The AI Curve and Why Universal Basic Income is The Only Solution

You’ve probably heard of a `tick’ or hockey stick curve. It’s a device statistics experts often use to show how a trend starts slowly, and then rapidly accelerates upwards, as people buy a product, change jobs, search online for something etc.

Right now, we are in the little dip in that hockey stick curve when it comes to the impact that AI (Artificial Intelligence) and automation are having on the global jobs market. Certain sectors, like package distribution, driverless vehicles or product assembly are already seeing a huge variety of changes due to automation and use of robots. But the real structural shift in ALL our lives is the deeper impact of AI. When algorithms can replace a day’s work in a few seconds, then millions of us will no longer be required.

From barristers to journalists, architects to heart surgeons, IT coders to University lecturers, every single well paid profession in developed/Western economies is going to be profoundly affected within the next decade.

The Jobs Cull Has Begun

Here are some stats for you to ponder upon, which highlight where we are right now in terms of automation affecting the jobs market.

The new Aston Martin 4X4 car factory in Wales will create just 750 assembly line jobs. Robots will do most of the work. Compare that to the 3600 jobs currently located at Bentley’s factory in Crewe, where an older, 1990s plant exists, or the 6700 workers still busy at Nissan in Sunderland.

Once robots are deployed on mainstream car production, in the same way that Aston Martin is obviously planning to do in Wales, how many workers do you think it will take to assemble a Qashqai? Yep, about the same, say 750-1000 max. Now extrapolate that job loss across the entire UK car manufacturing industry.

Here’s another case study; Hachette Filipacchi are closing their UK book distribution centre with the loss of 230 jobs. Penguin are doing the same, with 255 jobs vanishing. We can only guesstimate how many humans will be required in the new automated plants but let’s assume it’s roughly the same reduction as the car industry, say 70-80%.

Maybe those warehouse pickers and packers could get jobs in call centres? Nope, think again. RBS Scotland announced in 2016 that 230 jobs would go, as AI software replaced humans at its call centre in Edinburgh. LV Insurance has a new `Robo-adviser’ program that offers retirement advice for just £199 – guaranteed no human bullshit involved!

This rush to automate jobs isn’t just an EU/USA thing, where wages are still relatively high compared to say India, China, Africa or South America. Foxconn in China – who assemble iPhones for Apple laid off 60,000 staff last year.

Other electronics giants plan to do the same. They must, or their wage bills will bankrupt their companies.

Ask yourself why Amazon paid $775 million to acquire the Kiva robotics company, for Robot Wars type fun? No, they plan to replace a huge swathe of their workforce one day with machines. Then they will hire out their Kiva robots to their warehousing and distribution rivals. A perfect storm of jobs decimation is coming and its impact will irreversible – unlike Brexit or an Indy Ref. The jobs are NEVER coming back.

It Must Be Universal Basic Income; All Or Nothing

I’m a proponent of Universal Income for the UK, probably of around £750-£850 per individual, per month, and I’m going to explain why a phased-in, or gradual UBI scheme, which is being trialled in Finland, cannot work.

First, as described above, the jobs impact is across the board. It isn’t just going to be working class men losing van driving or taxi jobs, or young people kissing goodbye to the modern day headset-slave camp, also known as the call centre. Politicians who think that AI will only affect low-skilled workers are living in a dream world, because AI IS a learning program. That intelligence is fluid, adaptable and obviously can’t be contained, bargained or reasoned with. Like the Terminator, it will never stop dreaming up new ways to cut costs for governments in their public sector budgets, or save private companies money. This is especially true of global corporations, who stand to save the most cash by binning off workers en masse, and thereby gaining a marketplace advantage over smaller rivals who lack the financial resources to develop their own AI solutions.

Large companies will need fewer supply chain staff as AI monitors sales, market regulations, consumer feedback and localised demand 24/7. No supermarket buyer can match that level of detailed data mining and instant adaptability. Big corporations will be able use AI to design a product, making it compliant for its sector before it’s even tested. Machines will assemble it, pack it, ship worldwide and assess the success, or failure, in real time. If something isn’t quite working right, AI will detect it and build in upgrades on the production line within weeks of a launch.

So we should accept that the pace of change will accelerate, as AI gets ever-more clever at reading our human desires and preferences. The tipping point, where full-time employment collapses as AI and automation dominate the supply of goods and services, may be closer than we think. Sadly, it is human nature not to recognise such historic turning points and we can see examples such as the Luddites in the past, where those who cannot deal with the destruction of their livelihood seek violent revenge against the machines, or the people who enable them. This danger of civil unrest is another good reason why Basic Income must be universal, not piecemeal.

This isn’t just a recession, a dip, or an annoying blip. The application of AI globally will destroy about 47% of ALL USA jobs, and possibly 77% in China, according to a study by Oxford University, so its impact is enormous. This is the greatest change in human society since the Industrial Revolution in fact. It makes Brexit look like a Teddy Bears picnic.

Where do you think those jobless people in India, China, South America or Africa will be heading when the iPhone, shoe, clothing, or car parts factories are staffed by robots, or the call centres are all run by software, not people? That’s right, millions will head for Europe and the USA, where there are social welfare systems that are far more generous than anything on offer locally. It is human nature to seek security, freedom from hunger and destitution, and find a place where your children have a better chance in life. The great migration from poor countries to richer ones is just beginning and only fools would ignore that reality.

So politicians need to start planning NOW, running UBI trials as soon as possible. Again, these need to be universally applied – no selective trial groups – such as the one in Finland where 2000 long term unemployed people have been chosen. That will not help us learn anything about how UBI changes people’s lives. Most of us are going to be long term unemployed, or at least under-employed soon, so there’s no point in assessing the impact of UBI on a sample group who – for various reasons – are already OUT of the jobs marketplace.

UBI offers freedom from drudgery, a chance to be creative, start a small business, or be a carer, retrain as a nurse, a counsellor, a watchmaker – all kinds of things. But we will need a new social contract, a new way of taxing goods and services to pay for our collective enforced leisure time.

Most of all, we will have to redefine our value as humans, putting aside the old snobbery of job titles, of defining our social status through our work. Just think about that revolution.

One thought on “The AI Curve and Why Universal Basic Income is The Only Solution

  1. Pingback: Taxing Questions | Citizen's Basic Income Network Scotland - SC046356

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