Podcast available here: https://soundcloud.com/user-280580802/38-andrew-yang-will-destroy-bullshit-jobs
Andrew Yang frames his presidential campaign around the threat of automation taking more and more jobs. An impending unemployment crisis can no longer be tackled by government retraining programs that turn out to be wasteful and insufficient anyway. The government does not know where the labor shortage is and is even worse at taking people and transforming them into something the market values highly. Instead, everyone should get a universal basic income, no questions asked. $1000 a month is not enough to live on, but it provides basic security for one’s daily and most immediate needs and can make people more optimistic about the future, as they are no longer excluded from the monopoly profits from technology companies like Amazon or Facebook.
Yang’s framing is fair enough and I very much endorse it. Another point for the UBI, which he does not emphasize often enough is the ability of the policy to destroy bullshit jobs, which according to David Graeber are positions that are deemed useless by the people doing them. Graeber’s examples are telemarketing, advertisers, health care and education administration, corporate law, accounting and middle managers in most large corporations. These jobs exist in part because automation has been a success in reducing the number of positions for production workers and then managers using the excess corporate profits to fill up the “feudal retinue”, which are pointless managerial positions in corporate bureaucracies. These jobs are created to increase the profile and reputation of the manager.
How could a basic income result in a reduction in bullshit jobs?
In Graeber’s account, people who receive a basic income can pursue their true passion, which they otherwise could not because without the basic income the alternative choice is a worse or poorer lifestyle working a lowly but highly useful job like a nurse or kindergarten teacher. This path would become much more lucrative with a basic income. The corporate managers will lose many potential applicants, and they might be able to attract some people with sufficient pay but the pay premium has to be gigantic. If homo oeconomicus is incorrect, i.e. people don’t just care about money, but also family, leisure, social life and volunteer work, then a big category of bullshit jobs will be substantially reduced if not eliminated.
Yang agrees with the sentiment by noting his five unhappy months as corporate lawyer after finishing law school. He then became an entrepreneur with very uncertain income initially, but at least he was working at something meaningful. Yang finds it perverse that the best talent in society is funneled into management consulting, banking and law, i.e. the center of meaninglessness and bullshit. His Venture for America organization was supposed to lure young, talented people to quit their bullshit jobs in the big cities and move to smaller towns and become small business entrepreneurs, which creates more local jobs in communities that lack such jobs. He noted that he is pouring water into a bathtub with a giant hole ripped underneath, i.e. it wasn’t enough to create some local jobs when automation is spreading. For Yang, the bullshit jobs like corporate law can be automated too. This might very well be the case, but I agree with Rutger Bregman (2017) in that we “cannot underestimate capitalism’s ability to create bullshit jobs”. In the case of the corporate lawyer, using automated software to file legal claims could result in the maintenance of corporate staff that produces internal paperwork and define ambiguously defined performance targets even though there is nothing to be performed.
Without explicitly addressing this point, Yang is aware that the economy is full of bullshit jobs, and his human-centered economy promise is a pivot to underline this point. One important concern he has is that the most valuable economic activity is housework, raising children and caring for the old. These activities tend to be done by women and are not remunerated. Yang believes that we should not be pursuing jobs for its own sake. We should only have jobs that we find meaningful, but the current logic of necessity does not allow it. The market is failing us really badly, because the jobs we enjoy doing, many people will offer their labor (sometimes for free, as I don’t earn anything writing this blog, but the advertisements you see on here provide revenue to WordPress), which will push down wages and the living standards of those doing altruistic jobs. On the other hand, the soul-crushing bullshit jobs that also require unpaid internships subsidized by rich parents to crack into are done by very few individuals, and the market will shell out more to hire them. The insanity that is embedded in this capitalist system can only be undermined by revaluing what we find valuable in work, and the basic income is an important pillar of it.
