Robot tax could ease drawbacks of automation

Robot tax could ease drawbacks of automation

Robot tax could ease automation

San Francisco politician Jane Kim is pushing for a robot tax on companies gaining an advantage from automation. The move could raise funds for retraining and lower the rate at which jobs are lost.

One of the great fears of advancing technology is that it will render a number of jobs obsolete. The threat of automation is not indiscriminate. Although it will put jobs at risk across several sectors, the biggest challenge will be to workers in low-skilled positions.

San Francisco city supervisor Jane Kim argues that a robot tax could be the solution to the radical shifts on the horizon in the jobs market. She has launched a statewide campaign with the hope of bringing revenue-raising proposals, such as a robot tax, to the California legislature.

“I really do think automation is going to be one of the biggest issues around income inequality,” she said.

In a city famous for innovation and disruption, she sees a moral obligation in managing how technology will impact lives in the future. This is not an anti-automation campaign. Instead, Kim wants to raise awareness of its consequences and put measures in place to protect those most vulnerable to the rise of robot workers.

“It’s not inherently a bad thing, but it will concentrate wealth, and it’s going to drive further inequity if you don’t prepare for it now,” she said.

Read more: Opinion divided on impact of AI on jobs market, says BT survey

Risk of automation

A recent PwC report analyzing the future of work in the UK suggested that breakthroughs in robotics and artificial intelligence will provide a boost to productivity and create new jobs. But it also pointed out that unless significant action is taken to prepare for these changes, inequality will widen as robots take on low-skilled tasks.

In the UK alone, PwC predicts that 2.25 million jobs are at high risk in the largest sectors of employment, wholesale and retail. 1.2 million are at risk in manufacturing, 1.1 million in administrative and support services and 950,000 in transport and storage.

Read more: Chief executives fear smart factory automation backlash

International appetite

The notion of taxing corporations benefiting from automation and replacing human workers with robots was raised last year as part of a draft report to the European Parliament, put forward by MEP Mady Delvaux.

Notable supporters of the idea include Bill Gates, who, speaking with Quartz, suggested that taxing the placement of robots in a factory, for example, makes complete sense considering what robots could take out of the economy.

“Right now,” he said, “the human worker who does, say, $50,000 worth of work in a factory: that income is taxed and you get income tax, social security tax, all those things. If a robot comes in to do the same thing, you’d think that we’d tax the robot at a similar level.”

“If you can take the labor that used to do the thing automation replaces, and financially and training-wise and fulfillment-wise have that person go off and do other things, then you’re net ahead,” he said.

Last month, South Korea became the first country to effectively introduce a robot tax. Although not a direct charge on the use of robot workers, the move will limit tax incentives for companies deploying automated technologies. The change is expected to help balance the loss of income tax and ease rising unemployment.

Read more: John Lewis on how IoT automation can cure supply chain heartache