What to do about people who don't have much to offer the marketplace?

The problem the OP raises is a short term problem (1-2 generations) over the life cycle of a society. The problem with creating entitlement programs that support these 1-2 generations impacted is that future generations are raised to to expect them to continue to be there (see social security) in the future and do not readily change their behavior to deal with life without them…thus the creation of an entitlement society. Over the long run multi-generational, this will result in abject failure. There will be less incentives for creativitiy in the marketplace, etc.

I don’t have the solution, but bringing out the crutch for a short term problem is not good for the long term.

What changes should the elderly with low skills and low earning potential have made to avoid dependence on Social Security?

Umm, attaining specialized skills, a higher earning potential, and not expecting an anti-poverty insurance program to fund their entire retirement?

Because he’s the one with all the money.

Not only are they enough to support themselves, they’re enough to support themselves and the rich guy too. That is in fact exactly what they were doing, before the rich guy got the robot.

No. This island is self-sufficient. There are no boxes being flown in from somewhere else.

That is very true.

You’re assuming, of course, that the rich guy owns all the land. And maybe ocean and the fish in the ocean as well.

In that case, I’d suggest a redistribution of property rights on the island, so that 20 people don’t have to starve pointlessly.

**What to do about people who don’t have much to offer the marketplace? **

Negative income tax, with a 50% subsidy rate. No-one ever is made worse off by getting a job, as every $1 in wage income only costs them 50 cents of NIT (up to the tax level), so there’s still an incentive to be gainfully employed, but those who aren’t have enough to live on.

If desired (such as to serve the idea that people need a productive role to feel they have value), the NIT can be tied to community service (for the able-bodied): picking up litter, pruning hedges, and so forth. The sort of jobs that are nice to have done, but aren’t essential.

If they are better off trading amongst themselves, why do they need his money?

WPA was not just digging ditches. There were also WPA writing projects where they paid writers to document the history of various regions. I don’t know if the architects of WPA funded buildings count - but they certainly got lots of work they wouldn’t have otherwise.

Today we have lots of overqualifed people doing unskilled jobs. If a WPA kind of program got them to use their skills, it would open up the jobs that don’t need them for the truly unskilled.

Why do you suppose they fail to do that now? Does the free market not provide enough incentive to do those things? Are just not clever enough to attain specil skills? Or is it just laziness?

Well, some people have retirement savings. How much?
From here

Ages 50 to 54: $111,900

Ages 55 to 59: $134,600

Ages 60 to 64: $133,100

Ages 65 to 69: $136,800

This is 12% above the year before thanks to the good market. But at a totally unrealistic 10% investment return and 5% withdrawal per year our average 62 year old could be expecting $20K a year. Without Social Security, not exactly enough to fund a retirement on.

I’m that age, and if I only had that much money I’d be planning to work until 80.

Give me $20,000 - $160,000 and I’ll give you a piece of paper. I, of course, make no guarantee that the paper you get will be useful by the time you get the paper. I also make no guarantee that you’ll even get the job back you quit to come pay me to get the paper in the first place.

I also have a friend who will readily loan you the money and even pay me a finder’s fee, so everyone wins! What do you have to lose?
The correct answer to your question is: To get most skills, you get to pay. If you are barely squeaking by, how do you propose to pay for school and make enough to pay to eat? That’s right. You get to get a loan…

That you will pay back for the rest of your life, whether that loan helped get you a better job or not.

So: Risk it all, or stay where it’s meager scrapping, but at least those scrapping are yours?

Even with skills like learning how to manage…most fast food and retail managers don’t exactly make bank, either. And, in fast food, you hit manager and you’re done. No more vertical movement, because the owner is right above you. If you are in general retail, you can move to department manager, but then the store assistant and manager are right above you. Both positions that pay pretty well and don’t go to inside candidates all that often.

