The Impact of AI on Employment and the Case for Universal Basic Income

Exploring Universal Basic Income Through AI Research

Last week, OpenResearch, the research division of OpenAI, unveiled a comprehensive study on universal basic income (UBI) that has drawn significant attention. The study engaged 3,000 participants, randomly assigning them either $1,000 (€920) or $50 (€46.16) per month for a duration of three years, with no strings attached. The findings revealed that the majority of recipients allocated these funds toward essential needs such as rent and food. Many participants also reported spending more time caring for loved ones and contemplating further education, pursuing meaningful employment, or relocating within the United States.

“Cash is the only tool that provides the flexibility needed to address the diverse challenges people face over time,” stated Karina Dotson, the research and insights manager at OpenResearch, in an interview with Euronews Next. She emphasized that as the economy and labor market continue to evolve, it is crucial for the social safety net to adapt correspondingly.

The Stakes of AI-Driven Job Losses

As the discussion surrounding UBI gains momentum, the potential job losses resulting from AI advancements remain a contentious issue. According to a January analysis from the International Monetary Fund (IMF), nearly 40 percent of global employment is at risk due to AI technologies. This figure escalates to 60 percent in advanced economies, where entire job sectors may vanish as AI continues to evolve.

Adding to this concern, a recent study conducted by Swiss staffing firm Adecco found that 41 percent of executives in C-Suite positions are considering reducing their workforce as a direct consequence of AI integration. However, contradictory research from the Massachusetts Institute of Technology (MIT) suggests that only 23 percent of jobs in the United States could be replaced by AI in a cost-effective manner, and that it may take decades for AI to replicate certain human capabilities, particularly in fields like computer vision.

Furthermore, a scientific report from the AI Seoul Summit asserts that any temporary job losses will likely be short-lived, eventually being offset by the creation of new jobs, similar to previous waves of automation. The transition’s success will largely depend on whether workers possess the necessary skills to adapt to new job markets or geographic locations.

Addressing the Economic Divide

Guy Standing, the founder and co-president of the Basic Income Earth Network, argues that the prevailing narrative about AI eliminating jobs is receiving disproportionate attention. He points out that, despite the rise of AI, countries like the United States are experiencing record-high job vacancies.

Standing emphasizes that society should shift its focus toward how universal basic income can help bridge the widening gap between the wealthy and the poor, particularly in light of the insecurities created by the AI revolution. “If we fail to move toward a basic income, we could witness an increase in suicides, heightened stress levels, and a surge in support for extremist ideologies,” he warned.

Anselm Küsters, who heads the new technologies department at the Centre for European Policy, adds that implementing a universal basic income could alleviate skepticism surrounding AI’s impact on employment. He believes that the assurance of a basic income would encourage individuals to embrace technological advancements, fostering innovation and upskilling.

“When people feel secure and supported, they are more likely to adopt and implement new technologies in their lives,” Küsters explained. “Conversely, skepticism may lead to monopolistic practices and stifle innovation.”

Challenges of Implementing UBI in the EU

Both Standing and Küsters acknowledge the complexities involved in determining an appropriate amount for universal basic income, as it would vary significantly based on regional living costs. They caution that applying a uniform UBI across the European Union would be particularly challenging, given the diverse social policies and regulations in place across member states.

Küsters advocates for initiating discussions on basic income at the international level, involving organizations like the G7 or G20, to prevent inequalities in UBI systems that could encourage companies to relocate to more favorable jurisdictions. In December, the G7 adopted the Hiroshima AI process, establishing a voluntary international framework aimed at promoting safe and trustworthy AI systems.

Recently, the G20 agreed to collaborate on imposing a tax on ultra-wealthy individuals, potentially reaching rates of up to 2 percent on fortunes exceeding $1 billion (€920 million). This measure could generate global revenue of up to $250 billion (€231 billion) from the world’s wealthiest 3,000 individuals.

These discussions at both the G7 and G20 levels provide Küsters with optimism that there may be a willingness to address the fundamental question of universal basic income. Should individual EU nations pursue UBI, he suggests that policymakers consider partnerships with the insurance industry to modernize protections for workers in the age of AI. Such collaborations could facilitate the implementation of a basic income without jeopardizing states’ abilities to attract and retain major businesses in competitive markets.