The world is changing rapidly: tremendous technological advances and innovations have emerged in recent years. History has shown different technological eras, for example the Renaissance in the 14th century through the 16th century and the Industrial Revolution from approximately the late 18th century until somewhere in the middle of the 19th century (Castells, 1996, 5 – 12). The time where we live in now, the 21st century, and the end of the previous century is called the ‘Information Age’ or sometimes the ‘Digital Age’ or ‘Computer Age’. This era is characterized by the use of information technology (Castells, 1996, 5-12), such as automation. To illustrate: companies such as Amazon have been started to replace human labour with robots. Amazon uses robots to move, store and sort goods at their Fulfilment Centers (Business Insider, 2017). Having said that, Ford (2015) argues that there is no reason to believe that machines will not serve burgers, tacos and lattes across the fast-food industry in the future. It seems that people, businessess and governments have been affected by technological changes. In 2013, Carl Benedikt and Michael Osborne of Oxford University predicted the automation of nearly half of U.S jobs. In addition, they recommended making radical policy changes (McAfee & Brynjolfsson, 2016). Also, Martin Luther King and Richard Nixon – e.g. – mentioned the basic income before as a policy (McAfee & Brynjolfsson, 2016). “The basic income is an income granted unconditionally to all on an individual basis, without a means test or work requirement” (Groot & van Eds, 2000). They – Groot & Van Eds (2000) – consider it as a pure form of a minimum income guarantee for citizens. This argumentative essay will put forward that the Universal basic income as a policy has positive effects on labour and the 21st century-society in general.
Automation affects our economy
In this first section, some predicted impacts of automation on the economy will be discussed. The impact of automation might lead to effects which require a new policy for regulating our changing society. Business Insider (2016), quoting Amazon’s executive Dave Clark pointed out that the use of robots has cut Amazon’s operating expenses by 20%. Given that Amazon had 13 fulfilment centres at that time, they were saving $ 286 million (Business Insider, 2016). In addition to that, the BBC (2016) announced in 2016 that Foxconn had replaced 60,000 factory workers with robots because it made their production process more efficient and cheaper; a great win for Foxconn. However, automation is generally accompanied with job losses. As stated by the McKinsey Global Institute (2017), around 400 million to 800 million jobs could be displaced worldwide by 2030 due to automation. Of the total displaced, 75 million to 375 million people need to switch to occupational categories and learn new skills in the years ahead. In advanced economies like the Netherlands, the job loss seems to be the greatest. In particular job loss in occupational categories such as office support, production work, food preparation and general mechanics et cetera: routinized work. (McKinsey Global Institute, 2017, 9 –11). On the other hand, it is well known that greater efficiency and reduction by costs lead to the ability to produce more and make products cheaper for consumers, which stimulates consuming. As prognosticated by the McKinsey Global Institute: “automation technologies will generate significant benefits for users, businesses, and economies, lifting productivity and economic growth” (2017, Chapter “In brief”). It seems that automation, therefore, is good for the economy. Despite economic growth, automation could lead to the problem that people cannot afford their needed consumption goods. People need an income to be able to buy goods. In summary, automation seems to have positive effects on the economy, as a more efficient and cheaper production process leads to more wealth. The side effect is that jobs could be lost and a need for displacement. To reduce these negative consequences, there should be a policy which could regulate the negative effects of automation.
Due to automation, our way of working needs to be changed dramatically
In the previous paragraph, some consequences due to automation have been discussed. In order to regulate job loss and displacement, workforce transition and labour supply is needed. The Universal Basic Income can stimulate the needed workforce transition and labour supply. There are many points in support of this view. Firstly, the Universal basic income could stimulate studying which leads to a better workforce transition, because people would be more certain of an income. In advanced economies like the Netherlands in particular, the demand for workforce transformation seems to be relatively high: people need to learn new skills which suit the market demand. An experiment in India pointed out that the Universal basic income leads to an increase in education (McKinsey Global Institute, 2017, 9 -11). To illustrate, think about the fact that the number of students in the Netherlands highly decreased after the abolition of the ‘basic study grants’ for students by the Dutch government (European Commission, 2017). Secondly, the Universal basic income could help to create jobs. To give an illustration, people are more likely to invent and exhibit entrepreneurial behaviour when they are more certain of an income such as the Universal basic income. In the Indian experiment it was pointed out that entrepreneurialism increased. As the McKinsey Global Institute wrote: “innovation and entrepreneurship often underlie the creation of new business models and work activities, another catalyst of job growth” (2017, 9). Thirdly, the Universal basic income could lead to a shorter workweek and a better equability of jobs. Historically, men were responsible to run the family and earn the household wages. Nowadays, especially in advanced economies, man and women both work. With a Universal basic income, it is likely that couples will not need to work fulltime to pay the bills, which leads to a decrease of full-timers or an increase of part-timers. Having said that, experiments in India and Canada have shown that the Universal basic income leads to an increase of part-time workers but no significant reduction in total work hours (McKinsey Global Institute, 2017, 121). An important thing to be considered is that these experiments were small and took place in a time when automation did not have the kind of impact yet as is predicted for the future. All things considered, the stimulation of further education, a shorter workweek, better job equability and creation of jobs, it seems reasonable that the Universal basic income could contribute to the needed workforce transition and labour supply.
