Many tech entrepreneurs have long argued that a guaranteed income could mitigate job losses caused by artificial intelligence and automation, and the latest and greatest research into the idea has been spearheaded by ChatGPT mastermind Sam Altman.
Michael Dwyer/AP
Hide caption
Toggle caption
Michael Dwyer/AP
The rise of artificial intelligence has raised fears that these technological advances could result in the loss of millions of jobs. Silicon Valley entrepreneurs are thinking about that too, and have long promoted the idea of unconditional cash assistance from the government to soften the blow.
Now, the first results of the latest and largest study into the impact of free money, spearheaded by the minds behind ChatGPT, have been published.
OpenAI CEO Sam Altman offered to fund a so-called basic income experiment in 2016. In a blog post that year, he said some sort of state payment would likely be necessary because technology is creating so much wealth while also destroying so many jobs. So it would be good to study what would happen if people received a regular paycheck from the government, he said.
“Will people just sit around playing video games, or will they create something new?,” Altman writes. “Would people accomplish so much more and contribute so much more to society if they weren’t afraid of not having enough to eat?”
Technological unemployment wasn’t his only motivation: Altman also cited progress toward eradicating poverty, writing, “I also believe that true equality of opportunity is impossible without some form of guaranteed income.”
There were a thousand different needs.
His experiment with free money took a while to come to fruition, and dozens of others did in the meantime. The idea also got a boost from the success of federal relief checks and other aid during the COVID-19 pandemic. But Altman’s study is much longer than most others and includes a more nationally representative group across rural, urban, and suburban areas.
Over the course of three years, 1,000 low-income people selected in Illinois and Texas received $1,000 per month. (A control group of 2,000 received $50 per month.) Elizabeth Rose, research director for Altman’s nonprofit Open Research, began tracking their financial situations as they enrolled them.
“Some had just graduated from beauty school and didn’t have the money to get a cosmetology license,” she said. “Some had just had their cell phones turned off. Some had been in a car accident and their car was totaled and they didn’t have the money to buy another one.”
She says there are a thousand different needs and only cash can meet them all. Rose says the survey, like many others, found that people are spending their extra money primarily on basic necessities like food, transport and rent.
“More and more people are actually paying for housing,” she said, “so a lot of people who were actually living with two other people have been able to move out on their own.”
Many people have money in the bank. The biggest increase in spending was actually helping family and friends.
One unexpected challenge during the experiment was the early onset of the COVID-19 pandemic, which complicated the study, but it also came at a time when unemployment rates were soaring. “During one of the most turbulent times in modern history, cash has given more people power over their employment decisions,” said Karina Dotson, research and insights manager at Open Research.
For example, the study found that some women were able to take a pay cut in order to take a job with more room for advancement thanks to the extra cash, and now earn close to six figures, but this increase in the quality of their work was rare.
Overall, people who received cash transfers worked slightly less — 1.3 hours less per week on average — and so did their partners, including those who worked 50 or 60 hours a week in multiple jobs.
Participants also reported having more leisure time.
Dotson recalls one single father who works at a restaurant: “When he found out about the cash benefits, he went straight to his boss and said he wanted to cut his hours so he could spend more time with his 4-year-old son,” she says.
As for Altman’s question about whether people would create new things, the study did find that interest in starting a business was on the rise, but it wasn’t until the third year of the program that participants, most of whom were black, actually took action to start a business.
Meanwhile, many people reported initially big reductions in stress and food insecurity that faded after a year, though the researchers aren’t sure why. Rose also notes that in some cases, the surplus money led to unexpected expenses. For example, some recipients were able to buy a car that then broke down and needed repairs.
The Open Research team plans to further analyze where people moved during the study period (the most common reason participants gave for moving was to move to a better school district) and how the cash affected children’s educational outcomes.
Altman declined an interview request about the findings so far, but the bottom line is that the report states that “our findings support both sides” in the debate over whether a basic income would help people’s long-term prospects.
Supporters say basic income alone is not a magic solution.
Guaranteed income is an old idea with a surprisingly diverse following, from liberal economist Milton Friedman and President Richard Nixon to Martin Luther King Jr. and the Black Panthers, and its Silicon Valley billionaire backers include Elon Musk and Jack Dorsey.
The most grandiose vision is universal basic income: 2020 presidential candidate Andrew Yang has called for giving every American adult $1,000 a month (plus cost-of-living increases) regardless of income. In a 2016 blog post, Altman called for giving people “enough money to live on.”
But thinking around basic income has changed significantly, with a series of recent experiments and certain national policy proposals being much more targeted and aimed at lower-income households.
“We hope that people learn from this study and others that a guaranteed income doesn’t work on its own,” Facebook co-founder Chris Hughes said.
He’s also co-founder of the Economic Security Project, which advocates for basic income. But Hughes says basic income isn’t a magic solution. $500 or $1,000 a month isn’t nearly enough to cover the ballooning costs of housing, health care, education and child care. Still, a growing body of research and pandemic benefits prove that a little extra money can stabilize families, Hughes says.
“Having some kind of guaranteed income when times get tough would be a good place to start,” Hughes said, suggesting that to that end, automatic payments could be triggered when rising unemployment signals a recession.
But making unconditional cash transfers a national policy would face strong opposition, and some states have already banned them.
“Contributing to society through the labor market is a more promising system than a system where poor people just get a check from the government,” said Michael Strain, an economist at the American Enterprise Institute.
While previous studies have shown the impact on jobs would be limited, Strain worries that a permanent basic income scheme could exacerbate long-term declines in employment rates for some groups.
A better idea, he says, would be to dramatically increase tax credits for low-income workers. Say you lose your $40,000-a-year job to automation, and the only other job you can find only pays $25,000. “Imagine living in a world where the government was giving you $15,000,” Strain says. “Only if you got the job, but the government would try to make sure it was worth the work.”
To be clear, neither Strain nor Hughes are too worried about mass job losses from technologies like AI — they say history shows that new technologies will create new kinds of jobs over time — but they agree that struggling American families will need some kind of extra help as jobs become more precarious.
