The AI Age Requires Inequality Insurance
The AI revolution will almost surely lead to an increase in income disparities. To ensure that the emerging technology does not widen the wealth gap, governments must reform the tax system so that rates for high earners increase automatically once an inequality threshold has been breached.
NEW HAVEN – European Union lawmakers recently reached a provisional agreement on a landmark regulation to mitigate the risks that artificial intelligence poses to humanity, and other countries seem ready to follow the EU’s lead. But this regulation does not address one of the greatest disasters AI may bring – the prospect of mass unemployment and sharply increased income inequality. Regulation cannot eliminate these risks without precluding the world from enjoying AI’s potential benefits, namely dramatic increases in productivity and enormous wealth creation. That is why policymakers must also enact policies to compensate citizens if these disasters occur.
Let us be clear: we are not opposed to regulating AI. But just as we take a two-pronged approach to protect flood-vulnerable homes – building sea walls and providing flood insurance – so, too, must governments offer inequality insurance to ensure that AI does not widen the wealth gap. While future administrations could conceivably change the terms of such a program, cutting back on widely experienced benefits would be politically difficult.
The writing is already on the wall. This year, Hollywood actors joined screenwriters in the first industry-wide strike in more than six decades, with safeguards against generative AI being one of their main demands. But AI will revolutionize the future of work for all types of professionals, from doctors and lawyers to taxi drivers and checkout clerks, and the subsequent increases in total output will not be shared equally. Those who make and own the inventions could amass immense wealth, much of which will come from economizing on labor costs.