Universal Basic Income (UBI): The Answer to AI Job losses

What does the future of work look like? With the advances in technology, workers in various sectors will see their jobs automated and mechanised. According to a recent Goldman Sachs report, Artificial Intelligence (AI) could potentially replace the equivalent of 300 million full-time jobs. Another prediction was made by OpenAI researchers and presented in a paper (GPTs are GPTs..) last year in March. The authors hinted that the Large Language Models (LLMs), such as Generative Pre-Trained Transformers (GPTs), showcase characteristics of general-purpose technologies (GPTs) and about 47% to 56% of all jobs will be affected (exposed to LLMs and software built on top) sooner than later. It is suggested that the jobs that are most exposed are those of translators, customer support representatives, copywriters, designers, creative writers and even mathematicians. With large numbers of workers out of jobs, the disparities that would arise among societies, and the huge toll on the growth and economy of countries, governments will need to start seriously rethinking national welfare schemes. One proposed answer to this economic crisis by the scientific community and notable leaders in technology like Elon Musk and OpenAI’s CEO Sam Altman is the introduction of a guaranteed income, known as “Universal Basic Income (UBI)”. We’ll discuss why this proposal is of utmost importance and the benefits that would follow with the adoption of UBI.

Guaranteed incomes’ positive returns

Money, money, money! It is all anyone can think about as an adult and is crucial for any human’s survival and the protection of their families. With advancements in technology and jobs being lost to automation by AI, times are getting tough, and many fear having to live on the streets and not having the funds to provide for themselves and their loved ones. The idea of having a monthly flow of income for every citizen guaranteed by the government and being able to use this money with complete freedom, detached from any bureaucracy, sounds brilliant, and indeed it is.

UBI has the potential to reduce income inequality. With the rich having easy access to modern technological developments, furthering their capital looks like an obvious route, and the wealth gap that is already present in society would only become larger. If financial support exists for lower-income individuals and households, it can help bridge the wealth gap.

The issue of migration has been a pertinent problem for many developed countries. According to a report from OECD iLibrary, more than 6 million permanent immigrants were recorded migrating to OECD (The Organization for Economic Cooperation and Development) countries. It was found that permanent-type migration to OECD countries increased by 26% in 2022 compared with 2021. Preliminary figures for 2023 suggest a further increase. The reason for migration is due to better economic opportunities, to join family, or to study. Some move to escape conflict and persecution, or even in response to the adverse effects of climate change and natural disasters. With the input of UBI, if governments provide all the basic needs that a human requires, this could help curb migration as there would be less motivation to move for a higher quality of life when instead it is being provided at home.

UBI can help increase economic security. Due to fluctuations in the economy and job market, many livelihoods are disrupted mentally and financially in the case of massive layoffs. A basic income will help bring more financial and mental stability. We would also witness an increase in consumer spending. If all citizens are provided with a basic income, humans with wants will demand more and be ready to spend more on increasing the production and supply of goods, thus stimulating economic growth and supporting local businesses.

Poverty has always been a dark matter that humans still find difficult to address and eradicate. According to data presented by the World Bank, approximately 700 million people around the world live in extreme poverty – they survive on less than $2.15 per day, the extreme poverty line. With the adoption of UBI, it can help alleviate poverty by providing a financial safety net for all citizens, ensuring that everyone has a basic income to cover essential needs. A recent opinion article written by Michael W. Howard and posted on Scientific American suggests that the adoption of UBI could help solve the poverty problem in the U.S. The article mentions the implementation of the Permanent Fund Dividend in Alaska, which provides an annual cash payment of $1600 to every resident without the means of any test or work requirement, contributing to poverty reduction and showing no negative effect on people’s willingness to work.

Automation of most of the repetitive and mundane jobs is imminent, but these are jobs that people have to do today just to earn a basic living. In the long run, this is detrimental to human potential as a whole. If UBI comes into play, this would ensure a basic income for all individuals taking care of their basic needs and opening new avenues where humans can then utilise their potential, knowledge, and creativity to perform tasks that will push human development to greater levels.

Where would the money come from?

Many question the feasibility of the adoption of UBI and the sustenance of such a scheme in the long run to provide for all citizens of a nation. A large idea floating amongst most leaders and policymakers is the method of taxation. Whom to tax? The rich. It is a hypothetical approach, but placing larger tax brackets for the wealthy as they increase their capital through advances in technology would help governments better distribute these returns equally among the poor and lower-income individuals. According to a 2021 report from CNBC, OpenAI’s CEO, Sam Altman, suggests taxing capital, that is money and land instead of labor. Leaders perceive that the production that would arise from AI would help fund the success of UBI. Some other plausible solutions are larger taxation for companies that make use of AI tools for their development and individuals that make use of robots or automation for their work.

UBI as a helping hand for alleviating poverty. Illustration: Anna Parini/The New Yorker

Worries about proper usage

Amid the proposal of UBI, a general fear is the misuse of the free money provided. Common beliefs are that the homeless would spend this money on their addictions instead of their basic needs, and hence this money can be channeled more towards building shelters and providing better services. Contrary to these beliefs, a study from last year titled Unconditional cash transfers reduce homelessness discussed the positive impacts of providing a one-time deposit of $7500 to 115 participants in Vancouver who went homeless within the last two years. The results produced were positive and contradictory to conventional thinking; the participants spent the money on housing, rent, and better food rather than drugs or alcohol.

Money can buy you happiness

UBI effect on employment and well-being

Experiments on guaranteed incomes have been implemented on a small scale in various countries, such as the Permanent Fund Dividend of Alaska, the Eight project in Fort Portal, Uganda, and the GiveDirectly program in Nairobi, Kenya, as well as the pilot programs implemented in Finland and the Netherlands in early 2017.

Focusing our attention on results from a two-year experiment in Finland curated by Mckinsey & Company, it was found that with basic income there was actually a positive impact on employment. Albeit small, compared to a control group without support, people with a basic income were more likely to be employed. The reasons behind this could be the sufficient level of the basic income and the lack of bothersome conditions attached to receiving it, motivating recipients to seek and accept work they otherwise might not have.

Another interesting find was the positive feedback of better well-being from people receiving basic income. The average life satisfaction of people on basic income was 7.3 out of 10 compared to 6.8 for the control group, which is a huge increase. The adoption of basic income seemed to have improved all major components of life satisfaction. The people receiving this guaranteed income reported better health and lower levels of stress, depression, sadness, and loneliness, which are all major determinants of happiness, compared to people in the control group. This cements the notion that “money can buy you happiness”. This safety net helped people demonstrate better confidence in their cognitive skills, like their ability to remember and learn. They also expressed higher levels of trust in public institutions, their fellow citizens and their own future.


The volatility of the job market right now puts professionals in a constant state of fear that can compound into unhealthy levels of stress and eventually lead to depression or anxiety. UBI would hence provide a sense of relief and security in such a scenario. If indeed there is a framework that allows professionals affected by layoffs a cushioning mechanism, it would effectively reduce much of the financial and mental stress caused. If AI creates enough production to keep society running without most of us needing to work so much, or even at all, then there’s a much stronger case to be made that people should be given a basic living stipend and allowed to pursue their own lives with a greater degree of freedom. Not just in the scope of financial security, UBI would have a positive impact on various aspects of society, like poverty alleviation, reduction of social disparity and an overall increase in economic growth in many nations. These are reasons enough to believe that UBI is indeed a likely answer to the initial adverse effects of AI automation and job losses. Do you think the same?

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