While the topic of a guaranteed annual income is usually confined to conversations about poverty alleviation, this weekend I listened to a fascinating interview that linked the topic to the increasingly powerful impacts of technological evolution on employment.
On Sunday, CBC’s Spark played an interview with Martin Ford, author of “Lights in the Tunnel”, a book that looks at the disruptive effects of technological evolution on the economy. As I wrote elsewhere (here to be exact), Ford’s general thesis focuses on what happens if technology keeps evolving as quickly as it has over the past several decades.
In particular, Ford argues that, “applying Moore’s law of technological innovation to ongoing innovation will mean the disappearance of what today are termed high skill, high touch jobs that heretofore have remained beyond the reach of technology’s grasp. The result is an increasingly structural form of unemployment, today reserved to lower-skilled portions of the economy, but one, Ford believes, will increasingly move up the value chain.”
You can listen to the entire interview with Ford here: http://www.cbc.ca/player/Radio/Spark/Full+Episodes/ID/2391174192/
While Ford’s general thesis isn’t necessarily novel, what I found quite unique and interesting is his response when asked for a solution. In particular, Ford responds that while technological evolution cannot, and should not, be impeded, the policy response could include a form of guaranteed annual income (GAI) for citizens that ensures that technological productivity doesn’t further contribute to a widening income gap and disaffected citizenry.
The topic is highly politically and ideologically contested, and its use as a policy tool has so far been limited because of it. However, the small number of case studies performed have shown a potentially positive role for a GAI. It’s subsequently worthy of attention and increased analysis.
Building on Ford’s concept of the GAI as a mitigating policy lever in the face of what I’ll call “rapid technological advance” (RTA), a couple of primary impacts and questions jump out.
First, the potentially negative effects of RTA on employment include a rise in unemployment but conversely could lead to increasing profits/margins. There would then be space for public-revenue generation that would better compensate those affected by job losses. The cost of the GAI (which is potentially net positive for the government given case study findings on the effect of a GAI on health outcomes) is thus pushed down the list of issues.
However the more interesting/novel angle is the impact of a GAI on innovation and entrepreneurship. The limited case study evidence we have on a guaranteed income shows that a GAI may lead to a decrease in hours worked, and thus have an potentially tightening effect on the labour market. This tightening, however, could help to counteract the negative effects that RTA would have on the labour market.
This is certainly important, however, what I’d like to better understand is what affect a GAI might have on entrepreneurship, and whether a GAI spur increases in youth/other cohort entrepreneurs? Would it allow a safety blanket that might increase risk taking amongst new startups? And thus in so doing would it help build a more productive society?
These certainly aren’t easy questions to answer, and would ultimately require pilot projects to ascertain. However they highlight that solving the increasingly complex questions created by the confluence of technological and economic dynamism, and their impacts on society, will require better data, better analysis, and new and creative ways at looking at the intersections between policy areas.