First let me preface that it is not possible to accurately forecast what will happen in 20 years. The sun will still rise, the tides will still change dependably every day and the seasons will still be there although they may shift, but the rest is just a guestimate. Having said that, let us take the chance and see what might change.
Company CEOs say that one of the major challenges in their business is finding ‘qualified’ people, i.e. those who really want to work and not just sit.
Therefore, the drive toward automation via robots and Artificial Intelligence (AI) is seeing a big push. If people don’t want to work, create machines that do.
Bain & Company has a new report out, “Labor 2030: The Collision of Demographics, Automation and Inequality.” The company thinks that by 2030 automation will have eliminated 25% of all jobs. If that is correct, it would test our social fabric.
One forecasting firm estimates that 70 million people, mostly low level, will lose their jobs to machines by 2030.
Even skilled labor will not be immune. Look at the surgery robot of Intuitive Surgical, which performs complete surgery. Similar accuracy can be applied to many other jobs.
That will certainly create a lot of social turmoil. At the same time, the people on the left of the political spectrum are doing everything possible to make voting in the US by non-citizens legal. The game apparently is “if we can’t get Americans to vote for us, we will import the voters from abroad who will.”
Of course, many of those people won’t find jobs, either because they don’t want to work, or they don’t have any skills. Remember, primarily unskilled labor will be replaced by robots.
With 70 million additional people out of work by 2030, that will open the door to UBI, Universal Basic Income. The trial balloons are already being floated to condition taxpayers to the concept. It will guarantee a basic fixed income per month from the government for everyone.
Of course, someone has to pay for that. It will probably be the so-called ‘wealthy’ via a yearly tax on their asset. But even if you confiscate all the income – 100% of the income of the “wealthy,” it still wouldn’t eliminate the governmental deficits.
Already we have over half of the US population, and much more in Europe, saying that socialism is a far better form than capitalism. Socialism is basically the theory that hard working people need to share the product of their labor with people who would rather not work.
Seventy years of communism in the Soviet Union showed us that this policy doesn’t work and only leads to starvation.
The hand-writing is on the wall. Plan ahead.
Non-mobile assets like real estate could be a disaster. Politicians know people can’t take the house with them. It’s the easiest thing to target with much higher property taxes, transfer taxes and wealth taxes.
You can read more of our current analysis and forecasts on the global stock markets, bond markets, and global economies in our award-winning WELLINGTON LETTER, now in its 41st year.