Handouts won’t fix this jobless future

Taxing robots to pay for millions unemployed won’t work, writes Vivek Wadhwa

Once, the idea of governments handing out cash to everyone seemed crackpot. A universal basic income (UBI) had few supporters beyond a smattering of niche left-wing political parties and a handful of radical capitalist economists, who believed it was the only way to solve the near-ancient problem of the benefits trap. The trap dictates that those struggling in the economy have a disincentive to work, because doing so threatens their state benefits. The idea ran that if everyone got a UBI, any work done could be paid in addition to their basic income.

Times have moved on, because support for UBI is now mainstream. Tech Moguls such as Mark Zuckerberg, Elon Musk and Bill Gates see it as a secret weapon against rapid and accelerating automation, a method of saving the working class from an economy where all the work is done by machines. As robots march into factories, UBI is colonizing the minds of thinkers everywhere, Bill Gates also suggests an additional tax on robots be levied to pay off those whose jobs they have taken.

UBI is certainly one of the things we need to think about and a part of a comprehensive solution to the problems of joblessness that technology is creating. Over the next decade and a half, most jobs will be automated and done by artificial intelligence and robots. But UBI won’t solve the soul-destroying loss of purpose that comes from having your economic raison d’être stolen from you by a ton of animated metal and software. Nor is a UBI even likely to happen, at least in the US. The government is rolling back over healthcare protection; how likely is it to approve a universal system of welfare that – by definition – hands payments to billionaires as well as down-and-outs?

There are ways of moving forward that are less susceptible to political climate change. In a paper titled A New Deal for the Twenty-First Century, Edward Alden and Bob Litan argue that, as traditional working-class jobs disappear, jobs in the tech and caring professions will boom. Technology is taking over the world, and the global population is aging — so follow the money. The key, say Alden and Litan, is to furnish the young with the core skills necessary to adapt to fundamental labour-market changes so rapid that governments and educational institutions struggle to keep up with them. Older workers who become displaced should receive assistance in finding new jobs and retraining. Governments should offer tax incentives for that training. Career loan accounts could be established to encourage employees to gain new skills, with repayment of the loans linked to future earnings.

The authors advocate a generous wage-insurance scheme that tops up earnings; direct wage subsidies; and minimum wage increments. They suggest that a voluntary military and civilian national-service programme for young people could mitigate social disruption and teach important new skills. In towns and cities, the extra labour generated by national service could tend to public spaces, parks and playgrounds.

The danger is that the public will think this new thinking is addressing a problem coming tomorrow. A peek inside Amazon’s warehouse reveals that it is a challenge to be addressed today. Machines do all of the product storage and retrieval – the bulk of the hard work. Within five years, robots will likely take over the loading of self-driving trucks bound for distribution centres. From there, drones will fly the goods the last mile. Most of the jobs that require human labour will be eliminated. In other fields, millions of new jobs – specification not yet known – will be born, but these roles will not suit unemployed warehouse workers, because they won’t have the skills to take them.

We need grand thinking to solve the big problems ahead. The world is about to throw millions of employees on the economic scrapheap, and incremental solutions should be rejected in favour of grand global experiments in meeting their human need for purpose and social cohesion. There are thousands of job vacancies for thinkers who can turn their thoughts to the coming electrical storm. 

Vivek Wadhwa is distinguished fellow at Carnegie Mellon University’s College of Engineering