Andrew Yang is Right to Worry About Automation. So Why Isn't He Winning?

Andrew Yang is Right to Worry About Automation. So Why Isn't He Winning?

Andrew Yang is perhaps the most unorthodox democratic presidential candidate in a field composed of unorthodox candidates. He is quick to point out that he is an Asian-American man who loves math. His racial background in and of itself puts him in a category of his own in the history of presidential politics. But beyond the superficial qualities of his identity, Andrew Yang is the only candidate in the current field focussing on the threat that automation poses to the economy. Perhaps that is due to the fact that he is a serial entrepreneur with deep roots in Silicon Valley, so tech issues are naturally his wheelhouse. But automation is truly an existential threat to our nation, and Yang is right to build his campaign around it. In fact, Yang is correct about almost everything he says. In contrast to our current president, who has a terrible relationship with facts, Yang spits out facts and numbers in almost every sentence he utters. It is hard to point to another candidate who has such a strong command of the numerical realities of the state of our union. His solutions are equally impressive, and policies that reflect the kind of cool-headed business rationality that most Americans say they want in a leader. Moreover, he is a true libertarian, as many Silicon Valley types are, and he plants his flag directly in the center of almost every economic policy debate he engages in. His commitment to centrism is encapsulated in his campaign slogan: “Not left, not right, forward.” That strong economic centrism allows many right-wingers to look past his otherwise leftist policies on social issues and invites leftists to consider social policies that favor reducing the social safety net. With such a broad appeal across both the left and the right, one would expect that Andrew Yang would be leading the field. So why is he polling at 1%?

The first clue comes from the fact that he is proposing a provocative solution to automation and other socio-economic challenges facing America: universal basic income. Universal basic income (UBI) is not a new idea, but it has come back into vogue in recent years, especially in European countries, as a response to increasing automation and outsourcing of manufacturing industries and traditionally blue-collar jobs. A highly publicized test of UBI in Finland ended after two years with mixed results. But test cases are not limited to the EU. Canada and some African countries have tested similar ideas in the past. Yang is quick to point to Alaska’s long-running Alaska Permanent Fund as an example of a successful UBI scheme in the United States. Taking inspiration from these experiments, Yang has staked his entire candidacy on a version of UBI he calls the Freedom Dividend: a monthly payment of $1000 in cold, hard, cash to every American. What’s the catch? If you take the money, then you would forgo access to all other social services, like Medicare, Medicaid, and food stamps.

This is a bold offer to put on the table during a presidential race where most other Democratic candidates with strong policy platforms are concerned with debating more traditional liberal solutions to economic woes. Bernie Sanders, for instance, wants to implement a universal healthcare policy aimed at providing Medicare for all Americans. Sanders also wants to make education free and reform the tax code to reduce income inequality. Similarly, Warren wants to forgive all student loan debt and introduce tax reforms that would reign in Wall Street and multinational corporations who exploit loopholes to avoid paying taxes. Warren wants to solve economic problems facing America by investing in American manufacturing and R&D, as well as incentivizing foreign groups to buy American products using subsidies. 

Andrew Yang thinks they are both wrong about the way forward, not because their policies wouldn’t be effective in the current economic and political climate necessarily (though Yang is skeptical about this as well), but because he thinks the other candidates are fundamentally mistaken about nature of the jobs crisis that Americans are facing. According to Yang, the problem is not that Americans need free education to get jobs, as Sanders argues, or that Americans should be investing in bringing back manufacturing jobs, as Warren argues. The problem is that, as automation ramps up over the next decade and beyond, there will be no jobs available anymore for a significant portion of Americans.

Yang is not spouting paranoid nonsense about a dystopian future, either. According to experts, he seems to be completely in line with current economic forecasts across a range of industries. Within 10 years, America’s 3.5 million truck drivers could be displaced by automated trucks. With Amazon sucking up retail markets and shutting down malls across the country, 5 million retail workers could be out of work as well. Other industries that will likely be affected by automation over the coming decade include call centers (3 million workers), fast food (3.5 million workers), and agriculture (3 million workers). Even traditionally white collar worker will not be immune. Already, automated diagnostic technology is threatening the job prospects of radiologists, surgeons, and primary care physicians. The financial sector is also under immense pressure from automation, with the majority of stock trading now automated, rendering traditional stock traders and brokers obsolete. In fact, in almost every sector of the economy, automation is threatening jobs. In late 2017, L. Rafael Reif, the President of MIT wrote that the goal of MIT as an institution must now be to smooth the transition of jobs and the economy into an automated future

