Tag Archives: global economy

A bigger gig economy

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The gig economy is a system where people work as freelancers or take on side jobs for companies instead of having a regular full‑time position. Uber drivers are a great example of this. There are a few reasons why I think the gig economy is going to grow:

  1. High prices are making a side hustle of some sort essential if you want to enjoy things beyond what salaries allow.
  2. Companies like the structure because pay is based on performance rather than a set salary.
  3. Entertainment is shifting to live performances, gigs, as a primary form of earnings. Getting your music to stream is not enough to keep most musicians going without a concert tour.
  4. A trend now in social media, is to see a lot of affiliate marketing. Only the biggest of social media stars can make this a full-time living. For the vast majority affiliate marketing is nothing more than a gig economy.
  5. We are going to see a wave of AI trainers needed to train robots to do everyday skills. Work as a maid in a hotel? We’ll pay you to wear a GoPro for two weeks while you work. That video will train an AI that’s going to take your job less than a decade later.

Companies are afraid to hire full time staff. Money is better spent on technology than on training a human on a fixed salary. As a result, the gig economy is just going to get bigger and bigger.

UCI rather than UBI

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As AI and robotics continue to scale at unimaginable speeds, with AI getting exponentially smarter and robots increasingly more agile, we’ve got to realize how many jobs will disappear in a very short time period. This isn’t a gradual transition, it’s not a move from one field to another like farmers transitioning into factory workers during the industrial revolution. It’s a massive shift from human labour to machine labour that the world’s economies simply aren’t designed to absorb.

I’ve seen a growth in the number of people talking about the need for Universal Basic Income (UBI), but I fear this isn’t enough. I fear that the idea of giving millions if not billions of people a basic income, but no real means for most of them to supplement those incomes as an insufficient solution. We don’t need UBI, we need UCI – Universal Comfortable Income. It’s not going to be enough to give people a basic survival income. We are going to need to see governments, and maybe even companies, share their resources and wealth with people, or else who is going to have the resources to buy the products and services AI and robots will offer?

The potential for dissatisfaction and ultimately unrest seems scary to me. A world with a couple dozen trillion-dollar companies, and a handful of trillionaires running them, is also a world with vast populations of people eking out a subsistence lifestyle, unable to do more than meet their survival needs. A basic income, requiring additional sources of income to appreciate the offerings of a fully automated economy, will not survive without a revolt for too long.

Maybe I’m wrong. Maybe there are other solutions to this problem. Maybe I’m too bullish about to how far things will advance in a short time. That said, the potential for the scenario above to occur in the next decade is not zero. It might be a pessimistic bad-case or even worse-case scenario, but it’s possible… and scary. If things advance as fast as I think they will, we can’t continue to have UBI conversations, we need to move the goal posts and start really thinking of UCI.

Feeling the financial crunch

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I just spent $155 on groceries that probably would have cost about $100 between 2-3 years ago. I know that prices go up, and I understand there are global factors like the price of oil that will elevate prices significantly. I get it. What I don’t understand is how lower middle class families and poor families are making ends meet?

The thing about the price of necessities going up that is often missed is that as a percentage of income, it significantly affects poorer people more. Furthermore, wage increases are negatively affected too. A person working a full time minimum wage job in BC Canada will make less than $40,000 in a year. When wages go up 3% in a year, that minimum wage employee’s salary goes up to $41,200, whereas the same 3% increase for someone that was making $100,000 sees their salary increase to 103,000… that means the higher salary person is making $150 a month more than the lower salary person for that year.

Of course, both of those workers are in a deficit when inflation has sent prices skyrocketing above 3%, but it’s clear to see how this is disproportionately affecting the poorer working class. And so again I wonder, how are these families making ends meet? What sacrifices are they making? What support are they needing that they didn’t need 3 years ago? When the financial crunch is felt, it is felt most by those who have already been struggling.

Fiscal year end squeeze

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Globally, we’ve seen jumps in prices in the last year that are unsustainable. It seems like everything in the grocery store is more expensive, and prices seem to continue to creep up. The impact must be felt around the world, and cost rises like this unjustly affect people below and near the poverty line more than they affect anyone else.

Now throw on top of this the loss of a job for the main breadwinner in the family, and the results are devastating. Unfortunately a lot of people are about to lose their jobs.

We are reaching, in the next couple months, the fiscal year end for a lot of large corporations, and two related patterns we’ve seen a lot of recently are going to repeat.

  1. Profits over people
  2. Massive layoffs

Corporations care about pleasing shareholders and maintaining stock value over caring for the people who work for them. This is the ugly side of capitalism. Eliminate thousands of salaries and suddenly the balance sheet proves to be more profitable. Never mind that these are people’s careers and livelihood that are being cut short. And never mind about loyalty to the company.

Cut. Save. Profit. And in a year, repeat.

And we aren’t taking about a few dozen jobs, we are talking about tens and cumulatively hundreds of thousands of jobs worldwide. We are talking about people with mortgages, people losing health care, people who were already living paycheque to paycheque, suddenly jobless. People who thought they were going to be ok, suddenly seeking a job in a challenging market where thousands like them are in the same situation.

Beyond purely meeting shareholder targets, AI and robotics are also taking jobs away. Companies are choosing to use the former salaries of employees to buy chips and memory storage. Manufacturers are replacing employees with robots that don’t take breaks or sick leave, and which don’t need to end their shift after 8 hours. On top of shareholder pressures, there are pressures to eliminate jobs and have the AI Revolution transform the workplace more dramatically than the Industrial Revolution did.

I think this year we are going to see this happen at an alarming scale. The irony is, the large scale layoffs that I see about to happen, added to soaring prices, are going to drastically affect the spending of consumers who buy the products these large companies need purchased. However, many of these billion dollar companies are circumventing this too, by committing billions of dollars to purchase goods and services from each other, again inflating their perceived profits for shareholders.

All this to say that I see a lot of short term financial pain for a significant number of people in the coming months. I’m predicting the fiscal year end squeeze is going to be a hardship like none we’ve seen before, and a lot of people, a lot of families, are going to struggle as a result.