US Economy

Why one man thinks the US government should pay citizens $1,000 a month

Will the Universal Basic Income work in America?

One former union boss has a bold idea on how to ensure economic stability in the U.S. — give every citizen $1,000 a month.

While the idea of a Universal Basic Income (UBI) is not necessarily a new one, Andy Stern believes his plan is important now because of "tectonic shifts" in the labor market that will see more and more workers replaced by robots.

"In order to make sure that everyone has a floor — something they can't fall below, that we end poverty once and for all — let's give everyone a check," the former president of the Service Employees International Union said in a recent interview with CNBC's "Power Lunch."

Income inequality continues to be one of the urgent topics in the public discourse. There were 46.7 million people living in poverty in 2014, according to the latest data from U.S. Census Bureau. The poverty threshold was $12,331 a year for an individual under 65 and $15,871 for a two-adult household during that time.

'Tsunami of change' on the way

Andrew Harrer | Bloomberg | Getty Images

Still, there is wide disagreement about how to alleviate poverty, whether the government should redistribute income to address it — or whether it's really a problem in the first place. Economists at the libertarian think tank Cato Institute recently argued that the income gap was being 'misperceived" by a range of factors that are being misinterpreted by the public.

Yet Stern, who is a senior fellow at Columbia University and author of "Raising the Floor," argues the debate is being shifted by concerns about the rise of artificial intelligence and the displacement of workers.

The World Economic Forum projects more than 5 million jobs in 15 leading countries will be lost by 2020, thanks to disruptive labor market changes, including the increased use of robots. Additionally, according to a 2013 Oxford study, 47 percent of U.S. jobs were at risk of being automated in the next two decades.

"A tsunami of change may be coming and we would be crazy to not look at the warning signs and figure out a plan," said Stern. "I'm not betting my kids life that this time is going to be the same as ever before. I'm not sure that's true."

However, critics have called UBI a "terrible idea" that would wither the U.S. social fabric by tying Americans to the government.

The idea was also rejected in Switzerland earlier this month, when voters decided against a basic income plan. It was the first country to hold a referendum on the issue, but others including Finland are examining similar plans.

Stern, however, is undeterred, and has an answer for those who are concerned about the cost to the government. He would cut some of the government's 126 programs that already pay out cash.

However, he suggests Social Security should remain intact.

"I'm not saying we end all of them but certainly a lot of them. That's the basis of how we can fund this kind of program," he said. "We're going to have to change the welfare system going forward."

— CNBC's Kerima Greene contributed to this report.