On June 5th the people of Switzerland will vote on a new law that would guarantee an income of $2,500 a month to all citizens. One of the reasons given for this initiative is that robots and automation are replacing people so it’s only fair to guarantee them a minimum income.
I agree with the trend, but disagree with the conclusion.
As I wrote about last month, there have been many forms of automation integrated into the workplace over the last couple of centuries that vastly increased productivity and decreased the need for labor. Examples include electricity, the steam & internal combustion engines, computers and the internet. And indeed, the need for labor decreased markedly.
As the chart above shows, the average number of hours worked in the U.S. decreased by 50% from 1830 to 2016. But that didn’t mean incomes went down. On the contrary, income skyrocketed from $1,856 per year to $50,820 over the same period (in 2009 dollars); that’s what increased productivity does. In fact, the decreased demand for labor and the corresponding increase in wages caused a new phenomenon we now take for granted: the weekend.
One way of predicting the future is to extrapolate both trends, which would mean that in the next 10 years we’ll have an average work week of 30 hours, with an annual income of $70,000. Based on an 8-hour work day, we should be at a 4-day work week in the next 5-7 years.
Sounds good, doesn’t it? And I think it’ll happen. It will probably take some large corporation, say Apple or General Motors to “go first” and make the change to a 4-day work week. In fact, it was Ford Motor Company in 1926 that ushered in the 40-hour week, a breakthrough at the time.
So here’s to three-day weekends and higher pay, coming soon to a company near you!