Could Universal Basic Income Protect UK Workers From AI-Driven Job Losses?

Artificial intelligence (AI) is changing how the world works, with uncertainty about its future consequences. It may allow businesses to automate routine tasks and improve productivity, but it also makes job loss a real risk. Amid concerns about how AI adoption may affect future employment, the possibility of a Universal Basic Income (UBI) has been raised in policy debates.

Below, we examine the concept, why it’s been linked to AI job losses, and the arguments surrounding its implementation. We then discuss what it could mean for employers and look ahead.

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What is Universal Basic Income in the UK?

Universal Basic Income is a regular, unconditional cash payment made to all citizens. Unlike means-tested benefits, eligibility is not affected by factors such as employment status or income. Its ultimate goal is to ensure a basic standard of living for all.

Universal Basic Income and AI Job Losses

AI’s rapid adoption across sectors spanning law, finance, and manufacturing has prompted renewed discussion about job security. Unlike earlier automation, which primarily affected routine tasks, modern AI has the capability to displace workers in skilled roles, such as data analysis and administration. This has led to concerns about significant labour market disruption, with individuals lacking the resources to adapt to and overcome these challenges.

Consequently, Investment Minister Lord Jason Stockwood publicly indicated that ministers had discussed the potential role of UBI. He explained that those affected by AI would face a “bumpy” societal transition and would need financial support, along with lifelong learning mechanisms, to acquire new skills and retrain.

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The Government and Policy Debate

The idea of a Universal Basic Income has been discussed, but whether it will actually materialise remains to be seen. Senior ministers have acknowledged the discussion and consideration of the concept, but significant debate remains about its practical implementation and the benefits and drawbacks.

Arguments in Favour

Supporters of a UBI cite several potential benefits. For example, the uncertainty of AI’s impact could lead to unexpected employment changes for workers, and the concept would provide financial support during their retraining and transition. It could also allow individuals to step away from work to retrain in anticipation of AI-driven job loss.

Furthermore, since AI is increasing productivity and wealth for organisations, the economic benefits could be shared more evenly. Lord Stockwood previously suggested that tech companies, which would benefit from AI, could pay a windfall UBI levy to fund the concept.

Criticisms and Legal Concerns

However, not everyone agrees with the idea of introducing a Universal Basic Income. Some critics believe that, without careful fiscal design, the concept could strain public finances or require significant tax increases, reducing its impact.

Moreover, while the discussion of UBI has included a mechanism for retraining workers, some worry that regular cash payments would disincentivise people to work. As a result, rather than pushing individuals into up-and-coming markets, it may simply manage a declining workforce.

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Finally, among other things, since such payments would be unconditional, high-income individuals would be just as entitled to them as those in need. Those contesting the idea, therefore, argue that the concept raises questions about fairness and whether it would be an efficient use of public funds.

What UBI Could Mean for Employers

If a Universal Basic Income were implemented in the UK, several implications could arise for employers. For starters, with guaranteed income, financial pressure would ease, potentially increasing employees’ bargaining power in negotiations for new roles. This could lead to greater flexibility and career transitions, as individuals’ priorities shift from roles that simply pay enough to those that they actually enjoy.

With the above in mind, organisations may need to review their pay structures and benefits. If such a concept were to be established, it might no longer be enough to pay more. Employers may need to improve their culture or consider other benefits to remain competitive. And if Lord Stockwood’s suggestion of a UBI levy went ahead, relevant businesses would need to factor this cost into their operations.

Universal Basic Income: Looking Ahead

So what does the future hold for Universal Basic Income and the UK labour market?

As it stands, UBI is nothing more than a suggestion that has been considered. Ministers have publicly acknowledged the need to anticipate and address the impacts of AI on employment, ensuring that those affected are properly supported. Yet, this provides no insight into the likelihood of the concept’s adoption.

Despite this, concerns around AI’s impact on employment, regardless of one’s personal view, mean that some form of policy response is likely required. Employers and employees will therefore have to wait to see how the government proceeds. Whatever the case, understanding the possible outcomes is wise to be best equipped for what comes.

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