The exponential growth of digital technology since the 1990s has brought us to the “fourth industrial revolution”. Advancements have reached the point where highly skilled jobs are as susceptible to replacement by automation as much as jobs requiring little or no education. Silicon Valley, the leading tech-hub is working tirelessly to unleash automation all across the globe. The future seems gloomy for the working class. Researches have shown that the percentage of jobs threatened in India is 69%, 77% in China, 80% in Nepal and as high as 85% in Ethiopia.
Developed world, no lagging behind with 49.1% in Las Vegas and 40.7% in New York. Unavoidable Shrinking of job market and a permanent increase in unemployment, namely “Technological Unemployment” is on its way. Policy makers and governments are viewing UBI (Universal Basic Income) as the solution. UBI is a fixed amount paid to each and every citizen of a country, irrespective of their socio-economic status, to help them maintain a minimum standard of living. Some organisations and governments have conducted small-scale experiments to study the effects of UBI.
In 2016, a non-profit organisation called GiveDirectly announced the world’s first true UBI experiment. The $30 million program will distribute an unconditional monthly benefit to 6,000 people in sub-Saharan Africa for 10-15 years. In 2017, the Canadian Province of Ontario announced that about 4,000 of the citizens will receive money as part of their “no strings attached” basic income experiment. The experiments have shown that the most substantial benefit of UBI will be the elimination of households living below the poverty line and health of the population.
Basic income will allow individuals from such backgrounds to have their basic needs met, so that they focus on growth and the future instead of worrying about survival. Having monetary security, many believe it will also result in an explosion of creativity, new ideas, entrepreneurship and research. These were experiments, let’s look into future aspects. Funding will come from a variety of sources: Income taxes, additional taxes on the wealthy like big business corporations, negative interest rates, earning from investments and cannibalizing the existing welfare programs. In other words, the entrepreneurs who own the robotic hands will finance the basic income.
Corporate interference will likely increase in government policy making. It will be a dangerous situation, where a handful of people will have an upper hand over the citizens, contrary to what a democracy is. Some have raised concerns that UBI may contribute to the disincentive to work at higher levels because of the high taxation involved. There are worries that a global benefit might result in inflation.
Many also believe that unconditional benefit would di-incentivise productivity at work. Others fear that reality being different from theory, government might not be able to secure such large amount of funds. Experiments like GiveDirectly are an essential stepping stone to exploring the ‘possible’ effects of universal basic income at a large scale. Economic or political theory can only tell us the possibilities, what we ultimately need is to observe and understand how it actually works in practice at a much larger scale. UBI ‘may’ not mitigate the negative impact of automation-led unemployment but ultimately, with the rise of technological automation and its disruption on the workforce, some form of universal basic income will be necessary. But, will UBI be successful or not? The Debate is still on.
