For economics, radio sponsored by the GM by Power card from capital, one, let's be real. No one like spending money on the small stuff, but you need things like gas to get to work in sometimes in early afternoon cup of coffee there's something else this podcast can teach you the little things you buy every day, can put you on the road to earning back on something huge, a new ride, the GM by power card. You get closer to a new shiver. Lay Buick, geomancy or cadillac, with everything you by even the small stuff, find out more at five Howard card that car, slash for economics, that's be you! Why power card that gum, slash for economics. Freedoms, radio sponsored by rocket mortgaged by Quicken Loans home. Today's so much more than it was yesterday, but at rocket mortgage home still all about you during these

challenging times the top priority at rocket mortgage is the health and safety of the communities they serve If you need mortgage assistance, their team is available. Twenty four seven to answer questions and offer solutions, whether that in saving money on your mortgage or finding a new way to navigate payments, from their home to yours, the team at rocket mortgage is, with you, visit rocket mortgage dot com, flash freak to learn more call for cost information, conditions equal housing, lender licence. In all fifty states, an m l, as consumer access, dot, org number, thirty, three, today show is the first of two episodes about employment and, of course, unemployment. Considering what's been happening with covered nineteen pandemic, it specially about reemployment. That is what kind of jobs are coming back and when in which jobs aren't coming back, so we

here from labour economist with the Federal Reserve, another. MR used to work in the White House and the Department of Labour, another economists who thinks that, even before the pandemic, we automated away too many jobs and an person who shares that view that jobs and automation, the former presidential Kinda Andrew Yang, whose call for a universal basic income has become a lot more urgent in the past few months. These two episodes are also about prisoners specifically prisoner and reemployment, and will ask whether that research can tell us anything about covert nineteen reemployment generally We are living through an historic disruption, a jolt to the labour market that was unimaginable just a few months ago. There will be books and books written about it, fifty years now, it'll show up in economics textbooks. Maybe

I'll call it then, what were calling it now, the great labour the allocation of twenty twenty friends, stature and Gunnar productions. This is pre economics, radio broadcasts and explores the inside of everything. Here's your home Stephen definite, we'll start today with a particularly interesting researcher, My name is Jennifer Doorway ACT and I'm an economics professor and the director of the Justice Tech LAB at Texas, aunt em university. What is the Justice tech lab? It is a research group that,

It is a research group that focuses on empirical research related to crime and discrimination. So we try to find answers to some of our trickier policy problems directed not set out to become a crime I missed a kind of assumed it would be an investment banker like every other week. I made her, but she repeatedly found herself drawn to the top I saw and near times article about DNA Data bases and how the law, I was very state to state, in terms of which offenders are required to provide. Dna too, are come justice, dna databases and I thought that's a great natural experiment, an experiment that could help her answer a key question, but criminals and incentives. So if your dna is added to the database, then your dna sample is frequently compared with dna evidence from crises and so My paper showed that that dramatically reduced recidivism for people in the- U S, meaning because it acted as a disincentive

to commit further crimes because of the knowledge that you're likelihood of being caught his home exactly yeah, so increasing the probability of getting caught then has a deterrent effect on future crime, and they just turns out I am is really interesting. Now do you have a lot of personal experience with crime Not yet maybe maybe one day after it may strike you there crime is an unusual topic for an economist. But if you think about crime as an industry, its a bit There are nearly one point: five million people currently imprisoned in the. U S is typically cos about a hundred dollars a day to lock someone up so that alone, is a hundred fifty million dollars a day or some fifty five. Billion dollars a year. Then there are the costs associated with law enforcement, the criminal defence in court systems and so on, all of which produce countless issues that appeal to an economist. I think their biggest issue is, though,

credible inefficiency, so we lock a huge number of people up every year we incarcerate them for a really long time that has cost to them. Personally, likely has cost to the community. There are probably other more cost effect Ways to reduce crime than just locking people up police thing is another. Place where, in a way, a bunch of research showing that hiring were police off there is on average reduces crime, but we know arguably little about. What is valuable for police to actually spend their time during the day and what tips into what we consider. Over policing and then just a bunch of problems like that in the courts hurts and reentry in and so on, some of those one, five million imprisoned Americans have plainly done terrible things and belong in prison, perhaps forever, but a consent

