Artificial Intelligence, the American Worker and a Universal Basic Income

With the growing talk of official implementation of a universal basic income picking up momentum in the post-pandemic world, a recent development gives us a sense of why governments will be under pressure to ensure the financial security of their citizens.

  

According to Nation's Restaurant News, McDoncald's CEO Chris Kempczinski told an investor conference being held by AllianceBernstein Strategic Decisions that McDonald's is testing automated voice order-taking at ten drive-through restaurants in the Chicago area.  

  

Let's look back to September 2019, when McDonald's moved into the voice-based and multi-item conversational ordering technology sector though its acquisition of Apprente as shown here:

 

Here is a quote from McDonald's press release dated September 10, 2019 outlining the companies rationale for acquiring Apprente:

 

"Building our technology infrastructure and digital capabilities are fundamental to our Velocity Growth Plan and enable us to meet rising expectations from our customers, while making it simpler and even more enjoyable for crew members to serve guests," said Steve Easterbrook, (then) President and Chief Executive Officer, McDonald's Corporation. "Apprente's gifted team, and the technology they have developed, will form McD Tech Labs, a new group integrated in our Global Technology team that will take our culture of innovation one step further.""

  

The Apprente team will be the founding member of a new, internal group inside of McDonald's Global Technology Team called McD Tech Labs.  This acquisition builds on the April 2019 acquisition of Dynamic Yield, an artificial intelligence company.  According to Dynamic Yield's CEO, the acquisition:

 

'....is great news for Dynamic Yield and McDonald’s customers, as well as personalization practitioners everywhere. Dynamic Yield will play a critical role in McDonald’s digital transformation, allowing it to become even more focused on the customer by deploying our technology in outdoor digital Drive-Thru menu displays, as well as other digital customer experience touchpoints, such as self-order kiosks and the McDonald’s Global Mobile App."

 

Let's go back to the recent revelations made by McDonald's current President and CEO Chris Kempczinski.  He told the investor conference that, while the automated voice-ordering system was 85 percent accurate and can take about 4/5ths of orders in all tests, that it will be some time before the company plans to roll out the system in its 13,673 restaurants (as of December 31, 2020) across the United States and, one has to presume, its 39,198 restaurants around the world. 

 

Here are some additional quotes from Chris Kempczinski:

  

"There is a big leap between going from 10 restaurants in Chicago to 14,000 restaurants across the U.S. with an infinite number of promo permutations, menu permutations, dialect permutations, weather — I mean, on and on and on and on.  Do I think in five years from now you're going to see a voice in the drive-thru?  I do, but I don't think that this is going to be something that happens in the next year or so...."

 

“One of the things that we've learned in our 10 restaurants that we've done it is: How do you train a crew to actually not want to jump in as soon as they hear a question or a pause?  We've had to do a little bit of training of ‘just keep your hands off the steering wheel, let the computer do its work.’”

 

Kempczinski also noted that staff needed to develop a comfort level with the AI technology: 

 

“We weren't getting enough of the orders to be actually able to be processed through the voice recognition technology, because as soon as there was a question or a hiccup, the crew had a tendency to just want to jump in. And it took a little bit of time to actually learn to trust the technology.”

Yes, by all means, trust (and learn to love) the technology that is going to put you out of a job.

 

As shown on this graphic from McDonald's, over the past several years, the company has increased expenditures on technology at the same time as it is reducing General and Administrative (G&A) spending:

Now, let's take a quick look at McDonald's wages for its front line workers (in the United States in U.S. dollars):

 

Here are the 2020 salaries for the company's Named Executive Officers:

 

If you were to take the salary of a fast food attendant of $9.83 per hour for a 40 hour week, their before tax income would be $393.20 for a week's work or $20,446.40 for a year's work (no holidays).  At this level, a fast food attendant at McDonalds would have to work for 4.92 years to earn the monthly compensation  (including perquisite and benefits) of $100,560.67 earned by the company's CEO.  And yet the company is looking to replace its front line, low-paid workforce with an AI-equipped automatic ordering system, putting untold thousands of workers out of jobs.  

