Bill Gates: We're not quite ready for universal basic income
Under a universal basic income, all citizens of a country are entitled to an unconditional amount of money.
Income for all
In theory, a universal basic income (UBI) would be great. Under such a system, all citizens of a country are entitled to an unconditional amount of money on top of income they already generate through other means. It could spur productivity, improve health, alleviate poverty, reduce crime, raise education, and improve quality of life. It’s also especially relevant, given the reality of automation taking over more and more jobs.
UBI’s potential has prompted several nations to study and test its viability. Among the pioneers are Finland, which just started implementing a UBI program that gives 2,000 randomly selected citizens $587 tax-free per month; India, which proposed the system as a solution to job loss caused by increased automation; and Canada, which saw leaders of four political parties unanimously support the decision to establish a program that will guarantee income.
It’s all going well so far, but until the trials are able to deliver definitive results showing UBI’s effectiveness, we are left to ponder the many questions surrounding it. For instance, how much income should be distributed? Should it be limited to the minimum needed, similar to welfare state programmes? Would a higher amount be more effective? Would UBI prompt people to lose their motivation to work? Is it enough of a response to address job displacement caused by automation? Can countries around the world afford it?
Bill Gates weighs in
The urgency that most UBI advocates feel, given the current state of the economy and realities of job displacement, isn’t shared by Bill Gates. While the co-chair of the Gates Foundation isn’t exactly opposed to the concept, he doesn’t think the program is ready for public implementation just yet.
“Over time, countries will be rich enough to do this. However, we still have a lot of work that should be done — helping older people, helping kids with special needs, having more adults helping in education,” said Gates during a recent AMA on Reddit.
While others worry about impending employee displacement in the age of automation, Gates believes that technology will open more opportunities for countries, allowing them to raise money that could be used to finance sectors that need people in the jobs he mentioned. Governments can use this added income as an opportunity to train the unemployed to fill new roles in the job market.
Gates also added during his AMA that countries aren’t financially equipped to finance a stable UBI programme. “Even the US isn’t rich enough to allow people not to work. Someday we will be, but until then, things like the Earned Income Tax Credit will help increase the demand for labor.”
The Microsoft co-founder could be right and now may not be the right time for a UBI, but thanks to the countries giving it a shot, we should know for sure rather soon.
This article was republished courtesy of the World Economic Forum.