A big cluster of bullshit jobs that the UBI would reduce is the welfare administration, which is in place to make poor people feel bad about themselves. They have to stand in line, produce different IDs, reveal all of their assets and they might still be rejected from accessing welfare benefits. As Virginia Eubanks pointed out, the state is now trying to automate some welfare benefits, but that actually creates additional hurdles as simple form mistakes that a human welfare case worker could easily catch and rectify convince the algorithm to deny benefits to the deserving poor. The shamefulness of poverty often deters the poor from applying for benefits in the first place, making them worse off financially. Once the freedom dividend gets paid out, many welfare case workers will essentially lose their jobs because most people will opt for the freedom dividend over the arcane labyrinth of the welfare bureaucracy. At that point, the welfare case workers have realized that all their efforts to make poor people feel guilty about being poor has really been counterproductive bullshit work. And no worries, the newly unemployed welfare case workers will also collect UBI.
Yang pushes for other policies that would generate a human-centered economy, and by implication reduce the number of bullshit jobs. He wants to simplify tax filing, which would destroy the accounting industry that relies on the complicated tax forms that induce people to seek accountants to fill out the paperwork for them. Yang was asked by a journalist whether it would be counter-productive to destroy the accounting industry given the many middle class jobs it supports. Yang’s response was that the loss of accounting jobs can be partly compensated by a basic income. This might sound like a harsh response, because $12,000 UBI is less than $60,000 salary as an accountant. Losing 80% of one’s income is no easy sell. My discourse on people being more than money-greedy creatures and wanting to be purposeful and spiritual will likely be ignored by middle class people losing their status and jobs. They might even rightly take offense at my moralizing.
My response is that the accountants are not the only ones facing upheaval, as the truck drivers, retail workers and most manufacturing workers had already been on the chopping block because of automation. In the case of accounting, their jobs exist not because it is part of maintaining our lifestyle, i.e. being fed, clothed, sheltered, nursed, educated, transported or entertained, but because their government lobbying has ensured an arcane and difficult to navigate tax system. Imagine a mafiosi taking a club to smash the windows in your house and then giving you a business card for window repairs, and you can’t complain because it is state sanctioned. Any accountant, who is honest with himself, acknowledges that this makes their job bullshit. Viewed from that angle, they might be happy to be rid of their accounting job. The entire point of bullshit jobs is that they are pointless. It is the insane ideology of job preservation by all means (and the associated wage-dependent relationship, which is really slavery) which would create skepticism against simplifying tax filing, but Yang is not afraid to demand the elimination/ reduction of bullshit accounting work.
Yang supports Medicare-for-all, although he has not explicitly endorsed Elizabeth Warren and Bernie Sanders plan, waffling between the more moderate public option and the single-payer proposal of Sanders/Warren. But let us assume that the single-payer plan gets implemented. What does that mean for the country’s health care system? A major reason why US health care is so expensive is that there is a giant bureaucracy in hospitals, doctor’s offices, insurance companies and drug companies, which exist because there is no simple payment structure for medical services. Most people have an employer-sponsored plan, some people benefit from Medicare and Medicaid, a smaller number have purchased plans in the Affordable Care Act exchange, and we still have 30 million people lacking health insurance. Many people with a health care plan can only afford plans with very high deductibles, which means they delay visiting a doctor until they get very sick, when the treatment costs are much higher. Medical bankruptcies are the most common reason for household bankruptcy. A comparison between a New York and a Toronto hospital is highly instructive. In Toronto, there is one small office for billing, and all the bills are sent to the provincial government, which pays them without a fuss. In New York, there is an entire wing devoted to process medical bill claims, most of which go to various insurance providers and some go to individual patients. There is no price transparency, so one can pay outrageous sums even for minor medical treatment.
Hospitals are known to be rapacious, sending bill collectors to garnish one’s wages. The same rapacious logic applies to pharmaceutical companies, who use their lobbying influence to prohibit the government from negotiating for drug prices and prohibit drug re-importation from other countries where the same drug is sold for one-tenth of the price in the US. Insurance companies make the most money by denying coverage to people for preexisting conditions. This practice has been prohibited under Obamacare, but insurance companies can still make money by denying payment for some formal, legal reason. (Yes, there are many bullshit insurance lawyers, who protect insurance companies from patients’ lawsuits and appeals.) Lastly, US doctors are paid about double of what the average doctor in a rich country earns, and that is mainly because the American Medical Association restricts the number of residencies which are prerequisite to working as doctor. It is not surprising that there are so many doctors seeking to work in the US.
