The growth and development of artificial intelligence (AI) has led to recent predictions that it will replace many – if not most – jobs. For David. W. Wise, the question of the moment is whether our society and economy are entering the path toward no longer needing human intervention. He gives an overview of recent policies being considered by Congress and elsewhere to address work and jobs which may be augmented or expanded with new tasks, restructured, partially substituted, or heavily substituted or eliminated by AI.
What AI may mean for jobs and the economy
In February, Citrini Research, a firm that analyzes megatrends, released the “Global Intelligence Crisis” report on Substack that reverberated through financial markets, resulting in a sharp selloff to start the week. The report was framed as a hypothetical lookback from June 2028, in which a vast amount of human labor, particularly for white-collar jobs and software developers, had been eliminated by the capabilities of artificial intelligence (AI) that had rendered human intelligence obsolete. This displacement, as the scenario played out, would lead to massive unemployment, resulting in a decline in consumer spending and an economic downturn. In response, the NASDAQ dropped by over one percent, and State Street’s SPDR S&P Software and Services ETF (XSW) index fell five percent, and IBM dropped 13 percent, its worst day in a quarter century. While not everyone agreed with the scenario outlined in the report, it demonstrated the extreme apprehension in society about the potential of this technology.
In a dramatic reversal, at the end of that week, the market celebrated a widescale replacement of human labor when Block announced that it was eliminating 40 percent (4,000 employees) of its headcount due to artificial intelligence. The company explained that this action was not a cost-cutting exercise, but rather a shift to workflows based on smaller, more agile teams. The market reaction to this technology-based efficiency was sudden and profound, with the company’s market cap increasing 25 percent.
It is a sad irony that the worn-out advice that people who lose their jobs because of technological disruption is that they should “learn how to code,” only to have the coders turn out to now be at great risk from AI. The extent of this reversal of fortune is by the fact that the VanEck Semiconductor ETF (SMH), which is driven by the demand for AI, increased 134% over the past twelve months while the iShares Expended Tech-Software Sector ETF (IGV) declined by more than 15%.
Will AI eliminate jobs or just mean different jobs?
Of course, no one can yet be certain how AI will play out, but given the effect that automation had on two earlier stages of economic development — agricultural and industrial production — some trepidation about job loss is understandable. At one end of the spectrum, you have Microsoft’s Satya Nadella, who believes that AI will augment human effort and create new employment opportunities. Nvidia’s Jensen Huang is also optimistic, while acknowledging that some tasks and positions will disappear. Anthropic’ s CEO, Dario Amodei, has a somewhat more cautious view but also believes that society can adapt to address some of the pain.
At the other end of the spectrum, two viewpoints envision large-scale and permanent unemployment. On one hand, Elon Musk believes that almost any position can be replaced by a robot but sees this as creating a stage whereby, through devices such as basic income, the benefits of production can be widely shared. On the other hand, Geoffrey Hinton, the “godfather of AI,” foresees the same outcome but believes it will result in a few becoming far wealthier while most people are relegated to dependency and the loss of meaningful activity. This view is sometimes referred to by some as “technofeudalism.”
AI’s potential workforce impacts
Artificial intelligence has the potential to drive significant technological advances that benefit society, while simultaneously displacing large segments of the workforce. Despite the leadership of such groups as the US National Institute of Standards and Technology (NIST) to promote a global framework for AI, developments are progressing much faster than the policies and regulation needed to ensure smooth and equitable transition. Beyond the widely discussed need for technological “guardrails,” there is also a pressing need for forward-looking policies that support workers whose long-term employment prospects may be affected. Unfortunately, as Brookings Institution report stated, “Research on AI and the labor market is still in the first inning.”
Unfortunately, that first inning was characterized by strikeouts. While a number of measures have been discussed or proposed, very little has actually been put into effect. In many ways, this is not surprising, as regulations for the internet and social media remain in flux after decades. In part, this is due to uncertainty about the future. The impact of AI on work can be broken down into four groups: people’s work may be augmented or expanded with new tasks, restructured, partially substituted, and heavily substituted or eliminated. There is no agreement on the eventual scale of these groups within the American workforce. Although automation and offshoring have been factors for decades, AI disruption is an entirely different animal.
