Highlights of a conference on the future of work in Zurich, the 4th of May 2016
‘Robots and artificial intelligence are going to take over and make redundant more than 50% of our jobs over the next twenty years’. This is how David Bosshart, CEO of the Gottlieb Duttweiler Institute for Economic and Social Studies, opened this conference about the future of work. We are now in a digital economy which allows us to do more and more with less and less. Later in the conference, Eric Brynjolfsson, author of The second Machine Age, supported Bosshart’s statement by providing a rich set of figures about the evolution of the industrial automation. The world-wide industrial robot shipment was of 100,000 items in 2000. It was not much more important 10 years later (only 120,000): but since 2010 it has increased dramatically. In 2015, the number was 250,000 and Brynjolfsson expects it to reach 400,000 in 2018. This is why he says that the robot revolution has barely begun.
These technological evolutions seem to have two main impacts: on the nature of work, and on the partition of wealth.
Bosshart outlined the fact that artificial intelligence and humans must be complementary, and that the company of the future will not be a digital entity with no staff. But if this is to be so then we shall need to leverage our strengths in collaborative and cognitive skills in order to be complementary with machines.
Robert Reich, the former US Secretary of Labour, in his presentation, pointed out that a lot of people are now moving to the third sector of the economy (particularly to the personal service sector); and while growth in America is relatively good, the labour participation rate is almost the lowest it has been for 40 years. The median household income (adjusted for inflation) is below what it was in 2000. At the same time, technologies are displacing jobs and are generating huge returns for their owners and their inventors. The results are higher inequality, lower aggregate demand, and a shrinking middle-class. According to Reich, the answer to growing inequality, insufficient aggregate demand and job insecurity is a Universal Basic Income.
Once again, the intervention and the figures of Brynjolfsson were going in the same direction. In the USA and other developed countries productivity output per hour is increasing whereas the median family real income is decreasing. From 1945 to the beginning of the 1980s these two data were at the same level. Now, productivity output per hour is almost double the median family real income. Productivity gains are therefore benefiting only the wealthiest. Brynjolfsson’s conclusion is that ‘We have to face a new grand challenge. Digital technologies will continue to accelerate; our skills, organisations and institutions are lagging; business won’t solve this problem; so we need to reinvent our organisations and institutions to keep up with accelerating technologies.’ Basic Income fits into this big reinvention of our organisations and institutions.
Debate on basic income during the conference
There was a consensus between almost all of the speakers that a Basic Income was needed. We only noticed dissenting opinions during a debate between Michael Tanner, Daniel Mitchell (both from the CATO Institute), Robert Reich, and Reiner Eichenberger (professor at the University of Fribourg, Switzerland).
Eichenberger’s opposition to Basic Income was in fact opposition to the 2,500 Swiss francs per month suggested by the proponents of the rejected referendum proposal in Switzerland, which he suggested would be impossible to finance and would cause huge disincentives to work. For Daniel Mitchell, Basic Income is an undesirable solution, and he offered a ‘nope-hope-dope’ argument: ‘nope’ to the belief that technology will destroy jobs; ‘hope’ that the local Basic Income experiments taking place at various locations and ‘may teach us useful things that help us reform the very inefficient welfare states operated by central governments’; and ‘dope’ to describe the people who think that we would get good results with a Basic Income scheme operated by central governments, whereas Basic Incomes would reduce incentives to work and would require economically destructive tax rates to finance them.
Tanner objected that a UBI, by replacing all other benefits, could correct the huge disincentives to work that the current welfare states is causing. He mentioned the case of Switzerland where the marginal deduction rate can go up to 97% (OECD figures).
Presentation of diverse experiments on Basic Income
A panel composed of Guy Standing, Ville-Veikko Pulkka, Amira Jehia and Michael Faye discussed pilot projects.
Pulkka presented the experiments to take place in Finland in 2017. Ambitions have been revised downwards and the pilot project will only concern 5,000 or 6,000 Finnish people, probably divided into different groups (with full and partial Basic Incomes – and maybe also a Participation Income). Guy Standing discussed the experiment held in India (http://isa-global-dialogue.net/indias-great-experiment-the-transformative-potential-of-basic-income-grants/) He insisted on the importance of a universal Basic Income, received by everyone, because ‘policies that are only for the poor are invariably poor policies’. Amira Jehia introduced the micro experiment that she is currently leading in Berlin, with the group Grundeinkommen. This group is raising money by crowdfunding, and as soon as it has collected 12,000 euros, it gives a monthly payment of 1,000 euros for one year to a person drawn in a lottery. Finally, Michael Faye presented the activities of Give Directly. This in an American non-profit organisation which gives cash transfers to the very poor, mainly in Kenya. Around 100 million dollars have already been given. First results are positive: money seems to be used sensibly. Haushofer and Shapiro published a report in 2013: https://www.princeton.edu/~joha/publications/Haushofer_Shapiro_Policy_Brief_2013.pdf. Give Directly is going to launch a program for at least ten years in fifty villages in East Africa.
Survey on Basic Income
To conclude: Nico Jasper, a Ph.D. student, presented results of a survey in which he has asked 10,000 Europeans about Basic Income. The survey is called ‘What do European think about basic income?’ and the results can be found here: https://www.neopolis.network/wp-content/uploads/2016-04-27_Basic-Income-Presentation_Press.pdf