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The Growing Precariat: Why We Need a Universal Basic Income
BY GUY STANDINGON MAR 30, 2015| FEATURED, FUTURE, GRAND CHALLENGES, SINGULARITY 264  7
There is an adage in economics known as ‘the lump of labor fallacy’. It is that technological change is destroying jobs and generating rising unemployment. It rests on an image of a finite number of jobs. In 1809, the Luddites destroyed machines seen to be putting them out of work. Ever since, their action has been cited as disproving the unemployment effects of technological progress.

To be fair to the Luddites, their actions should rather be interpreted as a protest against the destruction of a way of life that had generated social stability and community respect for traditional forms of workmanship.

Today, we have something similar. Technological innovation is more rapid and broad-based than in any previous industrial revolution, much of it linked to Silicon Valley and the entrepreneurial dynamism of its denizens.

Jobs are indeed being destroyed. The jeremiahs are out in force. “The end of work,” they shout. “Jobless growth!”

This is nonsense. What is happening is more subtle and potentially liberating, but also potentially generating a dystopia of socially unsustainable inequality, in which a growing share of the population will be mired in chronic insecurity, through no fault of their own.

This is not a time for smug libertarian mantras about meritocracy and the bracing effects of competitiveness. If what is happening is allowed to continue without imaginative new social policies, our society will be blighted by millions of people living wretchedly insecure lives and reacting accordingly.

Globalisation, technological change, and government policies have produced a class structure with a tiny plutocracy of billionaires coexisting with a dwindling salariat, with employment security, pensions and paid vacations, and a rapidly growing precariat, living bits-and-pieces lives, without occupational careers and experiencing declining real wages. Telling the precariat that they must obtain more schooling and training is disingenuous. Millions are currently over-qualified for the labor and work they can expect to be doing.

The reality is that the income distribution system of the 20th century has broken down, and it will not come back. Real wages in the US and in other rich countries will continue to stagnate and fall. More people, however hard they try, will earn incomes that will not enable them to avoid poverty and insecurity. They will find it impossible to insure against that insecurity.

Do not think they will be underemployed in the conventional sense. An irony of recent labor market developments is that the precariat has to do more and more work, much of which is unrecorded, unrecognised and unremunerated.

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One aspect is the converse of automation, which should be called, rather ungainly, heteromation. We understand we live through electronic gadgetry, but it generates time uses like nothing ever before. Some of that is play and entertainment. But for the precariat in particular, much of it is hard work. It includes networking, retraining, upgrading skills, seeking paid work opportunities, keeping up to date in one’s own field of work, and regularly applying for benefits or services needed for survival.

Most of that activity is not desired as leisure; it is necessary work.

This is why it is ludicrous to say that the new technology is destroying work per se. One challenge is to identify ways of limiting the imperative to be wired up in activities that are distracting and destructive of the reflective self. We need a ‘politics of time’. Those electronic gadgets are wonderful and should not be criticised for the fact that so far most of us remain dominated by their incessant demands on our time.

The politics of time must include measures to enable people to feel more in control of their time, which means they must feel less insecure. Chronically insecure people easily become irrational. This is why the politics of time should include moves toward a society in which everybody, in principle, should have a universal basic income as a right. This means every man, woman and child should have a modest monthly basic income, without imposing arbitrary behavioral conditions and not being dependent on marital, sexual or work status.

It is affordable, especially in a society in which billions of dollars are spent on giving affluent folk subsidies for which they have done nothing. There should be a bonfire of such subsidies; they distort market mechanisms, promote inefficiency, and are regressive.

A basic income would help people be more rational, more long-term in their outlook, and more prepared to take entrepreneurial risk.

It would not reduce labor supply. This was shown by our pilots in India, in which we were able to provide over 6,000 men, women and children with a basic income for 18 months and monitor what happened by comparison with a larger number not provided with one, through a randomized control trial. It has also been shown in experiments in the US, Canada and several European countries.

shutterstock_93945211The simple fact is that people with basic security work harder and more productively, not less.

