The idea that governments should provide citizens with a universal basic income has reemerged on the national stage, thanks to income inequality’s rise as a global concern and technology’s perceived threat on the future of human jobs.
Proponents of the idea say a basic income — essentially an annual stipend paid to citizens by the government — would provide a lifeline for those fighting poverty, while people with better means could use the slack the additional income provides to dedicate more time creating new ventures or creative endeavors. Opponents argue that the mechanism would eliminate the incentive to work at all.
Some countries are taking the idea seriously. Switzerland voted earlier in June on the mechanism, and 77 percent of voters opposed the proposal. Finland is going to run its own experiment next year; Y Combinator, an incubator firm in Silicon Valley, is running a similar test in Oakland, California.
Previous experiments with basic income have been inconclusive. In an initial test case from Canada — in the small town of Dauphin, Manitoba, in the 1970s — 30 percent of the population received the equivalent of $15,000 a year in an experimental “mincome.” But while employment initially dipped as a result, money for the program eventually ran dry under conservative party rule, even as some research suggests it provided myriad benefits to society.
Even though the prospect of a universal basic income isn’t imminent, experts say business executives would be wise to consider the implications such policy might have on the talent market.
Karl Widerquist, co-chair for the Basic Income Earth Network, an advocacy group, said that if people aren’t as worried about making money, they would have more time to further their education. In theory, this would deepen the supply of skilled labor — assuming people perused degrees in high-demand fields. “You’d get a better talent pool as people are able to take their time and learn the skills they need,” Widerquist said.
This might be a good launching pad for budding entrepreneurs and bad for companies looking to keep talent. If people aren’t worried about money, they can take more risks. Furthermore, while these entrepreneurial endeavors may indeed create new jobs, it also might lessen labor force participation.
“You might see more people opting out of the labor force altogether or reducing their hours of work in a more significant way if this program were instituted on a permanent basis,” said Matt Zwolinski, an associate professor of philosophy at the University of San Diego.
For instance, artists might feel freer to hone their craft without wage worries, a freedom that might contribute to society culturally, but also produce new value that could evolve into new businesses. In other cases, a universal income might keep people from staying in crappy jobs, a forceful check on employers that could create a new dynamic in the talent market.
Zwolinski said that in a climate of high unemployment, employees might feel trapped by their employer. The safety net of a basic income can provide employees the ability to say no to potentially exploitative or unfair working relationships. “Providing people with a generous safety net can give them a kind of freedom to make their own choices, live their own lives without being dependent on others,” Zwolinski said.
Emran Mian, the director of the Social Market Foundation, a nonpartisan think tank based in London, disagreed that a basic income would lead to people having more room for creativity and innovation. He said this argument is based on a false notion that creativity happens on your own without institutional pressures like deadlines and accountability.
“That kind of pressure, or if you like structure that comes through work, is part of what creates creativity and part of what creates innovation,” Mian said.
Mian also said the incentives of white-collar work wouldn’t change much because most jobs pay far more than a basic income would provide. After workers’ basic financial needs are met, however, they might opt for jobs that don’t require long hours.
“I think there’s an argument to be made that if people are finding their work rewarding, and if they’re using that work to make interesting contributions to the economy and society, then why do we want to diminish their incentives to work?”
It’s a question without a clear answer. What is clear is that, regardless of if such a basic income policy is put into place, executives need to think beyond the scope of money and financial incentives to attract and retain today’s talent. Not doing so comes with serious risk.Filed under: Talent EconomyTagged with: AI, basic, compensation, economy, future, income, pay, talent, universal basic income