How can Medicare-for-all untangle the health care mess? It would do what is happening in other rich countries, which is a more rational and efficient health care coverage that can actually save costs to society. Having a single health insurance will wipe out the health insurance industry, and the Medicare administration that is beefed up to produce universal coverage is going to be a fraction of the private insurance bureaucracy we now have. This might sound like an oxymoron, because the government is regarded as less efficient than the private sector, but this logic does not apply to the health care sector, where a single government agency processing all health care payments will streamline operations. The Medicare administration will only be bloated up if the government finds it necessary to dole out jobs to newly unemployed insurance clerks from the private sector. Yang’s response is that a better solution for the insurance clerks losing their jobs is to pay them a basic income as opposed to fill up a bullshit bureaucracy. Again, an insurance clerk earning $50,000 might not be happy to be demoted to $12,000 and unemployment, but, again, do the insurance clerks really enjoy calling up hospital billing departments and struggle over processing payments? Or would they rather coach Little League, perfect their BBQ techniques or become a Youtube video artist? Some people might find the insurance job meaningful because they don’t know how an efficient health care system looks like. If they bothered to travel to Canada or the UK and realize that there barely are any insurance clerks and yet patients are still cared for, they will realize that their job is bullshit, and they will be banging on the table to claim their “freedom dividend”.
Medicare for all will streamline payment to pharmaceutical companies. If that streamlining is coupled with a law to allow for drug price negotiation (which currently does not exist because of pharma’s lobbying power), then drug prices will come down drastically. Bernie Sanders has promised that drug prices will be cut in half in his administration, and the drug price negotiation will go a long way in that direction. The second measure is to allow drug re-importation. Some critics point out that drug research is really expensive, and the cost of research are passed onto high prices of the successful drugs. Firstly, a lot of the drug costs are buried in administrative bullshit jobs including hiring a large marketing team to create advertisements to promote the drugs. These ads tend to be of poor quality anyway. They usually hire laughing and happy people, who walk their dog in the park or go eat at a restaurant, and then they note some physical pain, but then they are saved by the drug, and they can continue on with their life. And while the actors are smiling, laughing and running, a deep, dark voice reads the side effects in a quick pace. Many drugs, in fact, have negative side effects on purpose, so that patients have to take other drugs to control the effects of one type of drug. This is not just bullshit but also harmful.
I have a feeling that bullshit jobs in the pharma industry are going to be reduced before R&D will be diminished. In some cases, R&D happen in private labs that get funding from venture capital, who then sell the patent to a large pharma firm that can scale production. It would then be better to use government R&D funds to directly benefit these private labs, and then sponsor government mass production of these drugs. There is a pro-market bias in US ideology, even though the practice is that important innovations are funded by the government, including the computer and the internet.
Within hospitals Medicare for all will diminish administrative and clerical positions. The billing and coding department will be thinned out substantially, and these hospital workers will be liberated from their bullshit jobs. The health care cost savings will more than fund the UBI of those laid off workers. However, the overall number of health care jobs might still grow rather than diminish, because the number of doctors and nurses (the useful parts of the health care system) can increase as administrative cost savings can be redeployed in improving health services. Some people might object that doctor salaries would still be very high, but here loosening government regulation on capping residencies is important. There are tons of people wanting to become doctors, but they are prevented from it because of the limited number of residencies. Yang supports a loosening of residency caps.
The AMA will cry foul and claim that know-nothing doctors will become certified and jeopardize patient health, but that is self-serving nonsense. In fact, there are so many doctor applicants relative to positions that even merely doubling the number of residencies would still allow for high-quality talent to be accepted into the medical profession. Streamlining the payment system and increasing residency caps will lower doctor salaries, but being a doctor will still remain a lucrative job because not every Tom, Dick and Harry enjoys taking biochemistry and memorizing Latin names for diseases. I think that making medical education free, as NYU has done recently, is another important pillar of medical reform, because many doctors who are altruistic still make the calculation to go into fields that are more lucrative just so they can pay back their medical school loans.
Regarding school loans, Yang endorses student loan forgiveness, although he is more skeptical about free college, because he wants to promote apprenticeship programs. A student loan forgiveness program would cut out the financial institutions, who profit from this arrangement. These branches of the financial industry will slim down their bullshit jobs. Since the federal government underwrites a lot of the student loans, it will be the taxpayers who are on the hook for student loan forgiveness, but it is a fair enough investment, because many of these college graduates earn sufficiently high salaries to fund the requisite tax revenue for such a student loan forgiveness.
