Universal Basic Income: Fiscal fantasy or AI necessity? – talkbusiness.net

In 2020, Democratic presidential hopeful Andrew Yang suggested Universal Basic Income (UBI) as a potential answer to job displacement from artificial intelligence. In those days, the general public had little idea of what OpenAI or ChatGPT could do.

Many didnt even know it existed. After all, GPT-3 didnt release until June of that year. The idea that a chatbot could write blogs, create PowerPoints, analyze data, and complete detailed reports with pie charts and bar graphs, all in a minute or two, was a foreign concept to the human workers doing those very jobs day in and day out.

Yang didnt come close to clinching the nomination, but he was the only candidate speaking about the looming near-term potential for job displacement as a result of this new technology. His suggestion supplement every American adult with a $1,000 per month Freedom Dividend sounded necessary to some and socialist to others. He proposed paying for it with a value-added tax (VAT). His ideas have since been adopted by several U.S. cities, including Denver, Chicago, Los Angeles, and Oakland, and are dispensed to around 26 million Americans at the time of this article.

A recent poll found over two-thirds of respondents wanted UBI, with more Democrats than Republicans (82%-48%) and more GenZers than Baby Boomers (79%-63%) driving the results. Generation X was the least in favor at 61%, while 12% of the country was neutral and just 20% opposed the concept altogether.

Its difficult to say whether Yangs system could work on a national scale. The closest weve seen to the federal government running such a program is Social Security, and, according to the Trustees of the Social Security and Medicare Trust Funds Annual Report, released on March 31, 2023, thats not going particularly well. The report postulates that the Medicare Trust Fund will become insolvent by 2031 and the Social Security Trust Fund will follow by 2033. In other words, recipients will no longer be able to receive their full benefits as promised if Congress doesnt take action.

Spoiler alert: they likely will.

If history is a guide, thats likely to result in your children and grandchildren working past the age of 67 (current age) before becoming eligible. Considering that life expectancy declined during the pandemic and has only recently inched up to 79.1 years (81 for females, 77 for males), thats not a lot of time to enjoy your Golden Years.

Following Yangs lead nationally would be a $3.132 trillion expense to a government that spent $1.45 trillion more in fiscal year 2022 than it took in. If you have faith in Washington to make the cuts required to accommodate UBI, then you might be a cockeyed optimist. Thats because our politicians have only logged surpluses five times in the last 50 years, with the last time being a relatively measly $128 billion in 2001.

The U.S. Chamber of Commerce issued a new report on Aug. 2, 2023, that looked at the 50 largest U.S. metropolitan areas using data from the World Economic Forum and Bureau of Labor Statistics. Their findings found that more than 10 million jobs fell into the at-risk category from AI adoption. These were mostly administrative roles (i.e., record-keepers, cashiers), accountants, bookkeepers, factory workers, and traditional security roles. Las Vegas was the most at-risk with around 16% of its workforce in danger by the year 2027. Other high-rankers were Miami, Louisville, Orlando, Houston, and Grand Rapids.

The good news: AI could be a massive job creator, provided governments can regulate it without stifling innovation. A PwC report projects the technology to add an average of 14% to 16% to the global economy, the equivalent of a $15.7 trillion contribution. Our share of that could be around 14.5%, or $3.7 trillion, more than enough to pay for a UBI program at the scale Yang envisioned. Expect discussion of this possibility among regulators as they seek ways to temporarily address job displacement or aid in upskilling for those who are employed.

For now, elected officials seem to understand the enormous responsibility that rests on their shoulders. Even if theyre unable to fully grasp the complexity of the tech, their study into possible regulations that launched in April of this year demonstrates a grasp of whats at stake. Whether that understanding translates into the right action, however, is anyones guess.

Editors note: Aric Mitchell is an AI consultant and communications strategist, and produces the AI-focused newsletter, Innovation Dispatch. The opinions expressed are those of the author.

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Universal Basic Income: Fiscal fantasy or AI necessity? - talkbusiness.net