Is the World Ready For Universal Basic Income?

If you checked out my previous post you'll realise that the threat of automation isn't coming, it's already here, slowly eating away at the most common jobs in the world economy. Plenty of people will be left without work, a sense of purpose and ways to spend their day.

While many of this large scale workforce will need to learn to adapt their skills prior to automation many of these people may not have the foresight or simply don't think it will happen to them and once it does they will be thrown out into the world with a skill the market no longer needs and will need to fend for themselves and their families in a brave new world.

While we will probably have displacement retraining programs for the affected workers only some will take up the offer and of that, not everyone will excel in their new skill or even make it through the program to find a job.

Image source: hackernoon

There is still a need for labour

Just because the most common jobs in the world are now being automated doesn't mean its a totally bad thing, I just think the speed at which it's happening without consideration of the workforce that will be affected will bring on a large scale issue countries will have no idea how to handle.

The market will always require labour and as we rid people fo the burden of menial tasks they can free up their time to specialise in new skills that provide the world with even more value like a trade skill or starting a business.

Life may become cheaper

As automation starts to take away the time needed for rudimentary tasks that are costing companies a fortune to do and really may not be worth spending on, products and services will become cheap, very cheap and therefore disposable incomes will be able to stretch a lot further than they used to since costs aren't being passed on to the consumer. Granted this is also reliant on companies not colluding to price fix or to continue to push massive profit margins post automation. We will probably need some sort of regulation or tax since there is no altruism in the current state of capitalism.

Is universal basic income a stop-gap solution?

So if products and services become cheaper all the wealth will probably be moved centrally to the tech companies who created these automation tools and if left unchecked will increase the level of disparity to a tipping point where people will take the law into their own hands.

Revenue created from robots and automation could, however, be subject to tax in order to take some of that wealth and use it to kickstart the economy in a new frontier by means of a universal basic income.

The UBI will be of some assistance to those who have been displaced but mostly act as a stimulant for the market to decide what labour it still requires.

While I am no fan of big government and I think they are probably incompetent at most things, but one task they've been pretty good at is handing out money to people in need, it's probably the only thing governments know how to do.

Trials for Universal basic income

Alaska

Alaska has had the longest running UBI program in the world which ranges from USD $1000 to $2000 per month and it has shown that people do not stop working with full-time employment did not changing, and the share of Alaskans who worked part-time jobs increased by 17%.

Ontario

A UBI pilot project was run in Ontario which paid citizens around CAD$1400-1600 but the program was cut short as the government didn't feel it was a sustainable practice. The sample was for that 4,000-people and cost C$150 million (US$115 million).

Finland

Finland attempted a UBI program between 2017 and 18 by paying 2,000 unemployment benefit recipients 560 euros ($635) a month without requiring them to go through the bureaucracy involved in applying for the traditional benefits and regardless of whether they landed a job

Failure by sample

Where I think people miss the point with UBI is on two fronts. Instead of giving money to just the affected UBI should be given to every citizen regardless of income which I think its effectiveness lies.

• Psychological

By giving everyone the same income we are not playing favourites, the middle and working class do not feel they are being taken for a ride while still uplifting the most vulnerable of society.

• Spending habits

By only giving handouts to poor people you only filter that money back into a select part of the system as poor people don't really spend on anything but necessities. Whereas if we give everyone an income those who see it as a bonus can spend it on a variety of goods and services, helping redistribute income and have disposable income spared for savings.

This healthy redistribution by the more responsible spending habits of the middle class is where UBI will really help in creating demand for businesses and open up new opportunities for SME's to set up to serve local areas. As these SME's grow they slowly absorb unemployment and provide people with skills the market now values.

The mixed reaction to Universal Basic Income

Many see Universal Basic Income as countries taking on radical socialist policies and turning into a welfare state where the middle-class and working-class carry those who don't want to be active members of society. I do understand those sentiments but where I disagree is that giving a hand out to selective people based on certain criteria only further aid victim culture and push away the middle class from local aid an private charity which is what we need to really start reducing unemployment.

This is where I think UBI can do its best work in helping poverty alleviation and assist in creating sustainable local economies going forward. It may not be the perfect solution but its the one we have in front of us that will buy us enough time to see how we adapt to the automation age.

Have your say

What are your thoughts on universal basic income? Is this something the world should get behind? Is a sort of prevention better than an absolute cure? How should we deal with the displacement of work through automation?

Let's connect

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Source:

• QZ
• The Guardian