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Universal Basic Income
No matter what part of the world you’re living, something keeps you up at night. It doesn’t matter what it is. It doesn’t matter where you live in something keeps you up at night. In America today, politicians are running for president and they’re pitching to us what we ought to be thinking at night. Some say, you ought to be thinking about the border, some say the trade war. Some are saying health care, some are saying global warming, but many business experts are saying the number one thing you and I ought to be thinking about is AI and universal basic income.
A Taiwanese AI expert and venture capitalist named Kai Fu Lee projected that 40% of all jobs will disappear within the next 15 years. That is 4 out of 10 people going jobless, that is a lot of jobs. Here are the jobs that are on the top of the list to be lost to automation.
The presidential candidate Andrew Yang sees AI as a threat to automation and job losses in the US and he is proposing to give all Americans over 18 years of age $1000 dollars a month to help out with the transition. Yang mentions Nixon, MLK, Elon Musk, Mark Zuckerberg and many others as proponents for UBI. (universal basic income)
Finland had a pilot test for UBI and they took 2000 unemployed people and gave them 560 euros per month to see how this worked. The test was stopped before the official date of it ending and they concluded that there was not enough good information to see if this would work on a full scale or not. Alaska has payed Royalties to all citizens since 1982. The citizens get payed depending on the oil prices. In 2015 it was $2,072 per person while in 2017 it was $1,100 per person. This fluctuation came from the change in oil prices. Due to Alaska’s rich oil resources and low population they can do this as a form of recruiting people to moving to the state. They have no income taxes in Dubai, only paying the value added tax, making it another place where they can leverage their natural resources.
Here is UBI vs Milton Friedman’s proposed Negative Income Tax
Above one can see the costs that would come with Andrew Yang’s proposed universal basic income, this would be $12k a year per person over 18 equaling roughly $3 trillion a year or $30 trillion added within the next decade.
On the left one can see negative income tax, and that would work as follows;
A certain living wage would be set, in this example $30,000. Say a person only makes $20k, this being $10k less than the minimum living wage, this person would then receive a percentage of the tax back (in this case 50%) allowing them to spend the $5k tax money as they wish. Milton Friedman proposed this as a tax that would take place instead of a wide range of entitlement programs, allowing the money to be put to better use than on a wide range of governmental institutions. However, Yang is proposing to add UBI on top of already existing benefits and entitlement programs.
Here are some of the arguments for and against UBI:
There are some clear advantages to UBI as well as some cons.
Here are the current number of the American federal budget breakdown:
One can see that there is a higher expenditure than there is revenue, breaking down the expenditure into further details one can see:
This clearly shows that there is a high cost to the current entitlement programs going on. Increasing this with another $3 trillion a year can be very costly and might cripple the economy.
Jobs have changed since the beginning of time and people have evolved into the new roles adapting to the different technology at each stage. When someone proposes something like this it is very important to do some research and really see for yourself if the numbers add up and if it makes sense for you. The full breakdown can be seen on the YouTube channel, but hopefully this bit has given you some understanding and sparked interest for you to figure out more on your own.
Sources:
https://www.yang2020.com/what-is-ubi/
https://fortune.com/2019/01/10/automation-replace-jobs/
https://www.youtube.com/watch?v=kl39KHS07Xc
https://www.forbes.com/sites/robertszczerba/2015/01/05/15-worst-tech-predictions-of-all-time/#2312c1f81299
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