Is UBI a solution to the unemployment crisis?
Automation is here on us, and, in the years to come, Artificial Intelligence (AI) will take it to an unprecedented level. It will bring about a profound change in the way we live and earn our livelihood. According to McKinsey, it can potentially leave 800 million of us jobless by 2030 across the world. The situation may be all the more alarming in developing countries; 69% of jobs in India risk losing their relevance in the same period.
That’s a scary possibility, given a highly unequal distribution of technological resources. Industry leaders whose innovations will likely influence the AI-related developments suggest Universal Basic Income (UBI) as a solution. For example, Elon Musk told CNBC: “There is a pretty good chance we end up with a universal basic income, or something like that, due to automation.” Mark Zuckerberg said during his Harvard commencement speech: “Every generation expands its definition of equality. Now it’s our time to define a new social contract for our generation. We should explore ideas like universal basic income to give everyone a cushion to try new things.”
In India, the opposition Congress party has announced that it will provide a basic minimum income guarantee to the poor, and the ruling Bharatiya Janata Party has similar ideas to offer. Such schemes are bound to bring immense pressure on the exchequer in their present forms. But, has the Indian political class unintentionally ended up providing a dress rehearsal for a future in which we are likely to face a permanent class of jobless people, in need of state support for survival?
When the machine came with the industrial revolution, it democratised the work culture to a large extent, weakening the institutions of slavery and caste, and making it unavoidable for the rest to work for subsistence. But for the first time in history, humans are facing an existential dilemma, where a substantial number of us stare at the prospect of being jobless because AI doesn’t only make humans’ physical work irrelevant, it also challenges the human brain, and it will only get better at it with time.
There may be newer job avenues with the proliferation of AI, but it would also mean that to keep themselves employed, humans would have to continuously update their skills. “A generation ago, the half-life of a skill was about 26 years, and that was the model for a career. Today, it’s four and half years and dropping,” Indranil Roy, the head of the Deloitte’s Future of Work Centre of Excellence, told the BBC.
But we are not prepared — emotionally, mentally and in terms of infrastructure — to adapt to such changes so quickly, threatening a prospect of great unpredictability around employment. Among the sectors that are likely to remain relevant — with constant training, of course — are creative, cognitive and technological, but for a large section of workers, it won’t be easy keeping up with these.
The possibilities of AI are, however, endless. It can open up jobs that are beyond our imagination right now, and may as well offset the loss in jobs. But the worrisome fact is that it can equally lead to an unprecedented inequality where the haves, having AI (like developed countries and a few individuals like Zuckerberg), will keep growing at a rate which have-nots will never be able to achieve. It may herald an age in which, initially, there is an unprecedented growth but little rise in pay or employment. Eventually, AI-driven automation will cheapen products, resulting in a decline in the wage of leftover jobs, and stagnation in the economy and employment — and could lead to the market’s collapse. UBI, in this context, makes business sense to keep the economy running.
Dutch historian, Rutger Bregman, calls basic income as “the venture capital for the people”. It could compensate for the loss in jobs and skills, and also help in innovation. Multiple surveys suggest that the young in this age do not recall their working hours as their happiest memories; may be, the UBI-funded creativity pursuits might help better our happiness index. Many consider George Orwell and Harper Lee, among others, as successes who were provided with basic support.
For many, such possibilities may simply be a red herring. But even if we discount the possibility of a loss in employment, certain activities would undoubtedly become automated (about half of the present-day skills, McKinsey, 2018), making a lot of workers easily dispensable, again leading to lesser pay for the rest of the employed — or pay polarisation, resulting into immense income inequality.
People cried wolf that machines and computers would eat up their jobs. But for the first time in history , it’s not just that humans’ physical power is being challenged, but also their thinking power, which was unique to humans. Precedence shows that the fallout of shifting from an Industrial and IT age to Artificial Intelligence age would indeed mean loss of jobs — for example, AT&T, worth $267 billion in today’s valuation, employed more than 7.5 lakh people in 1967, Google, worth $370 billion, employs merely 55,000.
It increasingly appears that the news of the wolf’s arrival may not be too far. UBI can become part of the solution, more so in developing countries such as India.