Perspectives


Business Case for Universal Basic Income

As technology changes industry, we must be ready to address the disruption to society

By Trista Harris

Society and business are changing at exponential rates. Advances in robotics and artificial intelligence are already disrupting our labor model and putting people out of work. For the business sector to fully realize the increased efficiency and profitability that accompany the technological revolution, it must also consider the human cost and lead on the issue of Universal Basic Income (UBI).

The Universal Income Project is an idea that could have a radical impact on our society. Basically, it is a form of social security in which all citizens receive an unconditional sum of money from government or another public institution. Universal income gives everyone enough money to meet their basic needs, thus providing an income floor. Income earned on top of basic income can be used to improve living conditions. Proponents say basic income could eliminate poverty, support entrepreneurship and creativity, and prepare for a future in which most jobs have been displaced by automation.

Surprisingly, UBI finds support across the political spectrum. Liberals like the idea of a universal safety net, while conservatives see UBI as a way to increase transparency and decrease bureaucracy of government-run anti-poverty programs.

Automation is already disrupting our economy, and its impact will only grow. According to market research firm Forrester, by 2021 robots and artificial intelligence will eliminate 6% of all U.S. jobs. The transportation, logistics and customer service industries will take the biggest hits initially, but automation will be felt across all fields in the not-too-distant future. Imagine dangerous jobs like mining and manufacturing, or monotonous positions such as those in call centers, replaced by robots able to work around the clock.

It’s not just entry-levels jobs that will be lost. IBM’s Watson supercomputer has already diagnosed complex medical conditions that human doctors couldn’t, and lawyer bots have successfully fought hundreds of thousands of traffic tickets in New York City and elsewhere. Business will reap the benefits of the transition with a smaller workforce and increased profits. But businesses need customers, and wide-spread unemployment will have a devastating effect on income. Today, the middle class spends a larger percentage of its income on food, shopping and consumables than the rich do. In the future, when many remaining jobs are low-paid, if employees combine salaries with UBI, they rise to the middle class, and business can continue to rely on their patronage.

Universal and partial basic income programs have been tested worldwide, and it turns out that giving people money is good for the economy. In 2013, people in Indian villages who received payments saw increased economic activity, higher work rates and many more people starting businesses. In 2008 Uganda, unconditional cash transfers inspired economic growth, and a 2011 Kenyan trial found higher rates of economic consumption.

Without UBI, high unemployment will lead to tremendous civil unrest. I work in the social sector, and I can already feel our community’s instability. We know that rising inequality leads to rising unrest, depression and community violence. UBI ensures that people’s basic needs are met, plus trials report increased high school graduation rates and lower rates in hospitalizations and crime. UBI gives people more time to care for children and elders, play active roles in their communities and help solve society’s biggest challenges.

There are questions about how to fund such an ambitious policy. Proposals include eliminating Social Security, Medicare, Medicaid, food stamps, housing subsidies and welfare, as well as agricultural and corporate subsidies. Some suggest an annual UBI of $10,000 to $13,000 for U.S. adults 21 and older (funded by eliminating welfare and social-service programs) would be almost $1 Trillion year cheaper than current expenditures by 2020.

The Industrial Revolution led to a 40-hour work week, the technological revolution may usher in a 20-hour work week, while UBI will ensure our society thrives during the disruption. Business must consider the human cost of the change and lead on the issue of UBI.
 

AUTHOR BIO
Trista Harris is a philanthropic futurist and president of the Minnesota Council on Foundations, a community of grantmakers who award over $1 billion/yr.