this has begun to emerge that many of those one point, five million, don't necessarily belong in prison that day and the rest of us would be better served if they were back in society and employed contributing. This is one of the rare policy positions these days that has support across political boundaries. This is probably my favorite thing about working in the space. Is that I frequently wind of talking to people who are far more liberal and far more conservative than I am at the same table and every the train and thou work. I told the same goal: Jennifer Dull Yak sees people engaged in criminal justice reform for one of three main reasons say: you ve got the libertarians who look at our communal justice. Some as just another big failed government programme and they want to shrink it and then you have more religious right that believes strongly in redemption and second chances and make up folks left to worry about our criminal justice system and the racial disparities involved in it and criminalized

poverty and so on. In all these people, regardless of ideological perspective, are asking the same important question: what's the best way to reduce the prison population while keeping the public safe, one key number to look at is the rate of recidivism. That is the law. We heard that someone released from prison wines are back in prison, recidivism numbers in the. U S are astonishing. In a typical year, roughly six hundred thousand prisoners are released within three years, two thirds of them returned to prison. If you happen to be released at a time when the local labour market is really bad like right now, we might expect recidivism raids overall to increase word, making it really hard for people to gonna get back on their feet and build a stable life free of criminal activity, a stable life free of criminal activity is deployed. Then on getting a job after prison? How hard is it for a former prisoner to get a job, so

oh. This is a much more complicated answer than you might expect. A part of the challenge and working in this space is how little we actually know about this population. So, if you think about the Sensus and over other big national surveys. None of those surveys asked a question about whether we have a criminal record, that sounds terrible for you. Yes, it's It is challenging. Why do the kind of service to mention not include? questions about imprisonment. I would think the routes are anti discriminatory. Yes, you know, you worry that people wouldn't answer truthfully ie or that they might be worried about the government is now coming after them if they say yes to that question imagine for a minute that you are the hiring manager for a company with a few hundred employees? Maybe it's a food packaging, company or construction firm. You are

constantly needing to hire new workers. Typically young men who don't have a college education, would you prefer to hire someone who has or hasn't been to prison? the argument you here sometimes is that people who have come out of prison and have had and finding a job and relating oh dont want to go back. They make great employees because they work really hard and I'll be really loyal to you. Did you hear that, from it there are sometimes sometimes, but not all the time. Many employers are much less eager to hire a former prisoner. The reasons that employers tend to gather usually our along the lines of their work. But the legal liability that comes with having some on the job. Who might come in other crime there other potential? things like you know, people coming prison on average, are at higher risk for of substance abused and that sort of thing. So, if you are the hiring manager at that construction or food packaging firm

How do you know whether a potential employee has been in prison? Remember the Sensus and other surveys. Don't ask that question. The internet has helped make Little background checks more widely available, but that still costs time and money in the old days. Without a centralized database background checks were slower and less comprehensive, so employers came up with a simple solution on every job application. They just asked the apple. Can to say whether they ve been in prison cell. Traditionally, there's a box. You check Ino check this box. If you have a criminal record, if a felony conviction, you could of course lie, but this box was considered useful enough that for decades, it was included on job applications in the late nineteenth nineties. Over there arose a movement called banned. The box to ban the box is a policy that aims to help people with criminal record

its get their foot in the door with employers and get a job, and it works by. Bidding and players from asking job applicants if they have a criminal record and toll, relatively late in the hearing process. In other words, employers could still do a background check before hiring someone, but they'd be less inclined to rule out an applicant early. Theoretically, this would give former prisoners better chance of getting higher. They wouldn't be dismissed out of hand just from their application and with a better chance of getting a job. Maybe there would be less recidivism at least was the idea, and especially after the last financial crisis, when young men, without a college education we're having a really hard time getting jobs. The ban, the Box movement gained momentum again across the political spectrum, so have some very left, leaning groups coming out this for more social justice reasons, and then you had the coat brother, is coming from a more libertarian