Yang claims that the acceleration of college costs come from the escalating tuition fees at universities that don’t really compete with each other. These rising tuition fees are built on the societal expectations that attaining middle class jobs require a college diploma (even though as more and more people attain the college diploma it becomes worth less), and the government student loan guarantees, which make it possible for people to borrow as much money as they want to complete their college education. The soft budget constraint in turn allows colleges to build fancy football stadiums and milk another cash cow: college athletes who are not paid (which Andrew Yang wants to change). It also allows them to fill up the ranks of higher education administration, where administrators with nothing to do start imposing administrative assessments for faculty to fill out, where they say what research projects they plan to do instead of actually doing them.
It is hard to find a professor who does not have experience with bullshit administrative work. The administrators don’t produce anything, but they are useful flunkies on paper, which form the feudal retinue to higher ed administrators. These flunkies are fed by the soft budget constraint of government student loan largesse. Yang wants to destroy that structure by tying loan guarantees to limiting administrator-to-student ratios. Higher ed administrators will cry foul over impinging on academic autonomy, but if that program were implemented the feudal positions are going to be reduced and teaching/ research quality will not decline, because faculty won’t be affected by these quantitative targets. It could also be that teaching and research quality will improve because the professors won’t have to do so much bullshit administrative work. It will evidently be quite sad for these higher ed administrators with their $70,000 salary to become unemployed UBI recipients of $12,000, but, again, we freed people from bullshit work.
Yang proposes to decriminalize marijuana. He argues that imprisoning so many people (especially black people) is socially dysfunctional and incredibly expensive. Yang likes to cite the prison guard, who tells him that it would be cheaper to pay people to stay out of jail than to have them in jail. This prison guard is a wiseman, because with a UBI more people would stay out of jail, prisons will empty out and potentially close and he might lose his job, although the prison guard will also be entitled to receive a UBI. What the prison guard is admitting to is that his job could be bullshit. Of course as a prison guard, I could convince myself that I am working a useful job because someone has to oversee criminals and society needs to be kept safe. On the other hand, if I realize that a lot of the prisoners are produced by the three-strikes policy, which is about warehousing an unemployed and underemployed population following deindustrialization/ automation, and strict anti-drug policy, then I realize that my prison guard job is bullshit and the evidence is that other developed countries do not have nearly as many people in prison and have not descended into anarchist tyranny.
The only people who have an interest to retain the three-strikes and the anti-drug policy are prison guard unions and private prison corporations. They are lobbying for strict criminal laws and they fund the election of judges to ensure the maximum amount of prisoners. This corrupt system needs to be cut down by changing criminal laws and decriminalizing marijuana, which is Yang’s position.
Yang’s human-centered economy prioritizes human well-being over military spending, which according to Kuznets should not be counted in the GDP. It is unclear whether Yang is going to cut military spending, and I suspect that he will do whatever is necessary to salvage the rest of his social agenda, especially the UBI. This would involve not offending the powerful interests in the defense-industrial complex. But to the extent that a powerful military contributes nothing to human well-being, the military budget could be halved and the US would still spend more than double what the Chinese are spending (i.e. there will be no loss of US global military supremacy). This would free up economic resources to be spent on social programs that would benefit more people than presently. Given that a huge chunk of the military spending goes toward personnel a substantial reduction in the military budget would result in less hiring in the various branches of the military, which is a social safety net for low-income and low-skilled people. But, again, a UBI of $12,000 would reduce working class anxieties and make the loss of the military as employer of last resort less problematic. Perhaps people, who otherwise would have joined the military, will realize that by not having to go through the drill and discipline, the standing around, exercising and carrying guns around spares them from doing bullshit work.
In conclusion, Yang’s freedom dividend is about reducing the amount of bullshit jobs. In addition to UBI, he has a coherent set of policies that will ensure that the number of bullshit jobs are reduced while truly valuable activities like child-rearing, household work, caring for the old, tutoring or even meeting friends, composing music, writing novels, painting, dancing, comedy or athletics can be revalued. For people who find that vision of society appealing, they should consider joining the Yang gang.