Today's number: 193. That's the age of the world's oldest animal, a tortoise named Jonathan. At True Story, I worked at a zoo for several years where my job was circumcising elephants. The pay wasn't very good, but the tips were huge.
I'm doing well. 193. Would you want to live to 193?
I don't want to live to 93. I've already... I think about being serious. I think about the end a lot. I've got the drugs picked out. I know where I want to die. I know the people I want around me. I spent a lot of time curating those Apple stories of my kids and friends. I'm going to live my life again. I'm going to play all of those videos on repeat and I'm going to trip. And I already know who I want to come visit me. And then I'm going to peace out. I'm going to overdose. I'm going to go crazy on heroin, which is supposed to be amazing, by the way. So,
Are you being serious about the heroin? I know you're serious about all the other stuff.
I do think at the end of your life, I don't see a problem with like really maxing out on Tom Petty and heroin.
Ed, speaking of heroin and interventions, Prof G Markets is going live. We're already in some cities, we're already 60% sold out, and this is after 4 days. So, if you're interested in seeing us in either New York, Miami, Chicago, San Francisco, or LA, please go to profgmarkets.com and get a ticket. And also, if you're a friend of mine, pretend you're a grown-up and get your own ticket. Seriously, people are calling me saying, 'Reserve me two tickets.'
That goes for my friends, too.
Reserve me two tickets. And I send them the URL and they're like, 'Oh, I have to buy tickets.' I'm like, 'Don't you make like 7 million bucks a year? Buy a ticket for God's sakes.' Anyways,
But I love my friends and I'm hoping to see them there. But anyways, we will sell out. These tickets are selling faster, I think, than the last tour I was on. So, it's a lot of fun. Live podcast. Who would have thought it? They actually are a good time. We are going to have great guests. So, we're super excited about that. A bunch of surprise guests, very famous, iconic, interesting people in great cities. So, come out. Ed and I will likely host an afterparty.
Where we will raffle off all of Claire's quint's wardrobe in a fundraiser. So, we're very excited. We're going to have all sorts of things. We're going to have magic tricks. We're going to have the Rockettes are going to do an appearance. I don't know where I got that. Did I tell you I dated a Rockette when I first moved to New York? Ed, it's crazy.
I've seen the Christmas Spectacular like three times. I'm the only Jew that's seen the Christmas Spectacular numerous times.
Um, I love that.
Yeah, I'm very excited, too. We're going to be heading to San Francisco, Los Angeles, Chicago, Miami, New York. It's going to be great. I'm shocked by how many people have been telling us and getting mad at us for not going to Denver. I did not have that on my bingo card. So, we'll go to Denver next time. But those are the cities, five cities. Very excited. Go to profgmarkets.com to get your tickets.
Let's talk about GDP and AI, Ed.
One of the biggest concerns around AI is its potential impact on the labor market. And so far, the data isn't very encouraging. Last year, companies attributed roughly 55,000 layoffs to AI. And unemployment for recent college grads rose to 5.6%. That is the highest level outside the pandemic in more than a decade. Andrew Yang has been making this case for years. Before ChatGPT was even released, he warned that automation and AI would displace millions of workers. In fact, his 2020 presidential campaign was centered on this very idea. And back then, he proposed the freedom dividend, which would give American adults $1,000 a month as a way to soften the economic blow. Now, as those concerns begin to actually play out, well, we wanted to revisit the conversation with one of the earliest voices on this issue and ask what he thinks we should do next. So, here is our conversation with Andrew Yang, entrepreneur, author, philanthropist, nonprofit leader, and former 2020 presidential candidate. Andrew, great to have you on the show. So, you ran for president. I mean, you started this campaign, I believe it was actually in 2017. 2018 is when it really got rolling. And the central premise was that AI would eliminate millions of jobs and automation and robots in general would also play into that thesis as well. A lot of people said that you were being alarmist. A lot of people said that it was kind of doomerish speculation. Now we're seeing that that is kind of the labor market issue of our time. I just want to start with this. How did you predict this and why were you thinking about this? What was it, 7 years ago?
Thanks for having me, Ed and Scott. Yeah, how did the magical Asian man from the future get so much right back in 2018? I had friends in Silicon Valley, as I know both of you do. And they told me AI was in the pipeline and that eventually it was going to do a number on call center jobs, retail jobs, eventually truck driving jobs. And I knew that they were right. I then asked them, look, how many of you want to say this in public? And back then none of them did really. And so I thought, you know what? Let me try and raise the alarm. In my view, the reason why Donald Trump became president back in 2016, which is what got me into the public realm, was that we had automated away millions of manufacturing jobs that were based in Pennsylvania, Wisconsin, Ohio, Michigan. And to me, that technological automation wave was just gathering steam and was going to get stronger and stronger over time. And now we're seeing that manufacturing jobs are continuing to decline. We saw net job loss in the manufacturing industry last year.
