Elon Musk says government checks are the 'best way' to deal with AI job losses — experts aren't so sure

• Elon Musk says government checks are the "best way" to deal with AI-driven job losses.
• In an X post, the Tesla and SpaceX CEO called for universal high income enabled by AI and robotics.
• Past economic growth hasn't eliminated poverty, and people need retraining, not a check, experts said.

Elon Musk thinks he has a solution to AI-driven job losses: the government pays for everyone to live well.

"Universal HIGH INCOME via checks issued by the Federal government is the best way to deal with unemployment caused by AI," the Tesla and SpaceX CEO said in a late Thursday post on X.

"AI/robotics will produce goods & services far in excess of the increase in the money supply, so there will not be inflation," he added.

AI is widely expected to displace a meaningful proportion of the US labor force in the years ahead. Boston Consulting Group predicted this month that 10% to 15% of US jobs could be eliminated in the next five years, affecting roughly 17 million to 25 million people. A Goldman Sachs analysis last year said 2.5% of US workers could be at risk of losing their jobs.

Universal high income (UHI) is effectively a more generous version of universal basic income (UBI), which is typically defined as a recurring cash payment to all individuals in a population regardless of their wealth, with no restrictions on how the money is spent and no repayment expected.

Whereas UBI programs aim to help cover basic expenses such as housing, food, and utilities, UHI would provide people with enough money to afford affluent lifestyles.

Peter Diamandis, a leading expert on the topic, has said that UHI will become possible not by giving out more money, but by reducing the cost of everything from food and energy to healthcare and education.

"When AI and robotics collapse the cost of living's five major categories by more than half, a $3,000/month check that barely covers basics today becomes a genuinely prosperous life," he wrote in a March post on Substack.

"The check doesn't get bigger," Diamandis added. "The world gets cheaper. That is when UBI becomes UHI."

Karl Widerquist, a philosophy professor at Georgetown University-Qatar and the author of several books about UBI, told Business Insider that "Musk is right" that UBI could cover more than the basics, and that the cost of paying a basic income in terms of GDP has declined due to forces such as automation, computerization, and AI.

But he said Musk is "wrong" to focus on unemployment when "low wages and stagnating salaries" are bigger problems.

"About inflation, Musk's prediction could happen, but we shouldn't count on it," Widerquist said, underscoring that even though GDP has multiplied over the past 50 years, most of the benefits of that growth have gone to the wealthiest people while poverty has remained.

James Ransom, a research fellow at University College London, told Business Insider: "If we can afford generous universal high income, we can afford to retrain and reskill — and the evidence suggests that's what most people actually need."

Ransom said his research suggests there will be a "productivity windfall for many workers" over the next few years, but they require "upskilling to capture it, not a check."

"For those who do lose their jobs, retraining done well preserves agency and self-worth in ways a basic income cannot," he added.

A future of abundance?

Musk made a similar prediction earlier this year when he said that saving for retirement could become pointless within two decades.

"Don't worry about squirreling money away for retirement in 10 or 20 years," the Tesla and SpaceX CEO told the "Moonshots with Peter Diamandis" podcast. "It won't matter."

"If any of the things that we've said are true, saving for retirement will be irrelevant," Musk added.

Speaking on the podcast, Musk described a future in which advances in AI, energy, and robotics supercharge productivity, generating an "abundance" of resources so that everyone can be given a universal high income.

For now, many Americans are living paycheck to paycheck after weathering years of stubborn inflation, onerous interest rates, and stagnant wage growth.

Surveys show that large numbers feel they're priced out of higher education, quality healthcare, owning a home, having children, or a comfortable retirement.

Experts in personal finance and AI told Business Insider that Musk's message was "dangerous and misleading," and emphasized that even if AI delivers abundance, governments will have to effectively distribute the gains.

John Nosta, an innovation theorist and the founder of NostaLab, labeled it "a coordination problem at the scale of civilization."