I recently finished the book the war on normal people written by Andrew Yang, who is a democratic presidential candidate for the 2020 election. The normal people in the title refers to the silent majority of Americans who haven’t received higher education and have suffered in the recent technological development and globalization. As a “techie” who lives in Silicon Valley, I am very thankful for Andrew to share his thoughts and opinions. This book is a great way for people like me to have a realistic view of America, a view Andrew developed after he worked many years to foster entrepreneurship outside Silicon Valley.
My first question when I saw the title was: Aren’t we living in a peaceful time? Who is waging the war to normal people? According to Andrew, we are in a “war” created by the nature of capitalism to achieve efficiency and the new technology that favors high-skilled workers at the cost of the normal people. Andrew feels that normal people lack the ability to stand on their own foot in this “war.” As a result, the government needs to step in and to give normal people a hand. The solution Andrew proposed is the the universal basic income (or so-called freedom dividend), which is to give $1000 to every American citizen. While there may be a better solution, Andrew has got the problem right — there is a massive job shift in terms of both skill requirements and locations. Unfortunately, not everyone could adapt to the shift.
More than 5 million manufacturing workers lost their jobs after 2000, and it was the emotion behind this massive job loss that sent Trump to the white house in the 2016 election. In the first part of the book, Andrew focuses on where and why the jobs have gone. There are two reasons for the job loss — automation and globalization. The former allows employers to replace a lot of human workers with machines, the latter allows employers to outsource many jobs to countries of lower labor costs. The American workers now need to compete with both machines and cheap labors overseas.
The underlying driving force is the desire for companies to maximize profit for shareholders. In spite of Andrew’s grudges, I think private companies should not be scrutinized for this. After all, it is the same force that propels the machine of the market to operate and it is the government’s duty to set the rules of the market and private companies are not and should not be wealth fare programs.
Another point mentioned in the book is that fewer jobs are created by the new technology than those that were eliminated. The example it cites is that while Walmart employes over +1 million works, new tech giants like Google or Facebook employes a much fewer number of people to reach the same scale. Although arguably this is true, the point is less clear if we consider the total number of job opportunities they provide. Google or Facebook are also platform companies that enabled many more job opportunities. If you count contractors, gig-workers and content creators, the number of job opportunities created by these platforms is much larger than the number of full-time employees they hire. Besides, more than 4 million enterprises rely on Google and Facebook and they provide many more job opportunities.
Although the total number may not change, there are still significant changes in jobs. On the one hand, new jobs require much higher skills than the ones they replace. On the other hand, New jobs appear in different geographical locations than the old ones.
While globalization and automation are shifting the nature of jobs, there is no mechanism to help people, especially less educated people, to adapt to the shift. Two decades have passed since the job losses started. As two decades is a long time and if the adaption still doesn’t happen, we couldn’t expect the trend will automatically be reversed. The losers are deprived of their representative rights in the market. They will eventually stop looking for job opportunities.
It is right that the government needs to step in to help bridge the gaps. However, instead of distributing money unconditionally, the government should give stronger incentives and guidance for people to adapt to the change.
First, the government should invest in education and ensure it is affordable and accessible. Since new jobs generally require higher skills. Equal education is the key to ensure every person has equal access to the new opportunities created by technologies. STEM education in the US is considerably lagging. Student debt is a serious issue. The quality gap of education in public and private schools needs to be narrowed. Also, adult education should be subsidized by the government because, arguably, adults who decide to continue education need more incentives and encouragement than kids.
Second, the government should help bridge the gap among different geographical areas. Currently residing in a place outside Silicon Valley and New York means a huge loss of job opportunities. When I graduated, I couldn’t find a good job in Boston so had to come to Silicon Valley. Most of my friends had similar experiences. Given that Boston is already a talent hub and a college city, the situations of other cities could only be worse. For this issue, I recommend another book The New Geography Of Jobs, which is authored by Enrico Moretti and also discusses the geographical shift of jobs in the united states.
One joke is that why silicon valley becomes the tech hub is that VCs like the good weather of the area. Although this is a joke, it is certainly true that VCs have a preference for certain places over others. If VC lacks the incentives to go to other cities, the government should step in and either provide venture fundings or adjust the legislation to give VC more incentives to invest in other communities.
At the same time, for those who want to relocate to a technological hub, the government should also provide the necessary help. This is tricky because we need to make sure this won’t cause too much pressure to the communities outside the existing technical hub.
Although I don’t agree with the plan of giving freedom dividends unconditionally, I do think the government should play a more active and positive role to create a better future for every person in the upcoming new technological society. I am glad to hear that Andrew is on the way to find a solution and his campaign has already increased people’s awareness of the issue a lot. Best wishes to Andrew for his journey.