Economy

The Right to Money: We Need to Discuss This Big Economic Idea

December 8th 2016

Formally known as "technological unemployment," job loss due to automation could have a devastating effect on labor force participation. According to a 2015 study by consulting firm McKinsey & Co., up to 45 percent of U.S. jobs could be adapted to be performed by currently existing technology — and not just low-skilled physical labor, but high-level professional positions.

One possible future created by this "automation bomb" was unveiled on Monday, with Amazon revealing its new grocery store, Amazon Go. The store is designed to require as little human interaction as possible. You just open up your Amazon app, pick out whatever you want, bag it, and walk out. The order is charged to your Amazon account, and you never need to speak to a person.

While the Amazon Go concept is currently in beta testing and only available to the company's Seattle employees, stores with few or no employees are clearly the wave of the future. This will mean countless people falling victim to technological unemployment, a development that could send unemployment rates skyrocketing and strain social services.

A solution could be the Universal Basic Income (UBI).

This is a form of social security that grants every adult in a country a basic income, paid irrespective of employment or other sources of money. A UBI could complement or take the place of some existing social programs, theoretically reducing bureaucratic waste by allowing recipients to better allocate what they receive according to their specific needs.

There are a number of both liberal and conservative economists who favor it. Both Martin Luther King, Jr. and the Nixon administration were proponents of a basic income, with the latter even trying to get it passed by Congress (it died in the Senate).

Supporters point to it being simpler and more efficient than current welfare programs.

A basic income could be an alternative to student loans, unemployment insurance, or entitlements, while allowing people to pursue education, spend more time with their children, or leave exploitative jobs and relationships. For workers who lose their jobs due to automation, UBI would mean money coming in while they retrain or start their own business. It would give workers more bargaining power, and allow people to spend the time needed to find work in their preferred field, rather than scramble to find anything they can before their unemployment runs out.

While versions of the UBI concept have a number of supporters, there are also detractors. Many conservatives fear it would destroy the motivation to work, creating an underclass dependent on government, with no discernable skills. There are also real questions to be asked about how it will be paid for, who will administer it, and how the government would prevent abuse.

Efforts to implement a UBI have faced hurdles from governments and the public alike. For five years in the 70s, a small town in Manitoba, Canada, gave all of its residents a basic income and saw poverty in the city drastically reduced; a new conservative government ended the program. Switzerland, meanwhile, held a national referendum to institute a UBI and the measure saw it fail by a 3-1 margin.

For a UBI to work in the United States, the entire structure of the federal safety net would have to be changed, along with Social Security and Medicare. These are massive programs involving billions of dollars and millions of people. But if every corner store ends up being free of workers, the U.S. might have no choice but to explore this radical social measure.

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