If AI Takes Away Many More Jobs Than it Creates, Could Universal Basic Income be the Answer?


That AI is going to be one of the disruptive technologies embraced in a big way by 21st century businesses is no longer a scenario that is to open to speculation. Simply put, it is happening already and will gather speed during the coming months and years. There are very few domains or functional areas which will not be affected significantly by the adoption of machine learning and artificial intelligence (AI).

In one of the early studies done about how humans will complement machines during the second machine age, Carl Benedikt Frey and Michael Osborne examined the possibility of computerisation for 702 different occupations and found that 47% of the workers ran high risks of their jobs being taken away as automation & AI started becoming increasingly mainstream. The domains where they saw this mostly happening included transportation & logistics, office services, sales and support. Subsequent studies put the equivalent percentages at 35% for Britain (more people there are engaged in creative activities, compared to the U.S.A.) and 49% for Japan.

MIT economist David Autor, in a paper in 2015, concluded that dramatic declines have happened in certain occupations over the past 100 years. For example, the percentage of workers engaged in agriculture in the U.S. has declined from 41% in 1900 to 2% currently. Cars have drastically reduced the requirement for blacksmiths and stable hands, machines have replaced many manual jobs in construction and factories and computers have replaced many record-keeping and office positions. Yet, despite the automation of so many human jobs over the last couple of centuries, the number of occupations which still remain is indeed surprising to many an observer of this change. As Prof. Autor explains this succinctly: "tasks that cannot be substituted by automation are generally complemented by it.". The fact is that while automation does substitute labour, it also complements labour in several ways, leading to higher economic output which, in turn, generates new demands for workers.



Many economists are already talking of 'job polarization', a scenario where middle-skill jobs, like those in manufacturing or office support, are steadily on the decline whereas both low-skill and high-skill jobs keep expanding all the while. Automation and AI today is blind to the colour of the worker's collar and is steadily taking away a number of both blue-collar as well as white-collar jobs. While, during previous industrial revolutions, large numbers of workers had the option to move from one routine job to another of a different nature over a period of time, the fourth industrial revolution that we are witnessing currently, enables companies to use the same 'Big Data' techniques, that they may use to improve their sales, marketing and customer-service operations, to also train machine-learning algorithms which then become capable of taking over several other types of jobs and executing them efficiently. For example, 'E-Discovery' software can search mountains of legal documents much more efficiently than human clerks or paralegals can, while, in the arena of journalism, certain tasks like writing market reports or sport summaries are steadily getting automated. 

In a scenario where 'technological unemployment' becomes widespread and alternate job generation simply fails to keep pace with the number of jobs disappearing owing to AI and automation, a system needs to be evolved so that the basic needs of the growing population of unemployed humans is at least taken care of. Failure to do so could result in a high degree of social tensions, leading to social upheavals whose results can be quite unpredictable. This is where the idea of a 'Universal Basic Income' comes in. 

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The 'Universal Basic Income' idea banks heavily on certain assumptions. One of the key assumptions is that, owing to advancement in technologies, the cost of living will be going down significantly in the years to come. In the two most populous countries of China and India for example, most of the expenditure happens in the areas of housing, food, transportation, education, healthcare and entertainment. One of the scenarios envisaged is that emerging disruptive and cutting-edge technologies will bring about a steady fall in the cost of housing, transportation, food, healthcare, entertainment, clothing and education among others and, over a period of time, the cost for some of these could even be approaching zero.

Universal Basic Income (UBI) is a policy in which all citizens of a country regularly receive, unconditionally, a certain sum of money, either from the government or from some other public institution, in addition to any income that they may be having through other means. UBI's core idea is to keep under control, social tensions and 'ills' by giving people, unconditionally, a certain amount of 'free money'. Several countries, including Finland, Netherlands and India, have carried out limited experiments in UBI. While the implementation of UBI at scale, is still in its very early stages anywhere in the world, the results of the limited experiments have been encouraging mostly. For example the Indian experiment showed that this led to more labour and work and not less, as was expected by sceptics. A shift was observed from casual wage labour to more self-employed farming and other business activities and a resultant drop in distress-driven migration from the region was also observed. Measurements of average weight-for-age of young children showed improvements in nutrition levels.

Raja Mitra