According to President Donald Trump and many pundits on cable television, the American economy is doing very well. After largely recovering from the 2008 Great Recession, the stock market is strong. Gross Domestic Product is high. Unemployment remains low. All is well.
But the economy is also in the midst of a historic transformation, and many are being left behind. America’s manufacturing industry has been decimated over the last fifty years, partly due to offshoring and globalization but mostly because of advances in automation.
These advances are now rapidly accelerating. Major studies from Bain and McKinsey and Company both found that between 20 and 30 percent of all jobs in the U.S. will likely be replaced by automation or artificial intelligence by 2030. In the final days of Barack Obama’s presidency, the White House issued a report warning that more than 80 percent of jobs paying less than $20-per-hour are at risk of being eliminated in the same time period.
Like climate change, the specter of robots replacing jobs is not so much a distant event on the horizon as it is a process that’s already underway.
While unemployment is low at present, the nature of work itself is changing. Stable careers are becoming rarer while more and more Americans – many of whom have college degrees and are underemployed – are finding themselves working multiple part-time jobs in the “gig economy.”
All the while, “unskilled” men, mostly with high school degrees living in rural parts of the country, are being disproportionately driven out of the workforce entirely.
Diminishing economic prospects in rural America are widely regarded as having been a major driver of the populist, anti-establishment anger that carried Trump into the White House.
The first industrial revolution – a period of comparable economic turbulence – was a time of remarkable violence and social turmoil in the United States. And though we’ve so far avoided the bloody clashes between labor and management that marred that era, there are signs that the social fabric of the country is under strain.
Speaking at the University of Kansas just months before being killed, Robert Kennedy warned us that if we are to judge the health of our society, we cannot look solely to the accumulation of our material output.
“Our Gross National Product, now, is over $800 billion dollars a year, but that Gross National Product – if we judge the United States of America by that – that Gross National Product counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage. It counts special locks for our doors and the jails for the people who break them. It counts the destruction of the redwood and the loss of our natural wonder in chaotic sprawl. It counts napalm and counts nuclear warheads and armored cars for the police to fight the riots in our cities.
… Yet the gross national product does not allow for the health of our children, the quality of their education or the joy of their play … it measures everything in short, except that which makes life worthwhile.”
Those things that make life worthwhile are increasingly out of reach for most Americans. Young people are getting married, buying homes, and having children at historically low rates. For the first time since World War I, life expectancy is in decline while suicides are at historic highs and Americans are more likely to die from an opioid overdose than a car crash.
Andrew Yang, an accomplished entrepreneur and a 2020 Democratic candidate for president of the United States, is hoping to change all of that. His platform, which includes a modest universal basic income, universal healthcare, and student debt reduction, is aimed at expanding opportunities for people to pursue meaningful careers and more dignified lives.
With the 2020 race underway, The Globe Post spoke to Yang about his vision for America and his ambitious plans to save society from what he sees as its bleak future.
The interview has been lightly edited for length and clarity.
Q. Before we dive into your universal basic income proposal and some other policy issues, I want to back up a little bit and ask you why it is that you felt compelled to run for president in the first place. What is it about our current economic system and the state of our society that’s made you sound the alarm and feel compelled to try to do something about it?
Yang: Well I spent six and a half years helping create several thousand jobs in the Midwest and the South. And it’s clear to me that the driving force behind Donald Trump’s election victory in 2016 was that we automated away four million manufacturing jobs in Michigan, Pennsylvania, Ohio, Missouri, and other Midwestern states that he needed to win.
My friends in Silicon Valley know we’re about to do the same thing to millions of retail jobs, call center jobs, fast food jobs, truck driving jobs and on and on. And for whatever reason, no one in politics wants to talk about it what struck me as a fundamental transformation in our economy and society.
So that’s why I’m running for president. As you said, it’s to sound the alarm that it’s not immigrants that are causing economic problems. It’s the fact that technology is pushing our economy in directions that make it harder and harder for many people to get by.