Free money for everybody!
Although it seems that the Universal basic income has a lot of pros, not everyone agrees with the idea that the Universal basic income policy would be good. There are people who have the opinion that the Universal basic income policy will not work. Several reasons have been mentioned. The thought that the Universal basic income makes people lazy does not sound crazy: who does not want free money? Despite that, there are several arguments to support the contrary. First of all, who wants to sit all day and do nothing? There is no scientific evidence, but people who are intrinsically motivated will do something with their lives. Additionally, are our lives not stressful enough? A survey of 23,000 office workers globally showed that the Netherlands has the most stressed employees in the world (Business Insider, 2018). In addition, the Universal basic income could promote self-actualization, which would lead to productivity improvements, better learning outcomes and better relations with other people, as well as improved health and a higher life expectancy. Wiencke (2017, 30) researched if the Universal basic income promoted self-actualization. Self-actualization has been defined as “a combination of feeling good and functioning effectively” (Huppert & So, as cited in Wiencke, 2017, 4). She concluded that the Universal basic income is perceived as a useful means of enhancing the potential of people’s self-actualization (Huppert & So, as cited in Wiencke, 2017, 5). To sum up briefly, yes, the thought that the Universal basic income makes people lazy is not that strange, but there are enough other arguments to think otherwise.
A Universal Basic Income is needed to prevent inequality and loss of freedom
Building on the prediction that automation could result in unemployment and replacement, mentioned in the first section of this argumentative essay, the Universal basic income could contribute to more societal fairness. First of all, the Universal basic income leads to more equality. As mentioned before, routinized work seems to be hit the hardest of all occupational categories. Routinized work often consists of jobs which are low-paid. The poor get poorer if the Dutch social system stays as it is today and the effects of automation become tangible. In addition, the McKinsey Global Institute (2017, 19) claims that “more permanent policies to supplement work incomes might be needed to support aggregate demand and ensure societal fairness”. From the analysis of history, it seems that wages for many occupations can be depressed for some time during workforce transitions. In addition to more equality, the Universal basic income also leads to real freedom. To give an illustration; when people are unconditionally granted an income, they are able to make choices. Van Parijs (1995, 4) distinguishes real freedom from formal freedom: “unlike formal freedom, in other words, real freedom is not only a matter of having the right to do what one might want to do, but also a matter of having the means for doing it” (Van Parijs, 1995, 4). Taking everything into account, it seems reasonable to conclude that the Universal basic income would be a good policy to ‘fight’ against social fairness and freedom. If current policies remain the same and the effects of automation are tangible, it could be that inequality will increase.
In conclusion, this argumentative essay has addressed a number of significant issues which show that the Universal basic income definitely has positive effects on labour and the 21st century-society in general. Employment, social fairness and the economy in general could be heavily under pressure if no policy changes are made. To start, there are signs for a great amount of job losses and the need for displacement due to automation. The way people live and the way organizations are organized need to change. In the second section, there has been concluded that it seemed reasonable that the Universal basic income could contribute to the needed workforce transition and labour supply. In the fourth section, there has been concluded that a Universal basic income is needed to prevent inequality and loss of freedom. The Universal basic income is promising. However, further research is needed.
BBC. (2016, May 25). Foxconn replaces ‘60,000 factory workers with robots’. Retrieved July 26, 2018, from https://www.bbc.com/news/technology-36376966
Business Insider. (2016, June 15). Amazon’s $775 million deal for robotics company Kiva is starting to look really smart. Retrieved July 25, 2018, from https://www.businessinsider.com/kiva-robots-save-money-for-amazon-2016-6?international=true&r=US&IR=T
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Ford, M. (2015). Rise of the Robots: Technology and the threat of jobless future. New York, The United States of America: Basic Books. Retrieved July 28, 2018 from https://www.uc.pt/feuc/citcoimbra/Martin_Ford-Rise_of_the_Robots
Groot, L., & van, D. V. R. (Eds.). (2000). Basic income on the agenda: policy objectives and political chances. Retrieved July 28, 2018 from https://ebookcentral.proquest.com
McAfee, A., & Brynjolfsson, E. (2016, Jul). Human work in the robotic future: Policy for the age of automation. Foreign Affairs, 95, 139-150. Retrieved July 26, 2018 from https://search.proquest.com/docview/1801887546?accountid=14338
McKinsey Global Insitute. (2017). Jobs lost, jobs gained: Workforce transitions in a time of automation. Retrieved July 25, 2018 from https://www.mckinsey.com/~/media/mckinsey/featured%20insights/future%20of%20organizations/what%20the%20future%20of%20work%20will%20mean%20for%20jobs%20skills%20and%20wages/mgi%20jobs%20lost-jobs%20gained_report_december%202017.ashx
Van Parijs, P. (2001). Basic Income: A simple and powerful idea for the 21st century. Redesigning Distribution, 4. Retrieved July 25, 2018 from https://www.ssc.wisc.edu/soc/faculty/pages/wright/RUP-vol-V.pdf#page=6
Wiencke, L. (2017). Does the Unconditional Basic Income Promote Self-Actualization?. Retrieved July 30, 2018 from https://essay.utwente.nl/72517/2/Wiencke_BA_BMS_s1568078.pdf