About Basic Income

The Age of Automation

 


 

What is Basic Income?

 


 

Frequently Asked Questions

Hasn’t history shown us automation creates more jobs than it destroys?

Automation is different this time due to advances in machines and artificial intelligence. Previously, only routine physical work could be automated. Now, even unpredictable cognitive work like driving a car or sorting data can be performed by automated systems. While new information age companies such as Google create more value than their predecessors, they employ vastly fewer people. The cost for humans to do any task over time goes up as the cost for a machine to do it goes down. Not only this but machines and AI are getting sophisticated enough to do what humans do not only cheaper but also better, and faster. It makes sense for them to replace us, and they will. Unlike previous waves of automation, this time it is widespread across virtually every industry. Innovation will not save us from a jobless future.

Don’t we just need more educated workers?

More education just means the skills necessary to actually create value in the information age will become less scarce. As the last 40 years have demonstrated, the value a worker creates has become entirely uncoupled from their pay. So, if everyone had the skills to get STEM jobs, they all might be making as much as fast food employees do today. The the unfortunate side effect of greater education is that it, raises the minimum amount of time and money people must invest in training before being able to enter the workforce and make a living wage. While fantastic for many other reasons, better education will not save us from a jobless future.

Couldn’t new workplace regulations solve this problem?

Human quotas would only lead to a massive waste of human potential, with a large number of the many people being “employed” doing pointless busy work which allows their companies to avoid the penalties of not meeting the quota. A higher minimum wage has been proposed as a solution to the current low pay work environment in America today, but in the long run it will do nothing other than speed up the rate of automation as human workers become more expensive and cause companies to shift over into other methods of paying workers in which minimum wage is not a factor. When your job is automated the minimum wage is zero. Regulatory measures will not save us from a jobless future.

I don’t think people will like a lot of automated systems, how do you know they will be put in place?

If a technology is cost effective it will be implemented whether or not all customers prefer it. Just look at automated call centers, no one likes talking to robots and pressing buttons to move from menu to menu for 5 minutes before actually reaching a human, but we are still forced to do it because it is more cost effective for the companies than hiring more people.

Why is our unemployment rate so low now even with automation?

The current unemployment rate does not include people who have given up looking for work. Automation does not only destroy jobs, it also lowers wages drastically by devaluing human labor. We are already feeling the effects of automation. Right now many can still find work, but a great number of people are forced to take minimum wage jobs which were not intended to be long term employment for adults. Americans work longer than people in other developed countries for less pay. Systematic underemployment is already here as many younger people are struggling to find their place in a highly competitive workforce packed with people older than them who are also struggling to move up. In the coming years these issues will only grow worse if nothing is done.

How would a basic income be implemented and who would be eligible to receive it?

Some plans for a basic income distribute it on an individual basis to all citizens of the country unconditionally with no means test. Other plans such as the negative income tax distribute funds to citizens entirely based on income. Everyone making over the basic income threshold would pay into the system on a sliding scale and everyone making less than it or nothing would get a certain amount out of it. Many plans have only people over the age of 18 receiving a basic income, while some give younger people a smaller amount or nothing.

How would we pay for a basic income?

Some social programs such as social security and food stamps, will not be necessary if everyone is receiving a livable basic income, so you would fund it partially with money from those programs. Under a progressive basic income, no one receiving benefits which get replaced will be worse off with a basic income, and most will be better off. We will have to create new taxes, there is no way around that, but the average worker would not be impacted by them under many plans. The technology of today allows for companies to create far more value than ever before, so even when these taxes are taken into account, they will still be better off than they were using people to do everything they will be using machines for. There are many viable plans for how to fund a basic income but in the end, it’s always the machines who pay for it.

Is basic income enough by itself to prepare us for a jobless future?

No. While basic income can replace many large scale government programs, others such as universal healthcare are absolutely essential in the jobless future we are rapidly approaching.

Isn’t there a risk of people spending their basic income on alcohol and drugs?

Why would someone be more likely to spend their basic income on drugs than they would a paycheck? Drug addiction is generally caused by social isolation and poor mental health. Multiple experiments have shown that basic income improves the physical and mental health of recipients. One should expect that basic income would actually reduce drug abuse, and experiments have demonstrated that it does exactly that. 30 studies have shown that poor people actually spend less on alcohol and tobacco when given money directly.

