Artificial Intelligence (AI) stands as a potential threat to job security and wage equality. Some propose Universal Basic Income (UBI) as a solution to these issues, along with the possible consequences of AI-induced job losses. Encouraging developments have been seen in areas where UBI has been implemented, but the effectiveness and economic feasibility of such a solution remain under scrutiny.
UBI as a solution to AI-induced job losses
The concept of Universal Basic Income, or UBI, has been around for centuries, but it's gaining traction in contemporary society as a potential solution to various economic inequalities. These inequalities, including wage disparity and job insecurity, are being exacerbated by the rise of Artificial Intelligence (AI). The fear is that as AI continues to evolve, it will render certain jobs obsolete, leading to a spike in unemployment. UBI is seen as a way to provide a safety net for individuals who find themselves in this precarious situation.
Differing views on AI's impact on the job market
Elon Musk, tech entrepreneur and CEO of SpaceX, believes that the rise of AI will make jobs redundant, as machines take over the tasks currently performed by humans. However, Karl Widerquist, a philosopher and economist at Georgetown University-Qatar, offers a more nuanced outlook. Widerquist posits that AI will not eliminate jobs outright, but rather push individuals into lower-paying professions. This shift in workforce dynamics, according to Widerquist, might lead to a decline in overall wages, and as a result, an increase in economic inequality.
Netherlands study reveals UBI's potential benefits
A recent study in the Netherlands adds weight to the argument in favor of UBI. The study found that when unemployed individuals were given a basic income, their participation in the labor market increased. This wasn't only due to the financial support provided by UBI, but also the removal of conditions and sanctions traditionally imposed on job seekers. The findings suggest that UBI could provide a cushion for workers displaced by AI and automation, and simultaneously incentivize them to secure new employment.
Kenya's large-scale UBI scheme stimulates entrepreneurship
Kenya is currently running the world's largest UBI scheme, which has been providing daily payments to almost 5,000 people since 2017. The program, which is funded by donations and managed by GiveDirectly, has resulted in an unexpected wave of entrepreneurship. As more people leave low-wage jobs to start their own businesses, there's a swell in the available workforce, which has led to an increase in salaries. These findings provide a glimpse into the transformative potential of UBI in a developing economy.
A macroeconomist and researcher at the International Labour Organization, Rosanna Merola, presents a different solution for dealing with AI-induced job losses: a robot tax. The idea is to tax companies that replace human workers with robots or AI, and use the revenue to fund UBI. While the idea is theoretically compelling, practical implementation remains a challenge. Issues like defining what constitutes a 'robot' and determining how to tax it present legislative hurdles that make the robot tax a currently unrealistic proposal.
Joe Chrisp, a researcher at the University of Bath’s Universal Income Beacon, voices skepticism about UBI. He fears that such a policy could inadvertently encourage the proliferation of low-wage, unstable jobs, rather than incentivize people to find more stable work. While he acknowledges the potential benefits of UBI, Chrisp remains cautious, emphasizing the need for careful consideration of the systemic implications of such a policy.
