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The case for a universal basic income supplement
Thanks for signing up for the Shares in America Newsletter! In this newsletter we’ll bring you information about the effort to (1) tax the wealthy (2) limit money in politics and (3) let all of us share in our country’s enormous and growing prosperity.
Short recap: these three charts show why we need Shares in America—and how we can afford it. The first shows how our economy has grown in a straight line since the 1940’s but that wages for workers have flatlined since the 1970’s.
The huge difference between worker income and what the country produces has almost all flowed to the top. Basic economics explains part of the story: as automation reduced the need for labor, especially in agricultural and manufacturing, demand for labor fell, and with it wages. That’s simple supply and demand. But this growth in inequality was helped along by tax policies and union busting favoring the wealthy.
The next two charts show current income distribution by household and how that would change with a Shares supplement of $1,000 per adult per month financed by a simple income tax change.
Before
After
As you can see Shares almost doubles the income of households at the low end but leaves plenty of income inequality. The middle class mostly gains too. You can see a fuller explanation at Shares in America: can we afford a universal basic income.
So much for the review.
Today’s newsletter is about how AI will accelerate these trends unless we act.
I subscribe to the Economist Magazine, a venerable British journal established in 1843. The Economist is strongly pro-market and pro-capitalist, and hardly alarmist, but in the latest issue their lead editorial was titled (actual size):
Prepare for an AI jobs apocalypse
It is not here yet. But governments should lay a safety-net
They go on to say:
Economists’ prediction that work will stay plentiful is less reassuring than it looks, especially over a long horizon. Though the market will find uses for human labour even as models and robots become more capable, the quality of those jobs and the wages they pay are not guaranteed.
Exactly. In Shares in America, the book, I have a chapter which looks at why wages have stayed stagnant even with low unemployment. US Net National Income is huge, over $190,000 per household, and that creates enough demand to keep everyone employed. But the top tenth of households in the US account for about half of income and consumer spending. Unless you have special in-demand skills, you, as a worker, are competing against everyone else and automation. The bottom half of US households share one tenth of national income before taxes and government benefits.
And now, even skills that were in high demand and well-paid just a short time ago are being threatened by AI. I made a very decent living in IT for much of my life, but AI can program and keeps getting better at it.
Meanwhile the economy, income, and wealth keep growing, but so do income and wealth concentration.
The Economist goes on to say:
Eventually humans could, like horses in the age of the car, become uneconomical. Income may go mostly or entirely to owners of capital, who then go on to spend it on things that are made by AI and robots using natural resources that they monopolise. This dystopian possibility is behind Silicon Valley’s admonitions that state intervention, and perhaps a universal basic income, will be necessary. That remains a long way off, if it ever happens.
The article examines a number of ideas to ease the coming shock, including partial public ownership of AI firms. Many of these ideas are good but lack the simplicity of universal basic income, and so are ripe for the kind of manipulation by money we’re all too familiar with.
Universal basic income —Shares in America—is simple and direct. We all share in the fruits of greater productivity. Like Social Security, once in place it can be easily adjusted to deal with whatever technology does to wages and employment. And like Social Security, once in place, it will become inviolable.
We can get to Shares. In a mere two years we could replace all our Representatives in Congress and in six we could replace all the Senators. But it will take a grass roots movement. Monied interests will muddy the waters at every turn. And that’s where you come in. Movements grow person by person.
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Thanks!