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Among the critical debates that the recent acceleration in technological advances, particularly in artificial intelligence, has reshaped are those concerning economic distribution and the future of our social welfare systems. Since technology is increasingly automating many tasks, the question inevitably arises: what will happen to labor and income generation?
This is why two concepts have gained importance: universal basic income and universal high income. Some influential people, such as Elon Musk, argue that we need guaranteed income programs due to the productivity gains driven by AI and to maintain social and economic stability.
While these two concepts may appear similar, they have some differences. One of the major differences is that universal basic income involves providing a minimum amount of funding to all individuals, regardless of their employment status or income level. The goal is to reduce poverty and inequality.
Some influential people argue that we need guaranteed income programs due to the productivity gains driven by AI
Dr. Majid Rafizadeh
On the other hand, universal high income is a much larger concept that is not limited to a minimum income. It promises a guaranteed income that would be enough for a relatively high standard of living. We can look at it in this way: that universal basic income is more like a reform, while universal high income is a major transformation in relation to work and labor.
The emergence of these concepts are mainly related to the impact of AI on the job market. AI automation is not just limited to routine and repetitive tasks but also more complex ones. Furthermore, it is being increasingly deployed in almost every sector of the economy. As a result, this runs the risk of causing structural unemployment. In such a scenario, the traditional model of income distribution may not meet people’s demands.
To analyze these two issues, it is important to examine their benefits and disadvantages. First of all, by providing a steady income to households, both universal basic income and universal high income address the job and income losses many have faced due to the latest technological advances.
The second benefit is that they can play a critical role in reducing poverty and global inequality by helping countries where many people still live below the poverty line. This can lead to financial security, less conflict and less stress, which generally improves the well-being of societies.
Third, if people are not dependent on wages to survive, this will give them more time and freedom, which could lead to more creativity and innovation, entrepreneurship or simply taking care of others. The fourth advantage is that universal basic income and universal high income will likely reduce bureaucratic costs.
Nevertheless, one should not ignore the concerns regarding guaranteed incomes. Firstly, it is much easier said than done when it comes to the implementation of a universal income on such a large scale. For example, with a universal basic income, how would governments raise the funds to carry out such a program? This causes problems such as increasing government debt or taxation.
Inequality could emerge in new forms, mostly in terms of status and position in society rather than income
Dr. Majid Rafizadeh
Another issue is inflation. If governments decide to provide a guaranteed income, meaning increasing people’s purchasing power without expanding supply, two things could happen: prices could go up and the value of the currency could decrease.
A third problem is that the world still needs workers in some sectors. If a high income is provided to everyone, this could fundamentally change individuals’ relationship to work, impacting participation in the labor market. In other words, there would be less incentive to work, particularly in places where human input is still necessary. This would have a negative impact on the economy and productivity.
We also should not look at this issue only through the economic and financial prisms. On the psychological level, there is the question of identity and purpose. Jobs and work have provided a sense of identity and purpose for centuries, so what would happen in a society where no one is required to work and yet still be guaranteed a high income?
Also, guaranteed incomes do not mean that inequality will be solved. Inequality could emerge in new forms, mostly in terms of status and position in society rather than income.
Finally, if either of these concepts are ever going to be implemented, universal basic income appears to be more politically feasible for the time being.
In a nutshell, the concepts of universal basic income and universal high income have recently gained significant momentum due to the fact that labor markets are being impacted by technological advances, specifically AI. The goals of these programs are to reduce poverty, enhance economies around the world and provide people with greater financial security. While on the surface both these models appear attractive and intriguing, a deeper examination shows that their implementation could involve substantial economic, political and social challenges.
- Dr. Majid Rafizadeh is a Harvard-educated Iranian-American political scientist. X: @Dr_Rafizadeh