Elon Musk proposes ‘universal income’ to tackle AI job losses, faces economic pushback

Tech billionaire Elon Musk has proposed a sweeping solution to address potential mass layoffs driven by artificial intelligence (AI), suggesting governments introduce a “universal high income” for citizens.

Under the idea, federal authorities would issue regular payments to individuals to offset job losses caused by automation and AI-led productivity gains.

Musk argued that advances in AI and robotics would generate such an abundance of goods and services that inflation would not become a concern, even with increased money supply.

“AI and robotics will produce goods and services far in excess of the increase in the money supply, so there will not be inflation,” Musk said in a post on X.

However, the proposal has drawn criticism from economists. Sanjeev Sanyal strongly rejected the concept, warning that such a system could be financially unsustainable and risk bankrupting governments attempting to implement it.

Sanyal acknowledged that AI could disrupt labour markets in the short term but emphasised that technological shifts have historically led to the creation of new jobs and industries over time.

He also dismissed Musk’s claim that AI-driven productivity would eliminate inflationary pressures, calling it a misunderstanding of economic fundamentals.

The debate highlights growing concerns about the impact of AI on employment, as rapid advancements continue to reshape industries worldwide, prompting policymakers and business leaders to explore potential safeguards for workers.