8.9 C
Elmira
Sunday, May 31, 2020
Their View / Opinion

Basic income: a done deal?

The First World War speeded up the emancipation of women; the Second World War led to the creation of welfare states in all the industrialized countries. What great change will the coronavirus crisis bring us?

This crisis has not yet killed tens of millions, and it probably never will. No great empires have fallen, and no human villain can be blamed for the problem. Yet there will probably be changes as great as those after the two world wars.

One great change will be in the pace of automation. As Microsoft CEO Satya Nadella put it, we have seen “two years’ worth of digital transformation in two weeks,” as tens of millions of people stayed at home and worked online. A great many of them will not go back to working in an office when the threat of the coronavirus recedes.

So does five weeks of lock-down equal five years’ worth of digital transformation? Probably yes. Last week Twitter became the first major Silicon Valley company to publicly accept this new reality, announcing that “If our employees are in a role and situation that enables them to work from home and they want to continue to do so forever, we will make that happen.”

But for the considerably larger number of people whose occupations do not allow them to work at home, the news is not so good. For them, the digital transformation means automation and unemployment. In a recent survey of company executives in 45 countries, auditors Ernst and Young found that 41 per cent of them are investing in greater automation of their work processes.

More will follow. The reason that the service industries (apart from retail sales) have largely escaped automation so far is that the new technology is expensive, disruptive, and annoys the customers, not that it doesn’t exist. But now the crisis is forcing the customers to get used to that kind of service, at the same time that the owners and managers are realizing what a nuisance it is to depend on human employees.

The process that has already destroyed the assembly lines (and given us Donald Trump) will continue through the workforce until around half the existing jobs have been destroyed, as Carl Benedikt Frey and Michael Osborne of Oxford University predicted in their famous 2013 study. Their prediction was for the year 2033, but the coronavirus may be bringing that date forward.

However, the other great change wrought by the coronavirus works in the opposite direction. When unemployment suddenly leapt to 30 per cent as lockdowns spread across the world, we were suddenly confronted with a working model of that future – and the social and economic changes that might deal with the mass destruction of jobs by automation are actually being road-tested right now.

In some countries, like the United States, it is real unemployment, only slightly alleviated by handouts like a $1,200 cheque signed by Trump. In most richer countries, it is some form of ‘furlough,’ with the government paying 75 to 85 per cent of people’s wages, up to a limit that is high enough to let them live in modest comfort, until their jobs resume in two or three or four months’ time.

Either way, it does concentrate people’s minds, rather like the prospect of being hanged in the morning. A lot of them will notice a) that this is the level of unemployment that already lies in wait for them down the road; and b) that there is still enough money around to keep them going anyway. Or, in the case of the U.S., that there could be if the government was willing to try.

It’s a small step from there to the concept of a guaranteed basic income as the long-term solution for a society where half the jobs have been destroyed by automation but productivity is higher than ever.

There are, of course, a number of codicils to this conclusion. The current levels of income support could not be sustained long-term without a significantly higher rate of tax. Widespread job-sharing would be needed to avoid creating a permanent under-class of the unemployed and to keep people connected. There are no magic bullets.

We were already sleep-walking towards this level of unemployment anyway, just over a much longer period. At least now we’re awake to the fact that such things can happen, and we know that they can be managed.

More or less normal service will probably be resumed in a few months, or at worst in a year or so, but automation is getting a big boost and from now on it will be an ever-present companion. But the experience we are going through right now makes it a lot less scary.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

To encourage thoughtful and respectful conversations, first and last names will appear with each submission to The Observer's online community. Pseudonyms are not permitted. By submitting a comment, you accept that The Observer has the right to reproduce and publish that comment in whole or in part, in any manner The Observer chooses. Please note that The Observer does not endorse the opinions expressed in comments. Comments on this story are moderated according to our submission guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

We're looking for opinions that count.

Yours. Join in the conversation, provide another viewpoint, change minds with your perspective.

OUR COLUMNISTS

Will the public good be part of the equation in post-COVID recovery?

Short-term thinkers as a rule, most of us are firmly ensconced in a reality shaped by COVID-19. Understandably, the current crisis and...

Now we’re lining up to get overcharged for booze

The sustained lineups in front of LCBO stores tell us booze is deemed essential through the coronavirus pandemic, the employees there frontline...

Hong Kong: a story of what went wrong

“We are the meat on the chopping board,” said Martin Lee, founder of Hong Kong’s Democratic Party. “They have set a precedent...

Basic income: a done deal?

The First World War speeded up the emancipation of women; the Second World War led to the creation of welfare states in...

Still too many close calls and safety issues for farmers

The COVID-19 pandemic fallout – in particular, the food shortages we’ve experienced in some commodities, due to either increased demand or decreased...

Frontline food workers to Ontario: We’re here for you

We’re pretty attached to our neighbourhood butcher. He’s always been renowned for quality, let alone service and friendliness. And...

Better days are just around the corner

There are no grouse in the woods where I now let my pup run – and that is why I choose to...

Dealing with the implications of a near-tragedy

The other day, a good friend of mine called to tell me about an unfortunate thing that happened to him. He was...

They may have a bad reputation, but wasps are useful critters

Q.  As far back as the fourth century B.C., Aristotle lamented the shortcomings of Greece’s young people, saying “They think they know...

Love is a drug, with real medicinal benefits

Q.  Have you heard talk about a “love medicine”?  Is it a new wonder drug? A.  It’s certainly wonderful...
- Advertisement -