How mass layoffs due to AI threaten economic stability
Two researchers from the University of Pennsylvania and Boston University have proven that mass layoffs caused by artificial intelligence implementation can lead to an economic collapse.
According to their findings, each company that replaces employees with AI loses customers, as laid-off workers can no longer purchase goods. If all businesses automate processes, the economy loses purchasing power, potentially resulting in widespread business failures.
At the same time, no single company can halt this trend because failure to automate means losing market share to competitors. Companies such as Block, Salesforce, and Goldman Sachs already report layoffs of workers replaced by AI. By 2025, over 100,000 IT specialists have lost their jobs, and up to 80% of American professions are vulnerable to automation.
Existing measures like basic income, capital taxes, or unions have proven ineffective because the incentive for automation remains. Researchers argue that the only effective solution is an automation tax that forces companies to compensate for the reduced demand.
Thus, automation not only reshapes the labor market but may also shift wealth from employees to business owners, threatening economic stability.
Looking ahead, without proper regulation, automation may continue to advance, deepening socio-economic disparities and worsening labour market conditions.
