We should let the robots take our jobs – and then pay us all a basic income

by Aaron Berger, Jul 31, 2017

As developments in artificial intelligence and robotics advance, there is going to be a severe and swift disruption of many working classes. Large swaths of laborers are going to lose their jobs, leading to unprecedented levels of unemployment.

To account for this problem, having access to basic needs should become a right, not a privilege for the non-automated classes. It should be the responsibility of the corporations that have taken away working-class jobs to grant families this right—and the best solution would be in the form of a universal basic income.

UBI, an economic proposition in which a sum of money is regularly paid to a population, could be a vital bulwark against the unintended consequences of automation in the workforce. Companies will profit significantly from workforce automation, so the private sector will be able to afford shouldering this burden, while at the same time still making greater profits.

Automation will save companies money and boost profits

AI and robotics technologies have been accelerating at an impressive clip and show no sign of slowing down. “A number of economic and technical barriers to wider adoption are beginning to fall,” says the Boston Consulting Group’s latest report. “As a result, a dramatic takeoff in advanced robotics is imminent.” These advances allow businesses to perform more complex functions at greater efficiency and ease, and such automated workforces have huge benefits for companies. After all, a full-time human has needs: 30 minutes for lunch each day, vacation and sick time, toilet breaks, and health benefits, to name a few. Meanwhile, an automated worker would only require an initial installation and the occasional repair or upgrade. This will have complicating effects on the health of America’s employment statistics.

The prices for robotics hardware and software have decreased by around 40% over the last decade as the cost of systems engineering has gone down. The BCG report stated that a human welder today is paid around $25 an hour (including benefits) versus the equivalent operating cost of around $8 for a robot. “In 15 years, that gap will widen even more dramatically,” the report states. “The operating cost per hour for a robot doing similar welding tasks could plunge to as little as $2 when performance improvements are factored in.”

This trend will only continue to accelerate. McDonald’s, an early pioneer of automation, is already replacing human workers with automated kiosks. They expect a 5% to 9% return on investment in just the first year; in 2019 they expect this return to balloon to double digits. And this is only one sector: PricewaterhouseCoopers estimates that 38% of US jobs will be in danger of being replaced by automation by 2030.

Companies that automate their workforces should be taxed on these new massive profits, and some of the resulting capital given back to workers by the government in the form of UBI.

While the idea of a UBI is popular—Mark Zuckerberg, Elon Musk, andBill Gates have all championed it—how exactly would a universal basic income be engineered? A small, yet successful, experiment has conducted in the UK, and Ontario, Canada is also about to experiment with it this year. But how would a private-sector-funded version work?

As the robots take over, people will begin to lose their jobs, but companies will be fine. More likely than that—they’ll thrive. The profits generated from automation could be used to pay a basic wage to those displaced by robots. To use the welder example from before, a company could slash the cost of their production by at least a third in a short period of time, and would continue to see greater profits as efficiencies increase and the price for parts drops. If that company eventually arrives at the $2 an hour mark that BCG predicts, the company’s bottom line would have been improved by 1250%.

Given all of the savings and massive profits companies are going to reap from these new technologies, they should be responsible for using part of this monetary kick-back to help the workers they’ve displaced. Legislators might consider a sliding-scale automation tax, where a company qualifying itself as using an automated workforce would be taxed depending on how many human workers they have performing tasks compared to how many tasks are performed by automated workers that a human could rightly do. This money could then be put into a UBI fund that is then distributed by the government to citizens affected by automation—or to the entire population.

At the exponential rate of robotization, there isn’t a lot of time for legislators to figure out the intricacies of a solution—but they don’t seem to be in too much of a rush. Steven Mnuchin, the US’s treasury secretary, is already completely ignoring this issue, for example. To understand how crucial it is that legislators get cracking, consider the timeline for the current mess that is healthcare in America: If it takes this long to debate solutions on something as dire as health insurance, what hope do we have for the solution to an automated economy? Governments need to act now to stymie potentially disastrous socio-economic effects in the coming decades.

The answer lies in two of the most popular contemporary hot-spot topics in the modern media landscape: UBI and automation. They could play into each other in a mutually beneficial fashion. Portions of the profits reaped by robots should be diverted to support this new system as humans inevitably phase out of the workforce.