Corporate world? The statistics are against you even getting your foot in the door, right now. But, even if you have your foot in the door, it’ll take you 10+ years to move up. There will be a few that can exploit circumstance to boost themselves, but that’s statistically against you coming out ahead, too.

There are just too many people willing, ready, and able to work, right now. Depending on who you talk to, there are 20 to 200 job applications submitted for each job. Sadly, the less money you have, the more likely you are to stay there, right now.

So, you propose make work? Or do you think there is a vast unfulfilled need for writers to document history in various regions today? And would the mass of the current unemployed be qualified to write history? And even if the answer is ‘yes’ how many do you really need? Remember, that today you don’t need them to pound it out on type writers and file it in cabinets or any of the other manual intensive things that writing at the time of the WPA would have been able to suck up…unless you WANT them to do all of this completely unskilled and manually, of course. Even so, I’m seeing, MAYBE, a few thousand or maybe even (with one eye closed and squinting a lot) a few 10’s of thousands…not millions. And it would essentially be make work, designed to do nothing more than put some people to work who are out of work or give them more pay then the market values their unskilled labor.

sigh That was just an example of a WPA project using skilled people. I’ve read things which indicate that the work they did was significant. It was not a proposal for today. It is much easier to publish today than back then, and there is even at least one publisher doing very targeted histories of even quite small towns.

I bet that a bit of study would reveal plenty of stuff that the underemployed could do that is useful but not profitable enough for business to do. Like I said, if you get the English Lit grads out of fast food you make room for those for whom fast food is a good job. And also decrease supply of people for those jobs, which should help to raise wages.

What’s the opportunity cost of a young, skilled person not making use of her skills?

I think that, generally, the people who work low skill jobs aren’t in those jobs because they’re strictly incapable of doing more, they have other things holding them back. Some of it could be ambition, various health/mental/addiction problems, lack of opportunity, interests other than their job, etc. I do think that automation will slowly chip away at the number of low skill jobs available. The biggest problem as I see it is that, as those jobs decrease, the demand for them goes up, so the market price for them goes down, and with increasing cost for employment, it just creates more incentive to automate jobs, and the vicious cycle continues.

I think there’s a few solutions to this problem. I don’t think these jobs are going to just disappear in the coming decades, it will take time to build infrastructure, and labor is still ridiculously cheap elsewhere. It may cost jobs in developed countries in the short-term, but all it means is that the jobs will move. So those in the low-skill labor market will be faced with a choice of fewer job prospects, moving to another location where there’s more and possibly lower cost of living, or getting additional skills to move up.

The cheap labor market won’t last forever, eventually the labor in places like China will no longer be cheap enough to make it worth the added cost of maintaining factories overseas and ship things here. This is inevitable as China continues to industrialize and the cost of living increases, along with the increased cost of fuel. This, of course, can continue for a time, moving to less and less developed areas or other countries, but it can’t carry on forever.

To take it to the extreme, in the more distant future, we may eventually be able to automate most or all of the cheap labor, like a Star Trek type of world. In this hypothetical world, it may be that the only jobs left are creative/artistic types of jobs, and other highly skilled types. What do we do with unskilled labor in such a world? There it might make sense, with so much automation, to enact some sort of socialized support ideas, as they would be really cheap, and people doing those sorts of jobs would likely be doing so more because they really want to than because they need to. In short, society will HAVE to provide for them ethically, even if a free-market, libertarian society, it makes less sense not to, because it’s virtually free, and even without bringing ethics into it, it’s less of a burden to provide something that is nearly free than deal with the consequences of the desperate populations by depriving them.

I bring this up, because perhaps in times past, it made sense to put the onus on everyone to provide for themselves because it took nearly all of a person’s effort just to provide for himself and his family. But as technology improves, we need less effort to produce more. This inevitably creates this imbalance where there’s not enough work to go around to produce everything that we need. So we either produce more luxuries, which is much of how we’ve expended that effort thus far, we just work less, or we start becoming more generous.

