It's Time to Start Talking Seriously About Basic Income

03/27/2015 05:27 pm ET | Updated May 27, 2015

Let's start with the bad news: The robots are stealing our jobs.

That may sound like science fiction hyperbole to many of you, but it really shouldn't -- it's been happening for years, and there are now hundreds of jobs disappearing every day. No, I'm not talking about a scenario where WALL-E rolls up and kicks you out of your cubicle. The way that robots are stealing our jobs is by automating the work we do today.

Here's how it happens: as technology progresses, machines are invented capable of doing work that used to require significant human time and effort. Since it's typically cheaper to have a machine than a person on staff, this eliminates jobs that formerly existed to get that work done -- the positions are "automated." Automation eliminated many auto industry jobs in the 1980s when robot-driven car assembly was developed, and now jobs like store clerks and baristas are being threatened by smarter and cheaper machines. More than 3 million transportation industry jobs are at risk of displacement by the widespread adoption of self-driving vehicles, which will be present in 30 U.S. cities by the end of 2016.

But wait, you might say, won't the automation of low-skilled jobs like these create new, higher-skilled technology positions in their place? Yes, there will be some new jobs created in the tech sector, but nowhere near enough to offset those eliminated by automation. And even higher-skilled jobs are at risk of automation: accounting, legal research, and even medical diagnosis work are starting to be handled more and more by computer programs. When there are computers being developed that are capable of teaching themselves, there's no limit to what type of work could be taken over by a machine.

In an economy premised on the idea of full employment, the displacement of millions of jobs by robots would be a devastating blow. With large segments of the population out of work, there would be massive increases in inequality and poverty, and a huge amount of strain on our social welfare systems for the unemployed, which weren't designed to support that number of people for extended periods of time.

So, what do we do?

The Case for Basic Income

What if full employment wasn't a necessity in our economy? What if it was okay to not have a full-time position? What if robots stealing our jobs could actually be a good thing, rather than something to fear?

That's the thinking behind Basic Income. Basic Income (also called Universal Basic Income or Basic Income Guarantee) is an idea that's been quietly gaining traction in recent years. The premise of it is very simple: every adult in the United States would receive a monthly stipend from the government, which is enough for them to live on.

At first blush, this may seem very similar to existing social programs, providing assistance to help those who are struggling. But there are a few key differences that set it apart:

  1. It's unconditional. Every adult would receive their monthly stipend with Basic Income. It wouldn't matter how much money you made, it wouldn't matter if you had a job, and it wouldn't matter how old you were. It would be considered a fundamental right, rather than a form of welfare. This would eliminate any stigma that might exist for programs that are designed specifically for those in need.
  2. It's simple. Because Basic Income would be provided to every adult, and because it just involves sending a fixed payment to people every month, it would be much simpler to run and require less bureaucracy than other social programs. This would mean lower cost for overhead, and less danger of subtle manipulations by special-interest groups.
  3. It eliminates poverty. This is the big one -- the money from Basic Income would be enough to live on, without needing any supplemental funds. That means that you'd be able to get by even if you lost your job, and there wouldn't be immediate pressure to find a new one as quickly as possible. Having full-time employment would no longer be mandatory. What's more, recent studies have shown that anxiety around poverty reduces brain power -- which means that the guarantee of Basic Income would actually make people smarter.

Once you remove the constraint that everyone in the country should have a job, the robot threat begins to seem much less dire. If your field of work had become automated, you'd have a lot of options available: you could take the time to learn new skills; you could take on a part-time job through the "gig economy", which provided some additional income, but not at the level of full-time employment; you could even try starting your own business, if you had an idea you thought could work.

Or you could just relax for a while, and allow yourself to be pampered by all the newly automated services available to you.

How Basic Income could work

The establishment of Basic Income in the United States would be a radical change, both to our social safety net and to our economy as a whole. And as with any radical change, we should be rightly cautious about possible problems that could arise from its implementation.

There are several main concerns that typically pop up in any discussion around Basic Income. They look something like the following:

Concern No. 1: "Everyone will stop working"

If you're giving everyone enough money to live on, why should anyone bother to work anymore? We'll just have a bunch of people lazing about on government's dime.

