Labour Market Implications Of Generative Al And The Case For Universal Basic Income Schemes

Artificial Intelligence (Al) is a major driver of economic progress, but also of an increasingly insecure labour market – similar to the early stages of the first Industrial Revolution. Preliminary evidence suggests that generative Al is more likely to alter job quality than eliminate positions, yet approximately three jobs out of ten are at high risk of displacement. Moreover, creative, highly skilled jobs will be most vulnerable to disruption, creating the danger of widespread social unrest. It is difficult to predict the future effects of this technology shock, as older market categories on labour policies are hardly applicable anymore in the age of generative AIl. However, without timely policy responses, Al risks creating a trilemma of rising inequality, low productivity growth, and high environmental costs that the G20 should address. To this end, we propose reconceptualising the idea ofUniversal Basic Income (UBI) not only as a tool for income equality, but also as a vector for empowering the new cadre of “data workers” at the heart of this digital revolution. Previous UBI experiments in different parts of the world show that, contrary to common intuition, the unconditional guaranteed income provided did not reduce citizens’ incentives to work; on the contrary, it often had a positive impact on employment and well-being. Overall, a basic income would provide an efficient mechanism to relocate jobs and businesses more flexibly, as demanded by the globalized economy and the technological disruption brought about by generative Al applications. It would also help to compensate for the lack of aggregate demand in our future, increasingly digitized economies. Finally, UBI schemes would also remunerate useful activities that are currently unpaid. As a form ofdigital commons with significant positive externalities, such a scheme can be developed best in international formats such as the G20.