Bill Gates, founder of Microsoft, recently gave a talk about the future - how technology will impact the future and how technology will impact jobs. What he said may been a boon for the "haves" but it's also a call to Governments to get out ahead of the curve. This will certainly be a defining issue in the years to come - how Government works to balance technology advances and how such advances will impact workers, families and the ability to fund the Government in general.
This is what Bill Gates had to say:
"Software substitution, whether it's for drivers or waiters or nurses … it's progressing. ... Technology over time will reduce demand for jobs, particularly at the lower end of skill set. ... 20 years from now, labor demand for lots of skill sets will be substantially lower. I don’t think people have that in their mental model."
Gates believes that the tax codes are going to need to change to encourage companies to hire employees, including, perhaps, eliminating income and payroll taxes altogether. He's also not a fan of raising the minimum wage, fearing that it will discourage employers from hiring workers in the very categories of jobs that are most threatened by automation.
He explained:
"When people say we should raise the minimum wage. I worry about what that does to job creation ... potentially damping demand in the part of the labor spectrum that I’m most worried about."
I don't claim to have the answers - but one has to consider that many American jobs got moved out of the US to Mexico - only to have those costs determined to be too high - so the jobs went to China - now that China is advancing - the low end labor market has moved to places such as Vietnam and Bangladesh.
The only obligation business has is to the opportunity - and if an opportunity presents itself to streamline operations at reduced costs and higher efficiency - business will go that way.
Now, the current tax code provides incentives for companies to invest in "equipment" - software being part of equipment - can be depreciated to write off associated costs - labor is an expense. You don't pay benefits to machines - you depreciate them and take that deduction to reduce what you pay.
What are the incentives for business to hire more people? The minimum wage is too low and not a living wage - but by passing minimum wage laws without changing how incentives and tax laws work for business - a perfect storm for millions - especially on the repetitive low end of the labor market - will bear the burden of in the not too distant future. Rather than narrow the gap of income inequality - it will become wider.
Democrats need to get out in front of this - not by abandoning minimum wage hikes - but by working to change the tax code and how Government incentivizes business. This will take a great deal of thought and communication between Government, business and labor leaders.
We also cannot stand in the way of technology. Technology has brought great advances to society and those who do not embrace technology are left behind by it. That said, we cannot survive by continuing down a path that only has opportunities for the few.
This will be huge opportunity for those who are willing to start planning for it now - I hope that Democrats can grab hold of this issue before it's too late.