How to Share the Wealth If the Robots Start Doing the Work
Now that he won’t be labor secretary, Andy Puzder will be free to keep running his fast food empire the way he likes: with low wages, rampant wage theft and sky-high rates of sexual harassment. Because humans do pesky things like complain and demand decent hours and collective bargaining rights, Puzder has toyed with the idea of replacing them with robots. As he’s put it, machines are “always polite, they always upsell, they never take a vacation, they never show up late, there’s never a slip-and-fall or an age, sex or race discrimination case.”
Bill Gates and French Socialist presidential candidate Benoit Hamon would appear to have similar ideas for how to curb the impact of the kind of profit-hungry automation Puzder dreams of: Tax the bejeezus out of companies that use robots. But like other proposals with support from opposite sides of the political spectrum — like the idea of a universal basic income — the devil is in the details.
Hamon, who has drawn comparisons to Jeremy Corbyn and Bernie Sanders, is running on a broadly left-wing platform in an election that includes far-right rising star Marine Le Pen, leader of the National Front. His plan, which also includes legalizing cannabis, would provide a 750-euro ($810) monthly income to all French citizens, financed partially by robots.
“When a worker is replaced by a machine,” he explains on his campaign website, “the wealth created benefits for the shareholders. I propose, therefore, to tax this wealth — by applying the social contributions on the whole of the added value and not just on the work.”
Gates has called for something ostensibly very similar, arguing that automation shouldn’t exempt employers from paying the taxes they would on their human workers’ incomes. Instead of funding a universal basic income, Gates contends that the tax revenue could be used to “amp up social services for old people and handicapped people,” diverting labor into sectors like education and elder care.
Hamon’s fourth place in the polls means he likely won’t get to implement such a measure, and a federal tax on robots looks more unlikely under Donald Trump than at perhaps any point in American history. But the proposal raises an important point. In 2017, the looming rise of our robot overlords has become a familiar meme in conversations about the future of work. Nearly half of jobs in the United States could be eliminated via automation over next two decades. In transportation alone, a 2016 White House report estimates that automated vehicles could eliminate or dramatically change as many as 3.1 million jobs in the United States.
Yet while upticks in automation are often cast as natural phenomena, the inevitable result of improving technology, it’s executives like Puzder and Gates who choose whether to swap people for machines. For Hamon, that choice should come with a cost that’s situated in a broader redistributive agenda that also gives ordinary people more of a say in national politics. For Gates, on the other hand, the tax is simply a way to make the market more efficient amidst the rising robot tide.
And as extraordinarily wealthy people, Puzder and Gates have more in common with each other than with any of the people likely to be put out of work. Gates’ embrace of charter schools has put him at odds with teachers unions and more in line with philanthropists like Education Secretary Betsy DeVos who see their vast wealth as license to dictate policy.
Gates and Puzder also share a similar stance on the minimum wage. Asked about wage hikes in a 2014 interview on MSNBC’s “Morning Joe,” Gates waffled. “Which are the households that end up benefiting?” he opined. “Is it much more the teenager in a wealthy household or is it that household in poverty?” The average age of a fast food worker is 29, and 26 percent are raising children. Fifty percent work more than one job.
In other words, bosses will be bosses. Back in December, Trump claimed to have saved 1,100 jobs in a deal with United Technologies to invest in its Indianapolis Carrier factory. Shortly thereafter, the company’s CEO, Greg Hayes, said he plans to use much of that money to replace workers. “We’re going to . . . automate to drive the cost down so that we can continue to be competitive,” Hayes told CNBC. “What that ultimately means is there will be fewer jobs.” Indiana taxpayers, meanwhile, are on the hook for $7 million in corporate tax breaks included in the agreement.
Puzder’s own embrace of the robot labor apocalypse is ironic given the reasons he and other executives have cited for opposing wage hikes: It would force employers to hire less people.
“If your objective is to bolster and support the unions, and you’re not all that concerned about whether young people will have entry-level jobs, then you should be protesting in favor of a $15 minimum wage,” Puzder told Fox Business last year.
For anti-labor zealots like Puzder, though, automation is about more than efficiency: It’s about giving workers less bargaining power in the workplace, eliminating lawsuits and union drives at their source.
His company, CKE Restaurants, has been charged with wage theft on multiple occasions and was forced to pay $9 million in a 2004 settlement. A recent study from the Restaurant Opportunity Center found that two-thirds of women working at Puzder’s restaurants experienced sexual harassment at work. Industry-wide, a 2016 survey found that 40 percent of women working in fast food are sexually harassed. Killing their jobs, in Puzder’s view, is a convenient path to a more compliant workforce — barring some Westworld-style revolt.
Still, it isn’t necessarily automation itself that should be feared — just Puzder and other executives’ version of it, where jobs, unions and social services are dismantled. Like Hamon, authors such as Paul Mason and Peter Frase argue that job-killing automation should go hand-in-hand with a universal basic income.
“A low-work society,” Mason writes, “is only a dystopia if the social system is geared to distributing reward via work.”
The idea of a universal basic income has attracted some strange bedfellows. Although he described Tesla workers’ complaints about wages and working conditions “morally outrageous,” the company’s CEO, Elon Musk, has joined other tech executives in calling for a universal basic income. Automation, of course, would mean a windfall for CEOs like Musk. If a basic income could cover displaced workers, it makes a smaller workforce all the more appealing. As the research director for a non-profit arm of Y Combinator, which is running a basic income pilot, told Quartz, it’s an opportunity “to begin exploring alternatives to the existing social safety net,” softening the blow for a workforce increasingly dependent on piecemeal gigs at companies like Uber and TaskRabbit. Some visions of a universal basic income see it as an outright replacement for public housing and benefits, disrupting welfare as we know it.
Deployed well, though, both a robot tax and a basic income could fit comfortably into a redistributive agenda, as they do for Hamon. But any policy embraced by the 1 percent deserves as much scrutiny as its richest backers.