You said that people in Silicon Valley didn't want to talk about it publicly and you asked them to. Why did they not want to talk about it?
Well, a lot of them were starting businesses that had very compelling projections based upon displacing workers. And no one wants to come out and say, 'Hey, invest in my company. You'll be able to fire everybody.' I mean, that makes everyone seem like a jerk. And so when asked about it back then, they would say, 'We'll find new things for these people to do. It'll be a shift in roles, but it won't result in wholesale layoffs.' And that was the party line, even though the business plans said something different that was closer to the reality we're seeing.
So then, ChatGPT comes out in 2022. How did you react to that development and how do you think that kind of changed this whole narrative?
Well, geez, I mean, like everyone else, you tried it out and subscribed and downloaded and you saw all of your friends and colleagues do the same. And it was like a light bulb going off for many, many people where they saw that large language models were going to change the way a lot of people lived and worked and unfortunately dated, which Scott has talked a lot about. Though I don't think ChatGPT... well, I mean, maybe ChatGPT itself is a lot of people's boyfriend or girlfriend at this point.
And as flawed as that first model was, I also knew it was going to get much, much better very quickly.
So now that when we look at the data today that we're seeing, I mean, last week Oracle laid off 30,000 workers. We've seen layoffs from companies like Block, companies like Pinterest, Amazon, and a lot of them are flat out saying we're doing this because of AI. I mean, there's a lot of nuance that we could get into here, but I just want to start with your reactions to some of those more recent layoffs. What do you make of those layoffs and do they make you concerned?
Oh yeah, we should all be concerned. Even though it is true that a lot of these announcements are not entirely accurate in terms of attributing the layoffs to AI. I think the term now is called AI washing, which Scott talked a lot about. Where let's say you overhired or you made some mistakes and you have to lay off a few thousand people or whatever it is. If you blame it on AI, then you seem like you're on it and savvy and just doing what the business requires and you didn't make a mistake in the past. No, I think that there's a combination of things going on. But one of the reasons why I've been on this for so long is that I have private conversations with people all the time, as I think you guys do, too. And one of the conversations I relate to people was with a CEO of a publicly traded tech company who told me flat out, 'We're going to fire 15% of workers this year. We're going to fire another 20% two years from now, another 20% two years later.' His direct quote was, 'I have no idea what my kids are going to do.' Because his kids actually see what he's doing and were like, I don't want to try and work for that company. You know, like that's not in the cards for them. So that CEO had no reason to lie to me over dinner, you know? I mean, there was not like, 'Hey, I'm going to say this to Yang and then go do something else.' I mean, he was confiding in me. And he's not alone. Like, there have been maybe a dozen CEOs I've had very, very similar conversations with. So, on that basis, you can see where this is heading, even if some of the current announcements aren't exactly accurate.
I find that clarification so helpful. Because I feel as though the AI washing story, while it may be true, it does seem relevant that at the very least these companies are trying to get rid of their workers. I mean, even if this exact round of layoffs that those people haven't been directly replaced by AI, what is very clear is that from an executive perspective, the goal is to do that. So they're doing it now and they're going to figure out whatever they can to continue to do that moving forward for exactly the reasons you just described, which I think is a very relevant piece of, I guess, anecdotal data. I'll have more questions, but I'm going to pass it to Scott.
If I didn't know about AI, I wouldn't know anything unusual is happening in the labor markets. And I would take, you know, for the purpose of the discussion, I'll take the other side of this, and that is with every technological revolution, there's a fear of job destruction, and there sometimes is some short-term job destruction, but ultimately adds more jobs. And I don't see... if you didn't have the narrative of AI washing as you're talking about, I think tech laying off people is somewhat about productivity gains with AI and other things, but mostly just about overhiring during the pandemic. But we haven't really seen unemployment spike. It's at about 4%, which is historically low. If in fact AI was replacing workers to anything resembling the narrative, you'd have rising unemployment, falling job openings. What you see right now is sort of a no-hire, no-fire, and hiring is slowing, but it's definitely not collapsing. And then we're seeing productivity gains from AI, but it looks like the biggest ones are for junior workers and routine knowledge workers, but it looks so far like it's being used to augment workers' productivity, which ideally would lend itself to higher wages. And we're still seeing the healthcare, construction, education, and services sector adding jobs. So, I guess what I'm... I just to be blunt, I'm calling bullshit on this narrative. That it's interesting. It gives cloud cover for layoffs, but where's the actual evidence that AI is destroying jobs?
