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Andrew Yang's Automation Truth

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By Robert Weiner and August Clarke

Andrew Yang won't win the Democratic nomination but is right that automation is costing the bulk of U.S. lost jobs. During his closing statements at a recent Democratic debate he said, "I know what you're thinking, America: How am I still on this stage with them?" (He didn't make the last debate but is still almost a top-tier candidate.) This question wasn't meant to be answered by the voters who were watching. Instead, it illustrated that his chances for winning the White House are as steep a climb as someone trying to ice-skate up a mountain. His support for modernizing the economy will outlive his 2020 presidential bid and the tippy-top Democratic candidates must pick up on that.

Even with his narrow chance of winning the nomination, Yang has made most of the debate stages and sits at the top of the second tier of candidates. How Donald Trump won in 2016 and why we see a candidate like Yang having powerful ideas for 2020 both have depended largely on workers' fear of their futures. Yang's campaign is centered around job-loss from automation, an issue that no other candidate speaks more loudly about other than Trump. Millions of American workers are left out of an economy that has no quick fix for them. During a speech at the National Press Club on October 21st, Yang highlighted this issue to a group of journalists, asking, "How are we going to help millions of Americans manage a transition from an economy of the 20th century to the 21st century?"

According to the Financial Times, approximately five million manufacturing jobs have been lost since 2000, with automation one of the main factors. The Urban Institute finds that since 2000, manufacturing employment began to plunge. As a result, 88 percent of factory-job losses from 2000 to 2010 was caused by automation. Communities in swing states such as Ohio, Michigan, Pennsylvania, Wisconsin, and Iowa lost four million manufacturing jobs, ultimately flipping the states red in 2016. John Oliver reported that we manufacture twice what we did in 1984 but with one-third fewer workers.

Yang believes that championing people over money would transform the economy where everyone can contribute. He calls this re-vamped economy "human-centered capitalism". Yang wrote in an op-ed in the New York Times, "We have to stop denying the effects of automation... Looking at the gross domestic product, the stock market and unemployment is a very 20th-century way of measuring the economy. Self-driving trucks will be great for the G.D.P; they'll be terrible for millions of truck drivers." Yang fears automation will cause mass unemployment.

Human-centered capitalism has been the bedrock of Yang's signature campaign proposal - a monthly payment he calls the "freedom dividend". Every American 18 and over would qualify for the $1000 per month payout--even billionaires. Giving people all that money would come with a huge price tag, and Mr. Yang suggests paying for it, in part, by imposing a value-added tax of 10 percent. His vision also calls for new measurements that affect our labor numbers including health and life expectancy, mental health, substance abuse, childhood success rates, average income, environmental quality, retirement savings, labor-force participation and engagement, infrastructure and homelessness.

A fair counter-argument to Yang's giveaway to everyone is that instead of the money itself, the government should provide services that help people who need assistance to make it--jobs, health care, housing, training, and education. These services help people and the nation.

However, convincing voters to acknowledge that automation is here is critical to his candidacy. It seems to be one of the most difficult obstacles Yang faces. This especially holds true as Trump has sought to blame blue-collar job losses mostly on immigrants. Democrats all over the country won big in the 2018 and 2019 elections by avoiding Trump's political warfare of divisive and racist scapegoating of immigrants and provided real solutions though different than what Yang has done. He has campaigned for more effective regulations on automation, revitalizing the manufacturing industry, while also re-negotiating bad trade-deals. This is the main reason why Yang has gotten farther than most have predicted.

He stated, "When I first started running for president, I was the only candidate talking about these big solutions for our economic problems. But the Democratic Party is realizing that automation worries many Americans. This vision and message drove the economic portion of the debate on the Democratic stage last time." Opposing candidates are starting to express opinions on it. Sen. Elizabeth Warren argues that automation can largely be attributed to bad trade deals while Yang suggests automation is the main contributor to job-loss in manufacturing. When we asked him at the National Press Club whether Warren is right that trade deals are costing jobs or he is right that it's automation, Yang answered, "Any economist who's looked at this says it's both. Then the question is the mix; What is the proportion? Most of the studies I've seen put the main cause as automation to the tune of 70 to 85 percent of lost manufacturing jobs."

His solutions and talking points about job-loss from automation shouldn't be unique and idiosyncratic, but among the 2020 Democratic field, they are. Whomever the Democratic nominee is, they must pick up where Yang leaves off. If not, the Party risks another Trump victory.

Editor's Note: Robert Weiner was a Clinton and Bush White House spokesman, spokesman for the House Government Operations Committee, and senior staff for Congressmen John Conyers, Charles Rangel, Claude Pepper, Ed Koch, and Sen. Edward Kennedy. August Clarke is Policy and Research Analyst for Solutions for Change and Robert Weiner Associates.

 

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