Artificial intelligence and inequality

The potential for good provided by artificial intelligence (AI) is immense. It can make our lives easier, by carrying out laborious and time-consuming tasks for us.

The tech can free up time for charities. They could use chatbots to write content, for example, or deal with low-level enquiries so their experts can focus on offering complex support.

AI can also harness data to propose solutions to combat large issues such as climate change, as well as offer day-to-day help, such as helping vulnerable people be more independent.

But there are mounting fears that the march of AI will also increase inequality.

Here we examine some of the ways that AI threatens to make the rich more affluent and the poor worse off. We look at some of the policies charities, governments, and others can deploy to prevent inequality so that AI proves to be beneficial for all, not just a wealthy minority.

Shift in economic power

A key factor in the use of AI is the economic power shift it presents from labour to capital. This means those remaining in unskilled jobs will continue to receive even lower incomes, as their roles are increasingly devalued. Also, with less members and economic clout their unions will be weaker, and their terms and conditions will worsen.

A study has found that three in ten UK jobs are at risk of being replaced by AI, with manufacturing roles most at risk. Meanwhile in Japan almost half the workforce is set to be replaced by AI or robotic machines within ten to 20 years.

While the poor could be worse off AI presents a windfall for those who are already rich, such as corporate executives and shareholders. According to one senior strategist at Goldman Sachs, over the next ten years AI could increase productivity by 1.5% a year, which could theoretically increase profits of the top 500 firms in the US by 30% or more.

Globally this productivity growth and profit bonanza is likely to be swiftest in developed countries with an already strong tech sector and weakest in developing countries. Global inequality between nations as well as within nations is set to be a defining legacy of AI. 

End of the safety net

Historically government welfare has been able to step in to support the very poorest in society, at home and abroad.

But wage reductions among many workers threaten to reduce tax bases for government and weaken its capacity to redistribute wealth through benefits and grants.

Tax bases could be further weakened by global firms, which are profiting from AI, avoiding paying taxes in many regions they operate in.  

How to tackle AI inequality

From overhauling taxation to focusing on new and emerging roles for people, there are several ways governments can off set the inequality caused by AI. These could be issues the charity sector can lobby governments on, to ensure their beneficiaries are not disadvantaged by AI.

Introduce a robot tax

One way to replace AI’s lost tax base for governments is to implement a so-called robot tax, or AI tax, whereby the existence of AI or the operation of robots’ labour in a company’s production and logistics is taxed.

This has the advantage of ensuring governments can continue to afford welfare benefits needed to tackle inequality. Also, it would ensure that the already rich corporate sector is paying its fair share of tax.

But it has the disadvantage of acting as a barrier to AI being implemented in certain regions effectively, as firms look to other countries without a ‘robot tax’ in place.

Global adoption of such a tax may be the best way forward.

Universal basic income

With a reduction in jobs for humans caused by AI, unemployment is set to increase leaving an even greater need for welfare benefits. But rather than replicate the current benefits system, the march of AI could be an opportunity for a more progressive model to be put in place, through a universal basic income (UBI).

The Joseph Rowntree Foundation is among charities already discussing its benefits. UBI would replace the current model, which is already beset by concerns around red tape and lack of money, with a guaranteed income for people without any conditions. This can be ‘topped up’ through work.

From this basic income people can take more control over their lives, using the money for food, housing, and other necessities as they best see fit.

This also gives people the foundation needed to explore different emerging roles in an AI dominated world, which may require training. Emerging roles include using psychology to continually monitor the impact of AI on people’s wellbeing.

UBI is being trialled in two places in England in 2023: Jarrow in the North East and East Finchley in London. Through the scheme 30 people will be paid a basic income of £1,600 a month over two years and observed on how it impacts their lives. 

“With the decades ahead set to be full of economic shocks due to climate change and new forms of automation, basic income is going to be a crucial part of securing livelihoods in the future,” said Will Stronge, Director of Research at the think tank Autonomy.