AI’s job shake-up is accelerating. Is it time for universal basic income?

AI is no longer an abstract threat. It's causing job loss right now, and the headlines, they tell the story. The Massachusetts Institute of Technology, MIT, on Wednesday released a study that found that artificial intelligence can already replace 11.7 percent of the U.S. labor market, or as much as $1.2 trillion in wages across finance, health care, and professional services. The New York Times recently reported that Amazon is on the cusp of replacing what would be 600,000 warehouse jobs with robots and plans to automate 75 percent of its operations. CNBC reporting that Salesforce, Walmart, Paramount, UPS, YouTube, and Meta have all announced new rounds of layoffs attributable to AI, with nearly 1 million job cuts nationwide this year. That's the job loss that we can measure. Now consider what some are predicting about the future. Goldman Sachs estimating that six to seven percent of the U.S. workforce could be displaced due to AI adoption. They do note, however, that the impact may only be transitory, because new opportunities created by AI might ultimately put people to work in other capacities. A report by the McKinsey Global Institute finding that AI could displace 40 percent of American jobs due to automation by 2030. That analysis found that robots and AI agents could automate more than half of U.S. work hours, both manual and cognitive, using technology that's available today if companies redesign how they'll do things in the future. The World Economic Forum projecting that 92 million jobs worldwide may be displaced by 2030. Ford's CEO saying that AI could replace half of all white-collar workers there. NYU professor Scott Galloway predicting that AI will hit middle management first, noting that six percent dropped in managers at public companies since 2022. So here we are. AI eliminating jobs, more automation coming. If millions of people lose work, how will they support themselves? This is where an idea from the 2020 presidential campaign returns to the conversation. Universal Basic Income, or UBI. The concept pretty straightforward. Every American adult would receive a set check each month for Cook County, Illinois, which includes Chicago. This concept just became reality. The Cook County Board of Commissioners unanimously approved its 2026 budget proposal just this month. It includes $7.5 million for a guaranteed basic income program. Commissioners approved it after the success of a pilot program where the county provided $500 a month to 3,200 households over two years. Survey findings based on that pilot revealed that 94% of the program recipients used the funds to address financial emergencies. 75% reported feeling more financially secure. 70% said that the program had a positive impact on mental health. Of course, there's the question of how do you pay for it? In the case of Cook County, as a result of the decrease in commercial real estate values, everybody's property taxes are now sky high. In Chicago, rising 16.7%, the largest jump in at least 30 years. West Garfield Park saw an increase of 133%. North Lawndale, 99%. Englewood, 82.5%. Then there's pushback from the Illinois Policy Institute, which cites concerns about workforce and income effects. Quote, Cook County is making its guaranteed income pilot permanent and committing millions to a failed strategy already shown to lead people with less work experience and lower earnings. Back in 2020, it was presidential candidate Andrew Yang who called his version of universal basic income the freedom dividend, specifically $1,000 per month, no work requirements, no means testing, a direct payment to help people cover bills, weather economic transitions, and adapt to a job market reshaped by technology. Andrew Yang joins me now. Andrew, nice to have you back. I pulled a profile of you from 2018 when you were just on the cusp of announcing your candidacy. Here's a quote that you provided to the author of the piece. You said, we need is self-driving cars to destabilize society. In a few years, we're going to have a million truck drivers out of work who are 94% male with an average level of education of high school or one year of college. That one innovation will be enough to create riots in the street. And we're about to do the same thing to retail workers, call center workers, fast food workers, insurance companies, and accounting firms. It was seven years ago. How is that quote aging? It's aging very, very well. Unfortunately, Michael, I'm so glad that we're having this conversation. 