Universal wage | July 2, 2016

Stories of mass underemployment due to the rise of Artificial Intelligence have been popping up all over the place the past 18 months. It would be easy to dismiss them as crack-pot theories, were it not for the credibility of their authors; from scientists like Stephen Hawkins to industrialists like Elon Musk.

Self driving cars seem to have gone from science-fiction fantasy to real world fact, in a matter of months, and the worlds transport workers are right to be concerned. Uber are already talking about making their drivers redundant with fleets of self driving taxies, while various local governments are experimenting with autonomous bus services. However the real employment risk comes from the huge swathes of haulage vehicles which could be made redundant. This won’t happen soon, but I suspect our roads will be 30% autonomous vehicles by 2030.

While it’s easy to assume that AI will only affect blue collar jobs, as we saw with the automation of manufacturing, I’m not so sure. I’m currently using an Artificially Intelligent PA to book my meetings and manage my calendar. It’s fairly crude at the moment, but it won’t be long before internet agents will be booking my travel, arranging my accommodation, and informing the person I’m meeting that I’m stuck in traffic. All things that are possible today.

Jump forward 20 years and I can see a lot of professional classes affected by digital disruption and the move to AI. In this brave new future, how will governments cope with rising unemployment?

One idea that’s been raised by both right and left is that of a Universal Wage. Put simply, every citizen would automatically receive a small, subsistence payment at the start each month. This would be enough to cover basic expenses like food and accommodation, but it wouldn’t guarantee a high quality of life, so most people would still choose to top up their incomes through work.

Unlike unemployment benefits, people don’t lose their universal wage if when they do work, removing a huge disincentive for many people. Instead this provides greater flexibility in the type of work people are able to do. For instance carers could fit work around their caring duties or students around college. As such, the Universal Wage supports the current trend we’re seeing towards the gig economy.

This may seem like an impossibly expensive solution, but various economic studies have shown it to be just about feasible today with only a marginal rise in tax. The reason it’s not more comes in part from the savings it would provide to the state. No more judging benefits on means, or policing infractions. Just a simple monthly payment for all.

The left love this policy for the social equality it brings. People can now spend their time in education and training, raising families and caring for loved ones, or exploring the arts. The right like it for similar reasons; empowering individual entrepreneurship while simultaneously reducing the size of government.

Several Universal Wage experiments are taking place around the world at the moment, so it will be interesting to see what the findings bring.

Posted at July 2, 2016 2:56 AM