effective and also the belief in emption. They were really pushing for this purpose, see as a way to ensure second chances for people who had paid their dues and sir, a time and now wanted to get a job. Jennifer doughleanders first heard about the ban, the box movement in two thousand thirteen after she finished grad school. As with the study she had done on DNA databases banned, the box, policy differ from state to state what way of getting a lot of media attention is what happens in the federal government, and you know nothing gets done the better government, especially in her field, criminal justice policy, almost entirely may at state level. In this case, President Obama did ban the Box on federal government jobs in two thousand fifteen. As for private employers, thirty some states had also banned the box. So inevitably, a diverse array of states yeah so California and Massachusetts implemented the box policies, but you also have Nebraska that implemented ban the box Paul

his answer. You really do have a mix of places that are more. Co stolen, more liberal and places in the middle of a country that that are not, but also there were a bunch of states that hadn't instituted the policy, so one again Dolly had a nice clean natural experiment, she could measure the effect of the policy by comparing hiring practices in states that didn't ban the box with those it is banned. The box works really well, then we should see an increase in employment for the types of people that are likely to have a recent criminal code Can they might worry and employer when Dolly axes the types of people? That means she couldn't measured the effect on X, prison,

per se because remember, administrative data generally doesn't include criminal records, but she could measured the effect on one particular cohort of the population. So if this policy's working, then we might expect employment increase, particularly for young men of color, who dont have a college degree, that's the group that is most likely to have a recent connection, so is that what happened did ban the box legislation accomplish its intended goal and produce more jobs for young men of color without a college education. Before I tell you that, let's hear what Dolly S thought when she first heard about the ban, the Box, policy. I remember thinking well that could totally backfire backfire, because why? If you remove information about who has a criminal record, which presumably employers are worried about. Then they might try to guess who has a criminal record, because guessing is,

stir and cheaper than running a criminal background check on every applicant, and then they simply discriminate against the entire group that contains people who are more likely to have criminal records so doin ex concern. With that? Banning the box would not only not help former prisoners but that it might hurt other applicants who happened to share demographic traits associated with former prisoners, a classic unintended consequence, if true, of course, those Mr concern, her hunch she and her co author, Benjamin Hansen, spent a few years assembling and analyzing the data to see if it actually was true and what did they find. So we only that on average across the U S in places that ban the box, employment fell by five percent for black men, who didn't have a college degree and by three percent for young hispanic man who didn't have a college degree, and so the next question is kind of like who were they hiring

dad and we found on average the people who benefited were older men of color, so you're trying to avoid people here. Actively and often crime. Older people are pretty good bet, colonel activity, tensor decline with age, and what about young under educated, wait potential employees, so for young white man who had the same level of education. We saw employment increase for that group. What seems to be happening was that employers were substituting from young men of color, but two young white men. My sense is that you came into this lake. The Listen, that's watching a horror movie when the characters they going into the abandoned barn and you're. Saying no can't you see we have in fact did it seemed that obvious. Do it felt very obvious to me if in players are statistically describing

it in they son, who is likely to have a record which is our hypocrisy, is going into the city than that's the same group that we might expect to see a reduction in payment for ok, so talk about the response to your paper as word: The paper began to get out in policy circles. I am sure that everyone said. Oh, my goodness, we ve made a terrible missing how's the anomalies, not helping the people, we want to help it. It's actually hurting people who have nothing to do with this at all. Let's roll back these policies immediately. Is that what happened he s exact an accident or repealed everywhere. Now so now, fortunately, we got a lot of push back by the time we had enough years of data to actually test. I bought the season and put out studies that were really confident in there was a really establish beyond the box lobby. And so at this point there are organisations that

very wedded to not helping people criminal records, get employment, but passing Ghana boxes and you're, the pesky economists that says well yeah, but you're, actually not getting a very good outcome exactly right. The challenges that most people who are on the grounds of working on the policy thinking necessarily about like, what's next to like powder people then respond as new set of incentives and that's what economists are trying to think about. The reason I wanted to bring in the story today about Jennifer duly expand. The box research is to show how hard it can be to create policies that hit their target without collateral damage duly access. It was obvious to her even the force did the research how the policy might back