A basic income would also modestly reduce income inequality. It would strengthen individual bargaining capacities and thus reduce exploitative pressures. Basic security has also been shown to induce a greater sense of altruism and to make people more tolerant of those different from themselves.

A basic income would not be a panacea to all our social ills. That is why it should be part of a Precariat Charter, as argued in my recent book. It does recognize that it is practically the only way to provide basic (not total) security and reduce income inequality while promoting that most precious of objectives, republican freedom, the freedom to be undominated by bureaucrats or figures of autocratic authority.

We must realize that the growing structural inequality is socially unsustainable and increasingly immoral. We must change that if we are to produce a Good Society fit for the 21st century, in which all of us have a life of dignity, freedom and self-control. People with basic security are likely to have the confidence to defend and enhance freedom not only of themselves but their relations, friends and neighbors.

That great proselytizer of America, Alexis de Tocqueville, would have liked that.

Guy Standing is Professor of Development Studies at the School of Oriental and African Studies (SOAS), University of London, UK. He has previously been Professor of Economic Security at the University of Bath, UK, Professor of Labour Economics at Monash University, Australia and Director of the Socio-Economic Security Programme of the International Labour Organization. He is co-president of the Basic Income Earth Network. His recent books include The Precariat: The New Dangerous Class (2014), Work after Globalization: Building Occupational Citizenship(2009) and Beyond the New Paternalism: Basic Security as Equality (2002).

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A basic income would also modestly reduce income inequality.

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Wealth redistribution sighted.

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AI interns: Software already taking jobs from humans

31 March 2015 by Hal Hodson
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People have talked about robots taking our jobs for ages. Problem is, they already have – we just didn't notice

FORGET Skynet. Hypothetical world-ending artificial intelligence makes headlines, but the hype ignores what's happening right under our noses. Cheap, fast AI is already taking our jobs, we just haven't noticed.

This isn't dumb automation that can rapidly repeat identical tasks. It's software that can learn about and adapt to its environment, allowing it to do work that used to be the exclusive domain of humans, from customer services to answering legal queries.

These systems don't threaten to enslave humanity, but they do pose a challenge: if software that does the work of humans exists, what work will we do?

In the last three years, UK telecoms firm O2 has replaced 150 workers with a single piece of software. A large portion of O2's customer service is now automatic, says Wayne Butterfield, who works on improving O2's operations. "Sim swaps, porting mobile numbers, migrating from prepaid onto a contract, unlocking a phone from O2" – all are now automated, he says.

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Humans used to manually move data between the relevant systems to complete these tasks, copying a phone number from one database to another, for instance. The user still has to call up and speak to a human, but now an AI does the actual work.

To train the AI, it watches and learns while humans do simple, repetitive database tasks. With enough training data, the AIs can then go to work on their own. "They navigate a virtual environment," says Jason Kingdon, chairman of Blue Prism, the start-up which developed O2's artificial workers. "They mimic a human. They do exactly what a human does. If you watch one of these things working it looks a bit mad. You see it typing. Screens pop-up, you see it cutting and pasting."

One of the world's largest banks, Barclays, has also dipped a toe into this specialised AI. It used Blue Prism to deal with the torrent of demands that poured in from its customers after UK regulators demanded that it pay back billions of pounds of mis-sold insurance. It would have been expensive to rely entirely on human labour to field the sudden flood of requests. Having software agents that could take some of the simpler claims meant Barclays could employ fewer people.

The back office work that Blue Prism automates is undeniably dull, but it's not the limit for AI's foray into office space. In January, Canadian start-up ROSS started using IBM's Watson supercomputer to automate a whole chunk of the legal research normally carried out by entry-level paralegals.

Legal research tools already exist, but they don't offer much more than keyword searches. This returns a list of documents that may or may not be relevant. Combing through these for the argument a lawyer needs to make a case can take days.

ROSS returns precise answers to specific legal questions, along with a citation, just like a human researcher would. It also includes its level of confidence in its answer. For now, it is focused on questions about Canadian law, but CEO Andrew Arruda says he plans for ROSS to digest the law around the world.

