Jobs, Work, and Universal Basic Income

One of the biggest factors in the decline of manufacturing jobs is technology and automation. Any repetitive task can be automated, and the automated processes make fewer errors and can work faster and longer than the humans that they replace; and this applies not just to manufacturing jobs. Has your grocery store replaced cashiers with self-checkout kiosks yet? ATMs replace bank tellers. Voice recognition takes your order at the drive-thru. You can probably list several additional examples. As this trend continues, what does it mean to people being able to earn a living? Robert Reich presents an interesting futuristic look at what might happen[1]. The solution is called a Universal Basic Income.

“Why we will Need a Universal Basic Income

Imagine a little gadget called an i-Everything. You can’t get it yet, but if technology keeps moving as fast as it is now, the i-Everything will be with us before you know it.

A combination of intelligent computing, 3-D manufacturing, big data crunching, and advanced bio-technology, this little machine will be able to do everything you want and give you everything you need.

There is only one hitch. As the economy is now organized, no one will be able to buy it, because there will not be any paying jobs left. You see, the i-Everything will do … everything.

We’re heading toward the i-Everything far quicker than most people realize. Even now, we’re producing more and more with fewer and fewer people.

Internet sales are on the way to replacing millions of retail workers. Diagnostic apps will be replacing hundreds of thousands of health-care workers. Self-driving cars and trucks will replace 5 million drivers.

Researchers estimate that almost half of all U.S. jobs are at risk of being automated in the next two decades.

This is not necessarily bad. The economy we are heading toward could offer millions of people more free time to do what they want to do instead of what they have to do to earn a living.

But to make this work, we’ll have to figure out some way to recirculate the money from the handful of people who design and own i-Everythings, to the rest of us who will want to buy i-Everythings.

One answer: A universal basic income — possibly financed out of the profits going to such labor replacing innovations, or perhaps even a revenue stream off of the underlying intellectual property.”

Reich raises some interesting issues. The frightening thing is that the underlying question is not if it will happen, but when.

“The genie is out of the bottle,” he said. “We need to move forward on artificial intelligence (AI) development but we also need to be mindful of its very real dangers. I fear that AI may replace humans altogether.”

Elon Musk and Bill Gates have also weighed in on this issue and expressed similar sentiments.

“Musk is a supporter of a universal basic income, claiming that it will be “necessary” as automation increases. Gates has advocated for a tax on robots that take jobs. “Right now, the human worker who does, say, $50,000 worth of work in a factory, that income is taxed and you get income tax, social security tax, all those things,” he said in an interview with Quartz. “If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”[2]

“These Towns Are Trying Out A Basic-Income Scheme And It’s Already Changing Lives[3]

Ontario’s basic income program, launched in April 2017, is currently operating in three towns ― Thunder Bay, Lindsay, and Hamilton. The scheme has enrolled more than 4,000 low-income people living on less than CA$34,000 ($29,500) individually, or CA$48,000 as a couple. This includes those who are working, in school, or living on financial assistance.

For three years, single participants will receive up to CA$17,000 a year and couples will receive up to CA$24,000. Those earning any money will see their basic income amounts reduced by 50 cents for every dollar they make. Participants with disabilities are eligible for another CA$6,000 annually ― although they do need to wave goodbye to state disability support, which can work out to more money.

A third-party research team will evaluate the effects on people’s physical and mental health, food security, stress and anxiety, housing stability, education and employment. Their responses will be compared against a control group — low-income participants who won’t receive the basic income but will fill out surveys about their life and well-being.

Universal basic income, or the idea of giving people money without any conditions, is not new. However, it is gaining fresh momentum globally as inequality worsens and swaths of jobs are at risk from automation and other factors. Ontario joins a handful of other places in the world to test out some sort of guaranteed basic income, including the Dutch city of Utrecht, a village in Kenya, the city of Stockton, California, and Finland, although Finland doesn’t currently have plans to extend its pilot program past its scheduled end in December.

This experiment is worth keeping an eye on as a possible weapon in the war on poverty.

This is an excerpt from my book on Poverty — part 16

(Written but not published. If you want a MS Word free copy, let me know.)