What radical actions are needed to support people losing jobs to automation in the future? And how will we fund them?
Society is bracing itself for technological disruption, automation, and continuing global economic shifts. What are the mechanisms that might help prepare for these changes? And how will the money be found to pay for them?
Suggested mechanisms to support unemployed people:
Universal / Guaranteed Basic Incomes – With inevitably employment casualties from automation many are arguing for a guaranteed or universal basic income (UBI)– paying a living wage to everyone – at a rate typically higher than unemployment benefit. Countries such as Canada, Finland, India and Namibia have been experimenting with different models. The newly elected Italian government has a manifesto commitment to introduce UBI.
Conditional Basic Incomes – One of the arguments against UBI is that a large proportion of the population simply don’t need it. To address this, a conditional scheme would make payments available to those below a certain income level as a top up to get them to a guaranteed earnings level. This could replace a lot of unemployment and work-related benefits, be available to all to apply.
Community Service UBI – Here the receipt of UBI would be tied to individual’s undertaking community service reinvestment. In return for the receipt of UBI, they would choose service projects (community gardens, walking trails, artwork, etc.) delivering a public benefit, giving individuals a sense of achievement, enable the acquisition of new skills and connections.
Guaranteed Basic Products – This might run alongside some form of UBI. Everyone eligible would receive credits for key products such as clothing and healthy foodstuffs. Government might use this to tackle critical food related health issues. For example, diabetics might be completely excluded from purchasing anything adversely indicated for them.
Guaranteed Basic Services – Claimants could receive services free at the point of consumption e.g. travel, healthcare, utilities. Again, governments might use such measures to nudge desirable societal health and environmental behaviours – through free gym access and free public transport.
In our opinion to do nothing is not an option. Governments have to face up to radical shifts in society and invest in radical policy experiments.
Ideas for funding the transition:
Robot Taxes – Many potential issues around the introduction of AI/other disruptive technologies will arise from employers’ choices. Without holding back innovation, we must explore how to fund the resulting social costs. One proposed option is robot/ automation taxes. Firms would pay a higher rate of tax on the profits derived from increased automation.
Tax Enforcement – A less radical option involves governments using technologies such as AI to improve tax collection. Many Governments are struggling to fund their current commitments and services are over-stretched. Tax increases might not be required if companies and individuals paid what they are legally supposed to and don’t use avoidance mechanisms.
Taxation at the Point of Purchase – Large companies have often avoided paying taxes where the transactions are undertaken. Instead they have issued invoices and reported their profits in a lower tax location. Simple rule changes would require firms to pay the tax in the markets where the clients reside. This isn’t simple but we could find out quite quickly what the potential gains and issues might be.
Delegitimising Tax Havens – A more drastic measure would be to ban all use of offshore tax havens and tax avoidance schemes. A short grace window would be provided for citizens to bring their money back onshore to be subject to national taxation rules.
Higher Rate Taxes for a Fixed Period – Of course, the above measures may not work to provide the funds needed for the proposed support for the unemployed. If so, then the targeted application of increased taxes to higher earning individuals and businesses could help provide the interim funding to finance the measures described above and in the previous article.
Fundamental changes are taking place with potential for large scale job loss e.g. resulting from AI. To avoid a medium to long term crisis, we need to be experimenting now with a range of policy measures to raise skill levels, generate new employment opportunities, and support those who lose their jobs in the transition process. Bold vision and leadership will be required to gain the investment and implement the necessary policies.
ABOUT THE AUTHORS
Rohit Talwar, Steve Wells, Alexandra Whittington, April Koury, and Helena Calle are from Fast Future, a professional foresight firm specializing in delivering keynote speeches, executive education, research, and consulting on the emerging future. Fast Future publishes books from future thinkers around the world exploring how developments such as AI, robotics, exponential technologies, and disruptive thinking could impact individuals, societies, businesses, and governments and create the trillion-dollar sectors of the future. Fast Future has a particular focus on ensuring these advances are harnessed to unleash individual potential and enable a very human future. The latest books from Fast Future are: ‘Beyond Genuine Stupidity – Ensuring AI Serves Humanity’, and ‘The Future – Reinvented: Reimagining Life, Society, and Business’. And their forthcoming book is ‘500 Futures’. See: www.fastfuture.com