Digitalization and the unconditional basic income!?

This blog post is about how digitalization is changing the world of work and how an unconditional basic incomeUBI) could be financed as a solution.

The image shows a human and a robot hand. Both point their fingers at a bright spot of light between them.

Digitalization has revolutionized production in recent years. It affects the world of work and society as a whole. Jobs are being eliminated because work processes have been automated and artificial intelligence has become widespread. How can the impact of digitalization on unemployment be cushioned? Is the concept of an unconditional basic incomeUBI) suitable for this purpose?

Unconditional basic income

The topic of unconditional basic incomeUBI) is a complex and controversial one. It has economic and social implications. Some believe that the UBI could be used to cushion the impact of automation and digitalization on unemployment.

Because artificial intelligence and robotics are spreading, many jobs are being automated. People become unemployed. An unconditional basic income lets these people continue to make a living and reorient themselves.

The argument against such a concept is that the economy is too heavily burdened. There is also the question of how such a project will be financed.

Estimated costs

The cost of a UBI depends on several factors.

How high should the basic income be?
How many people should receive it?
How should the UBI be financed?

Estimates put the annual cost of200 billion euros a UBI in Germany at . 200 billion euros is a lot and cannot be financed so easily. An annual 'Doppelwumms' doesn't help.

Other estimates are significantly higher. They are in the trillions.

However, it is often forgotten that the loss of jobs is a burden on the social system in any case.

How do we finance the UBI?

How about taxing the value created by machine labor differently than that created by human labor? Companies that use a lot of automation technology, creating fewer jobs for people, pay more taxes.

One approach is the idea of a robot tax. It requires companies to pay a percentage of their profits into a fund.

Another model is to tax companies that benefit from automation. They pay their resulting revenues into a fund.

The money from this fund will be used to finance the UBI.

There is no simple solution to finance the unconditional basic income. Nevertheless, I believe it is necessary to tax machine work in the future.

When companies use machine learning, artificial intelligence and other automation, they generate profits while reducing jobs for people.

Basic income pilot projects

Pilot projects on the UBI were conducted, in some cases decades ago, in various countries to study the impact of this idea on society.

In Germany, the pilot project 'Mein Grundeinkommen' has been running since mid-2021. 122 people receive an unconditional basic income of 1,200 euros per month for a period of 12 months.

There is a comparison group that does not receive an unconditional basic income but is surveyed regularly to compare the impact on quality of life, work motivation, and social security.

Further information on the study in Germany can be found on the German website Pilot Project Basic Income.

Conclusion

UBI or not, job reductions come at the expense of the social system. This leads to rising unemployment and to problems that society as a whole has to absorb.

Up to now, machine work has been taxed at most through profit. This will no longer be sufficient in the future. We need to think about solutions today and start implementing them step by step today.

Increasingly taxing machine labor and gradually taxing human labor less has another positive effect. The process would not gain momentum quite as quickly as it is currently suggesting. It would give us all time to adjust to the new situation.

In the picture you can see a robot in front of a large screen. The robot points with the finger of the right hand to a geometric figure, which can be seen on the screen together with formulas and calculations.

I think it is important to observe and analyze well how automation and artificial intelligence affect the world of work. This enables us to take necessary measures in good time .We can take advantage of the opportunities offered by automation. I am convinced that there will be a higher demand for skills such as data analysis, programming and creative work.