AI-Driven Economy Will Necessitate UBI

Vine Strategy has released a comprehensive report predicting that advancements in artificial intelligence (AI) will significantly transform the global economy, creating a need for the implementation of a Universal Basic Income (UBI).

Mass redundancies envisaged

The report, titled "AI and the Future of Work: The Case for Universal Basic Income," outlines the firm’s analysis of current trends in AI and automation and projects their potential impact on the workforce over the next two decades. Vine Strategy anticipates that, while AI will drive unprecedented levels of productivity and economic growth, it will also lead to substantial disruptions in the labor market.

The report discusses the likelihood that AI and automation technologies will displace a significant number of jobs across various sectors, including manufacturing, transportation, retail and even white-collar professions.

AI proliferation could fuel economic inequality

It also posits that the displacement of jobs will almost certainly exacerbate economic inequality and polarize societies. The benefits of AI-driven productivity gains, the report suggests, are likely to be concentrated among those with high levels of technological and capital investment.

Vine Strategy’s Co-Founder, George Chan is quoted in the report as saying, “Many traditional jobs will become obsolete and while new types of employment will emerge, many of these roles will require skills and adaptability that may be beyond the abilities of large swaths of the current workforce.”

To address these challenges, Vine Strategy advocates for the implementation of a Universal Basic Income. UBI would provide a guaranteed, unconditional financial payment to all citizens, ensuring a basic level of economic security amid the transition to an AI-driven economy.

UBI and the specter of inflation

Critics of UBI insist that it would be extremely expensive to introduce and many cite the inflationary consequences of paying workers to stay home, unproductive, during pandemic-era lockdowns as a warning of what could happen if UBI was rolled out broadly across an economy.

Nevertheless, the report concludes that, by providing a safety net, UBI can help stabilize the economy, supporting consumer spending and reducing the risk of economic recessions caused by widespread job losses.

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