Why Universal Basic Income Is Inevitable: What You Need To Know

Productive Technology Promotes Consumerism While Eliminating Jobs, Making UBI Inevitable

Over the next 20 years, remote work and automated production technologies will cause societies’ labor markets to rapidly change. Welfare programs including Universal Basic Income (UBI) and Universal Healthcare will become necessary for the wellbeing of society. Without such programs, civil unrest will become rampant from a lack of work opportunities.

This essay focuses on the causes of this technological change, the impacts of it’s change, and how they lead to inevitable social welfare programs. 

Technology-Enabled Productivity Eliminates Jobs

Machine learning, AI, robotics, and automated processes are advancing. As these technologies improve, they become more affordable and provide greater productivity. This gradual development forces companies to make a choice between human or robotic labor. Companies will decide, is it more cost-effective to install automated systems or employ human workers? 

As most jobs become automated, they will replace the productivity of humans. The ultimate consequence is a reduced supply of work for humans but no reduction in their demand for work.

Meaning less available work and a reduction in wages for those that do get jobs. This sets a backdrop of reduced opportunity for advancement and a diminished quality of life from the opportunities that remain available. 

That doesn’t mean that the importance of human labor will disappear. On the contrary, there will always be a need for skilled and dynamic laborers. But the skills required for the human worker of the future are going to change. 

Skills Needed for Future Jobs

What are the skills associated with AI, Machine Learning, Robotics, and software? 

• Math
• Computer Science
• Programing
• Statistics
• Data Science
• Deep Learning
• Problem Solving
• Systems Thinking
• Active Learning — how to learn
• Philosophy

Our Training For Future Job Opportunities Isn’t Ideal

These skills will become the primary beneficiaries of the changing labor economy over the next 20 years. Unfortunately, we don’t require many of these skills to be taught in school. In fact, we are experiencing a red queen effect in standardized education.

What we teach is outdated and doesn’t address many skills needed in the digital age. Many education innovations reinforce current job skills. Creating a workforce filled with skills that don’t apply to available opportunities. Training in obsolete skills produces the opposite goal of education. A reduced quality of life for standardized employment paths.

At some point soon, an entire generation of workers will have the incorrect skills for the jobs available.

What’s interesting about many of the next generation skillsets and the jobs they provide is that they don’t require the work to be conducted in person. This new set of skills and the location independence they provide will give rise to a new social class of people and a reorganization of society. 

As a Consequence of These Changes – The Future Will Be Defined By A New Social Class Divide

Technology is creating automated productivity. In doing so, it shifts the opportunities available to people and creates a new set of class divides. These divides are are no longer a blue-collar versus white-collar issue. Instead, they break down as digital workers (Sovereign Individuals), physically present and location-dependent workers, and everyone else (the UBI class).

As this class divide continues, global governments will change how they appeal to the diverging groups of people. Some will create favorable digital age policies. Others will cater to the location-based worker. And some will target the growing number of unemployed.

The Emergence of the Sovereign Individual Class 

The emergent digital working class has the in-demand skills required by future jobs in automation and robotics. The value provided to society by these skills presents an opportunity to leverage them and to extract value from society. This subset of digital worker can live anywhere in the world and is better at surviving challenges like a pandemic.

This location-independent digital workforce is forming a new social class known as The Sovereign Individual. 

It’s like a gig-style workforce in the digital age. These people may work for a single corporation, or they may be solo contract workers with many different project-based clients. Regardless of how they take on work, they can now live anywhere in the world. Meaning they can reorganize their personal preferences and relocate based reprioritized needs. 

Examples: Relocating to lower tax jurisdictions, communities with better child education, better healthcare options, and places that adhere to their social appetites (city vs rural). 

The Sovereign Individual class is free to shop around the globe for their location of choice. As more of these workers become untethered to any one location, countries will begin to adapt their governments to provide ideal policies suited to the specific needs of these individuals. 

The Emergence of the Location-Dependent Working Class

But the transformation in labor is also altering traditional portions of the workforce. The automated future will require highly skilled workers that fall outside the Sovereign Individual workforce. These individuals are location-dependent, restricted by the location of their job, and have different needs than remote workers.

They will repair robotics, support construction projects, and other trade-based work. They support the maintenance of production equipment, the machines, and servers that make these new technologies possible. But they will also include plumbers, electricians and agricultural workers. Location-dependent workers are essential to society but restricted by the location and needs of their employer. 

