Robots are poised to eliminate millions of jobs over the coming decades. We have to address the coming epidemic of "technological unemployment" if we're to avoid crippling levels of poverty and societal collapse. Here's how a guaranteed basic income will help — and why it's absolutely inevitable.
Illustration by Tara Jacoby
The idea of a guaranteed basic income, also referred to as unconditional or universal basic income, is starting to gain traction in many parts of the world, both in developed and developing nations. It's actually a very simple idea: Everyone in society receives a single basic income to provide for a comfortable living whether they choose to work or not. Importantly, it's only intended to be enough for a person to survive on. The money for this social welfare scheme could come from the government or some other public institution, in addition to funds or income received from other sources. It could be taxable, or non-taxable, and divvyed up on a continual basis, monthly, or annually.
Advocates argue that a basic income is essential to a comprehensive strategy for reducing poverty because it offers extra income with no strings attached. But looking ahead to the future, we may have little choice but to implement it. Given the ever-increasing concentration of wealth and the frightening prospect of technological unemployment, it will be required to prevent complete social and economic collapse. It's not a question of if, but how soon.
A BIG Idea Whose Time Has Come
As a concept, a basic income guarantee (BIG) has been bantered around for quite some time now. As early as 1795, American revolutionary Thomas Paine called for a Citizen's Dividend to all U.S. citizens for "loss of his or her natural inheritance, by the introduction of the system of landed property." Even Napoleon Bonaparte agreed that "man is entitled by birthright to a share of the Earth's produce sufficient to fill the needs of his existence."
In his 1967 speech, "Where Do We Go From Here," Martin Luther King Jr. said: "I am now convinced that the simplest approach will prove to be the most effective — the solution to poverty is to abolish it directly by a now widely discussed measure: the guaranteed income."
The idea has also been supported by the esteemed economists Friedrich Hayek and Milton Friedman, the latter of whom advocated for a minimum guaranteed income via a "negative income tax."
A number of countries are currently considering, or even implementing, various basic income schemes, such as Brazil, Switzerland, Canada, and Germany.
Even conservatives are on board. A noted by Noah Gorden in The Atlantic, creating a wage floor would be an effective way to fight poverty and to reduce government spending and intrusion.
Fewer and Fewer Jobs
As we head deeper into the 21st century, it's becoming painfully obvious that there are fewer and fewer jobs available. As noted by Marshall Brain, founder of How Stuff Works and author of Manna, there are more working-age people in the U.S. receiving some form of welfare than there are working-age people who do not.
He adds that
Another interesting fact about the United States is that a surprisingly large portion of working age adults are not working, primarily because there are too few jobs to go around. This may not be obvious, because the declared unemployment rate in the United States seems low, at consistently less than 10% over a long period of time. The problem is that the official unemployment rate hides the huge number of working-age Americans who are no longer considered a part of the workforce. Currently, only 63% of working-age adults are actually working.
Owing to technologically-induced unemployment, it's a problem that's only set to get worse. As noted in Brain's article, "Robotic Nation," this is a small sampling of what we have to look forward to:
- Driverless cars are improving rapidly, and it is easy to understand that they will begin to eliminate all the jobs held by truck drivers, taxi drivers, etc. That is a million or more jobs that will be lost.
- Tablets and kiosks in restaurants will be eliminating many of the jobs currently held by waiters and waitresses.
- There are currently 3.7 million full-time K-12 teachers in the United States. Yet there is a host of new tools, including MOOCs, apps, computer-aided instruction, etc. that will start eliminating teaching positions in the near future. The pressure to reduce the cost of public education is relentless, and so is the advancement in the technology.
- Combine those trends with similar trends in factories, the construction industry, retail, etc.
Another prominent thinker who has given this considerable thought is James Hughes, a sociologist from Trinity College in Connecticut.
"We are now entering the beginning of an era in which technology has started to destroy employment faster than it creates it," he told io9. "The advance of information technology, artificial intelligence and robotics will eventually reduce the demand for all forms of human labor, including those dependent on 'human skills' like empathy and creativity."