Wouldn’t basic income cause a shortage in the labor supply?

Studies on basic income have consistently shown that most people do not stop working when given a basic income. Those who do often pursue education, or other gainful activities. For example, consider two UBI programs in India where villages spent more on food and healthcare, children’s school performance improved in 68 percent of families, time spent in school nearly tripled, personal savings tripled, and new business startups doubled. Successful experiments like these are the reason why India’s chief economic adviser supports UBI.

Why would anyone do unattractive but necessary jobs?

People will do these jobs if they pay well enough. Basic income has a sort of minimum wage built into it which makes it so employers must pay workers enough for them to be willing to do the work even when their survival does not depend on them doing so. Due to this, basic income would be a massive victory for worker’s rights.

Couldn’t a basic income cause inflation?

A basic income would be funded by taxes, not by printing more money. It is also important to understand that a certain amount of inflation is good for the economy and we have a very complex and highly effective system in place which through pulling various levers, controls the rate of inflation and the value of currency. So the real question is would a basic income overwhelm or put stress on this system. The answer is no. Until 1982 when the Alaska began giving residents a basic income via the Alaska Permanent Fund it had a higher rate of inflation than the rest of the US, after the implementation of this wealth distribution it actually became lower.

But wouldn’t the prices on basic goods such as rent go up?

More money in the hands of more people can cause inflation in natural resource leasing costs such as rent. Some are concerned this could reduce the benefit of a basic income for non-land-owners. However there are many ideas for how to mitigate this, including more basic assets such as universal healthcare, and funding a basic income partially with taxes on certain transactions which eliminate this problem by giving the potential price increases right back to basic income recipients.

Wouldn’t higher taxes mean less jobs and innovation?

No, quite the opposite. A basic income would create an explosion of entrepreneurship which would replace some of the labor demand lost from automation. Today an economic safety net and certain a amount of capital is required for people to innovate and start companies. Give that to more people and you’ll have more innovation. This has been one of the primary reasons CEOs like Mark Zuckerberg have come out in support of basic income.

Would higher taxes cause rich people leave the country?

It has been proven that raising taxes does not make rich people flee an area. California has the highest tax rate of any state and has the most people with a net-worth of more than 30 million. It’s often family, friends, culture and environment which keeps people geographically rooted, not tax rates. If we want wealthy companies to stay in America what we need is a smart, educated population which is not forced to spend much of their time working long hours for little pay.

What about companies to leaving the country?

The number of incredibly successful tech companies in California is a key indicator that companies look at a lot more than taxes when deciding which country to base themselves in. Companies moving to another country isn’t as attractive as it sounds and will be increasingly unviable as our country continues to crack down on tax evasion via relocation. Crafting vital policy around what large companies and the rich might or might not do is blatantly undemocratic and highly dangerous to societies.

Is basic income communism?

No. Basic income retains the capitalist system where private parties control the means of production. What basic income represents is a way for capitalism to survive in the age of automation, this is the only free market solution to the problem we are facing. Basic income works through efficient government spending, not controlling markets. Richard Nixon was a huge advocate for basic income and almost passed it decades ago, we can safely say he was no communist.

Doesn’t basic income delink merit from reward and devalue work?

No, it raises the poverty floor to a point where everyone can afford the basics to live, to better themselves, and to better our country in the long run. Work won’t be devalued because of a basic income, work is devalued by a supply of desperate workers like we have now.

Doesn’t basic income give government too much power over the people?

Basic income is the least authoritarian welfare system anyone has come up with. It’s better to have a democratically elected government supporting people who can’t find work than companies who don’t owe anything to anyone. Under basic income, the government does not control what people spend their money on, unlike the current welfare system. By simply giving them money, basic income gives people the freedom to spend it however they wish.

What are the alternatives to basic income?

Various forms of basic income have been proposed and some people favor an approach which features more universal basic assets such as healthcare, education, housing, and childcare, with a smaller basic basic income. Universal basic income alone cannot solve all of the problems we will face and some of these programs such as universal healthcare are absolutely essential. The more basic assets a country has the lower it’s basic income would need to be, however a significant basic income will always be vital as it grants freedom and economic mobility to it’s recipients.