We can’t afford not to provide a new social safety net

Posted on July 6, 2017 in Social Security Policy Context

TheGlobeandMail.com – Opinion
Jul. 06, 2017.   GARY MASON

In May, Facebook founder Mark Zuckerberg returned to his alma mater, Harvard University, to deliver a commencement address.

Mr. Zuckerberg spent only one year at the prestigious American university but it was a famous one: It was in his dorm in his freshman year that he created his world-changing social-media network. Humorous at the outset, his address got plenty serious in a hurry.

“It’s time for our generation to define a new social contract,” he told the graduates. “Every generation expands the definition of equality and we must too.” And along those lines, he said the wealth distribution concept known as Universal Basic Income (UBI) needed to be seriously explored.

UBI is a system in which all citizens receive a standard amount of money each year from the government to cover life’s basic necessities: food, rent and clothing. There are variations on the model, but at its core is the notion that every person should have enough money on which to survive.

It is not a new idea, of course. The seeds of it date back centuries. However, the thought that it may one day become reality is picking up steam. There are jurisdictions around the world now pilot-testing such a program, including Ontario. About 4,000 residents in three cities – Hamilton, Thunder Bay and Lindsay – are getting up to $17,000 annually for three years on which to form a base income. (B.C. could soon be the next province to run such a project.)

One of the big questions people want to see answered is: Does a guaranteed income act as a disincentive to seeking meaningful work? One of the biggest criticisms of UBI is that it would create a world of slouches.

Some skepticism is certainly warranted. However, what people need to begin wrapping their heads around is what happens when the labour market is turned on its head by robotics, throwing tens of millions of people out of work in the process.

This is not some dystopian fiction. People have been sounding the alarm about this for some time. Former president Barack Obama told the U.S. Congress that artificial intelligence (AI) represented an ominous cloud over the American labour force. And politicians aren’t the only ones concerned.

Among those most forcefully suggesting that some kind of massive new social safety net will be necessary to deal with the job-loss fallout from robotics are the heads of technology companies. They can sense the backlash coming when AI creates vast herds of digital nomads.

Earlier this year, Tesla founder Elon Musk told the World Government Summit in Dubai: “I think we’ll end up doing universal basic income. It’s going to be necessary.” Self-driving cars alone will wipe out 20 per cent of all jobs in the transportation sector, by some estimates.

Some of the biggest players in the world of technology and academia are behind the Economic Security Project. For two years, it is financing research and experimentation with unconditional cash stipends in the U.S. and elsewhere.

Unsurprisingly, the most vexing issue around UBI is how it could possibly be financed. A partial solution lies in taxing the robots that are taking the jobs of humans. This is not a joke. What this means is a company’s profits would have to be taxed at higher rates. In his commencement speech, Mr. Zuckerberg said: “People like me should pay for it.”

Supporters of UBI say that people also forget that in the not-too-distant future we will enter what is being referred to as a “post-scarcity economy.” With automation comes abundance. In theory, almost everything we have now should become cheaper to produce and, consequently, cheaper to buy.

It’s imagined that reduced costs would make a UBI-like system cheaper to finance.

At this point, however, UBI remains a deep, utopian fantasy to most people, its future bogged down by eye-rolling cynicism and distrust. Last year, the Swiss overwhelmingly (76.9 per cent) rejected a proposal to introduce a guaranteed income for everyone living in the country. As progressive-minded European nations go, Switzerland is fairly wealthy. Imagine how those countries bogged down in debt would greet such a plan.

That said, as the automation of our world begins to ramp up, as artificial intelligence becomes a more pervasive presence in our work environments, there will be a reckoning. Mark Zuckerberg and Elon Musk can see the future and they know it’s scary.


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