This lifestyle chart illustrated levels of standards of living as we will be looking at them going forward in a world of fewer jobs and more AI and automation. Instead of trying to estimate standards of living by income levels, this chart looks at characteristics beyond that as well as advancements in technology and society, and defines a baseline standard of living. In this model, it is very likely wealthier people will be lower on the lifestyle chart than poorer people based on their living habits.
To begin with, let’s explore the overall idea of this chart. There has been a lot made of Universal Basic Income as a solution to job automation and technical advancements. The idea is that everyone gets paid a minimum amount of money every month regardless of income to pay for basics like food and shelter. While this could be a band-aid to help displaced workers, it is not the best long term solution as different people will use the money responsibly or not responsibly. For example, would giving everyone $1,000 a month eliminate homelessness? No. We’d still need shelters and social workers to help these people. But ensuring every person has the basics each month would eliminate many support needs.
Baseline Living Standard
This area is what I call the Baseline. It is the minimum living standard (not money) that everyone should have regardless of working.
I like to describe it like this – and please humor my analogy. Let’s say you (and I) have another child and we love the child. He or she is precious to us. However, there is a problem. The kid is dumb as rocks. Nothing wrong with them, just not motivated, not bright, not a good decision maker. Yes, you spend sleepless nights worrying about them and you hope they get better as they get older but it does not look good.
You would not want them to be coddled or have a lavish lifestyle, but no matter how useless they seem, you do want them to be happy and have a minimum baseline of security, education, safety and long term stability. You do not want them to fear being murdered or raped. You do not want them to get dysentery. You do not want them to be falsely imprisoned. You do want them to have access to medical services and food and shelter that are nice. And you hope with all those things at some point it dawns on them that they can do some work and even have more things with a little effort.
Our wishes for our super dumb but well loved child should be our wishes as a minimum for every person in the world who is not a violent criminal or a hazard to the community. Regardless of motivation and intelligence, we now have the capacity to provide for all people a minimum level of fairly happy, if not fancy, existence. Most people, given the chance to not work and stay home watching Netfllix verses work a bit and go on vacations and go to sporting events would choose the latter. But the option should be for people to live a safe life at the baseline regardless of contribution.
Next I want to explore the lower red triangle. The vast majority of the world, including a majority of American citizens, are in this red triangle currently.
Baseline means you can never work and your life will be fine (The lowest level of the green triangle). I could refer you to a lot of statistics about earnings, how middle class jobs are disappearing, etc. That info is everywhere and easy to find. Instead consider this – you are in the stressed category if you cannot stop earning money today and live out the rest of your life in a modest, safe and secure manner.
This is not just about income but also about spending habits. If you read Mr. Money Mustache (ridiculous name) he is a prime example of someone who worked hard to establish a secure baseline through investing and saving and keeping his costs low to “retire” in his 30’s and now does only work and projects that he enjoys and finds value in.
There are other groups who have the baseline today. Senior Citizens in some countries get Social Security and Medicare to give them this baseline.
People who retire from public service often have a level of guaranteed income and services giving them a strong baseline, sometimes at a fairly young age.
People having large investment holdings that are invested well and are living off of only the earnings also fall into this category.
Business owners who have viable long term revenue assets.
While all of these can produce stable income without need to work (or work very much) it does come down to the lifestyle as well. Overspending and accruing debt in any of these means you are in a stressed lifestyle position. A temporary halt in new money could leave you stranded and losing things.
While you may think Welfare services also falls into this category, it depends on the country. In the US things like Unemployment and Welfare produce a temporary baseline but do not support you beyond a set period of time. So these people, while getting assistance, are not living at the baseline level.
Stressed Living Standard
So someone is below the baseline if they do not have the flexibility mentioned above. Even if they make millions of dollars, if they are spending it they are in a stressed lifestyle position (albeit a lavish one.) The level of stressed is needing income to survive and having debt that cannot be paid off with current holdings.
The current economy is designed to maintain a high level of stress on people. This precipitates the need for extreme work conditions to maintain bigger houses, nicer cars and generally more stuff. A combination of Marketing and peer pressure make people feel they need to keep up and this leads to hire debt and drifting further from the baseline where a person can feel secure. Living below your means can feel embarrassing when you associate with people of your same education level and this feeling fuels an economy design to keep people working, consuming and borrowing.
Think of it this way. If the economy cut out 20% of the total GDP one year by simply ending the production of low value or unhealthy things, along with unnecessary services created by overly complex systems, would that be a good thing? From an economic mindset it would be terrible. Growth growth growth at all costs. Keep everyone working – two jobs if we can. But from a human standpoint, assuming there is a safety net for people who lose their jobs, this is fantastic. 20% reduction in hours worked for everyone now means we work 6 hour days instead of 8 hour days. We are spending less money on unnecessary things, so the reduction in pay is not bad.
The fact is, the economy as a whole is a bubble where technology is going to reduce work, which will reduce pay, which will reduce demand, which will force the entire thing to contract and eventually the entire model will need to be revamped.
Keeping people in a stressed state of living works as a motivator until the stress gets too high and people start moving into the sever stage because there are too few jobs to support their lifestyle.
Escaping the stressed level and achieving baseline standards is a difficult feat as it requires a complete overhaul of how people think, live and work which is at great odds with their peer group.
