Rethinking Economic Safety Nets: AI's Impact on Universal Basic Income

0:00What can 160 years of experience teach you about the future? When it comes to protecting what matters, Pacific Life provides life insurance, retirement income, and employee benefits for people and businesses building a more confident tomorrow. Strategies rooted in strength and backed by experience. Ask a financial professional how Pacific Life can help you today. Pacific Life Insurance Company, Omaha, Nebraska, and in New York. Pacific Life and Annuity, Phoenix, Arizona. ever since the very early days of ai there's always kind of been this conversation of you know ai displacing a large percentage of the workforce and what the solution is are we going to need universal basic income how are we going to compensate people that are losing their jobs in this case and i mean to be fair something like technological innovation that displaces workers is not something new this has been happening for a long time you know you can look at cases in the textile industry back in the Industrial Revolution, where there was a large group of people that felt threatened by textile machines that no longer had to be done by hand, etc., etc., the luddites.

1:06In any case, the conversation is becoming, I think, more prevalent today with ChatGPT and other AI models that have really accelerated, and we're really starting to see a future where AI is integrated into everything, it automates everything, and there's a lot more implications that people are seeing. So today on the podcast, I want to talk about some solutions that are happening, some options that people are bringing up. And I think all of this is really relevant today because just recently, one of the co-founders of DeepMind, which is the big AI company that Google bought back in 2013 or 14, the co-founder Mustafa Suleiman recently just quit the company and said it was because he was worried about the direction of AI.

1:52It's kind of interesting because he said, he also said at the same time, you know, he's like, Google's doing everything right. They're doing everything good. But just the direction of AI in general, I couldn't, you know, stay here, which is kind of interesting. I think probably a large portion of that is the fact that he probably has some sort of deal where he was a co-founder, they bought him. So part of his shares or payout, I'm sure, is related to the fact that he's not going to go trash talk Google who bought his company that he started. So in any case, I don't know if that's true or not. I would just take it with a grain of salt when someone leaves a company and is talking about how it was a great company, but they're worried about everything that's happening in the industry that that company directly relates to.

2:31In any case, he recently left the company and he is an advocate of some sort of UBI or universal basic income and some sort of option he thinks is going to be really necessary in the future as we start looking at the impact of AI. He says a series he said that just based off of everything happening in artificial intelligence with white collar workers, he said that there is going to be a serious number of losers over the next decade. And he thinks that unquestionably many of the tasks in white collar land will look very different over the next five to 10 years, there's going to be a serious number of losers, and they will be very unhappy, very agitated.

3:12He was speaking at a GIC's bridge forum in San Francisco when he was talking about this. So, you know, he was obviously in a geographic area that there is a large supporter of universal basic income. And I believe that that's one thing that he specifically mentioned in that thing. So obviously, there's been a lot of really exciting advances in AI, but there's also been a lot of people that have been sounding the alarm on some of the disruption that all of this AI is going to cause from everything to from like medical diagnosis to copywriting and like so many different industries every every industry and every job will be impacted in some way recently a report came out that said something like 80 % of jobs will be impacted by AI so whether that means that they're going to replace jobs or just people are going to have to learn how to be augmented with that technology in order to stay relevant is to be under is to be left seen.

4:09But also recent bit of research out of Goldman Sachs also predicted that everything all the advancements in AI is going to actually boost the annual global gross domestic product annual GDP or global GDP by 7 % over the next 10 years because of just all the extra productivity that we're getting out of AI. And that does sound awesome. But that also could cause significant disruption in the labor force. As we're looking at other reports that say as many as 300 million jobs potentially are exposed to automation, aka will be replaced by AI. So Sullyman, who is the co founder of DeepMind, who is talking at this event said that governments are going to need to start thinking about how they're going to support people whose jobs have been destroyed with universal basic income as one potential solution that he said.