Well, there are a couple of data points I would home in on. Number one is that the labor force participation rate keeps on dropping where you've had at least a couple hundred thousand Americans raise their hands and say, 'I'm not even going to look anymore.' And so the unemployment rate misses that group. Placement rates have collapsed for particular populations, particularly computer science grads coming out of various universities where you had programs that had placement rates of 94% at high salaries and those have flipped. Now you have computer science grads out... By the way, I ran into a computer science grad out of UCLA, Scott, which is an awesome institution, and he was not able to find a job and was doing odd jobs and Uber to make ends meet, which would have been unthinkable. I mean, that's a great program, very, very bright kid, and he was looking for six months and was probably getting AI-fueled responses. I mean, like at this point, applying for a job often can be like a bot sort of thing. So you're seeing a couple of populations that are getting very, very adversely impacted. And what CEOs say to me, as they say to you, I'm sure, is the easiest people to fire are the people you haven't hired yet. So when you talk about this slow to hire, slow to fire, there's like a ladder being pulled up, I suppose, for a lot of entry-level workers that would have shown up. I think I saw one stat about the number of recent college graduates that are getting hired into various tech companies where it used to be, you know, double digits and now it's dropped to single digits. So there's, to me, that population is the canary in the coal mine. And if you play out what happens to that population over time, unfortunately their school loans don't get forgiven. They get sent home. I met some of these kids. I'm sure some of them reach out to you all the time. And the question is what happens for that generation? Meanwhile, you have the middle managers who are all freaking out and stressed, and you can argue, look, some of them are getting laid off because of various excesses. But the 30,000 Oracle workers that Ed talked about got laid off. Maybe they didn't get replaced by AI, but Oracle is making a $50 billion bet on AI and it needed the money. Like it looked up and said, you know what, if we cut these workers, we're going to save $8 billion and we're just going to plow that into data centers. The amount of money that we're spending on building data centers just surpassed the amount of money we're spending on office buildings for the first time. So you can see very literally that the compute infrastructure is the new human being.
You tend to be more right than wrong on stuff like this and you are definitely ahead of the curve. So let's assume that we do start to see this type of labor destruction.
Can I just jump in? Scott, do you disagree? I mean, where do you stand now that Andrew has said what he said here? Like, do you disagree that this is a problem for young people?
Yeah, I disagree. I think that in every major technical revolution, whether it's automation that supposedly was going to decimate the global auto industry employment or the PC, there's always a reconfiguration. There's always labor destruction. It's terrible for the people who are affected. I don't mean to diminish it, but I graduated into a recession and more than half of us didn't have jobs. And now the unemployment rate among youth is at 10%. Which is high, but it's about average historically. And I see all sorts of new startups and interesting jobs from AI. So I'll absolutely take the over-under on this that there's a V and then it rips back similar to every other technical revolution. So I'm on the other side of this argument.
Andrew, can I hear if you have a response to that position?
Well, the thing I like about Scott is he's open-minded to what the evidence brings.
Yeah. Exactly. Like this is something we're very clearly going to see it play out. I'm, by the way, very confident on my side of this argument, but you know, like obviously, you know, Scott's a smart guy who will just see what the facts bring and I'm like a thousand percent comfortable with that. I mean, that's a lot better than the dogmatic version of where some people, including folks who are in AI, who in my opinion are trying to provide air cover for themselves. But also some economists that I feel like aren't super homed in on whatever the signals are, don't talk to industry very much, where they tend to make arguments that I have a much more negative reaction to because it's like they'll hearken back to literally century-old fact patterns and examples and it's like, wait a minute, are you really comparing AI to the industrial revolution, horse and buggy? It's like that sort of thing never makes sense to me.
My favorite is elevator operators that we used to have. But just to Andrew, the overlap here in where I think we both agree when we want to work together is regardless of... I think most people would say there's going to be a V here. There's going to be a lot of short-term pressure on information workers at a junior level, services workers. So we can have empathy for them and regardless of how severe it is and we're all in Idiocracy on our couches watching Netflix all day and we need to distribute money to everybody, or this is just another cycle that plays out similarly with different nuances to other technical revolutions. The question is, would it make sense, for example, and I will use this as a lead into hearing your policy solutions, to do what Denmark or Norway does and spend more money on worker retraining regardless of the industry that's under pressure? Right? We're not good at that. We're really bad at letting the market recalibrate and letting winners be winners and losers be losers. But what we're terrible at is taking care of the workers on the wrong side of the trade. And I think other nations do a better job of this. So worker retraining, what are some of the policies? Let's assume that it's somewhere between what I think and what you think. Just for shits and giggles, what would the policy recommendations to prepare for a scenario that might be somewhere between what we're talking about and a worst-case scenario that you would want to recommend?
