The time is ripe for a universal basic income

A well-designed universal basic income could both underpin employment and secure income from satisfying work because it allows us to embark on a new exchange of certain guarantees, writes Dr Bronwyn Kelly.

With the Rise of Artificial Intelligence (artificial intelligence) and with the expectation that this could reduce employment opportunities, there is growing interest in whether it is finally time to achieve a universal basic income (UBI). As workers think about the possibility of not being able to earn income by working, the question of how else we can secure this naturally arises.

For some the answer is – for example Elon Musk – simply give everyone a UBI (or some version of it – a “universal high income”) and this work itself would then be unnecessary. This means that in the not too distant future we will manage to completely “dehumanize” work, robotize everything and happily reach nirvana.

But this assumes that people do not want to work and, moreover, that we will willingly abandon the basic means by which we have hitherto defined ourselves, announced our distinctive character and built our social position.

Work has always been the primary means of survival for humans; but it has also been the way for each of us to prove the value of our existence. Work means much more than income to us. It defines us more than anything related to gender, race, culture, or religiosity.

Throughout our lives—whether we work unpaid or paid work inside and outside the home—work is who we are. Therefore, our share of worthiness and status at home or in society cannot be replaced by a robot.

This means that people are unlikely to fall easily into a world of work, and they certainly do not experience serious ailments and mental anguish. We instinctively resist attempts to “put us out of work,” knowing that this would deprive us of our own sense of self-worth and negate much of the value of our existence.

So no matter how hard the Musks of the world try to consign us to the scrap heap, we can never let go of our natural and ingrained thirst for work. We are a long way from giving up the desire for meaningful work and surrendering to a purposeless life.

However, finding work is still a challenge and maintaining income when we can get it is even harder. But fortunately, this is where UBI comes to our aid, albeit not the kind of fanciful and disruptive UBI that Musk envisions in his imaginary world of jobless people. The kind of UBI that is urgently needed (with or without the rise of AI) is the kind that will make it possible to work in jobs of our own choosing for as long as we want.

It’s time for a UBI that will help us be able to continue working for as long as we wish and gain the basic life satisfaction that can truly only come from the work we freely choose.

But the question for many is how can a UBI be established to achieve this? Is it a viable option? How can we afford this? How can we prevent the inflation this could cause? So how exactly can it lead to both income security and decent employment security?

A simple answer can be given if we accept that a well-designed UBI can both form the basis of employment and secure income from satisfactory work, because it allows us to engage in a new exchange of certain guarantees.

To the extent that UBI provides income security for all, it also frees people from the fear of falling into poverty. And freedom from this fear could enable people, for the first time, to make a trade with government that would guarantee both the fairness of taxation and the adequacy of public spending on the foundations of our prosperity.

This trade can be structured in a sequence that would form what we might call a “social new deal”:

First, the government commits to paying a UBI at or above the poverty line to all citizens, permanent residents (and perhaps anyone else eligible to apply for residency or citizenship), and guaranteeing that this payment will be unconditional and tax-free. It will be the same for everyone throughout life. And it will be indexed.

The community could then respond by redesigning how taxes are paid on income earned above UBI. They could design this new taxation arrangement so that the increased spending power of the UBI is taxed back out of the economy by a sufficient amount to stabilize inflation, but with a much more equitable distribution of that amount. At the same time, portions of any tax we may be willing to pay may be mortgaged to any area of public expenditure that society deems necessary for our health, welfare and security. This will give people more control over deciding where public money is spent.

Depending on the choices we can make about taxes, this trade-off could be designed to ensure that the net after-tax situation of all individuals (even those with the highest incomes) is always better off than it is now, and that those with lower incomes are also significantly better off.

This may sound ambitious, but governments have the monetary capacity to initiate and sustain it. They could create the money needed to fund both UBI and all the public services needed for health and well-being.

With this type of design, which aims to move public money in and out of the economy, there is no longer any need to stabilize prices by transferring income from one group (for example, mortgage holders, as we do now) to the benefit of another group.

Instead, a significantly larger share of the total money supply would be transferred into the economy each year through direct basic payments from the government to everyone equally, and enough money could then be safely withdrawn through a more equitable sharing of the total tax burden.

Part of this tax can also be assumed to ensure adequate government spending on the types of services essential to our employment prospects, including primarily health, education, child care, elderly care, disability services, environmental sustainability and natural resources conservation.

The overall economic benefit that may arise from this trade is such that it stimulates the capacity of the productive parts of the economy to achieve productivity increases. By guaranteeing adequate health and welfare services (i.e. banning austerity), we can create our own healthy and educated workforce, which is absolutely essential for productivity.

At the same time, UBI would stabilize the cost of labor for businesses without requiring us to sacrifice any standards of living – assuming, of course, that the government passes laws to prevent wage cuts and also pays people working in public services well enough to force private employers to compete for labor at fair and reasonable prices.

Ultimately, a new social agreement designed in this basic configuration would result in a UBI that could ensure that work at adequate wage rates would always be available. Instead of Musk’s UBI, which is designed to replace work, we can design a UBI to sustain all the employment we need, and even every job we could want.

It depends on how smart we are Collaborating in the public interest to design the new social compactbut it is entirely possible. An example can be seen of how a UBI could be designed to be feasible and beneficial for individuals, government, the economy, and our prospects for full employment. Here.

Dr Bronwyn Kelly is the Founder of Australian Community Future Planning (ACFP). He specializes in long-term integrated planning for Australia’s society, environment, economy and democracy, and governance systems for nation states.

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