4:59He said, that needs material compensation, or that needs material compensation. This is a political and economic measure we have to start talking about in a serious way. So it is interesting. I'm hearing about a lot of different people that are really pushing forward on the universal basic income. I wanted to just give a quick, I mean, I'll try to stay unbiased about this, because I know that this is like, like he even mentioned, this is a political issue. So there definitely is different people on different political ideologies that believe different things about this. And I would actually be really curious to hear from you guys on our Facebook chat group, our AI group, if you join what your opinion on you, UBI is if you think this would be successful or not successful, I've heard pros and cons for it.

5:44I'll cover a few basic ones. But first, I really quickly wanted to just cover what it is, just a very basic definition from Wikipedia. So according to Wikipedia, UBI is essentially a social welfare program in which all citizens of a given population regularly receive a guaranteed income in the form of an unconditional transfer payment. It would be received independently of any other income if the level is sufficient to meet a person's basic needs. It is still sometimes called a full basic income. If it is less than the amount, it may be called a partial basic income. No country is yet introduced either, although there have been numerous pilot projects and the idea is discussed in a lot of different countries.

6:27Some have labeled UBI as utopian due to its historical origin. There was even so recently as 2013 a vote to do UBI in Switzerland. I believe there's a referendum, but it was voted against 77 to 23. So it never ended up passing. But ever since then, it's kind of been a concept that has been talked about a lot. Some people point to the fact that the Alaska Permanent Fund, which is essentially$1 ,600 a year that Alaska gives to all of its everyone that lives there, they call that like some sort of form of it. I think$1 ,600 is probably not very substantial to do anything with. And to be honest, that's almost just like a tax credit.

7:10I think there's special deals for living in Alaska since it's not a super, it's not somewhere that a lot of people want to go due to it being freezing cold. So I think, you know, you incentivize people to move to places like that. I think Canada, where I come from, does the same thing with northern territories where they give you land and different benefits if you would like to go move up and colonize the Arctic Great White North of Canada. So in any case, this is something that is being talked about a lot. There's a lot of pros and cons. I think some things that critics say is just the fact that if you pay everyone money, then people will be less likely to want to work and improve themselves and contribute to the economy.

7:57and so thereby they are just going to, you know, your country kind of gets stale and your talent isn't as good and you lose some of your GDP. Other people that are in favor of UBI say that it maybe gives you the opportunity to focus on things that you really like to do like painting or something that you might not actually, something artistic that you might not have been able to be paid for in the past. I know that Sam Altman, the CEO of OpenAI is a proponent of universal basic income. And he's also said that that's probably going to be part of the solution to AI and the displacement that's going to happen from that.

8:34So it's interesting coming from him. And you know, it's interesting because when you talk about it's kind of just brings up this whole like, this whole conversation of work, right? Some people say, you know, like you need to work to be able to find purpose and meaning in your life. And then some people say, oh, but there's different types of work. Maybe your work doesn't have to be something that gives you money. Maybe your work can be something that you work on. Anyways, there's this whole, there's different sides of the debate. And I mean, some people point to the fact that just because we have welfare systems doesn't necessarily, I don't know, doesn't always have positive impacts for people.

9:11And for others, you know, it's obviously a safety net. So there are pros and cons to it. I would love to hear your opinion on universal basic income if you believe that this is a solution to the impending disruption that is going to happen from AI. The one last thing I wanted to talk about real quick is there's a really interesting article that kind of had a different take on this than I've seen in other places and that was an article out of TechCrunch that essentially said we all contribute to AI should we get paid for that beyond the fact that everybody obviously loves pre-money. I think This is going to be an argument that a lot of people make saying that, you know, this isn't just universal basic income.

9:50This is the fact that maybe we actually are owed something or we deserve something because our data was used to train, you know, these models. So it'll be interesting. Maybe, you know, OpenAI is going to have to make royalty payments to the world and to everyone that ever contributed data to a website. I don't know. But in any case, this is going to be an interesting area to follow and continue following into the future to see how this evolves. if we do end up with some sort of UBI, if that's necessary, and what happens based off of all of this displacement we're about to see in the future.