A Bridge to a Universal Basic Income

By Toper Cliver

A Universal Basic Income seems like a necessity if you look far enough out, but paradoxically looks impossible the closer your horizon is to today, so how do we bridge the gap? On a far enough timescale we can foresee vast amounts of technological unemployment because of automation, robotization, and artificial intelligence making the majority of human workers no longer cost effective to utilize in the business process. Despite this, the social perceptions and enormous costs of a universal basic income seem insurmountable at present so that, while the need is clear, the path to get there is not at all clear. There are a handful of possible scenarios that may get us there but each has its pros and cons.

While the specifics of the future are uncertain the general direction of the future seems pretty clear cut. Technology will continue to increase the productivity of some workers and, because of cost efficiencies, replace other workers. You can analyze this deeply by industry and job but the general trend would seem to be that the more skilled and currently higher paid employees of today will supplement or even multiply their productivity tomorrow with technology. The other side of that coin is that the jobs that will be replaced will be those of the lowest skilled and currently lowest paid employees. These are the people that will be least likely to have the ability to transfer or translate their skills to an industry in need or demand of them. Bottom line is there are large numbers of people at the low end of the social economic spectrum that will be put out of work and made unemployable over the next decade or two.

These are the folks that will be put out of work by automation in the restaurant industry, self driving cars and trucks, 3D printed manufacturing, roboticized warehouses and inventory management and on and on. That is the obvious first wave but there are so many possibilities beyond that where the workers of today could be automated to the unemployment line. Some argue that new jobs would be created as a result of this process and that the worst jobs would be eliminated while more fulfilling jobs would be created. Assuming for a minute  this is true, there is still a huge skills and training gap that needs to be accounted for because fast food workers don’t get a pink slip today and become robot repair technicians tomorrow.

We see the train speeding down the tracks but we don’t seem to have the ability to do much about it. First there already are a tremendous number of poor, unemployed and underemployed people throughout the world and we struggle now with how to deal with them. Secondly, there is a social stigma to the process of giving and receving resources, whether that be money, food or some other form of “handout”. The people being taxed to pay for it see the people receiving it as lazy or undeserving, and the government facilitating the process as unfair, unjust and tyrannical. This stigma rubs both ways as the people who receive these benefits must surely feel like it is somehow their fault that they are in this situation and at the very least, have suffered a tremendous blow to their self esteem and confidence.

This all transforms into a political reality that makes it nearly impossible to fathom the implementation of a Universal Basic Income (UBI), short of as a last ditch effort to stave off revolution or anarchy. There are a handful of countries around the world that are experimenting with a pilot program but the results on such a scale are inconclusive as to what a large scale version would yield. Even if a small country were to successfully implement a UBI it would be a nice case study but hardly a view into how it may go for a large country with a huge economic footprint. The cost of implementing it is enormous even when eliminating many social programs already designed to help the poor. If taxes are meant to pay for the balance, then it will be difficult to pass if the taxation needed to make it work eroded or eliminated the basic income gain of the middle and/or upper class tiers of society. The net result of that is progressive taxation which brings us back to the original problem

I’ve argued above that that it looks unlikely that we would rationally examine the facts and vote to endure the short term pain for the longer term good a national UBI may yield. So the more likely paths of getting there would involve a desperate or forced decision in response to a greater threat or cost. One could image a future filled with technological unemployment where the middle class continues to erode and the wealthiest people on the planet continue to accumulate more wealth. This sort of trajectory could lead to a collapse of the economy, or in the poorest people revolting against a system they see see as unjust. Such a scenario is dealt with in my Book, Plato's Dream: Crisis of the Employment Singularity.  

A Universal Basic Income could be seen as a way to quell these scenarios. In the case of a collapsing economy it would provide a way to inject a surge of consumer spending as people at the lower end of the economic spectrum tend to spend the bulk of their income on the necessities of living, whereas the rich would be more likely to save any extra income as their basic needs were already easily met. While it is logical that this would indeed be a boon to an economy in such a state, it is not clear how it would be paid for now let alone where the funds would come from in the hypothetically tattered future economy. It would stand to reason that in this scenario there would be less workers to tax in order to afford a UBI and so the resistance would be that much stronger from a smaller group of elites who may or may not have the same degree of political influence. This makes this scenario seem even less likely to result in a UBI than today’s conditions would allow for.

