Universal Basic Income

The impact of robots and AI will result in a large number of people losing their jobs. Not now but eventually. Right now, as of May 2024, there were approximately 8.1 million job openings in the United States. This will change as robots and AI take on more jobs across many segments. For example, there are currently 3.5 million truck drivers. As AI makes autonomous driving more practical and safer, many of those drivers will be displaced. Some will be redeployed to similar positions. Some will be retrained to qualify for new occupations. Nevertheless, I believe millions of people will end up with no job because there are no jobs available, or they will end up with dead end low paying jobs. Those jobs won’t provide adequate income to sustain their home and family obligations. State, local, and Federal government subsistence programs may help, but not sufficiently. Is there another way to aid the unemployed?

Chris Hughes, then 35-year-old cofounder of Facebook, thinks so. Hughes, whose net worth is estimated at $500 million, believes automation and elimination of jobs is going to increase income inequality. He believes the time has come to consider new and bold ways to make the economy work better for all Americans. He is co-chair of the Economic Security Project, which is a network of people committed to advancing the debate on unconditional cash and basic income in the United States.

The Economic Security Project (ESP) believes, in a time of immense wealth, no one should live in poverty, nor should the middle class be consigned to a future of permanent stagnation or anxiety. The ESP believes automation and AI are changing the nature of work, and these shifts require us to rethink how to create economic opportunity for all. They believe now is the time to think to consider expanding unconditional cash, figure out to how to pay for it, and determine what the political path might be to make it a reality. I know the very term “unconditional cash” turns off a lot of people on both sides of the aisle, but please read on.

Hughes believes a universal basic income (UBI) can help solve the inequality problem. He says his proposal could provide stability to every lower-middle income taxpayer by providing a monthly $500 supplement. He proposes to implement the supplement through the Earned Income Tax Credit (EITC). Hughes would expand EITC to include childcare, eldercare, and education as legitimate types of work which could be eligible for EITC. One estimate says the Hughes proposal would add an additional $290 billion to the cost of EITC. Needless to say, a significant tax increase would be required to fund his proposal. It is hard to imagine such a tax increase in the current political environment.

Numerous pilot UBI programs (experiments) are underway around the country. The experiments will enable researchers to evaluate how people spend the money, whether they spend more time with family, changed jobs, quit jobs, got new jobs, whether health and healthcare are affected, and whether people perceive an improved quality of life. There will be many debates about what constitutes success for a UBI pilot program.

UBI has enthusiastic supporters and opponents. Some say it is expensive and doesn’t really solve the many problems of an evolving economy. Others say, instead of giving cash handouts, the government and companies should work together to create innovative training and redeployment solutions for those who lose their jobs due to automation.

Some tech billionaires have expressed support for UBI or expressed a view it is inevitable because there is no good alternative. Richard Branson said many exciting new innovations are going to be created, which will generate a lot of opportunities and a lot of wealth, but there is a real danger it could also reduce the number of jobs. This will make experimenting with ideas like basic income even more important in the years to come.

Sam Altman, former President of Y Combinator, a top Silicon Valley tech entrepreneur, and CEO of OpenAI. As a self-made billionaire, he has been vocal about why UBI is a good idea. He said,

Eliminating poverty is such a moral imperative and something I believe in so strongly. There’s so much research about how bad poverty is. There’s so much research about the emotional and physical toll it takes on people. I think about the amount of human potential being wasted by people not doing what they want to do. I think about how great it would be to undo that. And that’s really powerful to me.

Altman launched an experiment where 3,000 participants in Illinois and Texas received $1,000 monthly for three years beginning in 2020. The cash transfers represented a 40% boost in recipients’ incomes. Results of the experiment were mixed. Read coverage of it here.

Elon Musk, tech billionaire behind Tesla, X, and SpaceX, said, “There is a pretty good chance we end up with a universal basic income, or something like that, due to automation. Yeah, I am not sure what else one would do. I think that is what would happen.” In May 2017, Mark Zuckerberg Chairman and Chief Executive Officer of Facebook, addressed the graduating class of Harvard. He talked about the future and the idea of UBI, which he described as a standard base “salary” for each member of society. He said the idea of helping to meet basic needs regardless of the work someone does is worth exploring. He said we should have a society which measures progress not just by economic metrics like GDP, but by how many of us have a role we find meaningful. He said, “We should explore ideas like universal basic income to make sure everyone has a cushion to try new ideas.”

There are many diverse points of view about the effects of robots and AI. I believe we should embrace the coming technologies because they will have the potential to make our lives better in the short term. In the longer term, the technologies will likely cause disruption especially in some industries and some countries. Regulation will be needed to protect our privacy from intrusion. Government intervention of some kind will be needed to protect the financial integrity of individuals and to keep families from being devastated financially by automation. Government and technology leaders need to anticipate these changes and work together to ensure the longer-term effects of automation are as positive as those in the short term.

I wrote more about UBI in Robot Attitude: How Robots and Artificial Intelligence Will Make Our Lives Better.

Note: I use Gemini AI and other AI chatbots as my research assistants. AI can boost productivity for anyone who creates content. Sometimes I get incorrect data from AI, and when something looks suspicious, I dig deeper. Sometimes the data varies by sources where AI finds it. I take responsibility for my posts and if anyone spots an error, I will appreciate knowing it, and will correct it.