About 4.3% of America’s workforce is unemployed today, based on the BLS April data. That is about six million people. Credible estimates of AI job destruction range from 11 million by Goldman Sachs to 19 billion by Tufts/Digital Planet. At this high end, 15% of America’s workforce would be out of work, including the 4.3%.
To start, without a major restructuring of how Americans live financially, the US labor market, and probably the national economy, would not survive. So much individual spending would disappear that GDP would plunge.
The most optimistic range of solutions is that AI-driven economic growth will create a new generation of jobs. It is not terribly convincing. What could those jobs possibly be? They won’t be coding or building robots. America cannot have three million plumbers and electricians—or construction contractors.
At the far end of the solution spectrum is “universal basic income.” The idea that all people displaced by AI would receive income from the federal government is probably due to the difficulty of imagining where that income would come from. At one level or another, OpenAI’s Sam Altman and Elon Musk have used this trial balloon.
The source of UBI cannot be personal taxes. Too many people will be out of work for it to be realistic. Alternatively, the taxes on businesses could rise. That put more pressure on companies, many of which have lost customers to an AI apocalypse. That won’t happen.
This leaves a huge tax on the AI companies themselves. Presumably, these companies would be so wildly successful that they could provide hundreds of billions of dollars to the US government to support an army of the jobless. Presumably, also, these people would live lives of comparative leisure, although who knows what that life of leisure will be in the future.
And will the AI corporate giants pay? That depends on the leverage Congress and the President have. Who wins that tug of war? Or does the US partially nationalize companies like these? Maybe, but Musk may use his robots to keep the government at bay.
Looking across the numbers, high unemployment is plausible.
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