CAUSES OF PROLONGED PERIODS of high unemployment can range from economic mismanagement—such as over-expansion of money supply—to broad-based underlying structural changes. Economic mismanagement is often correctible over a shorter period of several years, but structural changes like globalization and free trade can take much
longer, and additional measures are often needed to redress the impact to the affected workforce.
A potential structural concern looming ahead is technological unemployment—unemployment
from powerful new technologies that enable automation and new business models and, in turn,
threaten to upend the employment models of important sectors of global economies. With the
employment losses come the related livelihood concerns.
One idea being looked at in several countries is that of an unconditional periodic payment of
a certain basic amount to all citizens—universal basic income (UBI). This article will touch on
technological unemployment, revisiting the concept of money briefly before discussing UBI.
Over the past few years, there has been a substantial amount
of discussion about the increased prospects for sustained high
unemployment as sophisticated technologies bring in new
business models—such as has happened in entertainment,
media, communications, retail, and with the sharing and gig
economies—which wreak havoc in the labor markets. These
technologies include the full range of artificial intelligence
subfields—deep learning, natural language processing, vision,
robotics, machine learning—and technologies such as 3-D printing and drones, all of which can, uniquely or in combination,
reduce the need for labor.
The idea of technological unemployment has been around for
many years; the phrase itself was coined by John Maynard Keynes
in his optimistic 1930 essay, “Economic Possibilities for Our
Grandchildren.” However, unlike Keynes’ optimistic perspective,
with a global population of over 7. 5 billion and growing, the loom-
ing potential for widespread job losses from technology-initiated
economic transformation, accompanying financial hardships,
governments’ short-term planning focus, other risks (e.g., cli-
mate)—the concerns about severe societal stress have increased.
In their groundbreaking 2013 study, Frey and Osborne[ 1]
estimated that 47 percent of U.S. employment is in the “high
risk” category of jobs that could be fully automated within the
next one to two decades. Recognizing that this projection reflected a “standstill” technological state and that the actual pace
of sophistication since then has increased (including previously
nascent technologies such as 3-D printing, drones, and quantum
computing, all of which are now nearly ready for “prime time”),
the outlook may have changed. The labor impact is now thought
to be both severe and global.[ 2]
As new technologies sweep through world economies, a
societal challenge could arise because the speed of change could
exceed workers’ abilities to bridge the growing “knowledge gap”
to stay current with the demands of the economy. This would
make it challenging to rehabilitate the displaced workers into
similar or better-paying jobs, instead of being forced to compete
for low-paying jobs that remain.