Work and unemployment the future: unconditional basic income
Material posted: Publication date: 27-09-2017
The future is not only the mass proliferation of 3D printing, unmanned vehicles, and the ubiquitous presence of robots. The future is unemployment. By 2020, 5 million people will lose their jobs because of the development of artificial intelligence and robotics. This data from the reportof the world economic forum.

The factory management in the Chinese city of Dongguan has replaced 90% of staff (650 people) on robots and automated systems. As shown by the first results, labour productivity increased significantly by 250%.

Even Sberbank plans to the end of the year to reduce 3 thousand jobs with the help of bot that will be able to write statements of claim.

"Fourth industrial revolution" will lead to the disappearance of many professions, the crisis on the labour market, rising inequality and economic stratification. But before the masses will remember the experience of the Luddites, will play the role of the new economic laws. Unconditional basic income is one of the tools designed to solve the problem.

What is basic income

In the most General terms, an unconditional basic income (BBD) is a concept involving the regular payment of a certain sum of money every member of the community from the state or another institution. Payments are made to all, regardless of income and without having to do the work.

This idea appeared a long time ago. Thomas Paine in the book "Agrarian Justice" (1795) described the authorities paid a basic income to all persons over the age of 21. For Paine primary income means that each person owns a share in the total national production.
In 1943, the concept that everyone should have recorded its share in the national wealth of the country, were practically approved by the Parliament of great Britain, but eventually won payout structure depending on experience, salary and other parameters, based on the ideas of William Beveridge. Legislators felt that the idea of a basic income would require too much funding.

The details of BBD many nuances. Exactly how much money you need to pay? Whether this amount is to cover the basic needs of a person or it should be sufficient for the education stuff? Where to get so much money if the number of the working population is steadily declining?

Simple answers to questions, but there are attempts to find the road that will lead to clarity. In 2017, conducted several experiments, which should show the efficiency of the process of gratuitous distribution of money from the state and non-profit organizations.

The unconditional income in different countries

GiveDirectly charity Fund launched a pilot version of the unconditional basic income in 2011. The program covers the poorest regions of Kenya, Uganda and Rwanda. In GiveDirectly found astonishing: an increase in coverage decrease in the number of people wanting to get money. This in a region where, in principle, no!

In 2015, in the district of Homa Bay (Kenya) the number of residents who refused payment amounted to 45%. As it turned out, the problem was common to all public organizations working in the area. Other development programs on HIV, water and sanitation, agricultural development, education and empowerment of women, also face resistance from local residents.

Potential recipients find it hard to believe that some kind of organization implicitly would be paid their salaries. As a result, many people started to invent various legends to explain what is happening. For example, spread rumors that the money associated with devil worship.

Sponsor GiveDirectly delivered investment company Omidyar Network created by eBay founder Pierre Mediaroom. In Kenya, the experiment was allocated almost half a million dollars. The holding period will be 12 years, and the number will reach 26 000 people.

Some results have been achieved already: the economic activity of all participants for the year increased by 17%. This means that BDM fewer people are unemployed. A similar experiment, conducted from 2008 to 2009 in the Namibian settlements of Omitara and Chivero showed that the number of unemployed in the village has decreased by 11%.

Just GiveDirectly received $23.7 million from various investors. 90% of these funds will be used for payments to participants in the experiment, 10% will be spent on organizing the office, paying employees, taxes and other expenses.

In Uganda launched another Fund — Eight, founded in 2015. Soon 50 of the poorest families will be weekly to get a significant for them, $8,60.

To repeat what was done in Africa was problematic. If in the poorest villages enough to give a few dollars — and significantly affect the living conditions of the population in America, even a few hundred dollars will not have a noticeable impact.

Attempts to do the impossible taken. The venture Fund Y Combinator in 2017 plansto start a five-year study of the effect of BBD on society. The project budget will make $5 million the Money will be spent on the residents of one of the roughest cities in California. In 2005, the city of Oakland was ranked first for murders in the state and tenth in the U.S. among cities with a population of over 250,000 people.

The pilot program participants will become one hundred families with children from different ethnic and socio-economic backgrounds, with a monthly income of from $1000 to $2000. It without any restrictions will pay more than $1000 per month.

In Finland we have already started a two-year experiment. It began in January of 2017 to two thousand unemployed citizens, selected at random. They receive €560 per month regardless of other sources of income.

