Basic Income and On Demand Services

It is Basic Income Week and I am speaking at the On Demand Conference in New York. That is a fortunate co-incidence as On Demand companies ought to be strong supporters of Basic Income.

First, with Basic Income, the distinction between employee and contractor status becomes irrelevant and should go away entirely. The reasons that we have the distinction today is that we have historically tied together employment with benefits and with tax withholding. With Basic Income anyone can take care of their basic needs independent of employment status. And along with Basic Income we should vastly simplify the tax code to do away with deductions and treat all income equally.

Second, Basic Income should greatly reduce the fear of automation and the potential for conflict it creates between on demand companies and their current workforce. The role of humans in many on demand services is that of undifferentiated labor could and should eventually be carried out by a machine. I say should because it is hard to make a case that many of the on demand tasks are a sustained source of purpose for the people carrying them out. Uber’s well documented heavy investment in autonomous vehicles can serve as Exhibit A here.

Conversely a doubling down on the current distinction, especially when accompanied with a $15 minimum hourly wage would only serve to further the existing distortions, such as companies and even public sector agencies artificially restricting work hours. I am sympathetic to the motivation behind a higher minimum wage as too many people are working hard and yet can’t meet their basic needs but a Basic Income is a better longrun solution to that problem.  For instance, a $1,000 per month basic income is the equivalent of 16 hours per week at $15 per hour.

So it will be interesting to see if I can help get some support from on demand companies for a Basic Income scheme.