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Social Impact of Automation and Universal Basic Income

Change caused by automation in the last few decades in industry and lifestyle, is exponential. Common consumer goods such as mobile phones would have been luxury items if there was no automation involved and people would have had to wait for months or years until they can buy a car after placing an order; not to mention the fact that only a few would have been able to afford them.

Generally, automation has made production more efficient, i.e. cheap and quick production without having to worry about human errors. In the service sector, implementations such as accounting software, self-help sections and intelligent chatbots limited human involvement. In agriculture production has been increased because of automation. Automation has let us enjoy luxury, which only the royalty was able to experience a few centuries ago, thus showing that there is a social impact associated with this as well. Let’s look at the path of Automation and AI before we discuss about its social impact.

About ten thousand years ago human race survived by hunting and gathering. People only wanted to cover the basic needs such as food, water and shelter. They spent most of the daytime hunting and searching for food. Around 7-10,000 years ago, people identified plants that yield a harvest, grew them in places easily accessible and domesticated animals for food. It was the beginning of agriculture. Humans had freed up the time they spent on hunting and gathering so they focused on making lives better.

People used to live in small clusters called “villages” and exchanged their expertise for products or services to make a living. Thus started the “division of labour”. With the division of labour most humans mastered skills and had their lives depended on it, which made the society more efficient.


Beginning of Automation

Humans gradually moved to using machinery to make their tasks easier and enhance production. This move escalated in the 18th and 19th centuries with the “Industrial Revolution”. Different types of jobs opened up; production capacity was increased; production cost was lowered significantly. People had money and goods were cheaper, therefore economic growth was high. Organisations were competing with each other to offer quality products and services for cheaper prices to promote them and earn more profits.

In order to manufacture a product at a lower cost, its components’ cost should be minimised. Labour is one of them. In order to reduce the cost of labour, automation was introduced. According to Mikell Groover, Professor of Industrial and Manufacturing Systems Engineering at Lehigh University, USA, 

“Automation, or Labor-saving technology is the technology by which a process or procedure is performed with minimal human assistance.”


Evolution of AI

This transformation of automation initiated recent Industrial Revolution which is known as “Industry 4.0”. Modern automation applications can learn complex cognitive tasks, which were performed by humans before, because of Artificial Intelligence. In other words, there is more possibility to substitute someone’s job with Artificial Intelligence. In order to stay in employment, employees have to constantly improve their skills. However, adaptability of AI is very high compared to human adaptability with new skills. For e.g. AI AlphaGo defeated 18-time world champion Lee Sedol in “Go”, a complex, ancient Chinese board game in 2016. (Go is a very complex game, it has more possible combinations than estimated no of atoms in entire universe.)


Free Money?

About a decade ago, Natural Language processing was a challenging task. Most of the time Natural Language Processing applications needed human intervention for better results. However now, AI is not only able to understand the words a person is saying, but also has the ability to understand the emotions. Tasks like transcribing is made easier by AI. On the other hand, a person who did transcribing for a job is now replaced with more efficient machines which can do the same job, cheaper. With the speed of current improvements in AI some futurists like Raymond Kurzweil estimate it to have human level intelligence (Technological Singularity) around year 2045. What will happen next?

There is a limit for human adaptability with changing technologies. Clearly, adaptability differs from person to person. This gives rise scary thoughts of running out of jobs for humans in the future. Then, how are we to make a living? Actually, you can make a living by doing “nothing” at all with Universal Basic Income! (UBI)

Universal Basic Income is the unconditional, non-withdrawable income paid to every individual of a country without considering their other socio-economic status.

“No matter what your income is, you will receive free money from the Government”

For an example, if a government decides to pay $1000 a month to every individual, every citizen of that country will receive it. They can spend it on anything they wish for which is legal. You can also do your job for an extra income. So, will it cause economic hardship for the government? Apparently not, government will raise money from direct taxation from the companies who are highly autonomous. Also, with increased cash flow, indirect taxation income will also be improved.



There were several trials done in Europe, USA, Canada and India. The amount an individual receives and the criteria to decide that, were different from programme to programme. From those studies, it has been observed that, living standards were improved and most of the money was spent on essential expenses and education. Also, former 2020 democratic presidential candidate in the USA, Andrew Yang emphasised on Universal Basic Income in his campaign; he called it “Freedom Dividend” and claimed every American adult will be granted $1000 a month irrespective of their income. Even though he suspended his campaign in early 2020, this can be identified as a significant milestone in global political context, for UBI as a response to job displacement by automation.


The Future

It is now clear that automation is adopting faster than humans in every work environment. Hence, there are two options as a human; adopt faster or find an alternative solution. Currently most people choose the first option as there are many fields where AI is not in par with the humans. However, it must be remembered that these areas will get limited day by day. Universal Basic Income is just one solution for this problem. Number of solutions for this problem is only limited by the thinking capacity of humans or AI. In order to survive in the future, we must evaluate our options for tomorrow, today.

In the next blog post let’s discuss how the economy works with UBI.



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