Is Universal Basic Income the Answer to Automation?

People are panicking about automation. Specifically, people are worried that increasing automation and robotization will result in large populations that are unemployable. Automating all of the low skill jobs means that only the highly skilled, trained, and educated will be able to earn a living. So what will we do with the unemployed? Some people believe that a universal basic income is the answer.

What is basic income?

Basic income, or universal basic income (UBI), is a guaranteed and unconditional right to payment. It doesn’t matter if you are employed, unemployed, male, female, single, married, or if you have undiagnosed or preexisting health conditions, you get the same amount as everyone else. This income is fixed and can’t be taken away.

While basic income is a popular topic in the United States at the moment it isn’t a new idea.

In the early 1500s, Sir Thomas More wrote about a fictional society that provides everyone with guaranteed income in Utopia. Several philosophers and governments have written about, explored, and experimented with variations of a basic income since then.

Switzerland held the first national referendum on basic income in 2016. 76.9% of voters opposed the basic income proposal and 23.1% approved the proposal.

There are plenty of arguments against basic income: people won’t work if they get paid no matter what, basic income isn’t sustainable, it would widen the poverty gap, and it makes more people more dependent on their government.

There are just as many reasons why people think that a universal basic income is a good thing: workers can refuse exploitative wages, it reduces the number of hours that people have to work (so they can focus on health, family, care giving, and volunteering) , it reduces the cost of welfare for the government, it enables entrepreneurs, and it helps those in need of financial support who do not currently receive it.

Automation and basic income

One of the most popular reasons for UBI right now is the idea that automation will lead to mass unemployment. Increased automation is the main reason that presidential candidate Andrew Yang proposes his “Freedom Dividend”, a basic income of $1,000 a month for every American over the age of 18.

A shortage of paid work means that people simply won’t have the option to work to earn a livable wage. Manufacturing jobs have disappeared due to robotization, and retail, transportation, service, and fast food jobs are next. Universal basic income provides a possible solution to the problem.

Researchers working with the Federal Reserve Bank of San Francisco discovered that the labor share has steadily dropped over the past 20 years. Their findings suggest that workers simply can’t compete with the cost savings of automation. Employers aren’t willing to pay more for human workers, which means employees either have to settle for less money or look elsewhere for work.

UBI hasn’t been proven yet, and there are mixed feelings about providing everyone with a basic income. There will certainly be hurdles to overcome, and we just don’t know if basic income works.

It’s unclear whether basic income is the solution for job loss due to automation. In fact, it’s unclear whether automation will actually lead to an unemployable work force.

However, it is clear that automation is going to become increasingly important in manufacturing, transportation, distribution, and many other sectors in the near future. Make sure that your machines are ready. Call 479-422-0390 for Indramat service and support.