Elon Musk and Universal Basic Income

Elon Musk and Universal Basic Income

During the World Government Summit in Dubai, Elon Musk brought up crucial ideas on the future of humanity. According to Musk, Universal Basic Income (an economic idea that suggests everyone receives a paycheck from the government for personal spending) is among the few solutions for robotic automation. 

When automation becomes widespread, everything will change.  People are referring to it as the coming of the “post-scarcity economy.” In simple terms, in future (a future that is fast approaching), money will not be a big deal, and all economies will completely collapse. 

Post-scarcity is one of those things that everyone should try to understand. Traditional economies are still functional because things are hard to come by. For instance, food is limited; otherwise, it would be free. You cannot possibly charge for what is infinite like the sun, can you? 

With replicators, which are technically magical boxes that can create anything out of anything in the blink of an eye, things do not have inherent value. You cannot even influence the demand and supply of anything since the demand is not definite and the supply is limitless. In a system like that, the traditional economy is useless and powerless. How would you even draw the demand and supply curve for such a circumstance?

Humans are nowhere near replicators, obviously. And a total post-scarcity system will not be possible for a long time. However, great advancements are about to happen. The number of jobs that robots will grab from humans is significant. Take self-driving cars, for instance, that alone will render about 20% of employees unemployed. 

That is hardly the only industry that will be shaken. So many jobs can be automated easily and eventually cause millions of Americans to become jobless. It might take twenty years—or even thirty—but the truth is that no economy can withstand that.  

   Plans for universal basic income suggest tax robots. This aims at replacing the revenue that will be lost from the unemployed and alternatively created from the robots. Businesses will still gain—money will keep coming in for people to continue spending. According to some conservative estimates, the robots might even pay for themselves several times over. So companies have nothing to lose. 

At the moment (and if nothing changes), this is the only productive solution. Most markets and corporations will remain intact while working with the complicated reality of robots for labor. So somehow, Musk is right. Take time and learn, know the possibilities of the future—because no matter what your job is, it is not safe.

A new study by PwC shows that 40% of jobs in the U.S might be replaced by robots in 15 years. The other developed economies do not face this risk since they have fewer jobs that can be replaced. In the United Kingdom, only an estimated 30% of their jobs face the threat of technical improvement in automation from robotics and Artificial intelligence. For Germany, it is 31% while the estimated percentage for Japan is 21%. 

The reason why so many jobs in the US are threatened by automation is that a majority of the employees in the US work in positions where the tasks are routinized, like filling out paperwork. The industries that face the highest risk of the technological revolution are those related to retail, manufacturing, and transportation. 

How did PwC come up with these estimates? They broke down all the types of tasks of jobs in various industries. The researchers then used an algorithm that put into consideration the “automat ability” of all those tasks and the attributes of the employees hired to do them. 

A good example of how jobs in the US are prone to replacement by automation than those in the UK, as per the research, is in the financial field. Despite the fact that these two countries both have identically service-dominated economies, jobs in the financial service sector in the US are a little bit more routinized and retail oriented. Financial services jobs in the UK, on the other hand, are occupied mainly by professionals who work in international banking. Their jobs are very difficult to automate, and they require higher educational levels.

A bigger portion of Germany’s workforce is employed in the manufacturing sector compared to the U.K’s, which are exactly the kind of jobs that robots will be created to do in the future. This explains why it has a bigger percentage of jobs that faces the threat of replacement by automation. 

Compared to the U.K, U.S, and Germany, Japan has the lowest percentage of jobs that face the risk of automation. Partly, this low percentage is due to the fact that the jobs that are highly replaceable by robots are not so many in Japan. Take retail, for instance; it requires skills and far much more training in Japan—the workers have more organizing and management tasks compared to the same jobs in other economies that were studied. Also, Japan already has widespread automation. The researchers recommend several policy interventions that may be used to address job losses that might accompany automation. One of those policies is workforce retraining programs or the much discussed universal basic income scheme.

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