Why Basic Income Is Essential in the AI Era

The background behind the rising debate over Basic Income (BI) in recent years is the AI boom. The idea is that AI will reduce employment and widen inequality, making BI essential to guarantee a minimum standard of living.

In the United States, IT has already reduced clerical jobs held by the middle class, such as call center staff, travel agents, and bookkeepers. In contrast, employment for manual labor performed by the low-income class and intellectual labor performed by the high-income class is increasing. In economics, this phenomenon is called the "polarization" of the labor market.

In Japan, labor market polarization is also occurring, though not to the same extent as in the U.S. As a result, the middle class is shrinking and bifurcating. While the proportions of both the low-income and high-income classes are increasing, the low-income class is growing more significantly. Simply put, this means the number of poor people is increasing.

While IT has already been taking middle-class jobs in the U.S., AI is now beginning to take high-income jobs. Specifically, these are finance-related occupations such as securities analysts, insurance agents, and asset management advisors. This is because the financial industry is a business that handles numerical data, and computers are inherently good at processing such data.

If robots become highly advanced by incorporating AI, the jobs of the low-income class engaged in manual labor will likely decrease as well. However, that is a story for about 10 years from now. Automating manual labor requires both the brain (AI) and the body (robot), and since they must be integrated with each other, development will take that much longer.

Let's take logistics as an example. To automate "transportation," self-driving trucks are needed, but they are still in the experimental stage. Among the tasks in logistics warehouses, the automation of "conveyance" (moving products) has already been realized, but "picking" is still mostly done by hand.

Picking is the task of taking products off the shelves in a warehouse. Current robots do not have arms as dexterous as humans, making picking difficult.

In 2017, the government's "Artificial Intelligence Technology Strategy Council" announced a plan to completely automate logistics by 2030. However, in reality, 2030 will likely be the point where the technologies to achieve nearly complete automation of logistics are finally all in place.

If it takes about 15 years for such technology to become widespread, then nearly complete automation would be realized around 2045. I say "nearly" because the job of managing all logistics processes via monitors and checking for unforeseen circumstances will remain for humans.

In any case, we can expect manual labor to start decreasing around 2030. On the other hand, many people likely think that new occupations will increase. Certainly, new occupations have increased in recent years and should continue to increase in the future. Looking at the past few years, creative occupations that did not exist before, such as YouTubers and TikTokers, have increased. However, in such occupations, only a few successful individuals make a lot of money, while most of the rest earn only pocket change.

As is the case with comedians and musicians, the largest volume zone for creative occupations is an annual income of 100,000 yen or less. No matter how many jobs there are with an annual income of 100,000 yen or less, can we really say that employment exists? If you advised someone who is unemployed and struggling to find a job to "just become a YouTuber," they would likely be angry.

Thus, the spread of AI (and robots) will lead to situations where many workers cannot find jobs or cannot earn sufficient income. If that happens, existing social security systems will fall into dysfunction. This is because existing systems do not anticipate situations such as NEETs, the working poor, or long-term unemployment.

Even now, the social security system is problematic in that regard, but as AI spreads, those problems will grow significantly larger. Namely, a large number of people will become eligible for public assistance. Public assistance is a selective social security system that sorts those who are worthy of relief from those who are not. In the AI era, the number of people eligible for public assistance will increase dramatically, making such selection difficult. Therefore, this era will require a system that provides relief to everyone without exception. That is BI, a universal social security system.

Until now, because the number of people facing poverty was small, BI was not generally known. I had predicted that it would only be around 2030, when AI-driven unemployment becomes common, that people would finally come to understand that BI is an essential system.

However, the COVID-19 crisis has accelerated the era by 10 years. This is because unemployment and poverty caused by COVID-19 are threatening people long before AI-driven unemployment and poverty become commonplace. Due to the COVID-19 crisis, the number of people worldwide who believe the introduction of BI is essential is increasing.