Robots and Guaranteed Income – Two Halves of a Puzzle?

Here are two strongly jobs-related topics on which I have written over 10,000 words.  We know by now that robots and other mechanical systems are continuing, irregularly, to replace human employees across a wide spectrum.  We also know that universal basic income, if we consider the issues of incentive to work (which I think is both illusory and not a problem anyway) and how to pay for it (much but hardly all would come from ending existing social programs such as food stamps) to be nonfatal, is one of the few conceivable solutions to the long-term jobs crisis.  As we will see, these areas are connected. 

Although it is silly to maintain that robots will create more jobs than they cost, there are some real opportunities.  Per Mike Duffy, Keystone Automation founder and CEO, as quoted in Dave Gardner’s “Trends in Technology: Robotics” in the July 2017 Northeast Pennsylvania Business Journal, implementation of automata is more important in many business areas than its development, requires more skill than most of the positions it will replace, and now there is a shortage in industrial automation graduates.  Most of the time I consider highly specialized bachelor’s degrees too risky, as they leave their holders poorly placed if they cannot find employment in their tiny fields, but robotics is guaranteed to be strong for many decades to come.  Despite a steady flow of career recommendations for software development, I rate physical automation opportunities more long-lasting, as they must be implemented and maintained locally.  If this is not now one of the hottest four-year and two-year majors, it should be.

Something I like less, though, Pedro Nicolaci da Costa advocated in the July 15^th Business Insider “A solution to job-stealing robots is staring us right in the face.”  Getting retrained is a good move for many individuals, but it’s not an overall solution, as it only tends to change who gets hired and who does not.  Another positive view turned up in “Can robots help the U.S. get its economic mojo back?” in TechCrunch on September 4^th, as Steve Cousins correctly stated that automata help overall prosperity but oversold it by crediting China’s world-leading robot spending for its unsurpassed national affluence rise, which came first. 

The next month, though, we began to see the direct connection between the two subjects.  In Fast Company’s October 10th “Robot Taxes Are A Good Idea As Long As The End Goal Is Basic Income,” Ben Schiller considered using the first, actually advocated by Bill Gates, to pay for the second.  Schiller wrote that two economists were advocating “taxing the purchase of equipment that replaces routine work” so governments could “transfer “a certain amount to all the agents in the economy, regardless of their occupation or income.”” 

It was only one day later that www.resilience.org published a paper titled “How to Fund a Universal Basic Income Without Increasing Taxes or Inflation.”  The piece cited an Oxford study projecting that “there was a 50 percent chance of (artificial intelligence) outperforming humans in all tasks within 45 years,” and that “all human jobs were expected to be automated in 120 years.”  Further research cited here suggested that guaranteed income of $1,000 per month to each American adult, the exact proposal I made in 2012’s Work’s New Age, “would add $2.5 trillion to the US economy in eight years,” and that a true universal basic income would not “encourage laziness,” a point also in that book.  With so much money pooling up I can’t agree that its movement will help prosperity as much as in times past, but we may indeed be closer to covering payments to everyone than we had thought. 

While I agree that “The Universal Basic Income Is An Idea Whose Time Has Not Come,” (J. David Patterson, The Federalist, October 20), we need to be exploring and testing it.  And indeed we are doing some of that.  Per Frances Coppola in Forbes on October 15th, “The IMF Gives a Cautious Welcome to Universal Basic Income,” a decision influenced by reduced money movement as above and countries’ differences in “transfer systems” or safety nets.  As Coppola perceptively pointed out, such programs could be especially effective in “oil-exporting developing countries,” and whether you consider, for example, Qatar to be developed or developing, there are several like it that could probably pay for such a scheme right now.

Three places have made the news with what they called pilot guaranteed income efforts, but two weren’t.  The city of Hamilton, Ontario, the subject of “Canada tests ‘basic income’ effect on poverty amid lost jobs” (Fox News, November 29^th), is now giving the equivalent of $13,000 to single people and $19,000 for married couples with incomes below $26,000, with amounts reduced for work earnings.  That may or may not be a valid unemployment and welfare arrangement, but it is not universal basic income.  Peter Goodman told us on April 24^th in The New York Times that “Finland Has Second Thoughts about Giving Free Money to Jobless People,” and is ending its program, which was not, as Goodman put it, an “experiment with so-called universal basic income,” but the same sort of “free money” Americans in any state get if and only if they lose their jobs.  The real McCoy, in Stockton, was the one Chris Weller described in the October 18^th Business Insider’s “A California city is launching the first US experiment in basic income – and residents will get $6,000 a year.”  It’s not nearly enough for them to live on alone, but the program will benefit “a select group of residents” for three years.  We’ll watch this one.

We bring automata back with a story about exactly the sort of quixotic 2020 presidential candidate we need to hear from.  In The New York Times on February 11^th, Kevin Roose told us about businessman Andrew Yang, in “His 2020 Slogan:  Beware of Robots.”  Yang expected serious social unrest from both robots and driverless cars, and proposed as a solution what he called a “Freedom Dividend,” or “a monthly check for $1,000 that would be sent to every American from age 18 to 64, regardless of income or employment status.”  In other words, a true guaranteed income.  Look for Yang to influence other candidates, as neither of these issues will go away soon. 

Next week, I will be a long way away and not posting.  I will return on May 25th with commentary and a recap on another issue that won't go away soon - artificial intelligence.