Some participants of the Finnish experiment has already shared his first impressions. They have to do extra work, pay more taxes and spend more money on consumption. Many received financial guarantees, think about developing their own startups. Interesting observation — the participants of the experiment noted a reduction in anxiety and depressive moods.

In the Netherlands the project will start in Utrecht. Participants in the Utrecht experiment will receive a monthly allowance of €900 (€1300 per couple). Different groups of participants will exist by different rules, one of them will be the control group, which will gauge the results.

In Italy the project started in June 2016: 100 poorest families receive $537 from the city budget.

Mechanics unconditional payments


Explanatory video for the experiment for payment in Finland.

The above mentioned experiments, which were conducted in various parts of the world, it is only a part of a worldwide research project. BBD is paid around the world — from Canada to India. While the program covers only a few hundred people and supported by private investors.

What if the concept of unconditional basic income will confirm its viability? Is it possible to scale the effect from one village to the size of even the city in any developed country?

The answers to these questions should be included in the economic model States the future. Money is not taken out of thin air. Unconditional income combines existing social and subsidized payments. To start paying, it is necessary to abolish all social benefits, including unemployment benefit, to abolish the pension, to reduce bureaucracy, to make a paid education and healthcare, raise taxes and introduce a few other unpopular measures.

There's no answer to the question of how in the long-term impact a basic income to the human desire to evolve. The biggest economic experiment on this topic was held only two years (1975 and 1977) in the canadian town of Dauphin. Any of the 12 million inhabitants of this settlement was entitled to an annual income of not less than a certain amount — they pay extra for every dollar earned.

The result among the recipients hospitalization rate decreased by 8.5% compared to the control group. More young people to finish school and not drop out to seek employment, and eventually found a better paying job than their peers. Mothers have more time to take care of the children while the breadwinners were not to cut their employment and to compensate for lost income benefits. That is, people in General want to work, even if they were offered the opportunity not to.

The pros and cons

Supporters of economic progress believe that a basic income will solve the problem of poverty and unemployment, reduce the cost of maintenance of the state apparatus, will reduce the problem of economic inequality will allow people to do what they want. Besides, the idea to demand payment for the use of total wealth, natural resources of the country, attracts many from the moral point of view.

But even if you keep all of the pros to zero, will remain a significant problem of unemployment caused by the emergence of a strong AI. Absolute income is our resistance to the market in which human labor is worth nothing. People may think that it is wiser to obtain free medicine or to go to public school, but they can't do anything with the reduction of the labour market. Even with learning new skills at some point will lead to a standstill — computers learn to do what used to be the prerogative of man.

While material possessions are not going anywhere — the robots will create a product that will be sold to people for real money. There is a problem of redistribution of surplus (from the point of view of society, not business). Part of the money to begin paying people for creative work.

BBD opponents often point to the example of Switzerland, which voted in a referendum against the introduction of unconditional payments. This should take into account that they had been offered to the — at very high salaries, even by the standards of Europe, the basic payment would have amounted to 2 500 Swiss francs, but at the expense of growth of taxes. As a result, people lost significant money. And the problem of poverty or unemployment in the region generally is not significant.

It can be concluded that the implementation of BBD, you must consider several factors. Need a situation in which the state is easier and cheaper to guarantee a minimally reasonable standard of living for all, than to solve the problems of poverty, crime, unemployment, and social inequalities. Conditions to start the BDB more in Africa than in the United States. To "enable" this mechanism, you need to make the payment in several times below the average wage of working people.

However, in poor countries where there is enough to pay a few hundred dollars, there is a risk to attract "lovers freebies", migrants, outcasts and other people who is the businesswill begin to spend money on drugs and alcohol.

And there is another problem, identify which have not yet succeeded, but on which the economists guess the person always just a little. Better get used to it, and expectations are soaring. And a basic income that, with the first payment seems to be a solid Foundation, very quickly "loses" its value — like "more gold". For some it is a way to find a new job, for others — to demand from the state (or private funds) increase in pay.

Conclusion: the era before the coming of AI

The robots at the Amazon warehouse

Comparing the pros and cons, economists and philosophers come to the conclusionthat the world at this stage of development not ready for an unconditional basic income.

We need to raise productivity, to make more goods and services than it can consume a society, to shift the economy to a post-industrial standards for automation and so forth — all this can only be done by mass robotics.

When the machines "win" mankind will need to revolt... or perhaps need. In any case, the choice remains for the person. In a world where there is unconditional basic income, you can choose any work or do anything.


Tags: finances