Photo by Immo Wegmann on Unsplash
Policies in the pipeline to address AI workforce disruption
Every year, bills aimed at taking a macro view of AI are introduced in Congress, only to be referred to committee, where they die. At the end of 2025, additional bills were introduced and sent to committee; as 2026 is an election year, they are unlikely to progress. For example, Senators Josh Hawley (R-MO) introduced the AI-Related Job Impacts Clarity Act (S. 3108) in November 2025. This was followed in December 2025 by the AI Workforce PREPARE Act (S. 3339), introduced by Senator Jim Banks (R-IN.) The latter bill seeks to shift the focus from narrow job loss to a broader emphasis on augmentation and transition management. It proposes an AI Workforce Research Hub and calls for improved federal modeling of the future workforce, recognizing that AI can both complement and replace human labor.
The first group of workplace disruption, job augmentation, highlights scenarios in which AI enhances worker productivity while preserving employment. Policies tied to the CHIPS and Science Act of 2022 exemplify this approach. Through workforce funding initiatives such as the NSF Regional Innovation Engines and advanced manufacturing pipelines, the government is investing in sectors where AI acts as a complement to highly skilled labor. In these environments—such as semiconductor manufacturing and advanced research—AI tools accelerate innovation, improve efficiency, and increase output, yet still rely heavily on human expertise. Rather than displacing workers, these policies aim to cultivate a workforce capable of leveraging AI effectively.
The second group, job restructuring, reflects a more nuanced transition brought about by a “zero-based” evaluation of tasks and workflows. The National Institute of Standards and Technology (NIST) has played a key role through its AI Risk Management Framework, which assists organizations in modifying existing positions to include AI-related responsibilities. This results in hybrid roles where workers collaborate with intelligent systems. While universities like MIT and Stanford offer rigorous AI education, community colleges will play an increasing role in localized continuous learning. Companies will also likely conduct much of this training in-house for greater efficiency, such as the AI degree offered by the Khan Academy in conjunction with Microsoft and McKinsey. Finally, the NSF Engines initiative continues to build regional ecosystems for technology innovation and workforce development.
The third group—jobs for which AI will reduce overall demand—will be marked by reductions in force (RIFs), three- or four-day workweeks, and the downgrading of certain positions with respect to compensation and benefits. Retraining programs and outplacement services are obvious measures, as are Lifelong Learning Accounts. Most pressing would be the need for some form of transitional income assistance, as proposed by MIT’s David Autor and by frameworks developed by the Hamilton Project at the Brookings Institution.
Additional policy concepts such as portable benefits would decouple health insurance and retirement savings from traditional employment. This approach recognizes that labor markets affected by AI will be unstable, requiring greater flexibility. Such proposals, however, inevitably collide with the complex structure of the US healthcare system. The policy response for this category focuses on smoothing transitions rather than preventing disruption.
The fourth and most transformative group, high-substitution jobs, addresses scenarios that could result in extended or permanent unemployment. In response, policymakers and thought leaders have proposed more radical interventions. Universal Basic Income (UBI), advocated by figures such as Elon Musk and Sam Altman, represents one such approach. By providing unconditional cash payments, UBI aims to ensure economic security regardless of employment status.
Related concepts include “AI dividends,” which would redistribute economic gains generated by AI, and the so-called “robot tax,” championed by Bill Gates. This proposal would levy fees on firms that replace human workers with automation. While it addresses the issue directly, it is often criticized as unworkable because it may negate the productivity gains that motivate firms to restructure. Another proposal, the Federal Job Guarantee, advocated by Senator Bernie Sanders and proponents of Modern Monetary Theory, would position the government as the employer of last resort.
A new social contract for the AI age?
Industrial Policy for the Intelligence Age: Ideas to Keep People First, released on April 6, 2026, a policy document by OpenAI, endorses many of these proposals. The manifesto argues that the impending arrival of Artificial Superintelligence (ASI) necessitates a dramatic US industrial policy to support a new “social contract.” This contract would aim to share AI’s gains in productivity and prosperity while ameliorating the risks of mass displacement. Core proposals include a publicly managed wealth fund funded by AI companies to give every citizen a stake in the technology’s upside. The document also proposes an “efficiency dividend,” including four-day workweeks at full pay and decoupled health insurance.
In a move that mirrors Sam Altman’s previous public stances, the document advocates increased taxes on capital and a levy on AI labor to sustain a robust safety net. OpenAI may be responsible for building the highway that leads to a potentially jobless future, but this proposal seeks to create the necessary off-ramps and rest stops.
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- Note: This article gives the views of the author, and not the position of USAPP – American Politics and Policy, nor of the London School of Economics.