Sever Living Standard
The Sever Living Standard stage is when it is no longer simply a matter of struggling to have what you want. While not ideal, the Stressed Standard can provide for a nice lifestyle, though it lacks freedom, flexibility and long term security. Once someone enters the Sever level, they begin to make sacrifices because they begin to lose things they have. Or, in the case of people who have been in this cycle for a long time, they keep juggling things, borrowing money and sacrificing things like their health, education and happiness.
Much of the world’s population in poorer countries have the last 20 years has moved up to this stage from the critical stage, which is a good thing because while it is still a difficult living standard, it does provide some more opportunities.
People in Sever living standards tend to have more children due to a number of factors including lack of adequate healthcare and preventative services and education. This adds additional stress on the family unite and also increases the number of people starting with this disadvantage.
Just like the stressed level, it is very hard for people to move on from this living standard. For obvious reasons such as lower education and less access to resources in the first place, to the fact that achieving a higher level living standard often requires leaving family and friends who have been a powerful support and survival group. Achieving a higher level living standard has been shown to make people feel uncomfortable within their family and friends which can sometimes lead to losing their support system, which makes the desire to leave a difficult decision.
Critical Living Standard
The most dangerous level to live at is the critical stage. These are people around the world, often due to famine, war or natural disasters who are in danger of dying or their children dying. Often this level is manmade. While the percentage of people living in extreme poverty continues to decrease, there will always be individuals in distress as well as temporary conditions that cause this level of living standard. Escaping this requires outside intervention most of the time.
If we go back to the well loved child from earlier, we need to apply that thinking to people in the critical living standard situations. We may not agree with them. Their education level is most likely far below ours. But they do deserve a chance at the future. And we currently have the means to eliminate this lifestyle level and a lot of smart people are working on that.
Summary Below the Baseline
So this is a summary of the broad areas below the baseline. While the lower two will seem obvious to the casual reader, the idea that more affluent people can be below an ideal baseline may come as a big surprise. This model is based on bringing everyone up to a safe, healthy and educated baseline where they have the freedom to then participate for more rewards or relax and live a safe, stable and simple lifestyle. This is achievable right now as far as resources go. The will and vision is what has been missing.
Now you may be wondering if people live at the baseline, won’t everyone stop working?
Not at all. They may stop working jobs they hate, but they will have the freedom to take chances, innovate and really look at how to make the world a better place. And in exchange for improving the world people will be rewarded with higher standards of living.
Most jobs people do not like are often low level jobs that could more rapidly be automated by a combination of simplifying and/or standardizing them.
While it takes time to get there, if it were made the priority it would not be a big stretch to think most humans could be raise to the baseline level in 10 years of less.
Now let’s explore those levels above the baseline.
Prosperous Living Standard
This first level of higher living about the baseline would be for people who choose to work some minimum amount regularly in jobs that are needed. Based on a number of factors, these people should have more spacious living and more freedom to travel, vacation, attend live events, and have other luxury items of lesser value. The jobs to achieve this level would be basic jobs that provide valuable services that cannot be easily automated. Examples might be personal trainer, guide, councilor, writer, local athlete, etc. The scope would be local and individual. As long as someone meets minimal contribution levels they have access to a more prosperous living standard.
Abundance Living Standard
The next living standard would be Abundance. This level would afford a level of having access to anything you would want (in a shared environment, not a hording environment) because to earn this level people would work in high-impact areas that make a difference in a huge number of people’s lives. The jobs are varied, but have a big impact, such as robotics, AI development, national or international entertainers or athletes, food producers (managing automated farms), research and development in many fields, etc. And anyone could achieve this state by picking a meaningful project and joining a team and working on making things better.
The abundance level would be maintained for the time someone works in this field and for a set time off for sabbaticals and vacations. It is not a permanent state.
Luxury Living Standard
The Luxury Standard level would be the same as the abundance level, with one glaring difference. It would be awarded to people based on huge, long term contributions that benefit humanity towards a greater good. And the level would be permanent regardless of further work. This is reserved for people who cure diseases, make incredible discoveries or developments, or solve major problems. These people would most likely continue to work as most overachievers do anyway, but they could take time off, try other projects or just do nothing because their contribution is deemed deserving.
Summary Above the Baseline
This entire model is based on the assumption and evidence that we are moving to a more abundant future where more automation and AI will end scarcity of products. False scarcity for goods and services that people need to live a baseline level of living will be very frowned upon. Unnecessary complexity will be simplified and streamlined.
As we improve the products and services in the higher levels, things will cascade down to the baseline, enhancing it as well.
Keep in mind this is not a prediction of what will happen. Actually, if no vision is developed you will end up with enormous poverty and nearly all wealth aggregated in the hands of people who control automation and AI. With a vision, like this or something better, we can begin building towards a fairer and more secure future for everyone while making the transition acceptable to most people. Instead of removing businesses, wealth and governments we can simply innovate until some of those things fall away in obscurity. This is a model that is fair, measured and gives time to fix issues as social processes are changed.
The long term goal is to move everyone to the baseline and have a more fair way to reward all people evenly for wanting to contribute more. While we cannot give everyone the baseline lifestyle today, we can work on it as a vision and goal for the near future.
It is a process. It is a journey. It is an adventure all fair-minded people should want to go on.