How would we solve AI and other automation taking our jobs?

Today I want to talk about what happens if AI or other forms of automation take all our jobs.

Let’s start with some historical context. Technological innovation has always disrupted the labor market. When the mechanical loom was invented, many weavers lost their jobs. The rise of the automobile wiped out horse-drawn carriage drivers. Computers and software have eliminated countless clerical and administrative roles.

So yes, automation can harm specific groups of workers, especially in the short run. And those losses can be painful and concentrated. But that’s not the full story.

Historically, automation has also created new jobs, new industries, and new opportunities. Fewer people are farming today, but we have many more jobs in healthcare, education, entertainment, and many other sectors. The labor market has always adjusted, and overall employment hasn’t collapsed. In fact, automation has helped societies become much wealthier over time through productivity increases.

So automation isn’t automatically a problem. Looking at historical patterns, we wouldn’t have wanted to prevent the automation but rather helped affected workers make a smooth transition away from that sector. That might mean retraining programs or direct compensation to those who lost their jobs due to automation. If done right, we all end up better off.

But does this mean we should never worry about automation? Not necessarily.

There’s no law of economics that says every worker will always be able to find a good job. In particular, economics does not guarantee that the “market wage” will be enough to live on, especially if machines or algorithms can do most jobs better and cheaper than humans. So it’s in theory possible for many workers to not be able to earn a livable wage, no matter how hard they try, at least in the short run following massive technological change. In the longer run, sectoral adjustments may solve the problem, or they may not. But even if it’s only a short-run problem, it could be an acute one.

So what’s the solution?

One answer is universal basic income, or UBI. The idea is simple: everyone receives a baseline income from the government, regardless of employment status. The income is not huge but enough to buy necessities.

Critics might say, “But won’t people stop working?” We don’t really know for sure how people will respond if widespread automation dramatically reduces the need for human labor. But humans generally want to feel useful and contribute, and if the basic income amount is not very high, many will still want to do something to supplement it.

At the same time, if we reach a point where machines can do most jobs more efficiently than people, then it’s also okay if many people stop working. That’s a sign that we’re living in a world of abundance-where human labor simply isn’t needed as much. This would certainly look different from the current world and require some adjustment, but it’s not fundamentally bad.

Of course, designing a sustainable and effective UBI takes serious planning. We’d need to think carefully about how it’s funded, how generous it is, and how it interacts with other programs. But if automation does massively reduce the need for human labor, we can afford universal basic income, precisely because the machines will be producing enormous amounts of value.

Economists already find a lot to like about a Universal Basic Income. It’s simple, transparent, and doesn’t create the same work disincentives that some targeted programs can. And in a world where work may become optional for many, UBI could provide a stable foundation, ensuring people can meet their basic needs while still choosing how they want to contribute.

We don’t yet know what the latest round of technological progress will bring, and there’s certainly no need to panic. But it’s important to keep an eye on how things evolve-and to be ready to step in with smart, thoughtful policy if it looks like too many people are being left behind.

Originally published at https://mytwocentsandcounting.substack.com.