But you can appreciate how all the advocates and activists thought it was a good idea. The problem is now it's too late. The policy came faster than the research that showed how the policy backfire if there's anything harder than making new policy its undoing existing policy, even when the existing policy appears to be hurting some of the most vulnerable people in the labour market, and that was before Covet nineteen. That was when the? U S, unemployment rate was under four percent. The official rate has since cod, rippled at least, and the true unemployment rate is even higher. So what kind of employment and reemployment policies are being created now? Will they also heard some of the people are intended to help? What kind of lessons should we take away? from this ban. The box story will get into all that right after the break. If you haven't

check out our new spin off podcast new, stupid questions. Please do the psychologist Angela Duckworth and I take turns asking each other questions about uncertainty, happiness, anger, immortality. He no regular water, cooler stuff, even that we don't have watercolors any more. You can find it wherever you get your podcast, no stupid questions. It's called we'll be right back. Freedom, radio sponsored by the GM by Power card from capital on the world's busy with overflowing schedules, places to go and people to see having a great right now and in the future is always part of the plan. The GM by our guard helps you earn toward a new chevaler, Buick, Gm Sea or Cadillac. By simply doing the things you already doing each day earn

every last minute, dinner run coffee date with an old friend or even gas, to go to a bucket of balls at the driving rage, build up the earth towards a new ride, while you're working through your schedule, check out by power card dot. Com. Slash freak anaemic It started, but be you why power car dotcom, flash for economics, The cuban nineteen crisis has scrambled just about every norm in protocol. We know one of the biggest disruptions is in the labour market. The pandemic has destroyed jobs like nothing

in recent history. There have already been a number of policy responses and there will be many more, but here's the thing about policy, especially when it created in the midst of a crisis. A policy intended to produce ex might produce some ex, but it'll often produce a lot of. Why too, and maybe even some z ideas it look great on paper or an emperor sticker bump up against the real world and turn into something else, like the ban, the box policy we heard about earlier. So what does reemployment look like as the cuban nineteen crisis starts,

Yes, who will be first and who last which sectors will surge in which will perhaps disappear. Do we see even more automation or less? Let's start with some numbers as gruesome as they might be before the pandemic? The? U S: economy was enjoying its longest boom in history. In February, the official unemployment rate was a measly three point. Five percent. This is worth remembering. Our current economic crisis has nothing to do with the underlying economy. It's all about the pandemic. In any case, the latest unemployment rate for the month of April fourteen point: seven percent, The reality is that number is too low. Betsy Stevenson, an economist at the University of Michigan, served as chief economist,

He was department of Labour, as well as on the Council of economic advisers in the Obama administration. Many of the people who reported that they were employed, but they weren't able to go to work. They were absent from work not working from home but absent from work. Many. This people should have been counted among the unemployed, at least among the temporary unemployed, means the official unemployment rate is skewed. So what other data sources are? There said the fastest data that comes out is applications for unemployment insurance. Those are called unemployment, insurance initial claims data, The cares act made a bunch of people who are not normally eligible for you, I eligible, and this is called pandemic unemployment assistance. Since the middle of March, forty million people have applied

it for unemployment benefits. Another way is to take a look at our employers and ask our employers how many people do they have on payroll compared to the number of people they had on their payrolls in February, Those losses are around twenty one million, quite a bit less than the unemployment applications. There's a third way that we can try to take a look at the state of the labour market. We can survey household. And ask people know what were you doing in a particular week? Where are you? at work are not all these now Greece are in this sort of twenty to thirty two, forty million. That's a huge range of all paints, the same picture of really a staggering scale of work, stoppage, so weird Stevens and put the true unemployment rate for April. The true unemployment rate is pro.

Play around nineteen twenty percent and that number may be below or may rise further. Let's put that in context during the great recession of two thousand and seven to two thousand and nine, the unemployment rate, ten per cent, nine million jobs were lost over the course of those two years with Covin nineteen. Twenty to forty million jobs were lost in about two months. If we use Steve since estimate that the true unemployment rate is now around twenty percent? That's getting us into the territory of the great depression when unemployment hit twenty five percent. Now again, the comparisons are not parallel in both the great depression and great recession. Job loss was a consequence of economic calamity with Covin nineteen, its job loss because of an economic shut down produced by a public house.

