Silicon Valley is preparing for the future it’s creating.
As AI eliminates white-collar jobs — dozens of tech firms have announced layoffs in the last month — the idea of universal basic income (UBI) is once again gaining momentum among tech’s biggest names, including Sam Altman, Elon Musk and Andrew Yang.
Yang — a tech investor who notably advocated for UBI when he ran for president in 2020 — told me he believes the need for regular cash payments to all citizens, no strings attached, has never been greater.
“The case for universal basic income or getting money into people’s hands just gets stronger all the time as AI gets faster and faster. The models double in power about every seven month,” he said. “Entry-level white-collar jobs are increasingly going to get gobbled up.”
Last month saw the most job cuts in any October in more than 20 years according to Challenger Data. It came on the heels of tens of thousands of layoffs over the past few months, largely due to AI replacing workers.
CEOs have privately conceded to me that the cuts are just beginning with many planning to lay off more than half of their workers in the coming year or two. One source even fretted that he didn’t know how his teenage children would find entry-level work when they graduated college.
“It will be like the Industrial Revolution all over again,” a tech executive told me. “The question is: can we minimize the fallout this time?”
While the idea of government-funded UBI would involve government expansion, some backers argue it would be cheaper and more effective than existing safety nets.
Union Square Ventures partner Albert Wenger and his wife and fellow tech investor Gigi Danziger are bankrolling one of the longest-running UBI experiments in the US. Since 2020, their HudsonUP has funded three different groups of residents in the Hudson Valley with $500 dollars a month. They say they have seen employment increase among recipients, and, as such, see it as a check against political destabilization.
“Existing welfare programs create misaligned incentives by cutting off benefits when people earn money,” Wenger told me, “while UBI enables market-friendly solutions … potentially eliminating the need for minimum wage laws, rent control, and subsidized housing.”
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Paul Vallee, another tech founder and UBI proponent, believes UBI could ultimately save money because, “It’s cheaper than poverty.”
While government-funded UBI is the most ubiquitous form of the idea, longtime Silicon Valley denizens I spoke with also suggest there could be a private-sector solution. A handful of AI companies could potentially consolidate power and provide stipends or a piece of their profits to people themselves, rather than waiting for government action.
Altman has said citizens should be given “an ownership share in whatever the AI creates.”
As for the politics of UBI, supporters are quick to note they don’t believe it falls into progressive ideology.
“This is a new idea,” Wenger said. “It doesn’t have a political home yet.”
Whether it will find a home remains to be seen. But if government, as Ronald Reagan suggested, “isn’t the solution to the problem … but rather is the problem” — maybe the private sector’s attempt to share the wealth should be the real solution.
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