Another situation whereby a UBI could be implemented is one where we take the current trends to their logical conclusions and foresee the rich getting richer, the poor poorer and more numerous while the middle class evaporates. Let’s assume technological unemployment goes down the path discussed and the wealthiest people continue to make more as they are the ones who can afford the technology that in turn makes them more money. The social safety nets would be strained as more and more people would be unemployable and when people are unable to feed themselves, history teaches us that violence is not far off. Given such a scenario the powers that be would be faced with either cracking down in a totalitarian police state fashion or do something to alleviate the problem such as implementing a UBI. Again, while it is a plausible solution to the problem presented in this scenario, it would be done at the threat of a Molotov cocktail and the rich would give up the least amount possible to avoid anarchy.

There is another way that is politically more palatable than the UBI, more affordable than a UBI and scalable such that when massive layoffs occur, no political debate, harsh delays or knee jerk reaction are required or need ever occur. The other way is a Universal Basic Employment and Training (UBET) program. Instead of a universal income this would be universal employment for anyone that wanted it. People could voluntarily elect to participate (or not) working two to three days a week while receiving some sort of training, education, internship, or apprenticeship for the other two to three days a week. As a participant, the people would receive a basic income sufficient to survive as well as receive the education and/or training that would allow them to land a new economy job and get them out of the program and back to contributing to society.

There have already been proposals to make community college free in the U.S. and with the proliferation of online classes and massive online open courses (MOOCs) this piece is not so far fetched in any country. The basic income here in essence replaces a minimum wage and gives workers an alternative with a ladder than can lead out of the wage cellar present today that is filling up with more and more people. As a matter of practicality the types of training would have to be focused on the types of knowledge and skills that are predicted to be needed and not a merely self fulfilling subject matter that the market sees little economic value in such as 6th century poetry. People would of course be free to pursue any topic they like with their own money financing it.

The minimum wage could be abolished as a concession to those on the right and with libertarian leanings as the UBET would be a competitive force at the low end of the wage scale. A UBET would ensure that companies would have to pay a competitive wage to lure workers away from the UBET option. The alternative for these companies would be to further automate and thus speed up the timeline of the inevitable. As mentioned, the participants of the UBET program would work 2-3 days a week so during this transition they could be hired out to these companies still in need of low skilled workers until there is no longer such a need. At that point the workers could be used for projects benefiting society as a whole.

A UBET program would initially target the unemployed and lowest skilled workers in the economy. As technological unemployment accelerates the program would be able to expand to ensure that everyone who was willing to work could earn a paycheck and that everyone had the opportunity through education and training to gain the knowledge and skills in demand so that they could leave the program and fill a job society still needs a human to do. Unemployment benefits could instantly go away as anyone who lost a job could sign up for the UBET program the same day. Other social welfare programs could be reserved to those who have truly been determined to be unable to work. This would also be appealing to conservative voters and perhaps in exchange, for those on the political left, a system of universal daycare could be set up utilizing participants in the UBET program.

Over time, unless futurists have totally missed the boat, a Universal Basic Income will be needed because there simply won’t be enough economically viable jobs that humans can perform better or more cost efficiently than Computers. There is a period of time between right now and then where we will need humans to continue to participate in the workforce, but the number needed shrinks on a daily basis while at the same time the qualifications and skill set of the remainder increases. It is this middle ground that we need to bridge. As the number of human workers shrinks over time we can adjust the UBET so that younger workers train more of their week and work less. In the U.S., we can continue to lower the age of Social Security, which is really just a UBI for the old, and give more workers an option out of the traditional worker marketplace to keep pace with lessening demand. A UBET gives us options, and more importantly, it gives us political air-cover to do the things we need to do to hold our society together while we sort out the next chapter in whatever form it takes on.  

The need of a UBI seems inevitable, the questions that remain are how soon, how much will it cost, how will we pay for it and how will we bridge the gap until we get there? We see hints of the future rise in technological unemployment all around us in the news from drones delivering pizzas and packages, to fully automated fast food restaurants and self driving cars and trucks. Despite the fact that humans are one of the most expensive pieces of the economic process and therefore business is incentivized to eliminate them, the idea of a Universal Basic Income seems implausible with today's political climate. The path to a UBI looks strewn with roadblocks and obstacles as issues of cost and social stigma stand in the way. Short of society being on the brink of anarchy and/or the economy on the verge of collapse, a UBI looks like an impossibility in a workable form. What is needed is a bridge to a future time when a UBI can work. A Universal Basic Employment and Training (EBET) program would be a bride to a UBI that keeps people working and earning while they are training and learning instead of unemployed, rioting and burning.

Toper Cliver,

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