Automation and AI is moving at breakneck speed. Within a few years, we will see lots of jobs disapear. Already there are McDonalds being trailed with no staff. There are driverless cabs, trucks and buses in operation. Factory jobs are increasingly being replaced by robots. During Covid we saw changes to retail, education and business that are still having effects. Retailers now no longer need huge stores and staff, Universities can offer on-line education in many areas without needed huge investments in land and staff, and traditional books are replaced with online versions. Businesses can have staff work from home, or even replace them with AI, and no longer need huge inner city offices. All of these changes have flow on effects, like cafes that now have less customers, bookstores that arent needed etc. So there will be a lot less jobs, and more people out of work.
But this will be so massive, that it will affect business. If there are less people with money to spend, this will impact business, who will then need to cut back, reduce staff etc. And governments will need to spend more on welfare, while recieving less taxes from income and purchases. It could be the start of a downward spiral that could destroy economies worldwide.
So what is the answer?
A Universal Basic Income (UBI). This is a social welfare payment that is made to every working age person. It is not income tested, and applies to every person in the nation. It has to be high enough for people to live and also have money left to spend. It has been trailed in some nations, and it works.
So why everyone?
Firstly, there will be no need for Centrelink. If everyone gets a payment, then this can be closed. People can decide to keep working full time, and have more money, cut back to part time, or not work at all. It gives people back a life. Humans did not always work. We work to enable ourselves to live. If we can work less, we can have time to persue other interests, like hobbies, gardening, education spending time with families etc. These can change over a lifetime, so people can decide when to work more and when to cut back. This will free up more casual and part time jobs. And yes, some people will decide that they want to sit around all day and watch TV. Thats fine. Its a choice.
Business will keep operating and have customers. So the economy keeps working.
How will we afford it? Aside from savings by not needing Centrelink etc, we only need to revise the way we tax. At present the largest businesses pay no tax, because they send it offshore. The only tax collected is from GST, which is a value added tax. One idea might be to instead tax on turnover, which could be a very small rate on top of the GST, or replace the GST. Another option might be to put a base rate on products, for example 10% on all mining products etc, even those exported. Income tax could be removed, and businesses could reduce wages paid (without a reduction to the worker of the Nett ammount) as incentives etc. There are plenty of options and governments have already started looking at it.
The biggest obstacle will be the people themselves. There will be a group who will not want it just because it will mean that some people might decide to do nothing. This envy and jealousy will be a major reason for them to oppose it. It will bring about a better distribution of wealth, and a happier society, but some people would rather see others live in poverty. This is real, and is the reason why we still have a war on drugs. Our governmen is aware of research and trials in other nations where all drugs were legalised, as long as they were obtained through doctors. Initially drug use went up, then dropped massively. Drug deaths dropped, because people were seeing doctors, and drugs came from pharmacies so were safer. But the best part was that drug related crime disappeared, so much that prisons strted to empty. So better all round. But we wont see it here in a hurry, because if a party introduces this today, people would oppose it and would vote them out. The majority of people want others to suffer and be punished for what they dont agree with. Envy and jealousy. So this require governments to educate people over time.
Some people have estimated that we will hit a crisis point in 10 years. Others say that the recent advancements in AI might make it 5.
What do you think?
In theory yes. It’s not an even spread though. If you give everyone $100 it won’t inflate prices by $100 unless it’s all spent on things that were supply constrained. Though it really requires the increased productivity that will come with AI to make universal sense, as well as an ability to capture more of that spending as tax.