Calamity still, if you are a labour economist, the current numbers are literally unbelievable s. A year ago. The same person had brought me this table of statistics and said this is what a calculated I would have said. You did something wrong: that's Abigail, Wozniak she's, a research economists at the Federal Reserve Bank of Minneapolis. We have in the course of a man taken, a turn that really has magnified the losses of the great I share many times over. We ve eradicated all of the job growth in the last ten years. Wozniak is spent her career studying recessions. Here's one sobering finding! If you are a college graduate who to the job market. During a recession, you never really catch up your lifetime earnings around ten to fifteen percent lower with covert nineteen

as has been surveying Americans across the country, about their physical and financial health. Some patterns have already jumped out, for instance, unemployment, and has risen dramatically for workers who don't have a college degree, and I looked back to the great risks, Jan numbers in Rio that pattern looks very similar, but she has noticed one difference most recessions, black workers experience more unemployment than whites in this case they are about the same, and in this event, unemployment rates for hispanic workers have shot passed, those for black and white workers and they are experiencing the highest levels of

employment rate now. So that is really something that's quite different bets likely, because some of the industry's most affected by the pandemic, including the service sector, have a lot of hispanic workers the same for construction, which is also slowed. So how does Wozniak think about recovery and reemployment that she says depends on what kind of recovery we get? So I think folks might have heard that kind of popular phrase, the jobless recovery and what that was connecting to was a kind of empirical fact that employment was so. What slower to recover in the last couple recessions prior to the great recession. And in fact, there's good evidence that it never quite fully recover, particularly for some skill groups. Workers, that what we had in the more recent recessions was significant reality. Creation of what jobs looked lake. So that way,

an employment started a pickup coming out of the recession, the types of jobs that folks were doing looked a little bit different. That is opposed to an older style of recession, where the previous jobs tended to return view, look out recessions in the Sixtys and Seventys. You would see folks reporting lay offs. This very. The all were, laying you asked what we might call you back type of separation. So what determines the nature of the job? Recoveries this time around Betsy Stevenson again what ultimately happens to job loss depends on the consumption choices that you and I and everyone else make dirt. And in the wake of this pandemic Stevenson sees three factors that are potentially changing our consumption choices number one. We are learning to use new technology, and the pandemic has forced us to make some investments.

Ange, though we might not have made before at least not right away because changes hard, but with a pandemic weep and forced to learn how to order things online. How do you zoom toddy? is Google hang out, so those investments will make more likely to continue to use new technologies going forward. Ok, that makes sense what else we are also adjust into a new level of risk that a lead to changes in how we live our lives for a while and the things we want to consume. So people who were avid travellers may not go back to travelling for quite some time. People who love to go out and hear music concert halls or not to go out to dinner. They may not continue to do those things at the same level or same degree. Also sensible- and, let's not forget, there is risk on the labour side,

the consumption equation to in many states, including my state of Michigan dentists, were told they should not practice during this period of rising contagion, and this would be a very hazardous job if you were a done to disarm dental hygienist, cleaning people's teeth being in their mouth. Maybe there s some tomorrow covered person, So there is a risk to the workers. That's gonna change, whether people want to go back to those jobs. And finally, there is the fact that incomes have changed we're gonna, see lower household income and when Lower household income people Bible ass. Some households may not even find that their income has declined, but there may be concerns that their income will. That causes a lot of people to say the brakes on their consumption. You can see how this might snowball. The more

asked, especially during a pandemic, consider the demand for deep freezers. What we see is that people tend to buy fewer, durable goods like a deep freezer when it comes to climb, but people who are adjusted to a new level of risk seem to think that they like to be able to buy more of their growth. Could they praiser when it comes to climb, but people who are adjusted to a new level of risk seem to think that they like to be able to buy more of their groceries at once, be able to put more things in the freezer, be better prepared for not being able to get to the shops. Indeed, the sale of deep freezers is way up, as I spent all home and kitchen goods like pastor makers and soda machines and water filtration devices. So if you make those products, you still need employees but

