Here’s two humans:

fav men rt women

Remember them for later.

So UBI (a universal basic income) has been out and about on the tubes lately – here’s Dylan Matthews, pro, PEG, anti, Jeff Spross, pro, Stephanie Slade, anti, Max Ehrenfreund, pro. One of the key questions that has become perhaps the crux of this most recent debate has been labor force drop-out, both its magnitude and its meaning. I thought I’d try to clarify this debate, though, by trying to dig a little deeper into exactly who we think might withdraw some or all of their labor if a UBI were made available.

I’ll propose three theses:

  • Labor force withdrawal is likely to come from the low end of the income spectrum
  • Labor force withdrawal is likely to come from occupations that are unpleasant, difficult, unrewarding, and/or low in advancement potential
  • Labor force withdrawal is likely to come from occupations that are less central to the core functioning of the economy (and therefore less likely to see wage increases correspond strongly with diminished labor supply

So let’s step back and take a look at the workforce.

Firstly, let’s take stock of the major trend of the American workforce – the changing balance between goods and services.

America has been shifting strongly towards producing services over goods…

you got served

…and employing people in service over goods production as well.

you served

These charts, though, mask an interesting trend – the differing productivity in those two sectors. What happens if we take a very raw measure of productivity (output/employment)?

you got gooder at gooding

Whoa. Sadly, the necessary data only goes back to ‘November Rain,’ but even since then output/employment in goods has increased 75% whereas in services it has only increased 28% – the relative CAGRs are 2.7% and 1.2%.

So first broad conclusion – most Americans are in service industries, and goods employment is likely to increase in productivity and therefore decline unless demand for domestically-produced goods relative to services (or government) increases sharply.

But that’s not really a good enough answer to the question of ‘how will UBI affect the workforce?’ I mean, what are services, as experiences on the ground by American workers? So let’s dig a little deeper into the BLS’s occupational wage data to see if we can pinpoint where labor force exit might be most pronounced.

The BLS uses 820 detailed occupational categories, grouped into 23 top-level major occupational groups. Below is a chart showing the average annual wage in each of those 23 groups; the area of the circle is proportional to the total employment level in that sector.

not lovin' it

That big bubble at the bottom? The one with nearly 12 million workers making an average wage of just $21,582.50? That’s “Food Preparation and Serving Related Occupations.” If you break it down to the detailed occupation level, six of the seven lowest-paying occupational categories are in food service. The second-worst paying occupation in America is “Combined Food Preparation and Serving Workers, Including Fast Food,” which pays just $18,880 and yet employes over 3 million Americans, more than any other detailed occupation group except ‘Cashiers’ and ‘Retail Salespersons.’ After the bottom seven, another eight of the next 36 lowest-paying occupations are in Food. Of the 18 different occupations within Food, only two – ‘Chefs and Head Cooks’ and ‘First-Line Supervisors of Food Preparation and Serving Workers’ make over $30,000 annually on average.*

If you, like me, are completely insane, you may enjoy scrolling through this chart, which is structured similarly to the above chart except it has all 820 detailed occupations. Enjoy, you crazy person.


The other really-poor-paying major occupational groups in America are ‘Farming, Fishing, and Forestry Occupations’ – which, as we have recently learned, is a pretty awful job – and ‘Personal Care and Service Occupations,’ which is anchored on the lower end by over 1.1 million ‘Personal Care Aides’ making less than $21,000/year, on average.

So who were those two women above? The one on the right was Deb Perelman. Perelman has a really awesome website named ‘Smitten Kitchen‘ where she shares her favorite recipes along with tips, personal stories, and awesome pictures of her food, like these cookies I’m going to make tonight:


Yum. She has a cookbook, too.

The woman on the left is Julia Stewart. Stewart is the CEO of DineEquity, which owns both IHOP and Applebee’s. Applebee’s serves food that looks like this (according to their promotional materials):

nom [cardiac event]

You can find which of the 2000+ Applebee’s locations is nearest you here and which of the 1500+ IHOP locations is nearest you here. The company is currently worth $1.65 billion.

Without putting political positions into either of these persons’ mouths, from a purely material standpoint Perelman should be rooting for UBI and Stewart rooting against it. I’d be willing to bet dollars over donuts that the biggest direct impact of a UBI would be an exodus from the food service industry, especially from the mid-range to the lower end where wages are lowest and customers are most price sensitive. An increase in the price of, and decline in the availability of, cheaper restaurant meals will mean more meals cooked at home, and less work means more time to cook meals. That likely means more sales for groceries and farmers’ markets, but also more clicks for recipe sites and more purchases of cookbooks.

This should be unsurprising to anyone who follows fights for increased minimum wage or universal worker benefits and protections at the state and local level – the leaders of those fights are never the factory owners, but the big restauranteurs. A UBI will empower people to opt out of serving others cheap food, and empower them to take the time to prepare their own food, cutting out the purveyors of cheap (and often very unhealthy) food in the middle.