Q. According to President Trump and people like Stuart Varney on Fox Business, the economy is very strong. They often point to metrics like gross domestic product and the unemployment rate to back that up. Why do you think that those more traditional metrics aren’t very good for gauging the actual health of the economy?
Yang: Some of the statistics that strike me as missing from that narrative are that our life expectancy has declined for the last three years – the first time in a hundred years that’s happened in the U.S. and an anomaly among developed countries. This has happened because of a surge in drug overdoses and suicides which have both overtaken car accidents as the leading causes of death.
Seventy-eight percent of Americans report living paycheck to paycheck. Fifty-seven percent can’t afford an unexpected $500 bill. And one of the jokes that I say is, who wakes up cheerleading about higher GDP? GDP is a measurement that we made up almost a hundred years ago and has less and less relationship with how many Americans are experiencing the economy.
“We’re in the third inning of the greatest economic and technological transformation in the history of the world.”
Q. You’ve also spoken about the broader social ramifications that these periods of turbulence and transition and uncertainty can bring about throughout history. In your interview with Joe Rogan, you talked about the mindset of scarcity and the profound psychological effects that it can have both on individuals and societies writ large. If we don’t change course significantly, are you worried that we could see a larger breakdown of the social fabric of the country in the coming years and decades?
Yang: Very much so and you can see our social fabric already disintegrating by the numbers. Again, the decline in life expectancy is wedded to the mental health crises and reduction in social ties and community engagement.
So the disintegration is already on us. We’re in the third inning of the greatest economic and technological transformation in the history of the world. And for whatever reason, we’re not talking about what that means.
Q. For the people who are caught in limbo and are being left behind in this period of transition, there’s this notion out there that we can just retrain these people and teach them to be computer coders and web developers and things along those lines. What’s wrong with that idea in your view?
Yang: Well you can just look at the numbers and see that federally funded retraining programs had effectiveness rates of between zero and 15 percent. And only eight percent of jobs in the American economy are STEM jobs, which leaves 92 percent of people that are somehow supposed to be transformed into computer engineers.
If you take a step back, in a way it’s actually telling that we’re even asking these questions. Why are we so driven to imagine that we can turn coal miners into coders? The reason is that we have been brainwashed to think that human value and economic value are the same things. And then if you lose value in the marketplace, then we somehow have to transform you into something that the market will prize.
Q. Now that we’ve hit on some of the major problems facing the country I’d like to get into what you think some of the best solutions we have available to address them are. The marquee policy of your presidential platform is your universal basic income proposal and for people who are not familiar with that concept, what is universal basic income and why do you think it’s become necessary for the United States to adopt?
Yang: A universal basic income is a policy where every citizen gets a certain amount of money. My plan is a thousand dollars a month to meet their basic needs, pay for food, shelter, start businesses, move for new opportunities and on and on.
This idea has been with the American people since the founding of the country. Thomas Paine was for it – he called it the citizen’s dividend. Martin Luther King and Milton Friedman and others championed it throughout the 60s and 70s.
It even became law in one state in 1982. Everyone in Alaska gets between one and two thousand dollars a year – no questions asked. So in an age of unprecedented technological shifts, we need to spread resources into the people’s hands so that they can more meaningfully make transitions.
“I call it the trickle-up economy for that reason. It’s people, families, and communities on up.”
Q. In your view, universal basic income would also be great for entrepreneurship, right? The idea being it would give people a better chance to pursue something that they find meaningful without having to worry about just their basic economic survival?
Yang: Yeah that’s right. As someone who’s worked with hundreds of entrepreneurs, most of them share a mindset of abundance where you think that if you work hard and put things together then things will happen for you. And that would become much more prevalent if you’re getting a thousand dollars a month and you felt like you could take a risk without your very survival being at stake.
Q: I’m sure everyone listening to this in the U.S. would love to get a thousand dollars a month, but the knee-jerk reaction people often have with these sort of proposals is to immediately ask how would we pay for this, which I suppose is a fair question, right? So what do you think would be the best way of going about funding this program?
