The US Needs Universal High Income

That dilemma is the crux of an evolving silent crisis that threatens to undermine the foundation of the American economic model.

You don’t need a business degree to understand the nature of the doom loop. A smaller labor force earns a smaller national income and spends less. As demand shrinks, companies lay off many of their remaining workers, who themselves spend less, on and on until we’re all in bread lines.

Assuming there are any charities collecting enough donations to pay for the bread.

The workforce participation rate has already been shrinking for more than two decades, forcing fewer workers to pay higher taxes. It’s about to get much worse.

Workers are already being replaced by robotics, artificial intelligence and other forms of automation. Estimates vary about how many and how quickly these technologies will kill American jobs as they scale and become widely accepted, but there’s no doubt the effects will be huge and that we will see them sooner rather than later.

For this to work, Musk observed, idled workers would have to be paid a “universal high income”—the equivalent of a full-time salary, but to stay at home. This is not to be conflated with the “universal basic income” touted by people like Andrew Yang, which is a nominal annual government subsidy, not enough to pay all your expenses.

“It will be an age of abundance,” Musk predicts.

Whether you’re a 55-year-old wherry man or cabbie, or accountant who loses your job through no fault of your own other than having the bad luck to be born at a time of dramatic change in the workplace, you always get the same advice.

Look at it from their—the boss’—perspective. Costs are down, profits are up. They don’t know you, they don’t care about you, guilt isn’t a thing for them. What’s not to like about the robotics revolution?

Those profits, however, belong to us at least as much as they do to “them”—employers, bosses, stockholders. Artificial intelligence and robots are not magic; they were not conjured up from thin air. These technologies were created and developed by human beings on the backs of hundreds of millions of American workers in legacy and now-moribund industries.

If the wealthy winners of this latest tech revolution are too short-sighted and cruel to share the abundance with their fellow citizens—if for no better reason than to save their skins from a future violent uprising and their portfolios from disaster when our consumerism-based economy comes crashing down—we should force them to do so.