The British government could protect against job losses from automation and artificial intelligence (AI) by giving £10,000 ($14,000) per year to every citizen under 55.
That’s according to the the Royal Society for the encouragement of the Arts, Manufactures and Commerce (RSA) — which has suggested increasing taxes on big tech giants like Amazon, Facebook, and Apple to pay for the payments.
Go deeper with GlobalData
The RSA said it could pave the way to everyone getting a basic state wage.
The scheme would involve citizens applying for up to £5,000 annually from the fund for up to two years to help with learning or training costs, social care, or for new business, in exchange for losing some benefits such as jobseeker’s allowance and tax credits.
The plan is costed at £14.5bn a year if it is fully subscribed to, and a total of £462bn over 13 years.
To pay for it the RSA wants to develop fresh taxes on tech firms, introduce wealth taxes, or borrow money from the financial markets to create a Norwegian-style sovereign wealth fund.
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By GlobalDataWhat was said:
Anthony Painter, director of the RSA’s Action and Research Centre, said:
The simple fact is that too many households are highly vulnerable to a shock in a decade of disruption, with storm clouds on the horizon if automation, Brexit and an ageing population are mismanaged.
Without a real change in our thinking, neither tweaks to the welfare state nor getting people into work alone, when the link between hard work and fair pay has broken, will help working people meet the challenges ahead.
In the report the RSA wrote:
In the UK, millions of people circle in and out of poverty; are exposed to insecure forms of work; and rely on a welfare system which can seem more intent on punishing than helping. Meanwhile, productivity growth in the UK has been anaemic for more than a decade. The current model of political economy is not working. New and practical thinking is desperately needed.
The central proposition is the creation of a Universal Basic Opportunity Fund (UBOF): an efort to reimagine how society supports people to live meaningful, contributory lives. Its premise is simple: fund every citizen under the age of 55 with a £5,000 opportunity dividend for up to two years, taken at a time of their choosing over the course of a decade. The fund would initially last for ten years, with dependent children also eligible for the payment in the year a parent, or both, were receiving it.
Why it matters:
It’s thought that millions of jobs could be affected by automation and AI by 2030s, as the technology makes inroads across all sectors.
Last year PwC reported that the transport, manufacturing, wholesale and retail sectors are the most at risk from job losses from automation.
In the UK it is predicted that around 30 percent of jobs will be lost to AI and automation, however this is less than countries such as Germany and the US, which could see 35 percent and 38 percent jobs lost, respectively.
Retail, in particular, is already seeing the impact AI can have. According to research by Gartner, 85 percent of customer interactions in retail will be managed by AI by 2020.
The Bank of England estimates as many as 15m jobs could be at risk.
In 2015 Andy Haldane, the bank’s chief economist, said automation posed a risk to almost half those employed in the UK and that a “third machine age” would hollow out the labour market, widening the gap between rich and poor.
Background:
Universal basic income generally considered a radical left economic policy, however some think it could also be used to encourage entrepreneurialism and replace state benefits.
The Scottish government has four councils testing the idea and the UK’s Labour party is also looking into it under leader Jeremy Corbyn.
Meanwhile, Finland has run a trial paying 2,000 unemployed people aged 25 to 58 a monthly €560.
