FIRE (Financial Independence, Retire Early) can be thought of as basic income. Once you build up your nest egg and let it ride in the market, you’ll have enough to not work again.
Universal Basic Income means that the government or some other entity hands you money just because. In FIRE, instead of money being handed to you, you have to build up the nest egg first. If you work really hard at it, you can become FIRE in less than a decade. Even if you choose to take a little longer to get there, there are at least 30 people who have documented their journey to FIRE online.
Do you really think politicians will ever pass a basic income law in the US? I’m sure widespread poverty will be rampant before a law like that is ever passed in the US. So, you’re probably going to need to create your own Basic Income.
What is Basic Income?
Basic income is the notion that you don’t have to work anymore. You’d be given an income equal to a normal cost of living. No fancy meals or houses, and you couldn’t spend that much on material goods, but it would give you enough monetary freedom to pursue passions for purposes other than money. I guess you could think of Basic Income as Barista FI, where you have your basic needs taken care of, but might take on a fun part time job because you loved it.
The progression of innovative technology has grown increasingly faster, and we’re finally venturing into lifelike robots and better AI, which should lead to higher unemployment. What did we expect from an exponential curve?
Related: Free Financial Independence Course
But There Have Always Been New Jobs Invented!
But what about all the horse and buggy drivers, the chimney sweeps, telegram operators, and the typists?
Sure, there have always been new jobs invented. But at heart, each job consisted of an integral skill — you had to be a human who had a basic level of reasoning or ability to do non-thinking jobs.
Nothing has ever come close to replacing that.
Until this century. The progress we’ve made in artificial intelligence and robotics is severely worrying on a humanity scale for the US. Simply because we’re not a very good when it comes to retraining people for other jobs. Look at what happens to old manufacturing and coal mining towns. What happens when unemployment rises? Do you really want to bet that politicians will have your best interests at heart and create some kind of basic income for a comfortable life?
Going back to college is incredibly expensive and the US does not have high-quality free retraining programs. If you need to learn a new skill halfway through your career, it will be difficult to compete with the 22-year old who just graduated and might understand technology better.
Robots Aren’t Able To Replace Humans Yet, Right?
Japan has made considerable advances in humanoid robots, right down to the representation of humanity’s flighty emotions. Sure, it’s not perfect, but how long until it is? Watch this video:
A robot is cheaper than hiring someone every single year, doesn’t need to rest and can work 24/7, and never complains or is late to work. While I think it’s a ways off for high-reasoning robots to be created, the robot above could function as a guide or receptionist who answers common questions. A human could oversee a fleet of them for the questions they can’t answer.
For more manual tasks, there’s Boston Dynamics! These creepy robot dogs might be able to do basic household tasks soon… I mean I love my robot vac and all, don’t get me wrong, but I might be slightly uncomfortable seeing this in my house. Maybe they could make it cuter and turn it into a Shiba Inu?
Structural Employment Is Up Next
I don’t think you can argue no jobs will exist when this happens. But I do think manual labor jobs will be eliminated eventually.
Structural employment is defined as the mismatch of skills between potential employees and what the employers need. In cases of structural employment, there are enough physical bodies who can fill the jobs needed, but those workers don’t have the skills necessary to do those jobs.
The skills necessary to move forward in society in the next few decades consist of more AI, programming, and creative and innovative thinking. Every industry is being decimated by automation.
Many startups seem to be simply recreating existing companies, but with better technology and UI. Companies who are not integrating all their legacy systems or rebuilding their systems entirely from scratch will not survive. A startup that has designed a more functional and integrative codebase will cannibalize those companies.
A solution? If you’re working a manual labor job, or one that could be automated, consider learning some new skills. There are some great full-time coding bootcamps which are free — the hiring company pays the coding bootcamp a recruitment fee when you’re hired. If you can’t swing a full-time break, consider trying to move to a tech company and ask how to get into the more skilled roles. You don’t necessarily have to go back to an expensive school, just show perseverance and self-motivation by studying it on your own time.
Ageism Is Real
It gets harder to find a job the older you are on average, especially if you don’t have specialized skills. Those skills absolutely are harder to learn if you’re not young anymore. Kids these days are learning about programming in elementary and middle schools! Meanwhile, I was in college before I realized what programming even was. People in their 20s are starting online businesses all of a sudden.
If you FIRE in the next 20 years, you won’t have to deal with this. But even in tech, once you get to your late 30s, that’s old, considering most the employees of most tech companies average 30 years of age.
Retail is Dying
In 2008, there were tons of malls that shut down. They never reopened and are now called “dead malls” in the commercial real estate community.
That sentiment continues today. Amazon is cannabilizing the retail market, bit by bit. Instead of going through a wholesaler or distributor, they’re getting products directly from the brand. Pretty soon they’ll even replace the wholesaler and distributor for brick-and-mortar stores. Amazon probably has the best supply chain out there — and they’re employing human packers, only until the robots can do the same job.
Alibaba is doing something similar in China. They’re utilizing modern technology to revamp mom and pop stores. Sure, it may sound exciting and happy at first, but if you’ve studied businesses, everything is bright and shiny for the underdogs at first. The price for that software is probably not terrible currently, but over time, the price gets raised, until the company can swoop in and replace the entire store.
In the coming years, sales people for retail stores will drop, even more than they do now.
What do I think is the next stage? VR shopping. If we can project intensely real video games via VR, why can’t we do it for any other kind of shopping? Put us on a little platform that keeps us in one place, and let us feel like we’re walking. Or just let us use the keyboard to navigate the store. Attach a sensor on to our hands so we can feel like we’re browsing the items.
All These High Tech Things Exist Already — In Another Country
I love Japan. They’re at the forefront of technology innovation. They’re so incredibly polite — and everything is done with honor. If anyone is set up to lead up via robot innovation, it’s them.
This video shows a guy who went to a hotel that His stay begins at 5:50 in the video, but the first few minutes are pretty interesting as well. He goes to a hotel that is completely run by robots. He checks in with a dinosaur, is led to his room by a mobile robot, and asks questions to a cute foot-tall robot. There’s even a version of an Alexa in his room that turns off the lights, just by speaking!
I don’t think ALL jobs will be eliminated. But the manual labor ones will be in short supply. The ability to think creatively and innovatively will be guiding factors in employment.
So you’d expect Japan’s unemployment rate to be sky-high right? Nope. It’s at 2.4%, the lowest it has been at for 24 years. But Japan also has a labor shortage crisis, due in part to young people not getting married and a growing elderly population. Culturally, people in Japan avoid rejection, which leads to less dating, and thus, less mating! Another factor might be the fact that Japanese companies pride themselves on not firing people and retraining them for appropriate jobs. If you start at one company, you’ll probably be with them for life.
I’m not sure the US would go the same way as Japan if we automated everything here. Capitalism without mercy (unless it’s a PR nightmare) seems to be how we do things. In the US, a company wouldn’t retrain an employee for another role. They’d just be laid off.
Related: Travel Hacking Japan Series
Pessimism? Better Safe Than Sorry!
Maybe this blog post is overtly and extremely pessimistic, but why not plan for the worst scenario?
This probably won’t happen over the next decade. Or maybe even two. But don’t you want to be retired, or at the very least financially independent before that happens? Can’t build wealth without a good paycheck!
But I could be oh, so, very wrong of course! I mean, we still haven’t even built a hoverboard like they have in back to the future! Perhaps the futuristic dystopian movies are clouding my judgement.
What do you guys think?
*I’m not Japanese, so I’m not biased towards them or anything.
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