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?
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Great post. I think (at least in the US) there is a lot of cultural and political opposition to UBI due to the misconception that it's a free lunch for those who refuse to work. But especially as the jobs lost to automation become so prevalent that even skewed reporting of unemployment stats can't gloss over it, people with start to understand and it will enter public discourse.
Many of the trials also have rules on who is included to participate, but in a real world scenario there may be an influx of outsiders flocking into a jurisdiction where UBI is implemented to get in on the action. That would be a challenge to control if UBI was not truly universal (global.) And while governments are good at handing out money, they are not good at doing anything global (except for maybe war.)
But if the need is great enough, I think we can get there. Thanks, and again, great read!
Hey @kevingblogger
You make some great points there and I agree anything with this kind of far reaching implications are going to have some serious teething issues and we're going to make mistakes and in the eyes of the pubic waste money but the lessons we learn on how we progress as a society will be well worth the spend in the end I feel.
I think this is is one of those cases where we cannot be penny rich and pound foolish. For sure the US, US, China and India will be hit the hardest by automation and UBI will probably be tried in thise regions first, many will want to get a piece of the pie.
This could be an amazing chance for blockchain and crypto to go mainstream as we could now have immutable public records with encrypted data hosting all UBI holders and what they receive, when they receive it and to an extent what they spend it on.
The data we get from this will go a long way into proving the use case, finding improvements or scrapping it all together. Unless we can measure it correctly we cannot judge its real impact at scale. Either way its going to be an interesting time for the world
Definitely opened my eyes to some potentially world changing ideology with this post, will be looking into depth about the various trials and implementations so far.
Great to find some content on here that really sparks the imagination. Thankyou ✌️
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Awesome man, glad I could reach someone with my ramblings. I feel its an important topic we cannot ignore and its effects are already starting to eat into the market so we need to have serious conversions and plans on how we as a society adapt to robots doing our work and how we continue to find value, purpose and fulfillment in this world
If they do give out UBI I agree it needs to go to everyone.
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We always focus on the super rich or the super poor but the fact remains that the middle class is what keeps society going and we need to take care of it, make sure it’s healthy, growing (absorbing the poor into middle class) and building SMEs! There needs to be a balance between taxing the middle class and giving them breaks and they will decide where the market goes next while these big companies focus on things we no longer want to do
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Very true.
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