Many tech entrepreneurs have long proposed that guaranteed income could offset job losses from artificial intelligence and automation. The latest and largest study of the idea is led by Sam Altman, the man behind ChatGPT.
Michael Dwyer / AP
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Michael Dwyer / AP
The rise of artificial intelligence has fueled fears that the advancement of the technology will eliminate millions of jobs. Silicon Valley entrepreneurs have thought about it, too, and they’ve long floated an idea to soften the blow: a cash handout from the government, no strings attached.
Now, the first results are out from the latest and biggest study on the impact of free money – research led by the people behind ChatGPT.
Sam Altman, CEO of OpenAI, offered to fund an experiment on what he called a basic income in 2016. In a blog post that year, he said that some kind of national payment would be needed because technology kills more jobs even as it generates great wealth. for others. So, he said, it would be better to learn what would happen if people got regular salaries from the government.
“Do people sit and play video games, or create new things?” Altman wrote. “Can people, without fear of not being able to eat, earn more and benefit society more?”
Technology-driven job losses are not the only motivation. Altman cited progress in eradicating poverty, writing, “I also think it’s impossible to have equal opportunity without some version of a guaranteed income.”
There are a thousand different needs
It took some time to experiment with free money, and in the meantime, dozens of other experiments were conducted. The idea also got a boost from the success of federal aid checks and other aid during the COVID-19 pandemic. But Altman’s study was longer than most and included nationally representative groups in rural, urban and suburban areas.
For three years, 1,000 low-income people selected in Illinois and Texas receive $1,000 per month. (Another control group of 2,000 received $50 a month.) Elizabeth Rhodes, director of research with Altman’s nonprofit, OpenResearch, began tracking her financial situation when she enrolled.
“One person finished beauty school, but they couldn’t afford a cosmetology license,” he said. “One person’s phone has been turned off. The other person was in a car accident and the car was totaled, and they can’t pay for the rest.”
There are many different needs, he said, and only cash can satisfy them all. Rhodes said this study, like many others, found most people use extra money for the basics: food, transportation, rent.
“We’re seeing an increase in people paying off their homes,” he said. “So many people actually double up with other people, and they can go out on their own.”
Many also put money in the bank. The biggest increase in spending was actually to help family and friends.
One unexpected challenge during the experiment: The early onset of the COVID-19 pandemic. This complicates the research but also means that it is played when there is a sudden unemployment. “Cash gives us more agency to make work decisions during one of the most turbulent times in modern history,” said Karina Dotson, manager of research and insights with OpenResearch.
For example, the study found that extra cash allowed one woman to take a salary cut for a job with room for an advance, and she is now making close to six figures. But the jump in the quality of the job is rare.
Overall, people receiving cash payments worked slightly less – 1.3 hours less per week on average – and their partners did the same. This includes some who have logged 50 or 60 hours a week at more than one job.
Participants also reported more free time.
Dotson remembers one father who worked at a restaurant. “And when he found out about the cash transfer, he told me that he immediately went to his boss and said that he wanted to reduce his working hours so that he could spend more time with his 4-year-old son,” he said. said.
To Altman’s question about whether people will create new things, the study found another interest in entrepreneurship. But it is not until the third year of payment that some, mostly Black participants, take steps to actually start a business.
Meanwhile, many people report an initial decrease in stress and food insecurity, but it worsens after the first year. Researchers aren’t sure why. Rhodes also notes that in certain cases, extra cash actually leads to unexpected expenses. For example, some recipients may purchase a vehicle, which then breaks down and needs to be repaired.
The OpenResearch team plans more analysis of where people moved during the study – the most common reason participants gave for moving was to a better school district – and the impact of cash on children’s educational outcomes.
Altman declined an interview request to discuss the findings until now. But the bottom line is that in the debate over whether basic income helps people’s long-term prospects, the report says, “Our results provide support for both sides.”
Proponents say basic income is not a magic solution
Guaranteed income is an old idea with a surprisingly diverse fan base, from economic libertarian Milton Friedman and President Richard Nixon to Rev. Martin Luther King Jr. and the Black Panthers. Other Silicon Valley billionaires who have endorsed it include Elon Musk and Jack Dorsey.
The broadest vision is a universal basic income, as when 2020 presidential candidate Andrew Yang called for giving every adult US$1,000 a month (plus living expenses) regardless of income. In Altman’s 2016 blog post, he called for giving people “enough money to live on.”
But thinking about basic income has changed dramatically. A raft of new experiments and proposals for some types of national policies are more limited and targeted at low-income households.
“I hope people will take away from this study and learn more that guaranteed income doesn’t work on its own,” Facebook co-founder Chris Hughes said.
He also founded the Economic Security Project, which promotes basic income. But Hughes says it’s not a magical solution — $500 or $1,000 a month isn’t enough to cover housing, health care, education and childcare costs. Still, he said, growing research, as well as pandemic payoffs, prove that a little extra can keep families together.
“I think the best thing to start with is to have a guaranteed income when things get tough,” he said. To that end, Hughes suggested that automatic payments could begin when unemployment rises to signal a recession.
But making no-strings-attached cash a national policy will face strong opposition. Some countries even ban it.
“Making a contribution to society through the labor market … is a more promising system than one where the poor just get a check from the government,” said economist Michael Strain of the American Enterprise Institute.
Although research to date has shown a limited impact on work, Strain worries that a permanent basic income program will exacerbate the decline in employment rates for some groups.
A better idea, he said, would be to significantly boost tax credits for low-income workers. For example, say someone loses their $40,000 a year job due to automation, and the only other job they can find is one that pays $25,000. “What if we lived in a world where the government gave you 15 grand?” Strain said. “You only get it if you take the job. But the government will try to, you know, kick in enough to make you get the time.”
For the record, neither Strain nor Hughes are too worried about the massive job losses due to technologies like AI. He said history shows that new technologies create a wide range of new jobs. But he agrees that as jobs become increasingly precarious, struggling American families need more help, one way or another.