It's no wonder that there is increasing discussion about a universal basic income.  With technology, particularly artificial intelligence, displacing workers on the low end of the pay scale, the American work force is on the cusp of substantial and permanent changes that will benefit only the few at the top of the salary pyramid.  After all, it's all about profits, isn't it?

A Universal Basic Income - Coming Soon to a Nation Near You

While, thanks to the nation's public broadcasting system, Canadians are completely distracted with all things COVID and while the House of Commons (Canada's federal parliamentary body) sits mainly empty, the ruling socialist-leaning Liberal Party under Justin Trudeau has introduced legislation that will ultimately lead to a Universal Basic Income/Guaranteed Basic Income.

 

Bill C-273 was introduced for first reading on February 22, 2021 as a private members bill by Liberal Member of Parliament and backbench dweller Julie Dzerowicz:

 

 

For those of you that don't understand Canada's political system, private member's bills are supposedly introduced into parliament by a legislator, often a backbencher (i.e. non-cabinet minister) who is not acting on behalf of a party leader/executive.  In Canada's parliament, most bills are introduced by the ruling party or by members of the opposition party.  Here is more information on private member's bills from the House of Commons website 

  

Here is the text of Bill-273:

  

Preamble

 

"Whereas all Canadians have the right to have their basic needs met, to participate fully in society and to live with dignity, regardless of their employment status;

Whereas the Government of Canada is committed to promoting those rights, including by reducing income inequality and other disparities that exist in communities across the country;

Whereas the Government of Canada is committed to supporting the workforce of the 21st century by ensuring that program and service delivery structures are more responsive to workforce disruptions, and that the social welfare system is flexible and adaptable;

Whereas the Government of Canada is determined to ensure that its social welfare system is updated to meet the current and future needs of Canadians and to realign its program and service delivery structures to maximize Canadians’ ability to innovate;

Whereas a guaranteed basic income program could enhance the economy’s ability to grow and improve its productivity; 

And whereas a guaranteed basic income program could lift many Canadians out of poverty and provide them with the stability they need to access education and employment opportunities and to reach their full potential;

Now, therefore, Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:

 

This Act may be cited as the National Strategy for a Guaranteed Basic Income Act.

Definition of Minister

In this Act, Minister means the Minister of Finance.

(1) The Minister must develop a national strategy to assess implementation models for a guaranteed basic income program in Canada.

Consultation

(2) In developing the strategy, the Minister must consult with the Minister of Employment and Social Development, the Minister of Industry, representatives of provincial governments responsible for employment and social development, leaders of Indigenous communities and governments, representatives of municipal governments, experts in guaranteed basic income pilot projects, the academic community and key stakeholders, including representatives of organizations involved in labour and employment and in entrepreneurship and innovation.

Content

(3) The strategy must include measures to 

(a) establish a pilot project in one or more provinces to test models of implementation of a guaranteed basic income program;

(b) create a framework of national standards to guide the implementation of a guaranteed basic income program in any province;

(c) support research programs that will provide evidence to guide the design and implementation of a guaranteed basic income program in each province, including through collaboration with international organizations and institutions with experience of similar programs;

(d) collect and analyze data for the purpose of assessing, for each model tested, 

(i) the effect on government, including in relation to the efficiency, flexibility, cost, continuity and responsiveness of program and service delivery models and the potential of a guaranteed basic income program to reduce the complexity of or replace existing social programs, to alleviate poverty and to support economic growth,

(ii) the effect on recipients and their families, including in relation to their quality of life, their physical and mental health, their use of health services, and in relation to housing stability, living standards, nutrition, savings, education, social relations and labour market participation, and

(iii) the direct or indirect benefits for the recipients’ communities, including in relation to entrepreneurship, job creation and civic action; and

(e) establish metrics that may be used to measure the effects and benefits described in subparagraphs 

(d)‍(i) to (iii).

