UBI is no antidote to automation

Proportion of jobs threatened by automation in India is 69%, 77% in China and as high as 85% in Ethiopia.

By Author Dr V Ramachandra Reddy   |   Published: 29th Mar 2017   1:52 am


Cognizant, the multinational IT company that has major operations in India, is reportedly laying off more than 6,000 employees. Though the reason being cited is ‘non-performance’, it, in fact, is part of a wider trend in the IT sector where the ever-increasing automation is making many jobs — especially lower-end — redundant. 

There are clear indications that this redundancy is only going to get more intense in future. Research based on World Bank data predicts that the proportion of jobs threatened by automation in India is 69%, 77% in China and as high as 85% in Ethiopia.

Corporate leaders have gained expertise in employing euphemistic language – when they want to lay off workers to reduce their workforce, they announce that their employees are ‘transitioning out’, which will result in the ‘right-sizing’ of their businesses. Irrespective of the kind of language they use, the layoffs are very painful as they deprive people of their livelihoods.

Things to Come
Internet of Things (IoT), Big Data, and Artificial Intelligence (AI) have now emerged as popular technology buzzwords. There is a symbiotic relationship between these three technologies and they complement each other. Internet of Things, a network of sensor-enabled and Wi-Fi capable machines and appliances, produces enormous quantities of data, which is analysed by big data analytics. The resultant information is used to enable machine learning, which in turn leads to artificial intelligence. These three technologies are poised to truly revolutionise the way we work and lead our lives.

These disruptive technologies, though stand as a testimony to the stupendous progress made by the humankind, are capable of affecting the livelihoods of the people and have the potential to trigger massive unemployment. Conventional wisdom has it that large-scale unemployment invariably triggers social unrest.

Silicon Valley, the leading hub for hi-tech innovation, is working to unleash automation all across the world. Once they install the IoT-enabled, AI-capable robotic hands in manufacturing facilities, they will need very few humans in their factories. The proponents of the free market, who are on an automation spree, are well aware of the consequences of their actions. The windfall profits that will be generated by their automated factories will definitely empower them to accumulate wealth but the people who get elbowed out by the robotic hands will start turning restive.

Robert Schmid, Chief IoT Technologist at Deloitte Consulting LLP, asserts, “Like a wildfire racing across a dry prairie, the Internet of Things (IoT) is expanding rapidly and relentlessly”. However, it is not just the technology that has the capability to spread like a wildfire but even the unemployment-induced unrest has the capability to spread in the same manner, albeit with a devastating impact.

Getting Set
Corporate leaders the world over are gearing themselves for the inevitable. They can’t escape adopting technology, but at the same time are apprehensive of the likely unrest, which could pose a threat to their businesses.

So, they are busy devising a ‘social vaccine’ to ward off any negative impact of their automation plans and to protect their interests. This social vaccine appears to be none other than the Universal Basic Income (UBI).

UBI, to put it in simple terms, is a flat payment made to each and every citizen of a country, irrespective of their socio-economic status, to enable them to maintain a minimum standard of living. The proposal, on the face of it, appears alluring and for many, it may even sound utopian. There is a lot of discussion and debate about UBI and the feasibility of implementing it in our country after it found mention in the Economic Survey 2017-18.

The UBI is finding favour with left-libertarians as well as the supporters of the free market. The left-libertarians, who oppose exploitation, inequalities and concentration of economic power, feel that the UBI, to some extent, will ameliorate the hardships of the people who are facing dire poverty. The free market capitalists have paradoxically emerged as the most vocal proponents of the UBI.

Venture capitalists Marc Andreessen, Sam Altman and web guru Tim O’Reilly are some of the top denizens of Silicon Valley who made a pitch for the UBI. Elon Musk, Founder and CEO of SolarCity, Tesla, and SpaceX, in a recent interview, stated, “There is a pretty good chance we end up with a Universal Basic Income or something like that due to automation”.
It, therefore, appears that the free market capitalists have come to the conclusion that the UBI could prove to be the “social vaccine of the 21st century”, which would succeed in mitigating the negative impact of automation-led unemployment.

Who will pay for UBI
Payment of UBI, no doubt, will require the mobilisation of enormous amount of financial resources. The most likely source of financing the UBI is levying additional taxes on the wealthy, especially the big corporations, and cannibalising the existing welfare programmes. In other words, entrepreneurs who own the robotic hands will be financing the payment of the UBI.
This will have serious repercussions on governmental policy making as the corporate interference is likely to increase manifold. In a democratic world, the voice of the people is paramount.

However, in the emerging world of rampant automation the smart machine-owning entrepreneurs, who will be financing the UBI, may acquire the supreme status. It will be a dangerous situation, where a handful of people, who own robotic hands, will gain an upper hand over the rest of the humanity and may even push them into subjugation.

(The author is a former Associate Professor)