Elon Musk believes he has a solution to job loss due to AI. The idea is that the government pays for everyone to live a prosperous life.
“Universal high income through checks issued by the federal government is the best way to address AI-induced unemployment,” the CEOs of Tesla and SpaceX said in a post about X late Thursday.
“Inflation will not occur because AI/robotic technology will produce far more goods and services than the increase in money supply,” he added.
It is widely expected that a significant portion of the U.S. workforce will be replaced by AI in the coming years. The Boston Consulting Group predicted this month that 10% to 15% of U.S. jobs could be cut over the next five years, affecting an estimated 17 million to 25 million people. A Goldman Sachs analysis last year found that 2.5% of U.S. workers could be at risk of losing their jobs.
Universal High Income (UHI) is effectively a more generous version of Universal Basic Income (UBI), which is typically defined as a regular cash payment to all individuals in the population, regardless of wealth, with no restrictions on how the money can be spent and no scheduled repayments.
While the UBI program is intended to cover basic expenses such as housing, food, and utilities, UHI provides people with enough funds to provide them with a rich lifestyle.
Peter Diamandis, a leading expert on the subject, said UHI would not be made possible by providing more funding, but by cutting costs on everything from food and energy to health care and education.
“With the advent of AI and robotics, a $3,000 monthly check that barely covers today’s necessities will become a truly rich life, as the five major cost of living collapse by more than half,” he wrote in a March post on Substack.
“The checks are not going to get bigger,” Diamandis added. “The world will become cheaper. That’s when UBI becomes UHI.”
Karl Widerquist, a philosophy professor at Georgetown University in Qatar and author of several books on UBI, told Business Insider that UBI could cover more than the basics, and that “Musk is right” that forces such as automation, computerization and AI are lowering the cost of basic income payments as a percentage of GDP.
But he said it was “wrong” for Musk to focus on unemployment when “low wages and stagnant salaries” were the bigger issue.
“When it comes to inflation, Mr. Musk’s predictions may happen, but we shouldn’t rely on them,” Weiderquist said, stressing that although gross domestic product (GDP) has expanded over the past 50 years, most of the benefits of that growth have gone to the richest and poverty remains.
James Ransom, a researcher at University College London, told Business Insider: ”If we had generous universal high incomes, we could afford to retrain and reeducate, and the evidence shows that this is what most people actually need. ”
Ransom said his research suggests there will be “a windfall of productivity gains for many workers” in the coming years, but that getting them requires “upskilling, not checks.”
“For those who do lose their jobs, retraining, if done properly, can preserve agency and self-esteem in a way that basic income cannot,” he added.
A prosperous future?
Musk made a similar prediction earlier this year that retirement savings could become irrelevant within 20 years.
“You don’t have to worry about scraping together money for retirement in 10 or 20 years,” the CEO of Tesla and SpaceX said on the podcast “Moonshot with Peter Diamandis.” “That doesn’t matter.”
“If any of what we’ve said is true, saving for retirement would be meaningless,” Musk added.
In his podcast, Musk described a future in which advances in AI, energy, and robotics will dramatically increase productivity, create “abundant” resources, and provide universal high incomes for everyone.
For now, many Americans are living paycheck to paycheck, weathering years of stubborn inflation, onerous interest rates and stagnant wage growth.
Research shows that many people feel they are sacrificing things like higher education, quality health care, home ownership, having children, and a comfortable retirement.
Personal finance and AI experts told Business Insider that Musk’s message was “dangerous and misleading” and stressed that even if AI brings wealth, governments need to effectively distribute the benefits.
John Nosta, innovation theorist and founder of Nosta Lab, calls this the “civilization-scale coordination problem.”