San Francisco is considering a once unthinkable measure to offset the threat of job-killing robots
There is a growing evidence that robots and artificial intelligence could displace huge swaths of the American workforce in the next couple of decades, much sooner than the "50 to 100 more years away" timeline that Treasury Secretary Steven Mnuchin said he expects.
In San Francisco, where robots already run food deliveries for Yelp's Eat24 and make lattés at a mall coffee kiosk, one politician is working to ensure the city stays ahead of the curve.
Supervisor Jane Kim is exploring a tax on robots as one solution to offset the economic devastation a robot-powered workforce might bring. Companies that use robots to perform tasks previously done by humans would pay the city. Those public funds might be used to help retrain workers who lose their jobs to robots or to finance a basic income initiative.
Kim, one of 11 city supervisors in San Francisco, has been interviewing tech leaders, labor groups, and public policy experts in the hopes of creating a task force that will explore how a "robot tax" might be implemented. San Francisco would become the first city to create such a tax, after European lawmakers rejected a similar proposal in February.
"We think that [automation of work] could be one of the bigger - or biggest - policy issues that will face us in, not the next 50 to 100 years, as Mnuchin said, but in the next five to 10 years. And I think that government needs to get ahead of the curve," Kim tells Business Insider.
Kim learned the concept of a robot tax when Bill Gates called for one in an interview with Quartz. It struck a chord with the San Francisco politician, who represents some of the poorest and wealthiest residents across the Tenderloin, South of Market, Civic Center, Treasure Island, and several other neighborhoods. She hears of robots cropping up in hotels, hospitals, and even her local bar, and worries about how automation might deepen the income gap.
A new study from research fim PricewaterhouseCoopers (PwC) estimates 38% of US jobs could be lost to automation by the early 2030s. Jobs that are repetitive and do not require human interaction - like flipping burgers or making deliveries - are likely to be the first to swap out people for robots.
The disruption will hurt low-income earners first, Kim predicts. San Francisco has one of the highest levels of income inequality in the US, according to figures from the Brookings Institute.
Sam Altman, president of startup accelerator Y Combinator, has said automation will bring "a change in the economy on the order of the Industrial Revolution or the Agricultural Revolution, where you see a huge amount of human jobs change in a very short period of time."
When Kim hears tech workers talk about automation, she says they often put a positive spin on the displacement. "No one's going to have to work at McDonald's anymore," they tell her.
"That wealth will accumulate among a very few due to automation," she says. "[So the question is,] what do we do with that accumulated wealth that's being distributed to fewer people?"
A robot tax could potentially give the city of San Francisco the ability to channel those savings into a fund that helps low-income workers make a living. The Office of Economic and Workforce Development already provides training in healthcare, hospitality, construction, and technology to residents who face barriers to employment, like a lack of higher education.
The tax might also provide funds for a universal basic income experiment, such as the one currently underway in Oakland, California. The program gives roughly 100 families $2,000 a month to live on, and has racked up some impressive supporters from Silicon Valley.
This isn't the first time a robot tax has been floated in the US. In 1940, a US senator suggested a tax on machines to offset the unemployment they may cause. It was called an "economic monstrosity" that has "no chance whatsoever of congress [sic] ever enacting it into law."
When Gates resurfaced the idea in February, internet commenters took to Twitter in protest.
Most tech leaders have been quiet on the issue. The CEO of robotics startup Savioke, whose robots deliver fresh towels and coffee at hotels across the region, compared the tax to an "innovation penalty" in an editorial. Ulrich Spiesshofer of European automation-technology solutions company ABB Group also attacked the proposal in an interview with CNBC.
"Taxing robotics is as intelligent as taxing software," Spiesshofer said. "They are both productivity tools. You should not tax the tools, you should tax the outcome that's coming."
Kim made clear that she is in the beginning stages of assembling a group that will explore solutions for automation. San Francisco is a long way from seeing a robot tax implemented.
"I do think it's important that we're the city that looks at this issue, because we're at the center of the technological revolution. We have access to so many academics, researchers, and tech companies that can help us brainstorm and think about this issue," Kim says.
"And why not? DC's not thinking about it."