The connection between rapidly evolving AI and Universal Basic Income (UBI)

The connection between rapidly evolving AI and Universal Basic Income (UBI) centers on addressing the economic disruption that artificial intelligence is expected to cause in the job market. As AI technologies advance at an unprecedented pace, they're creating both opportunities and challenges that are prompting serious consideration of UBI as a policy response.

The AI Displacement Challenge

AI is transforming the employment landscape in ways that distinguish it from previous technological revolutions. McKinsey predicts AI could replace up to 45% of jobs in the U.S., while the IMF estimates that in advanced economies, about 60% of jobs may be impacted by AI. Unlike past technological changes where workers could transition to new industries, AI represents a unique challenge because entire job categories may be permanently eliminated.

The displacement is already beginning. Google recently revealed that 25% of its code is now generated by AI agents, reducing the need for junior-level developers. Companies are increasingly leveraging AI to reduce employee costs, with 40% of employers expecting to reduce their workforce where AI can automate tasks. The World Economic Forum projects that by 2025, AI will displace 75 million jobs globally while creating 133 million new ones, resulting in a net gain but significant disruption in certain sectors.

UBI as a Policy Response

UBI is being proposed as a crucial safety net for workers displaced by AI automation. The concept involves providing a guaranteed income to all citizens, regardless of their employment status, which could address several key challenges posed by AI:

Economic Security During Transition

UBI would provide financial security for individuals who lose their jobs due to AI, ensuring they maintain purchasing power and can continue participating in the economy. This is particularly important because AI-driven unemployment may be more permanent than displacement from previous technological changes.

Enabling Human Development

By decoupling income from traditional work, UBI could empower individuals to pursue education, entrepreneurship, or other forms of meaningful work without the constant fear of economic insecurity. This aligns with the need for workers to retrain and adapt to an AI-transformed economy.

Addressing Inequality

AI's benefits are likely to accrue disproportionately to those who own the technology and capital. Geoffrey Hinton, often called the "godfather of AI," warns that while AI will boost productivity and wealth, "the money would go to the rich and not the people whose jobs get lost and that's going to be very bad for society". UBI could help redistribute some of AI's economic benefits more broadly.

Funding Mechanisms

To make UBI financially sustainable in an AI economy, several funding approaches are being proposed:

• AI automation taxes on companies that benefit from AI-driven automation
• Capturing a share of the increased productivity and wealth generated by AI systems
• Redirecting existing social welfare spending into a more efficient universal system

Evidence and Skepticism

While UBI has shown positive effects in trials—with over 160 UBI tests conducted over four decades generally yielding benefits for poverty alleviation, health, and education—some experts question whether AI displacement specifically justifies UBI. A major study backed by OpenAI's Sam Altman suggests that UBI's benefits may be valuable regardless of whether AI actually displaces workers on a massive scale.

The Broader Vision

UBI is increasingly viewed not just as a response to AI displacement, but as part of a fundamental recalibration of the social contract for the AI age. Proponents argue it should be combined with universal healthcare and lifelong education to create a comprehensive framework for ensuring AI's benefits are shared broadly rather than concentrated among a privileged few.

The connection between AI and UBI reflects a recognition that as artificial intelligence transforms the economy, society needs new mechanisms to ensure technological progress serves human welfare rather than undermining it. Whether UBI proves to be the right solution remains to be seen, but the rapid pace of AI development is making this conversation increasingly urgent for policymakers worldwide.