Why we need basic income
Basic income is widely debated globally. It divides opinions. Some say it is totally absurd; giving money to everyone for doing nothing?! Others stress the fact that it balances income inequality and supports stagnant wages. Both are valid arguments, but what we really should focus on is how current full time jobs will transform to sub-hourly tasks, and the “minor” fact that robots and deep neural networks could replace half of human labour. Yes you read it right, half. But will universal basic income be the right answer? Probably.
What is universal basic income?
Universal basic income (UBI) is a fixed amount, sufficient for subsistence, given by the state to every citizen despite work or income status.
How is UBI distributed?
It is estimated that it would be distributed in intervals of a week, month or even a year. Some have proposed that the money should be given in a lump sum, when you turn 18 or so.
How much UBI?
Somewhat $850 per month. But the exact amount varies between countries. Switzerland proposed a hefty $2600/month while Kenya is testing a €1000/year.
How much would this cost?
In United States of America distributing around $10,000 per year for every citizen would total about $3.2 trillion. With certain limits, such as excluding high net worth individuals form UBI, the cost could be halved. Also it can be argued that when a lump sum is given to every individual it eliminates the need for a heavy bureaucratic system calculating what subsidies should be given to every individual, resulting in less cost.
But why would we need UBI?
The robot-to-worker ratio is rising globally…
…And as the number of robots grow, their implementation costs shrink.
The developing countries are most at risk, but so is the developed world…
…And it is not only manufacturing jobs that automation will replace…
Results of UBI
UBI has already been tested in couple of countries and the results have been impressive. Alaska has increased 10,000 jobs for the state, as a result of the increased purchasing power. The country’s poverty rate among Native Americans fell from 25% to 19% between 1980 and 1990. Namibia’s proportion of malnourished children has dropped from 42% to 10%, average income beyond UBI has increased by 29% and crime has dropped by 36.5%.
We have yet to see the outcome of UBI currently operating in Kenya, Finland, The Netherlands, Switzerland, France and India. Also Y Combinator’s Sam Altman has come up with a pilot experiment for Oakland folks. We have yet to see what these initiatives will bring us, but the expectations are high.
So what will the future bring us?
I believe we are going to face a solution similar to UBI. It is almost necessary. Donald Trump states that immigrants are taking Americans jobs, but the fact is that robots are. Former President Barack Obama warned Congress about the possible threat of robots replacing 50% of all jobs by 2030. This means that millions and millions of people will wind up out of a job. The upside of automation is abundance. Everything will become cheap, resulting in a dramatic increase of a society’s wealth. More with less.
The money used could be redistributed, which would develop financial security for people even if they would not work. UBI would thus become significantly cheaper for the government than now forecasted. On top of that, there are just few people on the planet with enormous amount of wealth, so UBI could actually decrease everyone else’s tax burden.
Ultimately, UBI could give us more time for our families, relationships and hobbies and motivate us to do what we love, boosting entrepreneurship, creativity and research to new levels. And technological advancements could be distributed equally. But most importantly, it would eliminate households living below the poverty line and giving everyone a secured income.
Some argue that governments will not be able to provide UBI in perpetuity and that global benefit could result in inflation. And if we don’t have to work, will it make us lazy, unhappy and finally depressed? Do we lose the purpose of living?
Is there a need for us anymore?
But what are our options?
Sources: Business Insider, Futurism, Statista