In his TEDx talk on Basic Income last year, Rutger Bregman counters this concern with a question: if you were to receive just enough from the government each month to live on, would you stop working? Probably not. Most people actually want to contribute to society, and receiving a basic monthly stipend doesn't change that desire.

This is borne out by past small-scale tests of Basic Income. There was no significant decrease in employment rates when Basic Income was implemented for five years in the Canadian town of Dauphin, and economic productivity actually increased in a two-year test of Basic Income in a Namibian village.

Concern No. 2: "It will be too expensive"

It's true that a Basic Income program would cost a lot. There are nearly 250 million adults in the United States -- if each one were to receive $17,500 per year, that would mean an annual cost of $4.38 trillion, which is more than entire $3.5 trillion federal U.S. budget.

That seems like a ridiculous number on its own, but there are a few key factors to considers. First, Basic Income will obviate the need for many of our current social programs. Unemployment, food stamps, disability, and even social security are no longer necessary if everyone is receiving enough money to live on. Combined, those programs already require expenditures each year in excess of $1 trillion, which could be instead used to fund Basic Income.

Second, a commonly-proposed implementation of Basic Income is the "negative income tax." With a negative income tax, money earned beyond the amount received through Basic Income would be taxed at 50 percent, up to twice the level of Basic Income support. For example, with a $17,500 annual Basic Income, the first $35,000 of additional income would be taxed at 50 percent. For people earning more than that $35,000 amount, the money they received through Basic Income would be fully offset by their tax payments -- meaning they would effectively not receive any net support from the program.

In this scenario, Basic Income wouldn't cost any money for those earning above this salary cut-off level, and the cost for those earning less than it would be lower the closer they were to the cut-off amount. Using income levels from the 2010 census data, we can crunch the numbers and find that providing a $17,500 annual Basic Income with a negative income tax would have a net cost of about $1.9 trillion.

On top of that, there is strong evidence that Basic Income can allow money to be saved in other areas associated with poverty, most notably health care costs. Hospital visits dropped in Dauphin for those receiving Basic Income, and there was a measurable reduction in child malnutrition in the Namibian village where Basic Income was tested.

It's true that Basic Income would be an expensive program, and likely require an increase in taxation to provide the additional revenue. But with these considerations in mind, the cost of implementing it begins to seem more reasonable -- particularly when the alternative is rampant poverty from a robot jobs takeover.

Concern No. 3: "It's not politically viable"

This is certainly a legitimate concern. When it's barely even possible to approve funding for existing programs, how could we possibly launch a new program of this size?

But one interesting aspect of Basic Income is that it actually has support on both sides of the political aisle. Progressives like the idea because it eliminates poverty, and Conservatives like the idea because it simplifies the social safety net and cuts down on government bureaucracy. One of the earliest proponents of Basic Income was libertarian economist Milton Friedman, and Richard Nixon even tried to pass a limited version of Basic Income during his presidency.

Bipartisan support distinguishes Basic Income from most social programs -- but given its magnitude, it's highly unlikely that a national Basic Income could be implemented in the immediate future. However, if jobs continue to be displaced by automation in the years ahead, it's possible we may be looking at a very different political climate a decade or two down the road...

It's Time for a Political Debate on Basic Income

Right now, Basic Income is completely absent from the political debate in the United States. Even though it's been gaining support amongst many in the tech industry, has an annual conference dedicated to it, is being seriously considered abroad, and is starting to receive more media attention, elected officials seem to either regard it as too much of a fringe idea for consideration or aren't even aware of the concept.

It's time for that to change. A national Basic Income could be a politically viable program twenty years down the road, but only if it can become a more mainstream concept in the nearer future. Given the magnitude of the crisis we could face by jobs lost to automation, and given the compelling evidence for its effectiveness, our politicians need to begin addressing Basic Income as a legitimate idea and start talking about how it might work.

We need to build awareness, so that elected officials and the general population know what Basic Income is and what problems it could solve. We need policy experts to think about scenarios for how it could be practically implemented. And we eventually need to set up city- and state-wide experiments here in the United States, so that we validate its effectiveness in a real domestic environment.

I, for one, would like to know I have a Basic Income to rely on when the robots come for my job.

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