BERN, Switzerland – When machines began to take over the textile work of the Luddites, there was economic and social upheaval. Now, with new efforts to advance Artificial Intelligence, what will happen to jobs and the poor? Can policies such as Universal Basic Income help?
When the Luddites and the people who worked in agriculture became displaced by structural unemployment, the economy adapted and new jobs became available to these laborers. Machines and tools have been taking away jobs by replacing human sweat with steam or oil since the industrial revolution, making production more efficient.
In today’s age, machines are not just replacing physical labor – they may now be able to do tasks previously thought to be confined to human intelligence, like driving a car. Already, self-driving cars and trucks are being tested on roads to see if they can perform at least as well as humans. The results are positive, suggesting that the millions of people employed by the transportation sector of the economy may be at risk of losing their jobs.
The reality of AI is that within a decade, many jobs will begin to disappear to specialized AI. Two MIT scientists are calling this the “second machine age”. The question that then must be answered is, will there be new jobs?
The question of whether AI will take some jobs but also create a new cohort of jobs is important and still unanswered. Many believe that AI will most likely take over more jobs than it creates and leave many millions without work and with less net jobs in the economy. This will hurt the poor and possibly drive more people into poverty if the economy cannot create enough new jobs to accommodate the newly unemployed.
If, in fact, the economy does not create enough new jobs, new policies must be put in place to ensure that people can survive in a world without enough work. Without policies that can reconcile the new economic reality with the population’s needs, countries could be at risk of civil unrest and increases in poverty and inequality. One proposal to avoid these calamities and simultaneously help the disadvantaged is called Universal Basic Income (UBI).
As work becomes scarce, Universal Basic Income could provide unconditional income to everyone in the respective nation regardless of employment status or other income. Universal Basic Income is one of the forerunning ideas to fight poverty as well as a host of other issues, especially because it has generated appeal across the political spectrum. By guaranteeing everyone an income, those suffering from structural unemployment and poverty can alleviate their own pressures and fend for themselves.
The Swiss will be voting on a UBI of over $2,000 per month. This could be an important experiment to see how these new policies work in practice. One criticism of UBI is that in practice UBI is expensive. Paying everyone a fixed amount would cause tax rates to soar in order to balance the books. On the other hand, as the economy continues to increase productivity and scarcity across the board decreases, perhaps in the future UBI will not be as large of a cost for governments to impose.
Another problem with UBI is that developing nations right now would have no chance of implementing a system like the one the Swiss are going to vote on. Funds are scarce, governments corrupt and developing nations may also lack the infrastructure to properly disperse the funds evenly if they had them. UBI’s biggest fault is that it may be less feasible in the short run, but the long run picture is less discouraging.
Is Universal Basic Income inevitable? Maybe. The United States currently has 79 means-tested programs for those in need. This system is highly inefficient and bureaucratic in comparison to how UBI could be operated – simply and elegantly. Universal Basic Income can address poverty by freeing those people from lacking enough income for basic survival necessities. The impact of structural unemployment due to the possibility of a net loss of jobs could also be mitigated by UBI. Thomas Paine supported some of the fundamental ideas behind UBI, and Representative Paul Ryan has been in support of stream-lining the complicated United States welfare state. Support for UBI has potential to grow across the political spectrum and this also increases UBI’s likelihood of being “inevitable”.
UBI may be a key shift in the way the world fights poverty and the way governments interact with their constituents. The idea has gained traction in recent years and the current alternatives seem to be floundering (minimum wage, food stamps, etc.). The new reality that will become clear within the coming years will make Universal Basic Income tempting to say the least.
– Martin Yim
Sources: Wired, Washington Post, Economist, The Atlantic
Photo: Two Roads