With the coming work revolution wherein many low skill and repetitive jobs will be replaced by machines or software, we need to start thinking about how to address the coming crisis. Massive unemployment would spell disaster for the United States and other economies worldwide. One potential solution is known as Universal Basic Income. The concept recently became even more attractive after a new study shined a favorable light upon it.
The United States Economy Could Grow By Providing Universal Income
The idea of universal basic income is pretty simple. Every adult in the United States would be provided with a stipend regardless of employment status or socioeconomic status. In theory, it could help combat poverty and offset job losses due to technology.
However, universal basic income may also add to the economy as well. A study released by the Roosevelt Institute suggests that providing each adult in the United States with a monthly stipend of US$1000 would actually grow the economy by a whopping $2.5 trillion by the year 2025. What is even wilder is that the study suggests that the larger the basic income per individual, the larger positive impact it would have on the nation’s overall economy.
While this may sound a bit counter-intuitive at first, it makes some sense after thinking about it. If more people are further from poverty, the more goods and services they can buy. This means that tax revenue from things like sales and property tax will increase. Thus, the government receives more tax revenue, and individuals are able to increase their quality of life.
Universal basic income would likely be paid for by some sort of business or robot tax as more jobs fall victim to automation. Essentially, businesses would need to pay a premium for using automated work, but still see that premium cost less than hiring workers. That tax would help fund the basic income plan.
Always Do Your Research to Inform Your Opinions
While the Roosevelt Institute piece felt like a great big win for advocates of universal basic income, it is important to keep in mind that the Institute is left-leaning, and its findings could be subject to bias. Indeed, any studies like these should be taken with a healthy degree of skepticism. However, the research and analysis strikes me as very well done and highly empirical. It is definitely worth reading, regardless of where you stand on the universal income debate.
To me, it seems obvious that we will need to do something to address the coming technology-induced employment crisis. Indeed, we are already seeing it starting. Massive spouts of unemployment are bad news for any country, but having a proper contingency plan may mitigate their effects. I think that universal income akin to what this new study analyzed may be an eloquent answer to a very real, impending problem.