Basic Income Faculty Journal Series Posted on Thursday, August 16, 2018

Arguing for universal basic income: precariousness, not the end of work

Michael Howard

Michael W. Howard Professor of Philosophy at the University of Maine

Universal basic income (UBI) is in the news, and is being considered by leading politicians (including Obama and Clinton), titans of business (including Facebook co-founders Mark Zuckerberg and Chris Hughes, and venture capitalist Sam Altman), and union leaders such as Andy Stern. There are many factors contributing to the news explosion, including the 2016 Swiss referendum, and basic income pilot projects in CanadaFinlandIndia, and elsewhere. But what is the underlying social reality that is generating all this interest? Some have argued that artificial intelligence and automation will soon bring about the end of work, and hence that income must become less conditional on employment. The title of Martin Ford’s best-selling book says it all: Rise of the Robots: Technology and the Threat of a Jobless Future.  Former Labor Secretary Robert Reich explains, “Researchers estimate that almost half of all U.S. jobs are at risk of being automated in the next two decades. This isn’t necessarily bad. The economy we’re heading toward could offer millions of people more free time to do what they want to do instead of what they have to do to earn a living. But to make this work, we’ll have to figure out some way to recirculate the money from the handful of people who design and own i-Everythings, to the rest of us who will want to buy i-Everythings. One answer: A universal basic income—possibly financed out of the profits going to such labor replacing innovations, or perhaps even a revenue stream off of the underlying intellectual property.”

Reich and Ford may be right, but there is reason to be skeptical about a jobless future, and arguments for basic income should rest on a surer footing. The standard economist’s response to the worry about technological unemployment is to see it as another instance of the “Luddite fallacy.”  Mark McCarthy, for example, says “technology-driven increases in productivity are leading to the creation of less-expensive goods and services, and the resulting demand is increasing employment throughout the U.S. economy.  Technology and job creation have gone hand-in-hand—with productivity and employment rising together over the decades.” An illustration of this is the ATM, which many feared would replace bank tellers, but there are now more tellers than when the ATM was introduced, just doing different tasks. In general, the US economy continues to create more jobs than it eliminates.

Nevertheless, other economists think that this time is different. Former Treasury Secretary Lawrence Summers says, “[T]here are many reasons to think the software revolution will be even more profound than the agricultural revolution. This time around, change will come faster and affect a much larger share of the economy. […] [T]here are more sectors losing jobs than creating jobs. And the general-purpose aspect of software technology means that even the industries and jobs that it creates are not forever.” In fact, among economists and technology specialists, opinion is split almost evenly, according to a Pew Research study in 2014.  The figure cited earlier by Robert Reich echoes the widely quoted 2013 research of Frey and Osborne, which found 47 percent of the American workforce at risk of being replaced by automation. But this figure is likely to be too high. Frey and Osborne focus on occupations. But, as a McKinsey report argued “Very few occupations will be automated in their entirety in the near or medium term. Rather, certain activities are more likely to be automated.” The authors find that although “as many as 45 percent of the activities individuals are paid to perform can be automated by adapting currently demonstrated technologies…fewer than 5 percent of occupations can be entirely automated using current technology. However, about 60 percent of occupations could have 30 percent or more of their constituent activities automated.” Starting from a similar critique of Frey and Osborne, an OECD study concluded that “on average across the 21 OECD countries, 9% of jobs are automatable.” Thus, while automation will massively disrupt the nature of work, it is unlikely to replace it. Mark Walker draws a more nuanced conclusion that still provides support for UBI: “Robots will reduce the need for human labor below full employment.” If that more modest claim is true, a partial decoupling of income from labor may be necessary to avoid rising poverty and inequality.

Even if there is no net job loss as a result of new technologies, there is evidence of rising precariousness of employment, sufficient to warrant UBI.  According to a recent study, “94 percent of the net job growth in the US between 2005 and 2015 came from alternative employment arrangements,” such as independent contracting, work that is on-call, part-time, temporary, or in the gig economy.  One illustration of this is the rise in the proportion of teachers in higher education who are employed as low-paid adjuncts rather than full-time faculty. Labor force participation is declining, and is projected to decline further. “Jobless recoveries” from recessions are longer than in the past.

Productivity of labor has continued to rise, but wages have not risen proportionately. The wealth produced has migrated to the top, exacerbating inequality. The causes of these phenomena are complex. But likely contributors include declining top marginal tax rates since their peak after World War II, the decline of unions, and the resurgence of monopolies. The rise of the precariat warrants a basic income. But if this is our proper focus, then the argument for UBI will need to be more nuanced than the need to replace disappearing jobs with UBI. Proponents need to explain why an exclusive focus on job creation, whether through neo-liberal economic growth or the government as an employer of last resort, is unlikely to be successful. Other measures are on the table for addressing precarity, such as making union organizing easier, raising the minimum wage, reversing tax cuts, and breaking up the new monopolies like Amazon. UBI should be seen as part of a package of policies to strengthen the power of workers, to broaden the social conception of work to include care work, artistic creativity, and civic participation, and to facilitate more sustainable development. The fruitful questions are whether and how UBI is essential to these wider social concerns.




Michael W. Howard (Ph.D., Boston University, 1981; B.A., University of Chicago, 1974) is a Professor of Philosophy at the University of Maine.  He is currently working on environmental justice, basic income, and how to share the burdens of climate change equitably. He has written over 50 articles on economic democracy, basic income, and other topics. He has authored, edited, or co-edited four books: Self-management and the Crisis of Socialism(2000), Socialism(2001), Alaska’s Permanent Fund Dividend(with Karl Widerquist, 2012), and Exporting the Alaska Model(with Karl Widerquist, 2012). He is the national coordinator for the US Basic Income Guarantee Network, and co-editor of Basic Income Studies.