The problem is, I think we’re getting to a point where we can see the most effective people creating enough for themselves to have everything they need, almost everything they want, and still having enough left over, so it’s pushing out the lowest people creating the wealth gap. For now, we can get away with it, but I do think we’ll see it come to a head in time.

Frankly, I think the best thing to do is to change how society looks at these things. If we expend some resources to help train and educate people, to help them address their problems, and fill the gaps in their ability to provide for themselves, they’ll end up more productive too. If some people who have all their needs and most of their wants are willing to provide work for others, they too can be productive. Unfortunately, I don’t see us reaching a point where this has to happen because such a significant number, possibly even into the majority, is marginalized that they HAVE to provide those things in the same way that they inherently do in the Star Trek scenario.

Frankly, I think it’s worth starting to lay the groundwork now and working towards solving these problems, it may be more costly now, but we’ll end up better off sooner if we do.

This is hardly a new argument. It’s been going on since at least the 18th century and societies have always come up with new jobs.

I’ll be reading this thread with keen interest, as it’s been on my mind for 40 years now.

The usual response, and a reasonable one, is that this worry has been raised repeatedly (at every “labor-saving” threshold in the industrial age), and the result has always been higher productivity rather than less employment.

But I suspect Buffett is correct, that we may be approaching the point where technology will render large sections of the population unproductive: they have little to offer.

Vonnegut’s answer was “reeks and wrecks” – menial jobs given to people who wanted to feel productive, in a society where all basic needs were provided by the system. No surprise: the people didn’t really like this situation.

It’s not difficult to extrapolate a bit into the future and imagine a case where the means of production is owned by a small minority, who no longer need the labor of the majority to support the productive industry. I’m a staunch capitalist, but for two basic reasons: 1) a person should be entitled to the fruits of their labors, and 2) it works. But in this future scenario, it doesn’t seem to work. Egad! Will I have to become a socialist? Oh no!

What can be done for someone who cannot carry 500 lbs? Give him a wheelbarrow. What can be done for someone who can’t count change? Give him a cash register. Technology evens the playing field and increases the productivity of low skilled workers making them employable in more diverse occupations.

In the 19th century the vast majority of people were put to work producing food. Today only a tiny minority is needed to do this. The remaining people aren’t idle. They have gone on to work satisfying different consumer desires. This type of chicken littleism has been going on for 200 years. There’s nothing of substance to it.

The thing that’s missing is that though the owners don’t need the masses to make their products, they need the masses to buy their products.
Their hope has been to sell all their stuff to China, but that hasn’t worked out very well. The rich in China will buy them, everyone else is happy to buy pirated knock-offs. And the Chinese government sees no reason to enforce the laws to keep American capitalists rich at the expense of their people and industry. Can’t blame them, really.
So, they have two things they can do. First, actually hire and pay workers money to make a market. That cuts into profits. Second, support enough welfare so that enough people have money to buy their products. That increases taxes and costs them money also.
Kind of a dilemma for them.

Because he was able to offer more money for their services than what they were able to offer each other.

In that case, how are they better off without him? If it was more beneficial to them to work for this guy than to work for each other, and they are no longer able to work for him, then it stands to reason they are worse off.

The WPA was fine, but the US didn’t really open its wallet until WWII. Debt/GDP, for example, climbed from 40% to 140%. That’s what really killed off the Depression. If they’d spent that kind of money on the WPA, they could have ended the Depression sooner, but it took a war to make it happen.

We’ll let me turn it around for a second. If before, they were supporting not only themselves but the rich man as well, and after the robot they were supporting only themselves, how could they not be better off?

At the very least, it’s one less mouth to feed. And, if - as is the tradition of the rich - he was consuming much more than everyone else, his mouth would have been an especially big one.

But to answer your question, nobody said they were better off working for him than working for themselves. At least, I never said that.

What I did say is that he is able to monopolize the services of others through the use of money. That makes them worse off, not better off.