Newsom Suggests Universal Basic Capital as Solution to AI-Driven Unemployment

Governor Gavin Newsom is ordering that universal basic capital be studied in California as a possible solution to the job disruption expected to be caused by the rise of artificial intelligence.Universal basic capital is an economic model that would distribute direct ownership stakes in the technology to all citizens, replacing the traditional ownership model in which companies pay employees for their labor.Artificial intelligence is a big industry in California but could eventually eliminate a large number of jobs in the state. Mr. Newsom says he wants to prepare for the expected economic disruption and make sure workers share in the gains made from the adoption of AI.In an executive order Thursday, Mr. Newsom directed state agencies to work with experts and industry officials to prepare workers for what is coming. They are tasked to gather data, identify early warning signs of disruption, and formulate new policies.The groups will also evaluate and support opportunities to expand and enhance worker-ownership models that would support broad-based capital growth and build wealth from productivity gains among workers.The state will also explore policies such as severance standards, employment insurance, and transition support for displaced workers. Mr. Newsom suggests safety net policies that go beyond severance pay, such as providing employees with stock or equity in the businesses where they work.“California has never sat back and watched as the future happened to us — and we won’t start now. We have taken the lead on advancing innovation, safety, and transparency,” Mr. Newsom said in a news release. “But we must think bigger. This moment demands that we reimagine the entire system — how we work, how we govern, how we prepare people for the future — and that work is starting right here in the Golden State.” Universal basic capital centers on spreading wealth as it is created rather than taxing it after the fact. It differs from universal basic income, which is based on unconditional cash payments that are guaranteed to everyone. OpenAI co-founder Sam Altman was once a proponent of universal basic income and spent $14 million studying it. He has shifted to leaning toward supporting universal basic capital, suggesting shared ownership might be better.Elon Musk has suggested universal income payments as a solution to AI job disruption and says such a program should be carried out nationally.“Universal HIGH INCOME via checks issued by the Federal government is the best way to deal with unemployment caused by AI,” Mr. Musk said in an April X post.Some tech companies are already announcing large-scale layoffs as they shift to an AI future. Facebook started laying off 10 percent of its workforce this week.

Newsom Suggests Universal Basic Capital as Solution to AI-Driven Unemployment

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