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Now & Next: Can free-cash handouts help society?

Posted on 04 March 2019

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Can free cash hand-outs help society? 

Imagine paying people no strings attached cash whether they have a job or not.

Chris Hughes
Co-Chair, Economic Security Project
There’s a need for a new kind of safety net.

It’s a utopian idea that some think could be the solution to a potentially jobless dystopian future.

Sam Altman
President, Y Combinator

There is a wave of automation is coming and it hasn’t crashed over society yet but it’s going to.

In California, two experiments are being planned that could point to a radically different future of work.

NOW&NEXT
MONEY FOR NOTHING, JOBS FOR FREE?

Stockton, California. Just five years ago the City was declared bankrupt.

Person
Free haircuts today.

Today, unemployment is almost double the national average and many people live pay cheque to pay cheque.

Michael Tubbs
Mayor
Hello how are you? Good to see you.

But the City’s Mayor, Michael Tubbs has a plan to combat an increasingly unequal and insecure jobs market. Starting this year, a hundred residents will receive a guaranteed income of $500 per month. Whether they work or not. The Mayor’s plan is inspired by the radical idea of a Universal Basic Income, or UBI. An unconditional cash payment for all citizens. The experiment will measure the impact of these payments on the recipients’ lives. Mayor Tubbs believes it could be the key to helping the working poor. Those who have jobs but find it hard to make ends meet.

Michael Tubbs
Mayor
If the Universal Basic Income works out in Stockton you will see the poverty levels decrease. I do think there’ll be more discussions about things like social safety net and basic income for sure. The truth is, one in two of every American can’t afford one $500 emergency which means that the majority of the country is not doing that well.

Chris Hughes
Co-Chair, Economic Security Project
I’m the first to say that for three years’ worth of work, I ended up with nearly half a billion dollars. That is not how the economy is supposed to work.

Chris Hughes is one of the people paying for Mayor Tubbs’ experiment. He made his money as a co-founder of Facebook.  But the online revolution he’s profited from could mean rising insecurity for the workers of tomorrow. Now he spends his time looking for new ways to deliver a fairer society.

Chris Hughes
Co-Chair, Economic Security Project

We’re seeing massive growth in the number of part-time jobs, contingent workers, in the gig economy and with that instability comes a need for a new kind of safety net.  $500 a month in the background every single month for people who need it so that in the great months you know that you’re gonna be good and in the months when work isn’t quite as stable, you know you are at least halfway to making rent.

Sceptics argue no strings attached handouts could discourage people from working but Chris Hughes says research to date suggests that top-ups have beneficial effects.

Chris Hughes
Co-Chair, Economic Security Project

When people get modest amounts of cash, they use it to improve their lives and the lives of their family. They invest it in themselves. Most importantly people don’t drop out of work en masse.

Mark Zuckerberg
Facebook CEO

Our generation is gonna have to deal with tens of millions of jobs replaced by automation like self-driving cars and trucks’.

Silicon Valley seems awash with billionaires eager to allay fears about an uncertain future of work. Fears stoked by the very innovations that have made them their billions.

Sam Altman
President, Y Combinator

Universal Basic Income is one of these ideas that’s been talked about and debated a lot. So we thought it would be really good, given what we think is going to happen in the world, if we could get some data.

Sam Altman is President of a Silicon Valley school for start-ups and he is about to launch the most rigorous experiment in basic income ever carried out in America.  3,000 people will receive either $50 or $1,000 with no strings attached every month for the next few years. Most economists argue a basic income would be just too expensive for Governments to provide today.  But Sam Altman claims the rise of the robots could ultimately have an answer for that.

Sam Altman
President, Y Combinator
If the AI comes, the good news is the cost of goods and services come down dramatically because computers can do them so inexpensively. In a world like that, you know, we’d see effective GDP growth in terms of purchasing power skyrocket. In the world where the AI really does arrive, there’ll be plenty of money.

Supporters of a basic income even believe it could change people’s attitudes towards work itself.

Sam Altman
President, Y Combinator

We’ll definitely have to redefine what we think of this work but we’ve had to do that many times before and one of the things that we learned in Silicon Valley is just how much potential some people have and if you can unlock that, if you can free them from having to work a job that they hate just to be able to survive, we’ll create hugely more value for the world.

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