Craig Berry: The universal basic necessity in the age of the machines

Electrical design engineer Craig Berry says it's essential to consider the role of a universal basic income as technology changes society

IF you've ever seen the film The Godfather, you will see Don Corleone, among other characters, use the line: "Make him an offer he can't refuse." What this refers to is making a deal with someone that can’t possibly say no to because it may mean their certain death. 

This is very similar to the world we live in today, but in this case Don Corleone is played by the private corporation, and we are the chumps that must accept their offer, because in the real world, we have a government whose attitude towards its citizens is 'we work or we die'. 

This may seem like a dramatisation of the state of things today, but sadly after the deaths we've had of the homeless in the busy streets of Glasgow city centre, this scenario has become all too real.

The deal that corporations are making are as follows; we will pay you below the Living Wage, and the government will subsidise your remaining pay so that you can continue to work for us. 

The deal that corporations are making are as follows; we will pay you below the Living Wage, and the government will subsidise your remaining pay so that you can continue to work for us. 

This, again, may seem like a dramatisation, but according to the group Americans for Tax Fairness, the United States of America currently subsidises companies like Wal-Mart and McDonald’s low-wage employees $6.2bn in public assistance. 

Had Wal-Mart paid their employees Living Wages, this would have saved the USA billions of dollars.

The increasing issue that those workers will now need to face is the rise of the machines and the automation of their jobs. PwC has estimated that the average growth of automation is 2.4 per cent faster than the growth of job creation. 

Uber may be disgracefully paying its drivers, but once driverless technology is fully implemented, this could mean the loss of a significant number of jobs, far greater than loss associated with Uber's unfair business model.

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A study by the Money Advice Service found that 16 million people in the UK, 40 per cent of the working population, have less than £100 in their bank account. On top of the risk to losing their jobs to a machine, there is a significant number of people on the brink of destitution as is. 

That is real people with real lives facing real problems. They can use whatever excuse as to why they are in that position, but the real problem here is quite simple: not enough people have enough money.

The 16 million people living pay check to pay check aren't going to be the only ones at risk from automation. The Trade Union Congress has found that real wages in the UK have decreased by 10 per cent since the world was shocked by the financial crash. 

Most people are facing either a job that pays less than it did 10 years ago or a robot that can do their job more efficiently and even more cheaply. This risk faces both the working class and the middle class.

The Office of National Statistics has also found that 60 per cent of the economy is consumer driven. That is something as simple as you buying a pint at the weekend, getting your cereal for the next morning or buying something special for the love of your life.

Most people are facing either a job that pays less than it did 10 years ago or a robot that can do their job more efficiently and even more cheaply. This risk faces both the working class and the middle class.

Coupling this with the rise of the machines and falling real time wages paints a rather bleak picture for our future. How many robots have you seen drink a pint or eat cereal?

If consumerism is so important to our economy, how can people afford to sustain the market if they have no job to support themselves? Aggregate demand (the demand for goods and services) will shrink the further automation rises, which will be self-defeating for the companies which replaced you with a machine.

All of these facts make further evidence that a basic income, the right for all citizens to receive a dividend from the state, isn't just an idea to overcome the problems of today, it’s a necessity. 

The welfare state has provided good insurance for people who lose their job, but we need to move on from the insurance-based system.

But the bureaucracy involved is damaging, and it is damaged further when the Conservatives take scissors to the net and expect it to do the same job. Basic income is the bedrock we need to not just save us from the increase in automation, but it is a tool that we will have to end the mafia scenario I began with.

When we have the safety of an income regardless of the work we do, we have the ability to say no to these companies providing ratchet wages for hard-working jobs, should they continue to exist. 

READ MORE – The evolution of universal basic income

This also provides companies with economic confidence. Aggregate demand will then have a floor, a minimum level for the economy to drop to. Should the rise of the machine be more radically encompassing than we expect, then the basic income will continue to be a constant stimulus for the economy.

Woman talk about breaking through the glass ceiling, but in this scenario, we need to ask, what is the make-up of this glass house? We need to make sure the foundations are there for women to stand upright, to break through. How can we expect this ceiling to be destroyed if women are more pre-occupied with depleting wages and increased foodbank use? 

We have seen in history the further we economically liberate women the further we empower them. But that has only brought about some change for some women. A basic income has the potential to empower all women.

The fear that we should all have with basic income is the attitude of corporations to its implementation. As discussed earlier, if Wal-Mart is willing to tally $6.2bn in public assistance for its employees, what confidence will you have that it will not continue to do the same to employees who receive an income that takes them out of poverty regardless of the pay or hours Wal-Mart provides? Workers’ rights are still an important issue in the world of basic income.

A progressive look at minimum wage is still necessary. The value of work and the gross value added, value of goods produced, will still remain the same within its boundaries if we continue to have a functioning market supported by basic income. 

READ MORE – The basic income: Can it really work or is it all just a pipe dream?

We cannot let corporations use the basic income as a subsidy for poor pay and poor contracts. The need to work towards a £10 minimum wage and the need to end exploitative zero-hours contracts are necessary for a progressive society.

A basic income will create the power of choice for its citizens. Will I choose this zero-hours contract that doesn’t guarantee me any number of hours of work, which puts the difference between my children being fed properly or not, on the whim of my employer?

In the case of basic income, the wage slavery will be ended. You will have the ability to say "No, these conditions are not right, and I am better off looking for something fairer, and my children will not starve because of this decision. And they never will again."

The basic income has already started trials in Amsterdam, Finland and Scotland. Fife is running trials and there is talk of Glasgow running its own trial. They may be able to introduce it locally, but we need to continue to convince people nationally to support a progressive change in the system, so that the basic income can be implemented properly.

A basic income isn't the magic cure to all of our issues, but it will certainly help us. What we need to remember to focus on is the importance of progressive taxation, which will be a prerequisite to an affordable basic income that provides enough for its citizens.

A basic income creates the power of choice and will save our economy from the machines that seek to help us.

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Comments

Conrad Hughes

Mon, 07/10/2017 - 15:07

Worth noting that there are leftist critics of the Basic Income idea, notably Bill Mitchell, an Australian economist who describes it as a “neoliberal strategy for serfdom without the work”: not only does it fail at a macroeconomic level, but it represents a surrender to capitalism and the reduction of citizens to “consumer units”. He prefers the idea of a well-designed Job Guarantee, arguing that it would better promote self-esteem, social inclusion, confidence-building and skill augmentation, as well as help end the hopelessness of multigenerationally jobless families. Die Welt summarises some of the arguments here: http://www.dw.com/en/whats-better-an-unconditional-basic-income-or-a-job...

The full list of Mitchell's articles on the Job Guarantee is a multi-page collection here: http://bilbo.economicoutlook.net/blog/?cat=23 ... he debates the two ideas in a series of posts starting here: http://bilbo.economicoutlook.net/blog/?p=34448

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