44% of American jobs are either repetitive manual or repetitive cognitive and thus could be subject to AI and automation. And we're seeing that unfold right now. It's heartbreaking for me because I feel we could be doing much, much more for the millions of Americans who are going to be displaced. I know that Cook County is just a microcosm, but I'm sure in hearing about their experience, people are wondering, okay, Andrew Yang, we're on board. Now we get it. What you saw seven years ago, the rest of us see, but how do we pay for it? The CEO of Anthropic, Dario Amadei, just raised his hand and said, you guys should tax us, the AI firms. And right now, hundreds of billions of dollars of value is being realized by Anthropic and these other firms. On the back, by the way, of data that we all provided unwittingly and didn't agree to it, but it's trillions of dollars of value. And most Americans aren't going to see a dime of that. So if you have the CEO of an AI company saying you should tax us, I think we should take him up on his suggestion. And if you have an AI tax or a compute tax, you get to very big numbers very quickly. So they're now referring to the Magnificent Seven or the S&P 493 instead of the S&P 500. I'll put a graph on the screen right now for the benefit of everybody at home. The Washington Post had this coverage. The point was that if you strip out Alphabet, Amazon, Apple, Meta, Microsoft, NVIDIA, and Tesla, then the market's doing OK, but the market surely isn't doing what it's doing when you include those seven. And I guess my question for Andrew Yang is, what happens if that is a bubble and it bursts? Then how do you fund the freedom dividend or universal basic income? Well, right now, a lot of the value that's getting generated is being hoarded or held by a handful of companies, Michael. I think you're right that we should be trying to spread those value gains more broadly across the market and to people. Right now, U.S. GDP is around $85,000 per person and trending upward because regardless of whether AI as an investment thesis is a little bit overhyped, you know that it's going to have a positive effect on GDP. So if you have $85,000 ahead, then having $12,000 a year, which I proposed in 2020, actually seems pretty modest and reasonable. And that's going to be affordable regardless of what happens with some of these firms' valuations. As you envisioned the freedom dividend, there was no means testing. Everybody gets a check, whatever that amount might be. What becomes of other federal assistance? Well, I intended the freedom dividend to try and clear up and clean up some of the bureaucracy and administration that's currently being applied. I spoke to a disabled woman in Iowa during the campaign, and she said she wants to volunteer in her community, but she's afraid to because she's afraid to lose her disability payments. And I think most people looking at that situation would say, well, that's not right. Like the intention is not to force this woman to stay home. So if you can put this into people's hands and say, look, this is going to be yours regardless, then it empowers them to go out and hopefully build things, start businesses, and participate in their community. Capitalism does not work very well if people don't have money to spend. So is this capitalism that we're talking about? It sounds rather socialist, doesn't it? That everybody's going to get a check and therefore they won't have to go to work because all these jobs are being taken by AI initially. It's capitalism where income doesn't start at zero, Michael, and you have a consumer economy that is predicated on folks being able to participate. And if you shove millions of Americans to the curb via AI and automation, then they're not going to be able to go to their local business. They're not going to be able to meaningfully grow the economy. They're going to stay at home. They're going to end up going down internet rabbit holes and getting radicalized in many cases. So that's a loss. And so if we can get people connected in various ways, that's the direction we should go. And I'm not someone who thinks that this money is the silver bullet that's going to do the trick. I mean, you still have to convey structure, purpose, fulfillment, community, all of the rest of it that jobs traditionally have provided. Andrew, a final question. There's an academic in the on-deck circle and I'll bet you've read the stories. It's Dr. Yampolsky who's been quoted as saying that he thinks in five years we'll have 99% unemployment. I'll see in a moment whether he's going to stand by that prediction. How bad does Andrew Yang think it will get undeterred? No, it's going to get bad. I certainly don't think 99% bad, but if you use this 44% of jobs subject to automation as a benchmark, and then you figure that we're going to churn through let's say half of those jobs over the next 10 years or so, that puts you at 30 to 40 million jobs that get eliminated. And that would be devastating. That would be catastrophic for many, many communities. And I think that's a realistic place to think we're going to be heading. Andrew Yang, thank you for being here. Perfect guest on this day. Thanks for having me, Michael. Wish I had better news. Hopefully so. Go to my website at smirkonish.com. This is today's poll question. Is guaranteed income a realistic remedy for job loss due to AI? Go vote at smirkonish.com.