Is there a future that does not include a universal basic income?
Being a father of young kids, I spend an inordinate amount of time trying to figure out what the economy will look like when my kids are old enough to enter the workforce. Suffice to say, I haven’t figured it out yet. But I am convinced that as technological advances in robotics and automation replace traditional employees (I won’t lie – I love the self-service checkouts at Target) the universe of jobs available in the United States will shrink even as our population is expected to balloon by over 100 million more people by 2050. In attempting to mitigate the pain this will cause, we are starting to hear rumblings of a universal basic income, that is, a guaranteed sum of money provided to every person in the US by the federal government.
It is hard to imagine being able to levy sufficient taxes to accomplish this. Let us consider what might be required a couple decades in the future. In 2035, there are anticipated to be roughly 398 million people in the United States. What if we were to give all of them a measly $5000 per year? We’d be looking at having to shell out nearly $2 trillion per year. Taking into consideration inflation projections wherein $100 in 2017 money is expected to be equivalent to $156 in 2035, and we’re actually looking at needing well over $2 trillion per year. If we project 2016’s $4T federal budget to 2035, that $2T would be 40% of a projected $5 trillion federal budget.
Now, admittedly the universal income will be expected to replace what we spend on social programs now. But even then, in a country where there could very well be fewer people working and not paying taxes and more people dependent on government aid, where will the $2 trillion come from? Will it be like today, where about half the population pays all the taxes? Or will less people expected to fork over $2 trillion to take care of all 400 million of us? Seems like a difficult bargain.
Maybe we’ll end up back to in a bartering economy.
At any rate, Hawaii is exploring the idea of universal income. Here is an article about it from cbsnews.com:
Driverless trucks. Factory robots. Delivery drones. Virtual personal assistants.
As technological innovations increasingly edge into the workplace, many people fear that robots and machines are destined to take jobs that human beings have held for decades–a trend that is already happening in stores and factories around the country. For many affected workers, retraining might be out of reach —unavailable, unaffordable or inadequate.
Enter the idea of a universal basic income, the notion that everyone should be able to receive a stream of income to live on, regardless of their employment or economic status.
It isn’t an idea that seems likely to gain traction nationally in the current political environment. But in some politically progressive corners of the country, including Hawaii and the San Francisco Bay area, the idea of distributing a guaranteed income has begun to gain support.
Over the past two decades, automation has reduced the need for workers, especially in such blue-collar sectors as manufacturing, warehousing and mining. Many of the jobs that remain demand higher education or advanced technological skills. It helps explain why just 55 percent of Americans with no more than a high school diploma are employed, down from 60 percent just before the Great Recession.
Hawaii state lawmakers have voted to explore the idea of a universal basic income in light of research suggesting that a majority of waiter, cook and building cleaning jobs — vital to Hawaii’s tourism-dependent economy — will eventually be replaced by machines. The crucial question of who would pay for the program has yet to be determined. But support for the idea has taken root.
“Our economy is changing far more rapidly than anybody’s expected,” said state Rep. Chris Lee, who introduced legislation to consider a guaranteed universal income.
Lee said he felt it’s important “to be sure that everybody will benefit from the technological revolution that we’re seeing to make sure no one’s left behind.”
Much more at the link.