With U.S. unemployment rising to levels not seen since the Great Depression, now’s a good time to discuss universal basic income (UBI) and its connection to the tech world.
From idea to tests
Finland ran the world’s most extensive basic income experiment from 2017 to 2018, giving cash to 2,000 unemployed adults and comparing their situation to a control group of 173,000 citizens who received unemployment benefits. Last week, the government published its findings:
- UBI recipients saw meaningful improvements in economic security and mental well-being.
- The UBI group worked an average of 78 days from Nov. 2017 to Oct. 2018, six days more than the control group.
- But…Finland introduced new standards for unemployment benefits in early 2018, which could complicate the UBI study’s findings.
As for the rest of the EU: 71% of Europeans support the introduction of UBI, according to a recent poll from a think tank based at Oxford University.
The tech angle
"We are in the third inning of the greatest economic and technological transformation of this country," UBI advocate and then-presidential candidate Andrew Yang told me last March. His UBI proposal involved a new value-added tax (VAT) levied on "undertaxed" tech industry activity.
Yang and others view UBI as a potentially effective policy hedge against future automation that could displace workers across retail, transportation, and service sectors.
Why it all matters now
As the economic crisis plays out, demand for human labor could continue to drop while investments in capital (automation) stay steady. It seems inevitable that the rate of automation will increase during and after the pandemic.
Now, what once was a radical idea is gaining momentum with governments in the U.S. (on a limited, temporary basis), Hong Kong, Spain, Denmark, and Scotland. But remember: 1) UBI has only been tested in limited settings with small populations. 2) When basic income is deployed during the pandemic, it’s more of a measure to offset the effects of lockdowns, not automation.
+ And you? Every time I cover UBI, I usually get pretty heated feedback on both sides. Do you think UBI is a good idea? Let me know.