He offers the example of Expedia. The online program may not be as creative at travel planning as an experienced travel agent, but it still displaces travel agents because it's considerably cheaper and more accessible. It's also an example of another impact of information technology, that of cutting out the middle man.
"Eventually 3D printing and desktop manufacturing will cut out most of the work between inventors and consumers," says Hughes. "Alongside growing technological unemployment, we will also be living much longer, and will need to figure out an equitable solution to the growing ratio of retirees to workers and tax-payers. Basic income is the logical re-negotiation of the social contract to ensure that we don't spiral into widespread poverty and inequality."
Adding insult to injury is the fact that wealth is becoming increasingly concentrated. Economists Emmanuel Saez and Gabriel Zuchman have found that over the past three decades, the share of household wealth owned by the top 0.1% has increased from 7 to 22 percent. They say
There is no dispute that income inequality has been on the rise in the United States for the past four decades. The share of total income earned by the top 1 percent of families was less than 10 percent in the late 1970s but now exceeds 20 percent as of the end of 2012. A large portion of this increase is due to an upsurge in the labor incomes earned by senior company executives and successful entrepreneurs.
In addition to skyrocketing labor compensation at the top, the explosion in U.S. wealth inequality has been fueled by stagnant wages, increasing debt, and a collapse in asset values for the middle class.
Making It Work
So with potentially billions of people out of work, and with the world's wealth concentrated into the hands of a few, a simple question emerges: How are people supposed to live?
According to Hughes, doing nothing is not an option.
"Allowing economies to go fallow because of widespread unemployment and poverty would bankrupt nations faster," he says. "What's more, a basic income guarantee would start by combining existing social welfare payments, reducing the size of the bureaucracies needed to maintain each of them separately. So the burden of the state would shrink. Various public resources can be monetized, as Alaska has done with Alaskan oil, the proceeds of which are distributed as payments to Alaskans. But we will need redistribution of wealth to sustain a BIG. There is enormous wealth being created by technological innovations, but it is mostly being sucked up by the top 1% of the population."
Indeed, when it comes to funding BIG, there are no shortage of options. Various proposals include tax revenues, shortening the workweek, and the reduction or elimination of other social security programs such as unemployment insurance. Milton Friedman even suggested that, if we're going to have a basic income, we should just scrap minimum wage altogether, which he felt just distorted labor market economics.
Futurist Mark Walker says we could pay for it all by slapping down a 14% VAT (value-added tax) across all goods and services, which in the U.S. would yield a guaranteed income of $10,000. It would be a start, but clearly not enough.
Last year, the Equal Life Foundation published the Living Income Guaranteed Proposal where it outlined practical implementation measures. Among its recommendations, the group calls for serious changes to the current socio-economic and political structure, including the nationalization of resources and social dividends, the redirection of military budgets, taxation, the preservation of a reasonable minimum wage, sustainable pricing, automation, transparency, and the digitalization of money.
Some thinkers contend that broader social restructuring will have to accompany the problems wrought by technological unemployment. In their essay, "Technology, Unemployment & Policy Options: Navigating the Transition to a Better World," authors Gary Marchant, Yvonne Angelica, and James Hennessy present six possible policy options:
- Protecting Employment: Using legal interventions to protect jobs that might otherwise be lost due to technology innovation and development.
- Sharing Work: Minimizing the frequency of unemployment by sharing the paid work that is available across more workers.Although these policies are mostly short-term, they may help delay or lessen the impact of technological unemployment.
- Making New Work: Using governmental and other non-market interventions to create additional employment that would not otherwise be available under existing market conditions.
- Redistribution: Redistributing wealth in order to blunt the human and social costs of widespread technological unemployment. This would include guaranteed basic income.
- Education: Revising our educational system to make workers more adept in succeeding in an increasingly technology-focused and changing world.
- Fostering a New Social Contract: Altering the existing social model in which an individual's economic livelihood, social status, and personal self-worth are based on their employment.
As an example of protecting employment, the Toyota Motor Corporation in Japan wants humans to take the place of machines in plants across Japan so workers can develop new skills and figure out ways to improve production lines and the car-building process. Also, robotics companies could help the workers they displace.