Yang: Well you have to ask yourself, who are going to be the big winners from artificial intelligence, self-driving cars and trucks? It’s going to be the biggest tech companies in the economy – Amazon, Google, Facebook, Uber. You probably saw the headlines that Amazon paid no federal taxes last year despite reporting record profits.
So what we have to do is we have to have a mechanism in place for the American people to get some of the value from all these innovations. The best way to do that is to implement a value-added tax. Because our economy is now so massive at 20 trillion dollars, up five trillion in the last 12 years, a value-added tax at even half the European level would generate 800 billion dollars in annual revenue. Combined with current spending, cost savings, and economic gains from all the new business activity, all of that would be enough to pay for a dividend of a thousand dollars per-month.
Q. You mentioned the expected return on investment and I want to follow up on that. The concept of trickle-down economics I think has been widely discredited, but the whole notion of supply-side economics still seems to be quite dominant.
When rich people make more money, they’re very likely to just hoard it and sit on it, right? But when poor or ordinary people make more money, they’re very likely to go out and spend it. So in some ways, a UBI would be a form of stimulus, particularly in rural areas, right?
Yang: That’s exactly right. I call it the trickle-up economy for that reason. It’s people, families, and communities on up. As you said, people who are actually spending money in the economy will actually spend their freedom dividend in mainstream retailers, at barbers and restaurants and car garages for repairs they’ve been putting off, and on and on.
If we gave Jeff Bezos a thousand dollars a month that would have zero effect on the economy. It would just be changing one digit in one of his accounts. But for the rest of us – for 80 to 90 percent of Americans – most of their money is going to get spent every day.
Q. You’ve also mentioned that you believe UBI could actually have an effect on recidivism rates for people that are thrown into the criminal justice system. Why do you think that is?
Yang: So if you come out of jail today, who’s going to hire you? And then you lapse into old patterns of behavior. Whereas if you come out of jail and I’m president and we have a dividend of a thousand dollars a month for you, then all of a sudden at least when you show up to your friends and family you have some money with you. You don’t have some sort of existential pressure on you.
Then if you get put back in jail, then you lose the dividend because we’re spending the dividend on incarcerating. So all of a sudden, you would see many, many more people not going back to jail relative to current patterns.
“Young people should be starting families and buying homes and starting businesses, not paying off phantom debt loads that persist for decades.”
Q. For people who are already part of other forms of welfare or government assistance programs, would the UBI be on top of that or is it essentially a block one thousand dollars a month for everybody?
Yang: Well it’s opt-in, it’s in parallel. So if you agree that you want the freedom dividend, you forego benefits from existing programs.
Q. I understand that there have been some test runs and anecdotal experiments run in other parts of the world on UBI and that there’s been generally mixed results. What is the status of UBI in terms of evidence for its effectiveness?
Yang: I went and inventoried every case study I could find when I wrote my book on the subject, the War on Normal People. And the benefits are uniform. Very consistently, you see improvements in health, nutrition, graduation rates, mental health, relationships, reductions in things like domestic violence and hospital visits.
Most of the trials you’re referencing are not truly universal basic income trials or sustained. For example, the recent Finland trial was relatively small cash grants being made to people who were out of work and reported all of the positive benefits I just mentioned. And yet people regarded this as somehow not working because their work levels did not rise above a control group.
You wouldn’t expect them to. The economic benefits and the work levels are enhanced when you have that income spread across an entire community over a period of time. So, the trials are actually very, very invigorating in terms of how positive the data has been.
Q. Student debt is obviously a major problem for young people in our country. It seems to prevent people from buying homes and can serve as a real barrier that prevents people from participating in the economy in a meaningful way. Do you also feel like alleviating student debt would be another form of stimulus for the economy?
Yang: Oh I very much do. And I plan to do that as president because young people should be starting families and buying homes and starting businesses, not paying off phantom debt loads that persist for decades.
One proposal I have is that if you agree to pay ten percent of your earnings for 10 years – at the end of 10 years, you’re debt free no matter what. That way everyone would have a light at the end of the tunnel. And for many Americans this would be a forgiveness program in the tens of thousands of dollars.
