President Obama’s top economic adviser does not sound too excited about universal basic income.
In a speech at New York University on Thursday, Jason Furman — the chair of the president’s Council of Economic Advisers — talked about artificial intelligence and the effect it is having, and will have, on the US economy.
And when one mentions AI, the subject of universal basic income (UBI) is often not far behind.
UBI is more or less exactly what it sounds like: You give every citizen a set amount of money, whether they work or not.
But Furman, despite declaring at the top of his speech that he worries we’re not utilising robots and AI enough in the US, said a solution for any future economic tension created by the proliferation of robotics is unlikely to come in giving every citizen money.
Furman argued that policymakers ought to first focus on the skills, training, and job-search-assistance programs that can help foster increasing employment opportunities for citizens even in an ever-shifting labour landscape.
Additionally, Furman said both the shortfalls of our current tax system and social assistance programs, as well as the benefits of a universal basic income, are overstated.
And another worry of many UBI proponents — that increased automation of the workforce will enhance already-widening inequality in the economy — misses the mark, in Furman’s view.
Here’s Furman (emphasis mine):
“Even with these changes, however, new technologies can increase inequality and potentially even poverty through changes in the distribution of wages. Nevertheless, replacing our current antipoverty programs with UBI would in any realistic design make the distribution of income worse, not better. Our tax and transfer system is largely targeted towards those in the lower half of the income distribution, which means that it works to reduce both poverty and income inequality.
“Replacing part or all of that system with a universal cash grant, which would go to all Americans regardless of income, would mean that relatively less of the system was targeted towards those at the bottom — increasing, not decreasing, income inequality.
“Unless one was willing to take in a much larger share of the economy in tax revenues than at present, it would be difficult both to provide a common amount to all individuals and to make sure that amount was sufficient to cover the needs of the poorest households. And for any additional investments in the safety net that one would want to make — and the President has proposed numerous such investments — one must confront the same targeting question.”
As we noted at the top, much of Furman’s speech dealt with concerns that we’re not using AI enough to our advantage. And that a top White House official is discussing at length AI and the exciting opportunities created by increased automation across our economy is, beyond any specific comment, the biggest takeaway from this speech.
But in thinking about what problems and solutions might be on offer for the US economy in the coming years and decades, Furman is still very much thinking inside the box.