If you sell those products in a physical retail store, you don't going into a store. Physically now represents a level of risk. That means that many people, even if they prefer to shop in person, will find that the benefits of shopping in person don't outweigh the new cars. Before the pandemic. There were nearly five million retail sales jobs in the: U S they we're already under extreme pressure from online shopping and automation. Now that trend has been supercharged just take a look at some recent bankruptcy filings: Jesse Penny, J crew, Niemann, Marcus Missy's, Berlin most of its one hundred and twenty five thousand employees. How many of those jobs do we think we'll come back a recent paper,

the economists Jose Maria Guerrero, Nicholas Bloom and Stephen Davis, estimated that forty two percent of recent lay offs result in permanent job loss. That sounds sounds terrible, even if you think of yourself as an optimist, it sounds like the glass is. Least forty two percent empty? I can make glass, a little more, how fall Abigail Wozniak again from Minneapolis FED, so that way they come up with. That estimate is that again from older recessions, when we have significant amounts of lay offs It looked like about three quarters of folks who are on lay off were eventual. Rehired. What we're missing with that is Some of these reallocation effects that happen in recessions, that is the newer jobless recovery recessions, not the older ones, to reality,

It just means the economy. He was doing a certain set of jobs or tasks are making a certain set of things, and then they kind of switched to making some different things right. So you can think of the twentieth century is just one big exercise and reallocation. We went from lots of people producing agricultural goods to almost nobody producing knows, and now we produce other things, but that opinions on a bit more of a granular scale and recessions its reallocation. It's not just straight up destruction and that process will take time Wozniak is reluctant to predict which industries are, firms might benefit in the long run and which might suffer the seams. Wise We are still in the middle of the crisis after all, and she works for the Federal Reserve where guessing about the future isn't strongly encouraged. But we can do some guessing educated guess,

least any industry is reliant on people congregated on mass. Those are obviously a pretty bad short term. What about healthcare? Spending hospital systems have taken a huge hit during the panel. Large part because they had to defer all their money making activities, but afterwards could imagine you will be a massive appetite for public health spending and healthcare infrastructure generally. What about technology already? The pandemic has made some of the rich alot richer, big firms, Facebook and Amazon and Google and Apple, if not only seen their business models

Why do the pandemic, for the most part, they've also been able to hire a lot of software engineers and data scientist from startup tech firms that have been crushed by the pandemic? Here's another educated guess the rise of automation will likely continue just to give us a sense of where we were before Covid nineteen for two thousand and seventeen Mckenzie or estimated that by twenty thirty, roughly half of the work currently being done in our economy would be automatically Information is really one of sea technological aspects, the last several hundreds of years? That's therein eskimo glue an economist at MIT. If you think about what the British Industrial Revolution was as a slew of automation, technologies that took the tasks that were previously per by skilled artisans and textile and other factories and

found ways all automating and recognising the automobile studies. The disruption that automation can cause in the labour markets is most club, sickly, summarised by our discussions of the lights alters who broke textile she's because they we're losing their jobs done. She than we always equated lovers were irrational. You're being entitled, acknowledges bathroom and look at the details. The Ladys were exactly wrong, they your daddy we're losing their jobs and theirs. Therefore, as ass, a mobile Caesar, automation typically create one of two outcomes. If automation is bringing significant productivity gains and cost savings, then it will create destruction, but there will be other compensating change,

that may do so that destruction, so people who lose their jobs in textile factories and get jobs in other factories are other sectors. In other words, the labour is reality but on the other hand, this Asia is not very productive, then he a double. Why you get disruption, don't get any of the better and especially marginal automation that takes place because of mistakes or because policy somehow encourages confirmation that the margin would be of this sort which, as well as travel, Reverend mother was worth, and I also saw them is an example of what asked him a blue calls, so so automation the automated check out machines in a grocery store police. Until recently, they ve been improving, also automated customer service. Still,

