Universal Basic Income Is Only a Temporary Solution to AI-Driven Job Losses

• Universal Basic Income may be insufficient to tackle the underlying causes of job loss in the AI automation era.
• Roughly 20% of occupations are at “high risk” of AI and automation displacement.
• Occupations requiring complex decision-making, human intuition, and physical dexterity/presence are less likely to be displaced.

Artificial intelligence (AI) technologies are evolving at breakneck speeds, and whilst this is may be an exciting period in our digital history, AI’s entry into the modern workplace raises concerns over job security.

Automation, as it has always historically done, will displace a huge number of workers from their occupations, and in the digital era, AI could leave millions without work. Now, the concept of Universal Basic Income (UBI) has never looked so appealing.

What Is Universal Basic Income?

UBI is an economic concept that, in recent years, has become a hot topic, especially with the advent of AI and the perception that the technology will displace many people from their jobs.

UBI proposes to provide all citizens with a consistent, unconditional sum of money regardless of their status. Whether unemployed, earning below minimum wage, or earning millions of dollars a year, it will be available for all.

Economists and experts, including tech moguls like Elon Musk, believe UBI to be a necessary solution  to address income inequality, as well as the work-related troubles stemming from automation. Proponents of UBI, such as former U.S. presidential candidate, Andrew Yang, also believe UBI can provide a safety net for those affected by job losses amid the automation and AI boom.

Furthermore, UBI has the potential to drive economic growth. With additional spending power, various economic sectors stand to benefit, and there’s a solid chance that this could spur new entrepreneurial ventures, create jobs, and foster innovation. Though this is simply an ideal outcome.

There are, of course, concerns about the potential drawbacks of UBI, such as the financial burden placed on governments and taxpayers, strain on public resources, or result in major tax increases and budget reallocations to accommodate a UBI program.

OpenAI UBI Study

Sam Altman, CEO of OpenAI, funded a three-year UBI study , providing some 3,000 people with $1,000 per month. The study found that UBI can relieve the weight of house payments, groceries, and healthcare costs. But, UBI doesn’t necessarily result in upward mobility, nor will it replace jobs.

Furthermore, the study found that the extra cash didn’t convert into a significant increase in entrepreneurial activity. This is despite study subjects reporting ambitions of starting a business, which suggests that the cash was insufficient on its own.

In some instances, these payments resulted in decreased worker output, finding that some people simply prefer to take a break from work. Interestingly, this also gave people a chance to be more selective with their employment.

Within the first year, the UBI payments may have had a positive impact on mental health, but it came with diminishing returns after that, and the study concluded that UBI simply isn’t enough over the long term.

Will AI Take Our Jobs?

AI job-loss predictions  are a mixed bag as some occupations, such as basic administration, language translation, coding, accounting, and even legal work, are more exposed to automation replacement than others.

According to a 2023 research paper  from the job search website, Indeed, approximately 20% of jobs face “the highest level of potential exposure” to AI-driven changes. As per their findings, these roles include software development, mathematics, legal, marketing, human resources, design, helpdesks, and others.

Around 45.7 jobs are in the “moderate exposure” range, including education, medical information, creative arts and entertainment, logistics, management, and customer services.

Indeed estimates 34.6% of jobs to be “low exposure”, meaning they are the least at risk from AI displacement. These include roles such as driving, childcare, food preparation, nursing, construction, sports, maintenance, and manufacturing.

What seems to separate these roles are their skillset limitations. Some roles require more complex decision-making, human intuition, advanced reasoning, or a combination of the above, plus physical presence and manual dexterity.

UBI: A Temporary Solution

Though the concept of UBI is extremely appealing to all—who doesn’t want free money?—the drawbacks could far outweigh the benefits, and it is unknown if UBI is sustainable over the long term or sufficiently

Implementing UBI on a large scale in nations such as the U.S. would require an extraordinary amount of financial resources and place strain on the economy. Although it may cushion the rough transition and retraining periods in the wake of new technologies, it doesn’t address the underlying job losses or income inequality. These factors alone could render UBI insufficient as a long-term solution.

There’s also a risk that UBI could discourage workforce  participation. Some may find a monthly payment that adequately covers their most basic needs and see no reason to rejoin the labor market. Naturally, this would decrease economic output and productivity, dampen innovation, and cause myriad unpredictable social issues.

Ultimately, whilst UBI sounds nice on paper, it’s merely a short-term solution to a long-term problem. It can prevent some from falling into dire financial situations, and it may even spur economic growth in some areas of the economy, but it fails to tackle the main issue, the future. UBI isn’t a silver bullet to protect us from AI and automation; it’s more of an economic strategy to address economic inequality.

As economies become increasingly digitized, the very nature of society will shift, requiring nuanced solutions to solve the complex issue of new technologies replacing human workers.