Universal basic income: This is the proposed solution for when artificial general intelligence (AGI) takes over

Leaders in the development of artificial intelligence are warning that within the next five years, the technology could destroy millions of jobs.

In an interview with CNN, Dario Amodei, CEO of Anthropic and former Vice President of Research at OpenAI, told Anderson Cooper that within one to five years, AI could eliminate up to 50 percent of jobs and push unemployment as high as 20 percent. Amodei warned of the dangers of the rapidly-advancing technology, admitting that AI is “starting to get better than humans at almost all intellectual tasks”.

“AI is starting to get better than humans at almost all intellectual tasks, and we’re going to collectively, as a society, grapple with it,” the Anthropic CEO said. “AI is going to get better at what everyone does, including what I do, including what other CEOs do.”

Amondei is not the only AI leader voicing these concerns. Geoffrey Hinton, known as the Godfather of AI, has made similar warnings. But, if millions of jobs are eliminated, what does that mean for those impacted and the economy more broadly? Some believe that the solution lies in Universal Basic Income (UBI).

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What is UBI?

Universal Basic Income (UBI) is an economic concept designed to provide a safety net for all members of a community or society. It guarantees that everyone receives a baseline amount of money sufficient to live on, with any additional income from work serving as a supplement.

Universal means just that—everyone within a defined group or geography receives it, regardless of income level. Basic refers to the amount: it should be enough to cover essential needs. A true UBI would have significant and immediate effects on the labor market. Assuming the private sector doesn’t respond by inflating prices and eroding the purchasing power of the payments, the economic security UBI offers could lead many to reduce their working hours or leave their jobs entirely. This would give people more time to rest, pursue their passions, or explore new interests.

Low-wage workers, in particular, would be empowered to demand better working conditions, knowing their basic needs are covered. In this way, UBI could be both liberating and transformational—but implementing it would require careful and comprehensive economic planning.

However, in an economy where rising unemployment often leads to recessions, political leaders will need to address the disruptions caused by AI, should they turn out to be severe enough to decrease the quality of life their populations are accustomed to.

How could AI lead to UBI?

Let’s break down why UBI might be essential in a future where AI has displaced millions of jobs—and where equivalent new jobs haven’t emerged.

If, over the next decade, a significant portion of the workforce is laid off because companies, organizations, or government offices decide AI can do the job better or more cheaply (or simply more cheaply), the overall size of the workforce could shrink dramatically. In other cases, employers might not eliminate all human workers but reduce their numbers, as AI enables remaining employees to match or exceed the output of full human teams.

So, without a job, how do people afford food, housing, or other necessities? That’s where UBI comes in. If companies reduce labor costs and AI remains relatively inexpensive, profits could rise—sometimes dramatically. Labor is one of the largest expenses for both private and public organizations. If those costs fall while prices stay the same, profits increase.

Governments aiming to maintain living standards might choose to tax these profits at levels sufficient to fund a UBI. While this sounds straightforward on paper, in practice, it would be complex and would challenge the foundational relationships of modern capitalism. In an economy where rising unemployment often leads to recessions, political leaders will need to address the disruptions that AI brings to the labor market.

The response from UBI skeptics...

Although government action may be needed to address disruptions caused by AI in the labor market, some researchers are skeptical that UBI is the answer. Their arguments center on four key tenets, outlined in a recent article titled AI ≠ UBI, written by Aleksandra K. Przegalinska and Robert E. Wright.

The first argument focuses on the current state of AI. While proponents are eager to tout its capabilities, Przegalinska and Write argue that the technology is not yet advanced enough to cause significant disruptions to the labor market. This point is valid, but it doesn’t negate the possibility that continued development could eventually lead to widespread displacement of workers.

The second argument centers on the idea that new jobs will emerge as others are eliminated. Historical precedent supports this: during the Industrial Revolution, machines reduced the need for human labor on manufacturing lines but also created new employment opportunities. These included jobs in the expanding service sector—where people spent their income—and roles related to the maintenance and production of the very machines that had displaced factory workers.

There is reason to believe AI could follow a similar pattern, creating jobs even as it eliminates others. However, the nature of these new jobs and the quality of pay and benefits they offer remain uncertain. If job losses are severe enough, competition in the labor market could become so intense that workers are, such as.

The third set of arguments rejects programs like UBI altogether. Instead of direct transfers, people might turn to alternative sources of “real income.” These could include subsistence systems, such as farming and hunting, undertaken collectively; ownership of businesses, where workers become their bosses (though this may be limited by access to capital or credit); or ownership of financial assets that generate income, such as corporate stocks or public bonds.

Finally, the authors acknowledge that UBI could still become a viable option in the future. “If employment decreases dramatically and individuals prefer UBI, it can be implemented quickly at that time,” they write. However, they stop short of endorsing the need for a UBI system—even in scenarios where labor market disruptions might make direct cash transfers appealing. They argue that “jobs are not disappearing, but even if they eventually do, individuals will have time to increase subsistence, proprietorship, and investment.”

UBI proponents, however, might counter that time alone isn’t enough. Displaced workers would need capital—not just time—to acquire the land and resources necessary for a subsistence lifestyle, or to invest meaningfully in private financial markets. Without that initial support, maintaining a decent quality of life without government aid could be out of reach for many.

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