Q. I know you’ve also been critical of proposals like Bernie Sanders’ idea of making public universities essentially free. Why are you not on board with that proposal?
Yang: I’m on board with it in spirit. Public education has been a great ramp up for millions of Americans. My parents attended public universities, so I’m all for trying to bring costs down and supporting those universities at higher levels.
The problem I have with it is that the top 32 percent of Americans will attend college. So what you’re doing is you’re subsidizing a path that only the top third of your people are going to enjoy.
You’re also presenting this message that college is the answer when in reality, 44 percent of recent college graduates are underemployed. And the cost structures of these institutions are still very, very high. So, I like the idea of trying to get the cost down, sure. I like the idea of expanding access but I think the message it sends is the wrong one – that somehow everyone’s going to go to college when that’s just not factually accurate.
Q. When we look at other countries around the world, other developed countries that are sort of peers of the United States, young people in those countries go to college for a much lower price that in the United States. Why do you think that is? And in terms of just driving down the cost, what do you think could be the most effective ways of just reducing the sticker price for education?
Yang: Well I looked into why colleges got two and a half times more expensive over the last number of years. It’s not professors or even buildings. It’s administrative perks where they now have 150 percent more administrators per-students than they used to.
So the way you get the cost down is you just have to see what you’re spending money on. And we’re spending money on bureaucracy at these universities. So you should tie federal loan access and aid to getting the administrator-to-student ratio down to a manageable level. And that would help a great deal.
“If that’s our floor, people will be shocked when they see our ceiling.”
Q. One area where it does seem that you are in agreement with Bernie Sanders though is health care. There’s an obvious moral argument that’s made for Medicare for all that essentially boils down to the idea everyone should have the right to get medical care when they’re sick. But from a more technical standpoint, why do you feel like single payer is the most efficient way to go?
Yang: Right now that U.S. systems in the worst of all situations where we spend twice as much as other countries to worse results. We struggle with access. We struggle with cost. We struggle with the results and this is just not a market that has elements that would make things like price transparency and consumer decision making actually introduce the proper dynamics.
When you get sick or injured, you just don’t care about cost and you need insurance because no one’s carrying around enough money to handle a catastrophic accident. So I’m for a public option, Medicare for all approach.
Then you would put most private insurers out of business over time because if you had a quality public option, it would be very difficult for private insurance to compete unless there were this high-end concierge service which would exist. This is America after all. But I am in agreement that we need to have. A robust public option and move towards a Medicare for All system.
So yes I’m in agreement with Bernie Sanders and I’m grateful that he’s made this so mainstream.
Q. On a more political note, proposals like single payer are often branded as socialist and even un-American by people on the right. A lot of conservatives sometimes will invoke Marxism, Communism things along those lines in response. Do you feel like as a candidate that you have to some degree more credibility or more political capital on these issues than some of your opponents because of your background in the private sector?
Yang: I think I do jus,t because people have a sense then I’m approaching this from a pragmatic, non-ideological standpoint. I have been a CEO, I have run companies and organizations and one of the things I say about healthcare to people is, “look, if you’re the CEO of a business. Our current system makes it harder to hire. Harder to treat people like full-time employees with benefits.”
It’s harder to switch jobs, it’s harder to start a business. Our health care system is a giant weight on the dynamism of our economy and that’s something I understand because I’ve been the CEO of a private company that provided health insurance to its employees.
So I do think I can make a different case for some of these policies than certain other political figures.
Q. How’s the campaign going? People have been saying you’re a long shot candidate, you’re only polling at one percent, but I understand that you see that actually as a positive metric right now. Are you feeling optimistic about the way the campaign is going?
Yang: Yeah, we had our best month yet in February. We’re on track to make the Democratic primary debates in June and most people have still never heard of me. So our support’s going to grow from here. The fact that I’m polling at one percent nationally as of several weeks ago is itself remarkably positive. And if that’s our floor, people will be shocked when they see our ceiling.