Policymakers Urged to Enact Measures Addressing Potential Mass Unemployment and Income Inequality Caused by AI Advancements
As European Union lawmakers move toward regulating artificial intelligence (AI) to mitigate risks, there remains a critical aspect untouched – the potential fallout of mass unemployment and escalating income inequality. While regulation is essential, a two-pronged approach, akin to protecting homes from floods, is proposed. Governments must not only build metaphorical “sea walls” through regulation but also provide “inequality insurance” to ensure that the transformative power of AI benefits society without widening wealth gaps.
The Risks Ahead
The advent of AI introduces the possibility of widespread unemployment and a significant increase in income inequality. Traditional regulation alone may hinder the benefits of AI, such as productivity boosts and wealth creation. To harness these advantages while mitigating risks, policymakers are urged to consider implementing policies that compensate citizens in the event of AI-induced disasters.
The Two-Pronged Approach
Drawing a parallel to protecting flood-vulnerable homes, the proposed approach involves regulatory measures (building sea walls) and providing inequality insurance. Just as sea walls shield against floods, insurance policies would safeguard against the potentially devastating effects of AI on employment and income distribution.
The Hollywood Strike and Growing Concerns
Highlighting the urgency of the issue, Hollywood actors and screenwriters recently staged an industry-wide strike, expressing concerns about AI’s impact on their profession. The scope of AI’s influence extends beyond entertainment, affecting professionals across various fields. Policymakers are urged to anticipate and address the looming challenges.
Reforming the Tax System
To prevent or limit increases in income inequality, policymakers can reform the tax system. Automatic adjustments, such as increasing federal income-tax rates on high earners if inequality surpasses certain limits, can serve as a proactive measure. Ensuring that the top percentage’s share of total national after-tax income does not exceed current levels is suggested to maintain a balanced income distribution.
Challenges and Solutions
In the face of potentially catastrophic increases in inequality, tax reforms may face limitations. A proposed plan involves incremental adjustments to tax rates to counter extreme scenarios. While full insurance against the most catastrophic cases may be challenging, building automatic insurance into the tax system becomes crucial.
Addressing AI-Induced Unemployment
To combat potential mass unemployment resulting from AI advancements, proposals such as a guaranteed minimum basic income or wage subsidies have been put forth. Funding these plans requires careful consideration, and incorporating inequality insurance into the tax system emerges as a long-term strategy.
As the AI age unfolds, the call for inequality insurance becomes increasingly urgent. Policymakers are encouraged to adopt a comprehensive strategy, combining regulation with proactive measures to safeguard against catastrophic disparities in wealth and income. The stakes are high, and the proposed approach aims to strike a balance between reaping the benefits of AI and ensuring societal well-being.