sales figures -- "it's ugly" -- but said to stay afloat, they are servicing old boats and building new ones only for those who pay up front.
Healey and others recall the last time the industry was on the brink of collapse. In 1991, a federal luxury tax throttled boat sales and nearly put Viking and other builders out of business before eventually being repealed.
"This time it's worse," said Brett Marshall, Silverton's vice president of sales and marketing.
Funny how they remember this luxury tax even two decades later.
Minimum wage is not the only bad policy idea out there. There's a large group of people who are willing to destroy their own future in order to get back at the rich for imaginary injustices. And there is a half century of bad policy decisions in the US which come from this group occasionally getting what they want. You can keep pointing out the living wage thing, but what's the point of having a living wage, if you aren't employed? What's the point of punishing the rich, if those policies either harm plenty of people other than the rich or encourage them to move a significant fraction of a country's wealth elsewhere? These bad ideas don't happen in a vacuum. They hurt people.