“A World Without Work” is an Atlantic story about what the U.S. might look like after robots and smarter software take over a lot of jobs within the U.S. The author says that the declining labor force participation rate in the U.S. (from 66 percent to 63 percent since 2009) hasn’t been the boon to American happiness that we might have expected: “By and large, the jobless don’t spend their downtime socializing with friends or taking up new hobbies. Instead, they watch TV or sleep. … The unemployed theoretically have the most time to socialize, and yet studies have shown that they feel the most social isolation; it is surprisingly hard to replace the camaraderie of the water cooler.”
This Wall Street Journal article shows that Puerto Rico is about 20 years ahead of the rest of the U.S. The federal minimum wage of $7.25 per hour is 77% of the median wage (comparable to a $13 per hour minimum wage in May 2014 (BLS data showing median hourly wage of $17.09 nationwide)). In other words, it is illegal for companies to hire a large percentage of Puerto Ricans at what would be a market-clearing wage for their particular skills. The result is that labor force participation in Puerto Rico is 43 percent, which means a much higher percentage of the population needs to find something to do every day other than work.
There seems to be a political consensus in the U.S. around raising minimum wage to $12-15/hour. If we assume that Americans as a whole will respond to economic incentives in the same way as those who live in Puerto Rico, presumably the 50 states in 10 years will look like Puerto Rico today (or sooner if the technological revolution forecast by the futurists turns into reality). This makes Puerto Rico a potentially useful laboratory for figuring out how to build a society that is satisfying for citizens when the majority of able-bodied working-age citizens do not have jobs. On some measures, Puerto Rico has already solved the problem of how to build a good society without work. This Orlando Sentinel article notes that Puerto Rico topped a worldwide happiness survey back in 2005. A lot of the boost seems to come from extended family living nearby. The mainland U.S. could be naturally trending in the Puerto Rican direction. As traditional colleges become unaffordable fewer young people will move away from home in order to go to college. As a smaller percentage of Americans work, a smaller percentage will move away from their birthplace in order to work. We could spend more of our tax dollars on festivals and social gatherings (every town every three days) and less on health care (if we cut the percentage of GDP spent on health care to something more like what other developed nations spend we could easily fund all-day, every-day parties; see my health care reform piece for other alternatives). We have 50 million people getting food stamps. What if, for at least one meal per day, those 50 million people were invited to come to a social meal? The same deal with SSDI. We could offer enhanced SSDI benefits for those who move to an “SSDI party village” where at least half of the neighbors are also on SSDI. Then there would be more opportunity for socializing during the middle of the day when 43-63 percent of working-age Americans were at work.
What ideas do readers have? How should society be organized if only a minority of working-age Americans are working? What can we test out in Puerto Rico?