The recent referendum in Switzerland on the possible introduction of a universal basic income (UBI) for all its citizens (which ended with the rejection of the proposal by 76.9% of the votes against vs. 23.1% in favor of the measure) has brought a hot topic to the headlines:
What do we do with those people who become unemployed as a result of technological advances and for whom it is very difficult to find an alternative job?
It is the phenomenon of “technological unemployment”. John Maynard Keynes already warned us about in the first half of the last century:
“We are being afflicted with a new disease of which some readers may not yet have heard the name, but of which they will hear a great deal in the years to come — namely, technological unemployment. This means unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor.”
Today we live in a scenario of growing technological unemployment, and universal basic income (UBI) is gaining popularity in many forums as a possible solution. To such an extent that the subject of discussion is less whether or not UBI is a good idea, but how to minimize the collateral effects of putting this formula into practice.
Because if we go ahead with this idea, not only we will need to figure out where the resources to finance such a program will come from, but we will also need to determine the amount of that basic universal income, as well as creating mechanisms to offset some of the potential negative effects of UBI, like potentially discouraging people from working, which is not good for people nor for our society as a whole.
We might look for inspiration in the idea of a negative income tax Milton Friedman popularized in the eighties:
For instance, imagine a family is entitled to a basic income of 20,000 euros per year. If we combine this basic income with a negative income tax and one of the members of the family works and earns let’s say 12,000 euros a year, the family will not only receive 8,000 euros for the difference between what they earned working and the guaranteed universal basic income, but they will also receive a portion (e.g. one half) of the basic income they did not use. Therefore, citizens would always have an incentive to work, even in the case of very short-term or low-wage jobs. Or they could follow their passion and do what they love, even if it is not a very profitable activity from a financial standpoint.
Whichever is the solution, the debate is served. Technological unemployment is an undeniable reality and something we need to do as a society to overcome this problem without slowing down the pace of scientific and technological development, a factor the economy of any country increasingly depends on.