The Spoke / Downsides to Universal Basic Income? Subscribe

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If we have always been taught to think that hard work is the means to securing a well-paying job, and a well-paying job is the means to a comfortable life, what happens when everyone has a well-paying job and lives comfortably without the hard work?

Imagine a future without jobs. Sounds like a pitch for a dystopian best-seller but lately this has become a theme explored in news stories and best-selling books. According to researchers at Oxford University, “routine tasks” that do not require a high degree of creative or social intelligence, such as construction, transport, and farming, are at high risk for automation. A number of studies warn about the loss of jobs as a consequence of technological advancement in both the developing and developed world. For example, 77% of jobs in China, 47% of jobs in the United States, 35% of jobs in Britain, and about 49% in Japan could be at risk.

In a world where income inequality is already a significant concern, the prospect of a large number of people being pushed out of the labor market is alarming. Lately, there has been a noticeable increase in discussions about the possibility of instituting a Universal Basic Income (UBI) as a remedy for the economic disruption in the labor market. UBI would mean that a baseline level of income – sufficient to cover basic expenses - is distributed to everyone, regardless of their current work status or income level. The average proposed stipend is around $10 000 annually, which would cost the United States approximately $3.2 trillion to distribute. Proponents of UBI argue that, by providing for basic necessities, people can focus on other valuable activities that would benefit both themselves and their communities. We can thus see it as a form of compensation for the unpaid work that many are performing in order to improve their societies, such as caregivers in the US, which amounted to $691 billion in unpaid work in 2012.

On a practical level, UBI programs have been found to have many positive effects. In Namibia, for example, evaluation of a Basic Income Grant (BIG) pilot program found that it had significant reduction of poverty, crime and malnutrition, as well as an increase in income-generating activities, and school attendance. But there are concerns about this type of program, particularly in more affluent nations. When political consultants conducted a poll to better understand the perspective regarding UBI in the United States, they found that the main concern about UBI was that it would act as a disincentive to work. This concern can be at least in part alleviated by the results from the Permanent Fund Dividend (PFD) distributed to residents of Alaska since 1982. The PFD is an yearly dividend paid through the government that is funded by local oil revenue. Only 1% of Alaskans have been reported to work less because of this basic income scheme. While the PFD covers basic necessities, few people are fully satisfied with this level of income. When jobs are available, people continue to work and strive for more in order to continue maintaining or improving upon their lifestyle.

But what if in the near future, there are very few jobs which require manpower, and there is no work to be accomplished? If my livelihood is secure and unlikely to improve, then will I still be motivated to develop myself in a positive manner? In other words, what kind of life will humans lead when automation does all the work? Kuwait offers an intriguing case study for all of these questions. In 1973, an oil boom profoundly affected the countries in the Persian Gulf. The discovery and rise in value of petroleum meant that nations like Kuwait had the capacity to exponentially develop their infrastructure and economy. In Kuwait, it became clear that the local population was either insufficient in numbers or inadequately skilled to support this infrastructural growth. As a result, labor migration, especially from surrounding Arab nations, filled job market needs. This is not an unusual economic structure. What makes Kuwait unique is that the local workforce, that is, the Kuwaitis themselves, was absorbed into the government. In Kuwait, a governmental job comes with many benefits. All nationals have access to free healthcare, free education, and pay no taxes while being guaranteed a job in the government. This employment scheme—where expats are in charge of major projects and dominate the private sector, and nationals work in the government — was necessary in the late 20th century. However, the scheme remains in place even today when Kuwait has the capacity to either educate its people or send them abroad to be educated so that they acquire the skills they need to be competitive in the local private sector. Recent data indicate that 70% of employed Kuwaitis work in the government, and the number of employees leaving the government for other sectors has been progressively decreasing each fiscal year. Why?

Kuwaitis working in the government have almost no risk of being fired from their jobs, barring exceptional circumstances. This security has in turn affected work ethic—production or innovation is often not celebrated, and inefficiency is not reprimanded. Promotions, for example, are not based on performance, but rather on seniority. When you add this extreme job security to the fact that the average government job pays better than a private sector position, it is easy to see why public sector employment is immensely popular. But this system, where most locals get a job in the government while expats work within the private sector, has become largely unsustainable. Given that the government spends 50% of its non-oil GDP on paying Kuwaiti salaries, and that the price of oil is progressively dropping, finding a way to relieve the government of some of the cost of living of its citizens has become a pressing concern.

Kuwait resembles an automated society which runs on UBI, in that the average Kuwaiti national lives well independently of how they work. How do we give value to work when work becomes unnecessary to live well? In the summer of 2017, I worked with an organization called Nuqat researching the deficit skills of locals, and creating a platform intended to help Kuwaiti nationals be competitive in the job market. The platform is an internship program that engages students in transdisciplinary learning by working within an academically diverse group, and assigns them a project to gain experience working with a private company. Doing the research and creating the platform became especially fascinating because I was trying to understand how to create an effective incentive scheme when our productivity is independent of our livelihood. By shifting what we highlight as valuable when we educate the youth of a nation, we can instill the intrinsic value to develop oneself and one’s society, and push individuals to find a purpose that is independent from their job. This means that we need to inculcate the value of striving for the sake of self and community improvement, and to have such striving be independent of eventual financial gain. If money and a good lifestyle is guaranteed for all, then education should not put a focus on production, since that production has become obsolete. Leila Al-Hamad, the founder of Zericraft, has commented on the effect of erasing the value of productivity within the context of a job and stated that it is by “thinking of our crafts, our music, our cultural capital as expressions of human effort, we can distance ourselves from the absurdity of today’s context….Whether the hands that weave palm fronds or break sea coral, it is human effort that gives birth to culture.”

Selma Khalil is an Albright Fellow, and a senior at Wellesley College studying Neuroscience and Philosophy. While she is uncertain about where the future will take her, she hopes to always ask the right questions, and do her best to answer them.
Photo Credit: Nick Jenner, "Robot," vai Flickr, 22 February 2012.