AI-related job losses are starting to accelerate due to accelerating innovation in AI, robotics, and automation. Anthropic CEO Dario Amodei warns that AI could cut half of all entry-level white-collar jobs in the coming years. A McKinsey report finds that “current gen AI and other technologies have the potential to automate work activities that absorb up to 70 percentof employees’ time today.” A Wall Street Journal article also cites leading CEOs who claim “AI will wipe out jobs.” OpenAI CEO Sam Altman has ominously written that the “2030s are likely going to be wildly different from any time that has come before.”

AI’s impact on the workforce is hard to forecast because so many factors affect economic projections. There are uncertainties concerning trade imbalances, exchange rates, technology deployment rates, shifts in business models, political developments, geopolitical forces, and CEO proclivities toward their own workers. Former Harvard University President Larry Summers once quipped that predictions are so fraught with error that prognosticators never should use a date and prediction in the same sentence. 

But given the magnitude of the phenomenon, it is important to think about ways to help workers who are likely to bear the impact of AI-related job losses. As I argue in my Brookings Press book, “The Future of Work:  Robots, AI, and Automation,” several policy reforms would help people navigate the transition to a digital economy. This piece offers an overview of them.

Encourage Companies to Retrain Workers

Businesses are on the frontlines of worker layoffs and have some responsibility for retraining employees. They need to finance job reskilling and upskilling for their employees so those individuals don’t get left behind. Governments should consider expanding tax credits for businesses that retrain laid-off employees, as these investments benefit the entire society. It is not in the country’s national interest for large numbers of people to become part of a permanent underclass struggling and failing to pay their monthly expenses despite their best efforts. Replacing these workers with AI would doom many individuals to a dismal financial future and create a host of social, economic, and political problems, many of them unique to AI’s role in worker displacement.

Read the full article about AI-related job losses by Darrell M. West at Brookings.