Remedies for Automation Part One: Universal Basic Income

By James Dail (CMC ’20)

The 21st Century has brought an explosion of new technology unlike anything ever seen since the Industrial Revolution. Yet, while the Industrial Revolution drastically improved the well-being of the American people, the Digital Revolution promises to have mixed results. Even as new technology brings increased life expectancy and daily efficiency, the threat of automation looms over the American workforce. Cashiers and taxi drivers are poised to be replaced by self-checkout kiosks and driverless cars, and it is not only the low-skilled workers who might be replaced: there are even robots that can compose symphonies. The United States is woefully underprepared for automation, and new legislation will eventually be needed to address the problem of mass unemployment.

There are some who will say that these expectations for widespread automation are wildly overblown. After all, new technology has come along before, and low-skilled jobs were never seriously threatened. What these critics miss is that there is reason to believe that this time will be different. A common example used to illustrate why automation is a dire threat is as follows: when society transitioned from using a horse and buggy to using a car, one could easily imagine that the people driving the buggies would be able to transition seamlessly to driving cars with a little bit of new training. In the present day, as the time for society to transition from cars to driverless cars is on the horizon, it is significantly more difficult to imagine the kind of work the drivers will be performing. Even if one is able to think of a new line of work for them, such as a computer programmer for example, the positions that would become available would require a tremendous amount of technical training that could take years.

It is clear that some form of a legislative solution is needed in order to avert mass unemployment. One commonly discussed solution to limit the impact of this potential mass unemployment is a universal basic income that could be administered to at least, the unskilled workers who stand to lose their jobs most immediately from automation. Proponents are quick to expound on this solution’s virtues. Automation would no longer be a threat because whenever an unskilled worker would drop out of the labor force, he would receive a check in the mail simply for existing. In spite of the large increase in the number of people who would not be working, proponents argue that GDP growth would not only not be hampered, but would increase. Widespread automation would mean that workplace efficiency would increase, and that all income and productivity gains would go to skilled workers. Instead of having large amounts of spare money sit passively in their bank accounts, this wealth transfer to former workers would mean that that money is now in being spent. This would create demand in the economy. After all, the former workers would still need to spend money on their day to day needs. Furthermore, the cost of funding would not be an issue because the universal basic income would replace current forms of welfare.

On the other hand, critics argue that adopting a universal basic income would be problematic for a number of reasons. Even though productivity would increase if this scheme were adopted, all of the income gains would be concentrated at the top of the income distribution. The United States has seen inequality widen in recent years, and a universal basic income would only entrench it further. It would firmly cement a divide between the meritocratic elites, who would live in wealth and luxury, and the majority of the population that would live only a few steps above destitution. They would have no opportunity for self-advancement after they left school, and would be permanently stuck in their societal position. In fact, one can already glimpse the negative effects of a universal basic income.  Even though it has never been formally implemented, in recent decades, a growing number of Americans have taken out disability instead of finding work. The cause of this increase is still being debated, but there is agreement that the automation of high-paying manufacturing jobs has a role to play. Many of these disability pension recipients are barely subsisting, and many of their lives seem desolate and hopeless. There is a strong correlation between taking out a disability pension and opioid usage.

A far better solution than a universal basic income would be to make laws that prevent automation in certain industries. This could take one of two forms. First, there could be an additional tax placed on corporations that automate their workforces. Second, there could be laws crafted that explicitly forbid corporations for automating jobs. The key for the remaining two ideas is finding a way to balance automation that could bring immeasurable societal benefit, and automation that causes needless industry disruption. These ideas will all be explored further in the coming weeks.

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  1. Pingback: Remedies for Automation Part 2: Taxation and Regulation | The Claremont Journal of Law and Public Policy

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