pretty bad, even automation and Teslas car manufacturing plants, which the company realized, was excessive and wasn't even saving much money, so they reverse some of it. But if you go back to the decades after world war to the story was different back then productivity and labour demand were increasing. In parallel. There were technological improvements that did require less labour, think of afford assembly line, but the gains in productivity meant more jobs in other areas like auto design and sales and marketing for labour. This he did a pretty good picture and then, if you look at the post, making a show you a completely different picture gratitude continuously, Greece, somewhat more unequally somewhat less strongly than before, but labour demand, especially for

workers without a college degree stagnant and if I were high school graduates, is declining. So what changed in the nineteen eighties a few things for starters, in the? U S, we provide a huge subsidies. Firms to adopt equipment instead hiring labour, so other does is that it encourages a lot of false automation because a little, technology that you would not have adopted and you would have just employed workers. I find it profitable to do so because it has tax advantages. The, U S, wasn't alone. In writing. Legislation and tax code that treated capital more favourably than labour we were more zealous than most countries, Ronald Reagan got things started. This was the famous trickled down economic model and subsequent administrations kept it going some to a greater degree than others, but in addition, we have also cut corporate taxes, both the actual rate,

but also the effective read, because we had an expansion in s, corporations that thought Hager corporate income tax. And then finally, we ve cut the income tax rates of the capital on the top of the contacts. So all of you have contributed to reducing the effective tax. Capital to essentially zero is pretty easy. To make the argument in retrospect that the U S over privileged capital at the expense of labour operations and their high end. Employees have continued to earn more and more money at the lower end. Meanwhile, there's been waged stagnation and income. Inequality has spite. But you also need to acknowledge that the past few decades have seen one of the greatest technological explosions in history, much of it emanating from the U S, and that this might not have been possible without all that cheap

capital. So if you look at some of the automation technologies of the last several DEC It was a very promising industrial robotics, hoping that one of the most important ecological breakthroughs and more recently we have a. I need a high, is very rich. You can use artificial intelligence, machine learning deploring as a way or creating new tasks. New functions for human think about teaching if you provide more input to teachers in real time about what are the hidden strengthened. Weaknesses of eastern or workforce futile that can really trust from the teaching profession, but instead the way you do with a sigh and dedication to me. What we do is that we try to replace the teachers, automated testing, multiple choice

Questions can be graded. Teach you don't have to interact with the students as much. I think the good type of automation we're all beneficiaries of it. You know robotics, it creates disruptions, but you know we don't wanna dial the time back have workers, assemble cars and be subject to work, accidents and costs of production are much higher than that encourage of shoring up. There are a lot that can do with the right to information, but the problem is: too much of that only known humans, the humans in this case, including as men, Is forty million Americans have already lost their jobs because of covered nineteen? Now look The crisis actually heightened I'll be stretched. On the one hand it is deepening our depends,

Some automation, Edward Way, I mean in this high all locked out. We did not have access to digital technologies. To a high technologies to robotics. We would be in dire straits in terms of whether in the store, but on the other hand, this could be an impetus to going to a future just automation and nothing else, because it already the case dad major companies in the? U S are automating and our banking automation their becoming stronger out of this will become more afraid of social interactions and sport. Physical contact that are involved and making a lot more investments in automation. At the moment, now. What I'm worried about is that this will go more in the wrong direction. Even automation doesn't move in. What are some ugly calls the wrong direction, even if we get better then so so automation. The fact is, we are

still staring into what may turn out to be a labour abyss, let's assume on the bright side that most of the jobs lost from the pandemic do return even relatively soon, but what if only ten or twenty percent of them? Don't that rate? There is several million how are they going to get by one idea? That's been gaining momentum, so need to adopt universal basic income to day right now, we'll be back next week to continue this conversation about the girl labour reallocation of twenty twenty until then take care of yourself, and if you can someone else to for economics, radios produced by sticker and W productions, this episode was produced by Zack Levinsky. Our staff also includes Alison Craig low red ribbon met, Hickey, Daphne, Chen married, Duke and Wallace get help this week from James Foster are in turn, is immaterial

we're theme song is MR fortune by the hitchhikers. All the other music was composed by many scare. You can get for economics, radio and any podcast app if you'd, like the entire back catalogue, use the stitched up or go to free economics, dot com, where we also published transcripts inch As always, thanks for listening. Picture.