Sorry Elon, universal basic income won’t solve the AI jobs apocalypse
Traditionally left-wing economists, universal basic income has now found unlikely support in Silicon Valley as AI threatens to wipe out jobs.
Universal basic income (UBI) has recently gained support from Silicon Valley, despite its traditional backing from social philosophers and left-wing economists. A decade ago, a referendum in Switzerland proposed transferring a minimum monthly income to every adult, but it was rejected by over three-quarters of voters. Now, UBI is being touted as the solution to the AI-driven jobs apocalypse, with backing from white-collar workers, venture capitalists, and even Elon Musk.
However, the writer argues that UBI won't work in Britain. The cost of providing every UK adult with the basic rate of Universal Credit – around £400 a month – would be over £200bn a year, comparable to the entire NHS budget. Even if taxes were raised to finance UBI, it would result in a redistribution of welfare, giving with one hand and taking away with another.
Additionally, the writer contends that UBI could lead to inflation in sectors like housing, healthcare, or energy infrastructure, exacerbating inequalities. While UBI may improve health and education, research from cash transfer pilots over the past four decades shows it does not boost labour market participation. Instead of relying on UBI, the writer suggests exploring alternative measures to navigate the AI-induced job crisis, such as pathways into human-centred work and a Public Wealth Fund.
Ultimately, work provides more than just financial compensation, offering purpose, relationships, organization, and mobility that UBI cannot replace.
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