Yeah. So, Scott, eight years ago, if you asked a political figure that question, they would 100% say we have to train Americans for the jobs of the future. And then you pointed out we're terrible at that. And I looked up the studies as to how effective government-funded retraining programs were and the efficacy range I found was 0 to 15% with 15% on the high side. What happened in Michigan was that an enterprising soul started a school to certify all these laid-off manufacturing workers in business skills, collected the government money, and then shut down and everyone had these valueless certificates and it didn't do shit. I mean, that's what we did in the past. So that was a talking point. I think they literally might have said 'learn to code' back eight years ago and now that's obviously...
Right, or learn Mandarin. Yeah.
Yeah. Really stupid. And I think that the retraining aspect is chasing moving goalposts. And my joke is that I'm now past 50. So if I don't get dumber or slower in a given month, it's a good month. Whereas AI is going to double in power and efficacy in that month. So trying to train workers who've been laid off in various jobs to compete against AI strikes me as a loser. It strikes me as like the next generation 'learn to code' or we're going to retrain the laid-off manufacturing workers. So that's not great news, obviously. One thing I think you could argue for that most people would accept is some kind of subsidy or incentive to hire a young person out of school. Where you could have entry-level workers, you get a tax break or some kind of match in credit or incentive to take on a young person. And the great thing there is that after the young person's in your organization, then they can become awesome and contribute. And you might not have hired them initially, but maybe the government can assist you on that level. That to me is a sensible policy and I've actually advised various policymakers on that. They haven't done anything with it. One of the reasons why I was so pro-universal basic income and still am is that it will fill in the gaps. Like we're bad at retraining. We're going to be bad at targeted policy. Political figures are great at talking about it and not doing it. Like no one will actually see what happened to the displaced workers. So if you were to take an AI dividend, and at this point there are a lot of folks in AI who are arguing for a version of this, and just start distributing it to workers of any age and stage, it would 100% facilitate successful transitions with people being able to switch fields or switch jobs or switch regions or whatever it takes. And so I'm still Mr. Let's distribute the money as quickly as we can, especially now that AI has minted or is in the process of minting several trillion-dollar companies and there hasn't been meaningful tax on any of it.
I'm not surprised that you're still an advocate for UBI and that's where these roads ended up. But I want to go back to the notion of worker retraining. I don't think it's fair to say that those efforts have failed and to give up on it. My sense is if you look at the economy, the number of data centers, nuclear power plants, healthcare, aging population, that specialty certification in everything from nursing to installation of energy-efficient HVAC, computers, that only 3% of US LinkedIn profiles say apprentice and it's 11% in Europe, that an apprentice culture and more vocational training that if we did it right could have real ROI. And also I worry, Andrew, that having a tax credit for youth... I would prefer just to have lower taxation on lower incomes, which is the same as taxing the youth lower. I worry that... what do you say to the 35-year-old single mother who wasn't in the workforce and is essentially going into the workforce entry-level at 35? I worry that age-based tax basis is just not politically palatable or realistic. So can you respond to those two things: that worker retraining when done accurately actually might, in my view, be really beneficial and we don't have enough of it, and two, my sense of any sort of age-based discrimination around taxation, although I would argue we do discriminate in terms of giving old people money, but I worry that that would just not be politically palatable to start subsidizing Edson versus say a 35-year-old who's entering the workforce for the first time.
Yeah. So 100% agree with you on the need for technical training, apprenticeships, vocational, and revving that up. You know, I think Germany is a role model in this dimension. We have a massive shortage of electricians and plumbers and HVAC repair. Those are resilient jobs. I say all the time that you're not going to have a robot plumber for the foreseeable future because like sending a robot to your home, that's just not a thing. I mean, some people might disagree with me. And so to the extent we can channel real-life human beings to those roles and industries, a thousand percent we should be destigmatizing the trades. We have made them seem like somehow second-class citizens relative to college grads and that's been a fiasco. As you can tell, I think that college grads are going to really take it on the chin on this one. So I'm with you on the trades. And I'm also, you know, I'm a little bit surprised because, you know, obviously I was in the green room when you went and did your TED talk about how young people are getting shafted and I thought that maybe some kind of policy in that direction... though I'm not disagreeing with you on the politics of it. That's one reason why I like universal benefits so much because everyone can see themselves in it and it's not as zero-sum, right?
We'll be right back after the break. And if you're enjoying the show so far, send it to a friend and please follow us on YouTube, Spotify, or wherever you get your podcasts.
This is advertiser content brought to you by Virgin Atlantic. Ed, a couple weeks back, I got you a birthday gift. Not to pat myself on the back, but it was a pretty good one.
It was indeed. You surprised me with Virgin Atlantic upper class tickets to London. So, tell us all about it.
It was pretty incredible. From the moment I entered that upper-class cabin, I have to tell you, I felt like a VIP. Anything I needed, a drink, snack, assistance with the seats.
