Andrew Yang is making me feel enthusiastic about this year’s Democratic presidential primary. Technically, I’m not even a Democrat. I’m still currently registered as Unaffiliated. I changed my party affiliation shortly after the 2016 National Democratic Convention. I still voted for Hillary Clinton in the general election. Not because I liked or respected her. I didn’t.
I voted for Hillary because she wasn’t Donald Trump.
I like what Yang is saying about automation and how it is replacing the American workforce. I agree with his assessment. As a trained electronics technician, I’ve personally witnessed the automation Yang is speaking about.
Automation is not new
My personal experience with automation is not new. It was used heavily in the United States Air Force even in the mid-80s and 90s. I was an electronic warfare systems technician.
Electronic warfare (EW) refers to the practice of detecting, identifying, and countering enemy radar on the battlefield. During most of my time in the Air Force, I worked on the bevy of EW equipment found on the B-52G Stratofortress Bomber. The B-52G had a crew of six. One of those crewmembers was an Electronic Warfare Officier (EWO) who would manually operate the EW equipment.
When an EW system on the B-52 was upgraded or added to the existing suite, it was with an automated system. Instead of manually operating the systems designed to keep B-52s from getting shot down, the EWO’s primary job began and ended with turning the EW systems on and allowing them to do their thing.
The EW systems in the Air Force became so automated that the B-2 Stealth Bomber does not have an EWO onboard. Electronic warfare on the B-2 is completely automated.
When I got out of the Air Force in 1994, I was hired by Walmart to fix and maintain high-speed equipment in a large centralized photofinishing lab it was constructing in Williamsport, Maryland. One of the machines I worked on was a Gretag Imaging Packer. It automatically cut the photos and negatives from giant rolls. It ensured the photos matched the negatives and then “packed” them together, placing them into the correct bag for the customer. It did all this extremely fast, much faster than what a human could do. Each Packer replaced a number of human workers.
Automation has been an integral part of manufacturing environments for a long time now. Machines are not only faster than humans, but they also don’t need to take breaks to pee or vape. They never need to miss a day of work to take a sick child to the doctor. They never get into arguments with other machines, requiring a visit to human resources.
Yang’s beginning salvo in the war on normal people is to establish a Universal Basic Income (UBI) of $1,000. He calls it the “Freedom Dividend” because it sounds better in focus groups. Under Yang’s plan, every single American upon turning 18 years old will receive $1,000 a month, no questions asked, for the rest of their life.
What I like most about Andrew Yang’s plan is not that he wants to give people free money, but that he is the only candidate who is recognizing the existential threat automation poses to the American worker. Automation has been getting better every year. It did not begin five or ten years ago. It began way back when the first steam-powered locomotive engine was first placed on its side in a factory.
How will Andrew Yang pay for UBI?
To help pay for UBI, Yang wants to enact a ten percent value-added tax (VAT). Think of it as a federal sales tax added to everything you buy. If you’ve ever been to Europe, you paid a VAT when you paid for something.
Ten percent is low compared to what people pay in Europe. Here’s a small list of what the VAT is in Europe:
- Denmark: 25%
- France: 20%
- Finland: 24%
- Germany: 19%
- Iceland: 24%
- Portugal: 23%
- Sweeden: 25%
- United Kingdom: 20%
Not only will the consumer pay a VAT, everyone up the supply chain will pay it too. Currently, too many corporations get away with not paying federal taxes. For example, Amazon made $11.2 billion in profit last year. Not only did it not pay any federal taxes on that $11.2 billion, it actually received a federal tax rebate of $129 million. That means its effective tax rate in 2018 was roughly at minus 1 percent.
Instead of paying no federal taxes, under Yang’s plan, Amazon will pay a 10 percent VAT on every cardboard shipping box, every padded envelope, every cloud server rack, and every robot it buys to replace humans in one of its many warehouses across the country.
Won’t a VAT make everything we pay for much more expensive?
Since every entity in the supply chain will pay a 10 percent VAT on everything it buys to produce the thing it is passing down the supply chain, it’s easy to assume the cost of the VAT will be passed on down the supply chain as an added cost of manufacturing. The end result will be that the consumer will wind up not only paying their VAT, but the VAT of every other entity up the supply chain. The thing is, that’s not the way the market works. Prices are set by what the marketplace will bear, not the cost of manufacturing.
If people are willing to pay up to $100 for a widget, that fact will not change if the producer of that widget has a 10 percent increase in the cost of raw materials it takes to build a widget. The marketplace is still only willing to pay up to $100 for that widget.
On the other hand, with an extra $1,000 a month, the market may be willing to pay more than $100 for a widget. That’s entirely possible. Saying it may happen is not the same as saying it will happen.
As a card-carrying Unaffiliated voter, Andrew Yang appeals to me. I plan on changing my party affiliation back to Democrat long before the Maryland Primary election so that I can vote for him. He has a motto that resonates with me. It’s “Not Left, Not Right, Forward.” I identify with that.
I like Yang and I like his message. I’m proud to say I’m a proud member of the Yang Gang.