Automated Income?
Driverless Cars, learning robots, AI…it makes us wonder what we humans are going to do in the future. One recent study by academics at Oxford University suggests that 47% of today’s jobs could be automated in the next two decades. 1
But what does this actually mean for us? And what should we do to prevent mass poverty due to unemployment?
Firstly, we should have a look at history. In the beginning of the 19th century, the Industrial Revolution transited hand production methods to mass production by machines. Capital owners highly benefited from this transition, while the worker’s life quality decreased due to a high unemployment rate and lower wages.
Countries that avoided an industrial change lacked behind the time and could not compete. Governments were finally forced to implement employees’ rights and adjust their laws to secure an employability and a standard of life. Apart from that, thousands of new jobs were created, based on the new technologies or the new life style. Because most of these jobs needed a bit of knowledge, the average level of education increased as well. Overall the standard of life increased due to changes in government, economy and education.
A similar thing is happening right now. Robots and high functioning computer systems will soon be able to replace repetitive jobs involving routine. IT companies make more and more profit while employing less people. There will be a higher rate of unemployment, as soon as it is more profitable to use a machine instead a person. But if the right steps are taken, this will lead us only to an even better standard of life.
The education system has to change. Instead of focusing on memorizing and learning, schools should train children in their creativity and critical thinking, something computers will not be able to comprehend for quite a while.
Apart from that plenty of new jobs based on or around these new technologies and systems.
But there will be people who won’t succeed in school and won’t find a job in these new sectors. What are they going to do? One prospect is the Universal Basic Income. This could be the legal change we need…
The Universal Basic Income guarantees every citizen of a country, every child, every retired person, every unemployed person, every disabled person and every working person an equal amount of money on which it is possible to live on.
There are several benefits to this thesis. It would be fair (at least inside the country). Working people could not complain anymore about unemployed people. People on benefits would not have more money available than people on low payed jobs Families would automatically have more money available for their children’s education.
But who would still work? This is the most common question regarding UBI. Funnily enough, nearly everyone answers to the question: “Would you still work?” with “Yes, of course!”. Contrarily, the answer to the question “Do you think people still would work?” is mostly a no. We always think that everyone around us is lazy, apart from us. But that is not the case. There are plenty of people enjoying their job, enjoying a structure and purpose in their life and enjoying the extra cash.
But there are also the jobs, nobody would like to do anymore. Emptying bins, cleaning toilets, working as a promoter... There are 3 options to that:
Get rid of the job – automise it!
Pay better!
Everybody has to do it.
The last point was trialled at schools and universities. Students were responsible for cleaning their toilets and floors and it worked! Instead 1 person having to do the job every day, 3000 people can do it 1 hour a year.
Another advantage is less bureaucracy. If everybody gets a living income, all the paperwork involved in handling benefits and pension would be unnecessary.
Furthermore, people would have more money to spend, which benefits the economy in total. But these leads me to my main concern – inflation. If everybody would suddenly have more money, would the prices not just increase?
Finland has started a 2 year pilot project in January 2017. 2,000 unemployed Finns aged 25 to 58 will receive a guaranteed sum of £475. The income will replace their existing social benefits and will be paid even if they find work.
This seems like a more feasible scheme than the Swiss proposal in 2016. The proposal of an UBI of £1,980 for every adult was rejected with 75%.
In Utrecht, the Netherlands, 4 different schemes are trialled on test groups:
One will get the sum as unemployment benefit, with an obligation to seek work – and sanctions – attached
The second will get it unconditionally, whether or not they seek work.
A third will get an extra €125 providing they volunteer for community service.
Another will get the extra €125 automatically, but must give it back if they do not volunteer.
These are the most recent trials with not enough data yet, to conclude on a long time effect. But there have been trials before.
In 1982, Alaska began providing a partial basic income annually to all its residents. Alaska had a higher rate of inflation than the rest of the United States, but with the UBI Alaska had a lower rate of inflation than the rest of the United States.
In 2011, Kuwait decided to give every one of its 1.155 million citizens $4,000 USD each. Kuwaits already high inflation rate decreased over the next year.
In In Uganda, the government gave about $380, to a group of applicants, and denied it to the other half.
"There were no conditions on the money, but those who got it invested most of it in “skills and business assets,” ending up 65 percent more likely to practice a skilled trade. Recipients worked an average 17 hours more than those without the money. And compared to the group that didn’t get the cash, those who did saw a 49 percent increase in earnings two years later and a 41 percent increase four years out, indicating that the effects last. "
Similar programs in India, South Africa, Mexico, and Liberia have all found similar results:
A universal basic income increases entrepreneurship and economically positive inflation.
Beside this evidence given, there is economic and academic reasoning, why inflation is not a threat to UBI.
New money is not created, already existing money is distributed, therefore the value of the currency should stay the same.
Demand and supply won’t change, therefore basic goods won’t increase in cost.
Demand will increase in an economically beneficial way, increasing productivity.
Conclusion
After researching the UBI I am way more confident that I actually could work and even, that it will be a necessary reaction to an increased automation. It is not a new concept and it has been trialed all over the world with mostly positive outcomes, so Why not?
I am personally quite excited how it is going to change our society, giving each individual the freedom and choice to fulfil themselves.
