From US Democratic presidential candidate Andrew Yang to TV1’s Sunday programme to the NZ Productivity Commission, unconditional basic income (UBI) is on everyone’s lips. While not everyone agrees with it, the idea is highlighting the problems with our current welfare system – particularly given the looming disruption to our labour market from the gig economy, automation and artificial intelligence.
American entrepreneur Andrew Yang has become a contender for the Democratic nomination for president on the back of his campaign for establishing a UBI of $1,000 per month. He has dubbed it the Freedom Dividend. Supporters of his campaign are known as the Yang Gang. Yang is particularly popular among the tech community who can see first hand that automation and artificial intelligence are taking jobs and pushing us ever deeper into the gig economy. He argues that work is going to become more scarce and sporadic, and the UBI will help people pay their bills, start businesses, retrain themselves, be more creative, or look after loved ones.
The gig economy isn’t something out of science fiction – it’s already a reality. Many young people are well aware of it. They have a side hustle or juggle several insecure jobs to make a living. This weekend, TV1’s Sunday is training the spotlight on the gig economy. Highly skilled people can benefit from flexible working and have a flexible lifestyle, but not everyone wins under this arrangement. The programme will also touch on the downsides, which of course UBI is intended to help address.
NZ Productivity Commission
Last but not least, the NZ Productivity Commission has released a report on how to give people income security in an uncertain labour market. The Commission considers the possibility of a UBI, but eventually rules it out. Its argument is that a UBI would either be too low to provide a liveable income or be prohibitively expensive.
The Commission includes plenty of experts, so of course I will give the report a thorough read. However, I would say up front that it did not think about how complex the current tax and welfare systems are and the crazy incentives they create. Nor did it consider how many people don’t get their entitlements or face stigma and shame when they do. It didn’t factor in the time and money wasted on bureaucracy and paperwork, or making people jump through hoops. Nor did it weigh the value of the huge amount of unpaid work that keeps our society operating. Finally, it did not contemplate how to encourage people to start businesses or pursue creative endeavours.
No, the Commission only looked at the idea from the perspective of income security for work and of work being the future of our economy. While that may remain the case for the immediate future, we have to ask whether we might start seeing some benefits from a modern market economy in the form of being able to work less. Shouldn't that be the ultimate point of progress? That we all get greater choice?
In a way the Commission is right. A UBI of $200 a week isn’t much – at least not from the perspective of well-paid public servants in Wellington. But for many hard-working Kiwis struggling to make ends meet, it would make a massive difference.
The more I think ahead to the future, the more I believe a UBI is inevitable. For many reasons.