Automation has been accelerating in the last couple of years. Due to governments around the world raising minimum wages, regulations and taxes, companies are responding by turning to technology, particularly in the form of robots and automation.
Since many fear that robots will replace workers and lead to widespread unemployment, there have been calls to adopt a universal basic income (UBI), and to help fund it by taxing companies that add robots to the workplace.
But is that the best response? No, says one world renowned billionaire entrepreneur.
Mark Cuban, the reality television star and owner of the NBA franchise the Dallas Mavericks, warned last week that “automation is going to cause unemployment and we need to prepare for it.” When asked if he supported the UBI, he replied that it is “one of the worst possible responses.”
@scottsantens no. I think it’s one of the worst possible responses
— Mark Cuban (@mcuban) February 20, 2017
This is a policy that, in theory, replaces the welfare state and gives everyone an income just for breathing. A growing number of jurisdictions are testing it out, including Finland and Ontario. Voters in Switzerland recently rejected a referendum to adopt such a policy.
Indeed, robots have been gradually replacing workers for the past century. Rather than employees holding wrenches, they’re equipped with tablets. If you go farther than that, you will notice that mechanization has been prevalent throughout history. Everything from the printing press to the wheel, from metal saws to irrigation channels, much of what has been developed hasn’t led to massive and permanent unemployment. They have been tools to enhance productivity levels, while allowing human workers to exploit their own human capital for other demands of the labor market.
Yes, it is rather likely that, despite rising levels of automation, the labor force participation rate will not crater to 20, 30, 40 or even 50 percent.
Simply put: those who call for a basic income guarantee are just a bunch of Luddites.