Abstract
Over the past forty years, income growth for the middle and lower classes has stagnated, while the economy (and with it, economic inequality) has grown significantly. Early automation, the decline of labor unions, changes in corporate taxation, the financialization and globalization of the economy, deindustrialization in the U.S. and many OECD countries, and trade have contributed to these trends. However, the transformative roles of more recent automation and digital technologies/artificial intelligence (AI) are now considered by many as additional and potentially more potent forces undermining the ability of workers to maintain their foothold in the economy. These drivers of change are intensifying the extent to which advancing technology imbedded in increasingly productive real capital is driving productivity. To compound the problem, many solutions presented by industrialized nations to environmental problems rely on hyper-efficient technologies, which if fully implemented, could further advance the displacement of well-paid job opportunities for many. While there are numerous ways to address economic inequality, there is growing interest in using some form of universal basic income (UBI) to enhance income and provide economic stability. However, these approaches rarely consider the potential environmental impact from the likely increase in aggregate demand for goods and services or consider ways to focus this demand on more sustainable forms of consumption. Based on the premise that the problems of income distribution and environmental sustainability must be addressed in an integrated and holistic way, this paper considers how a range of approaches to financing a UBI system, and a complementary market solution based on an ownership-broadening approach to inclusive capitalism, might advance or undermine strategies to improve environmental sustainability.
Highlights
This paper explores the major drivers to income/wealth inequality and presents modern technology/artificial intelligence (AI) as an emerging force that is likely to continue intensifying the rate at which capital is driving productivity at the expense of labor
Few approaches (1) are based on an economic theory that helps explain the growing inequality, (2) highlight the potential environmental problems that a universal basic income (UBI) might create with regard to growing effective demand/consumerism, and (3) present a voluntary way to finance a transition towards sustainable production and consumption
This paper reviews a broad range of proposals for providing a UBI and highlights how they rationalize the need for a basic income, how each proposal would work, and whether there is any attempt to connect the approach with strategies to advance sustainable development
Summary
Until the 1980s, growth in U.S labor productivity, private employment, median family income, and real GDP per capita grew in tandem (Figure 1) [1]. A critical question is “why have workers (through wages) failed to maintain in lower-skill jobs had a weaker growth of 31 percent [15] These lower-skill jobs do not provide their share of GDP?” Earlier automation, the decline of labor unions, changes in corporate taxation, the same income status that middle-income jobs used to provide and have a higher likelihood of the financialization and globalization of the economy, deindustrialization in the U.S and many becoming automated in the future [16]. As middle-income jobs hollow out, the majority of recent automation and digital technologies/artificial intelligence (AI) are considered by many as workers find themselves searching for employment in the service sector. Given the challenges presented above, two critical questions are (1) how to shape the economy so that it directly addresses current trends in income and wealth inequality and works for everyone [21], and (2) how to accomplish this in a way that is environmentally sustainable [22]
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