Federal-provincial agreements

4 The Minister, with the approval of the Governor in Council, may enter into an agreement with the government of a province for the collection, analysis and sharing of data for the purpose of determining how a guaranteed basic income program might best be structured and implemented in the province.

Reports to Parliament

Tabling of national strategy 

5 (1) Within two years after the day on which this Act comes into force, the Minister must prepare a report setting out the national strategy and cause it to be tabled in each House of Parliament on any of the first 15days on which that House is sitting after it is completed.

Publication

(2) The Minister must publish the report on the website of the Department of Finance within 10 days after it has been tabled in both Houses of Parliament.

Report

6 Within two years after the report referred to in section 5 has been tabled in both Houses of Parliament, the Minister must, in consultation with the parties referred to in subsection 3(2), prepare a report on the results of the implementation of the national strategy in each province that sets out the Minister’s conclusions and recommendations, and cause it to be tabled in each House of Parliament on any of the first 15 days on which that House is sitting after it is completed."

 

Currently, Chrystia Freeland is Canada's Minister of Finance (and Deputy Prime Minister).  Under her watch, Canadians can pretty much assure themselves that a Universal Basic Income is a done deal, particularly given her close association with the World Economic Forum as shown here:

 

...and the presence of former Bank of Canada Governor Mark Carney who is also closely associated with the World Economic Forum as shown here:

 

...and advisor to the Trudeau government as shown here:

 

You might be wondering what the World Economic Forum has to do with a Universal Basic Income.  Here is your answer:

 

 

Here is a quote from the article with my bolds:

 

"During these times, when we need to kickstart sputtering economies, the payoff of social stability would be tremendous, making an even more powerful argument for UBI. 

 

So a new social contract needs to emerge from this crisis that rebalances deep inequalities that are prevalent across societies. To put it bluntly: The question should no longer be whether resources for effective social protection can be found – but how they can be found. UBI promises to be a useful element of such a framework. 

 

Countries like the United States and Canada are already making such plans. Alaska, in fact, has been making annual UBI-type payments, to every state resident, for decades. Canadian prime minister Justin Trudeau pledged CAD$2,000 a month, for the next four months, to workers who have lost income due to the pandemic – a short-term form of UBI. Now we need to expand it and make it work in the long-term, and we can. 

 

We must approach it differently from how we have in the past. We should neither view it as a hand-out, nor as a Band-Aid solution to add on to systems already in place. Instead, we should use the current twin crises to re-evaluate where we are “still digging”. 

 

To make UBI fly, we will need fair taxation. Countries will have to work together, exchanging data across borders, to stop people and corporations from evading taxes. Simply put, we must all pay our fair share. With good conscience, we can no longer privatize profit and socialize loss.

 

Then stop the subsidies, notably fossil-fuel subsidies, which hinder the path to achieving the Sustainable Development Goals – especially climate-change targets. This would benefit us all, while generating financial resources not just for UBI, but also to support affected fossil-fuel companies."

 

Just in case you should happen to think that a Universal Basic Income is strictly a Canadian phenomenon, here are two graphics from Visual Capitalist showing which jurisdictions have experimented with UBI:

 

Future UBI experiments are planned for San Francisco, California, St. Paul, Minnesota, Newark, New Jersey, Scotland and Gyeonggi Province, South Korea.

Lastly, here are some posters that have recently appeared in the United Kingdom thanks to Organize.org:

  

If there's one thing that we can assure ourselves of it's that a Universal Basic Income is coming whether we like the idea or not.  It is a very clear cut way that governments can control their citizens; if they don't like your behaviour or beliefs, they are in control of your monthly government stipend.  It is also a way to ensure that the serf class remains where it is, as a source of labour for the ruling class.  A Universal Basic Income will not reduce income inequality, it will magnify the income and wealth differences between "us" and our "overlords".