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Will Chicago become the first major U.S. city to pilot Universal Basic Income?

Will Chicago become the first major U.S. city to pilot Universal Basic Income?

By Vera Sauchanka, Johanna Medrano

On September 12 Mayor Emanuel joined forces with Alderman Ameya Pawar to launch the creation of the Chicago Will Chicago become the first major U.S. city to pilot Universal Basic Income? | Chicago NewsResilient Families Task Force, to measure and recommend new strategies to help Chicago families living in poverty. The Task Force will partner up with the Economic Security Project and the Social IMPACT Research Center—both organizations whose mission is centric in the impact and social wellness for at-risk families.  The goal set forth by the Rahm-Pawar team is that the Task Force further advances and expands access to the Earned Income Credit (EIC), as well as investigate a potential initiative of Universal Basic Income (UBI), among other guaranteed income programs to target resolutions to both poverty and the massive job loss due to further expansion of automation and artificial intelligence.

The current discourse surrounding advances in artificial intelligence and automation has become a red herring to the central problems of a growing technological economy. Research shows that these advances ultimately put a lot of people at risk of job loss – not only blue-collar workers, but high-earning white-collar workers as well. Although new jobs continue to be created, it is inevitable that we are about to witness a rapid shift in the current economic structure.

As the number of “robots” continues to grow, the cost of their implementation shrinks, thus, further incentivizing automation in the workforce. Developing countries are most at risk for job loss due to automation. Ethiopia currently holds 88% of jobs at risk, China at 77% of jobs at risk and India with 69% of jobs at risk, among others, setting the global average of job loss at 57%.

The U.S major cities of Los Angeles, Las Vegas and Houston are already experiencing job loss at an estimated rate of more than 45% of jobs at risk. In addition, contrary to popular belief, manufactured labor is not the exclusively being targeted. Insurance underwriters (99% of jobs at risk), fast food workers (97% of jobs at risk) and truck drivers (79% of jobs at risk) are among the few that will suffer as a result of automation workforce takeover. With greater job loss, how will workers be taken care of in a post-manual workforce? Politicians, including Mayor Emanuel, have turned to Universal Basic Income as the great solution to rapid job loss to automation. If successful in his plans, Chicago will be the first major city to do so.

Let’s dive into the details.

What is Universal Basic Income?

Universal Basic Income is a fixed income amount set by sufficiency for subsistence, given by the state to all citizens, regardless of income or work status.

Why should it be implemented?

Although researchers have been studying the effects of UBI in large-scaled communities, there are still concerns about the Will you lose your job to a robot? | Chicago newseconomic feasibility of UBI. The socialist nature of UBI may altogether dismantle bureaucratic agencies, therefore largely reducing government spending. Logistically, UBI would redistribute wealth, without creating new funds and while maintaining the free market. Therefore, proponents believe that UBI should be implemented as a solution to not only job loss by automation, but a possible solution to poverty and economic slavery as well. In addition, UBI would allow people to return to school, look for better jobs or spark creativity and/or entrepreneurship, as they no longer would have to worry about income security.

How much should be given?

Average proposals set the UBI at $10,000-12,000/yr. untaxed. Switzerland is considering $2,600/month, while Kenya has begun to experiment with $1,000/month. Other proposals suggest that UBI be taken out in a lump sum at 18 years of age.

How would governments pay for it?

Funding would most likely come from a variety of sources which may include carbon taxes, income taxes, VAT, negative interest rates, earnings from investments, a decrease in military spending among other resource-based revenues that are still being explored.

What are the arguments against UBI?

Opponents argue that implementation of UBI may lead people to spend money on alcohol and drugs, as opposed to spending that money back into the economy. There are also concerns with UBI leading to a resurgence in prices, resulting in inflation.

How many countries already have or test it?

Experiments and trial projects are currently undergoing in The Netherlands, Kenya, India, Switzerland and France.

Chicago News spoke to Bradley Tusk, former deputy governor of Illinois, now venture capitalist, philanthropist, and a mastermind Interview with Bradley Tusk | Chicago Newsbehind Uber, about his thoughts on UBI.

“Finland just ran an experiment on with the idea being that the government would give everyone a stipend, whether its $20,000 dollars a year or $30,000 dollars a year, to make up for income loss caused by automation. It’s worth looking at and thinking about that is one way to do it,” he said.

According to Tusk, one more possible solution to a massive job loss to automation might lie in education as well.

“Another would be really making sure that we can figure out the jobs that we need to fill in 15 years, 20 years, 25 years and really invest in education and job training both for kids and adults who are one profession and going to have to switch to another and giving them the tools they need to do that. I worry right now there are schools in the U.S. that really just aren’t good enough in most cases to prepare people for this kind of change and will be caught unaware. This is where we’re going to have a problem.”

What do you think? Share your opinion in comments under this article!