These roles are essential for a functioning society and are secured by the value they offer the economy. But the specific needs of location-dependent workers will be distinct from the Sovereign Individual Class. 

The Emergence of the Universal Basic Income Class

As these two distinct classes emerge, there will be many workers that simply don’t fit into either category. Workers that for many reasons are unable to adapt to the changing skills required by society. They will struggle to make ends meet. Fighting for a dwindling number of jobs.

The emergence of this class is a direct result of the failure of standardized educational curriculums to adapt to forward-looking societal needs. ie: we train for relevant skills of today, not for skills needed tomorrow, and we are not preparing for the next 15 years of skilled job churn. 

As automation becomes more integrated into daily society, this class of people will transition to gig work. Picking up opportunities as they become available. But as this transition takes place, incomes will reduce and provide a burdensome living for most. And under the current healthcare system, they will lose health insurance.

This large workforce that struggles to adapt to changing societal needs will require UBI.

What Is Universal Basic Income?

But before I can explain why UBI will be inevitable, let me first explain what it is.

The International Monetary Fund defines UBI as:

Universal basic income is an income support mechanism typically intended to reach all (or a very large portion of the population) with no (or minimal) conditions.

I think of UBI as unconditional and regular cash payments from a government to its people, to provide a minimum standard of life. And when I refer to UBI, I’m talking about the policies governments use to pay their people.

But why would UBI be the answer to this future class divide? 

Automated Productivity Creates Goods The Majority of People Can’t Consume Without Income

Unlike today’s societal structure, the new class structure is like an inverted pyramid.

Sovereign Individuals will have upper class lifestyles built from the productive systems they create. But these systems rely on consumerism to have value. If the majority of people lose their jobs due to automation, and have no replacement income opportunities, they cannot purchase any of the automated goods. Without government support, there will be no way for the UBI Class to consume the goods and services facilitated by automation.

The location-dependent workforce represents the middle class and also require consumption to remain high in order to sustain their employment.

As a result, the system must be in favor of a basic standard of living for the majority of people. Without which, the system built on consumerism fails. Hence, the upside-down pyramid format of society reinforcing the need for UBI.

Government policy will inevitably cater to the majority of its constituency. The majority of workers will not have the sufficient skills or opportunities to be Sovereign Individuals. Technological progress and current educational systems simply leave the UBI Class behind.  

Mass unemployment from automation will become the major political battleground in the near future. Without radical change, the system won’t be able to support this type of unemployment. It will require UBI to function.

New Class Needs Require New Policies: UBI & Universal Healthcare

The main point: UBI will ensure a minimum standard of living and continued consumerism. This creates a positive-sum environment where quality of life is created for the majority of citizens and is reinforced by a consumer-driven culture. 

This future economy means that healthcare will become untethered from employment. As people struggle for employment or take on more gig style labor, healthcare options will breakdown. State-run universal healthcare will provide a minimum standard of health for all.

Financial Security From UBI Empowers Productive Long Term Decision Making

UBI provides financial security that supports long term decision making. Individuals that live paycheck to paycheck tend to struggle to make investments in their future. By providing a monthly living wage, individuals have a better opportunity to learn new and relevant skills to successfully re-enter the workforce. In doing so, they can perpetuate the self reinforcing cycle of consumer driven value.

An Example of Universal Basic Income In Practice

Some countries are already experimenting with UBI initiatives. Finland recently concluded a successful 2,000 person study. The results suggest that individuals receiving regular and unconditional cash payments, “reported better financial well-being, mental health and cognitive functioning, as well as higher levels of confidence in the future.”

Elon Musk & Andrew Yang on Universal Basic Income

This isn’t simply conjecture, it’s entered the public discourse. Elon Musk, a prolific tech entrepreneur, notorious for creating world building technologies believes automation necessitate UBI. Andrew Yang, a 2020 Presidential Candidate ran on a platform of UBI with his Freedom Dividend.

The Bottom Line

Like Musk, UBI isn’t something I personally want, but is something I see as inevitable given the current trajectory of society. Automation is coming and our educational systems are not adapting to these changes. It seems more than likely that any alterations to society may be too little too late to stave off mass unemployment and social unrest.

To that end, UBI should be seriously discussed in public discourse. We should promote small scale experiments like in Finland and Andrew Yang’s Freedom Dividend in order to gather real data. We must also be careful. UBI should only be implemented gradually and under circumstances where automation supports human levels of productivity or greater. Without these sustained levels of productivity, UBI could harm a thriving society.

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