Since its artificial intelligence is focused narrowly on the law, ROSS's answers can be a little dry. Asked whether it's OK for 20 per cent of the directors present at a directors' meeting to be Canadian, it responds that no, that's not enough. Under Canadian law, no directors' meeting may go ahead with less than 25 per cent of the directors present being Canadian. ROSS's source? The Canada Business Corporations Act, which it scanned and understood in an instant to find the answer.

By eliminating legal drudge work, Arruda says that ROSS's automation will open up the market for lawyers, reducing the time they need to spend on each case. People who need a lawyer but cannot afford one would suddenly find legal help within their means.

ROSS's searches are faster and broader than any human's. Arruda says this means it doesn't just get answers that a human would have had difficulty finding, it can search in places no human would have thought to look. "Lawyers can start crafting very insightful arguments that wouldn't have been achievable before," he says. Eventually, ROSS may become so good at answering specific kinds of legal question that it could handle simple cases on its own.

Where Blue Prism learns and adapts to the various software interfaces designed for humans working within large corporations, ROSS learns and adapts to the legal language that human lawyers use in courts and firms. It repurposes the natural language-processing abilities of IBM's Watson supercomputer to do this, scanning and analysing 10,000 pages of text every second before pulling out its best answers, ranked by confidence.

Lawyers are giving it feedback too, says Jimoh Ovbiagele, ROSS's chief technology officer. "ROSS is learning through experience."

Massachusetts-based Nuance Communications is building AIs that solve some of the same language problems as ROSS, but in a different part of the economy: medicine. In the US, after doctors and nurses type up case notes, another person uses those notes to try to match the description with one of thousands of billing codes for insurance purposes.

Nuance's language-focused AIs can now understand the typed notes, and figure out which billing code is a match. The system is already in use in a handful of US hospitals.

Kingdon doesn't shy away from the implications of his work: "This is aimed at being a replacement for a human, an automated person who knows how to do a task in much the same way that a colleague would."

But what will the world be like as we increasingly find ourselves working alongside AIs? David Autor, an economist at the Massachusetts Institute of Technology, says automation has tended to reduce drudgery in the past, and allowed people to do more interesting work.

"Old assembly line jobs were things like screwing caps on bottles," Autor says. "A lot of that stuff has been eliminated and that's good. Our working lives are safer and more interesting than they used to be."

Deeper inequality?

The potential problem with new kinds of automation like Blue Prism and ROSS is that they are starting to perform the kinds of jobs which can be the first rung on the corporate ladders, which could result in deepening inequality.

Autor remains optimistic about humanity's role in the future it is creating, but cautions that there's nothing to stop us engineering our own obsolescence, or that of a large swathe of workers that further splits rich from poor. "We've not seen widespread technological unemployment, but this time could be different," he says. "There's nothing that says it can't happen."

Kingdon says the changes are just beginning. "How far and fast? My prediction would be that in the next few years everyone will be familiar with this. It will be in every single office."

Once it reaches that scale, narrow, specialised AIs may start to offer something more, as their computation roots allow them to call upon more knowledge than human intelligence could.

"Right now ROSS has a year of experience," says Ovbiagele. "If 10,000 lawyers use ROSS for a year, that's 10,000 years of experience."

This article appeared in print under the headline "You are being replaced"

Which jobs will go next?
Artificial intelligence is already on the brink of handling a number of human jobs (see main story). The next jobs to become human-free might be:

Taxi drivers: Uber, Google and established car companies are all pouring money into machine vision and control research. It will be held back by legal and ethical issues, but once it starts, human drivers are likely to become obsolete.

Transcribers: Every day hospitals all over the world fire off audio files to professional transcribers who understand the medical jargon doctors use. They transcribe the tape and send it back to the hospital as text. Other industries rely on transcription too, and slowly but surely, machine transcription is starting to catch up. A lot of this is driven by data on the human voice gathered in call centres.

Financial analysts: Kensho, based in Cambridge, Massachusetts, is using AI to instantly answer financial questions which can take human analysts hours or even days to answer. By digging into financial databases, the start-up can answer questions like: "Which stocks perform best in the days after a bank fails". Journalists at NBC can already use Kensho to answer questions about breaking news, replacing a human researcher.