With numbers and statements like these accumulating in the public discourse every month, it is surprising that only one Democratic candidate is focusing on the issue. According to Yang, the threat of automation is on par with the threat of climate change in terms of the urgency of the issue and the scale of the response that will be required to address it. Furthermore, by offering a UBI solution that falls well outside of the traditional left-right debate surrounding economic policy, Yang has managed to sidestep many thorny issues that other candidates are forced to take a stand on. He can successfully support reparations for Black communities while simultaneously arguing for reducing social welfare spending. He can appeal to conservative worries about immigration and border security while arguing for a path to citizenship for undocumented workers. He can point to MLK as a supporter of UBI, as well as libertarians like Charles Murray. Even Trump supporters like Yang because he speaks directly to the malaise and nihilism that the phrase “Make America Great Again” represented to people on the right. With illegal border crossings hitting 13-year highs, disaffected Trump supporters look at Yang and see a guy who wants to put cash in their pockets and think, “if automation is taking jobs and immigrants are replacing declining communities even with a firebrand Republican like Trump in office, I might as well live out the rest of my days in economic security.”

So again, why is he losing?

As mentioned above, the first reason might be the fact that his policy proposal is so unusual that Americans simply do not understand it. Yang has to not only explain what UBI is to Americans who generally have a negative view of government handouts, but he has to convince voters that a Freedom Dividend is the best option available. It’s a tough ask, and in a time of deep uncertainty, Americans are risk-averse. New ideas are great, but Yang has to convince voters that the risk is worth taking. Unfortunately, the facts are not clearly on his side in that debate.

 A 2018 paper found that the Alaska Permanent Fund "dividend had no effect on employment, and increased part-time work by 1.8 percentage points (17 percent).” A 2019 study found "a 14% increase in substance-abuse incidents the day after the [Alaska Permanent Fund] payment and a 10% increase over the following four weeks. This is partially offset by a 8% decrease in property crime, with no changes in violent crimes.” While the same study found no annual change in crime, the implications of these two studies taken together paint a picture that goes against the narrative that Yang is pushing. Instead of providing the kind of long-term economic stability that Yang envisions, the Alaska Permanent Fund has no effect on employment rates. Instead, people seem to immediately blow the money on drugs and alcohol within the first few days of receiving their annual payment. If these trends hold at the national level, then, far from solving our socio-economic woes, Andrew Yang’s UBI plan may simply fund the greatest parties in American history.

Beyond policy talk, there are a few less substantive but sadly relevant explanations for Yang’s poor performance in the polls. These points will annoy Yang Gang supporters, but as Andrew Yang would probably agree, the facts are the facts. First, he clearly suffers from a lack of name recognition. As a relative newcomer, no one knows who he is. Second, he cultivates the image of a young, laidback, amiable, executive, which does not square with the sort of gravitas and strength that is associated with the leadership qualities Americans look for in a Commander In Chief of the armed forces. Another Democratic candidate with a comparable image is Pete Buttigieg, but he is a military veteran. Third, he’s an Asian-American man running for president at a time when tensions with China are at an all-time high. On the left, his minority status means that he has a lot of leg work to do on racial justice issues, which he has so far addressed fairly well by offering reparations to Black communities and a path to citizenship, something that Hispanic communities value a lot. But on the right, his Asian heritage and sympathy for immigrants may not play well with hardline anti-immigrant protectionists. Fourth, as a wealthy one percenter with deep connections in the tech industry and wall street, there is a knee-jerk lack of trust among leftist voters that Yang may not be able to overcome. No matter how many times he advocates for playing hardball with big tech firms, by for instance, implementing a VAT or some other form of consumption tax in order to combat Amazon’s ability to evade taxes, social democrats and other leftists, who are looking for a grassroots activist like Bernie or Warren, not a billionaire like Howard Schultz or Michael Bloomberg, will probably never trust him.

Optics aside, Yang has some other off-beat political views that would not necessarily play well on the national level. For instance, he is against circumcision, which is just a weird issue to even take a stand on in the first place, but will also turn off a lot Jewish and Catholic voters in the second place. Also, he is pro-nuclear energy (which is not a mainstream view in American politics currently), he wants mandatory 4 week vacations (which is not going to be popular in the business world), and he wants to bring back earmarks, which is an idiosyncratic view that many Americans will find counterintuitive and corrupt.

Clearly, Yang sees himself as a classic Silicon Valley disruptor. For instance, he is fond of saying that GDP is a terrible measure of economic growth and that by changing the metric we use to measure growth to be more human-centric, we will be able to grow our economy more effectively. That language is straight out of an Agile Framework management training seminar. Of course, Yang’s UBI policy solutions might be the kind of disruptive policy that we will need in an economy that is about to be disrupted completely by automation. Yang has a chance to make that case to the American public in the coming weeks during the Democratic primary debates. His entire candidacy probably rests on how he performs in these debates. So while his chances look slim now, the jury is still out. We might all be joining the Yang Gang later this summer.

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