Washington, Silicon Valley brace for AI job losses

Washington and Silicon Valley are bracing for the fallout from AI’s potential displacement of workers, floating everything from transition assistance to universal basic income as Americans express growing discontent with the technology.

AI leaders have long warned the technology could disrupt the labor market, with predictions varying from a so-called jobs apocalypse to more mild scenarios where AI changes the nature of work without triggering mass layoffs.

But as Americans become increasingly worried about what AI might mean for their futures in an uncertain economy, politicians and tech titans alike are searching for viable solutions.

Sen. Elizabeth Warren (D-Mass.) called for an overhaul of the U.S. tax system last week, arguing the federal government should tax AI companies in order to ensure the “winnings from AI benefit all Americans, rather than channeling them only to the wealthy few.”

“If millions of people lose their jobs to AI, we’ll need the funds to deliver universal health care so those workers are not bankrupted by a visit to the doctor,” she wrote in a Time op-ed.

“If AI transforms the future of work, we’ll need to invest in free education and apprenticeships and a new jobs guarantee so that all Americans have good-paying work,” she continued. “And while workers get back on their feet, we’ll need the revenue to bolster unemployment insurance to keep families afloat.”

Warren proposed taxing AI companies directly, including via data centers, as well as updating corporate taxes and establishing a wealth tax.

This idea is gaining traction with other progressive politicians. Rep. Greg Casar (D-Texas), chair of the Congressional Progressive Caucus, penned an op-ed in The American Prospect one day later calling for a “token tax.”

The tax would apply to tokens, or units of measurement for AI usage, which Casar argued would tie “the solution directly to the problem.” He suggested that under this proposal, an uptick in AI-related layoffs would also result in an increase in AI tax revenue, which could then be used to create a jobs program.

Sen. Bernie Sanders (I-Vt.), who is leading the charge for a moratorium on data center construction, said Monday he plans to introduce legislation to create an AI sovereign wealth fund by taking a 50 percent stake in leading AI companies — an idea he framed as a one-time tax.

“Since A.I. is built on the collective knowledge of humanity, the wealth it generates must benefit humanity,” he wrote in a New York Times op-ed. “Not just Mr. Musk, Mr. Altman, Dario Amodei and other moguls whose companies are positioned to dominate the industry.”

Sanders argued this would give the federal government the power to weigh in on key decisions through its voting shares, while also guaranteeing AI wealth is “used to improve the lives of all of us.”

The proposal reflects the increasing popularity of the concept of “universal basic capital,” in which people receive a direct stake in companies or infrastructure.

OpenAI embraced a version of the idea in April, when it put forward a series of industrial policy recommendations for the AI era.

The ChatGPT maker floated a public wealth fund that would provide every citizen with a stake in AI’s economic growth, while leaving it up to policymakers and AI companies to work together to “determine how to best seed the Fund.”

The company also embraced changes to the tax code that would increase “reliance on capital-based revenues — such as higher taxes on capital gains at the top, corporate income, or targeted measures on sustained AI-driven returns — and by exploring new approaches such as taxes related to automated labor.”

California Gov. Gavin Newsom (D) is also toying with the idea of universal basic capital.

He signed an executive order last month to evaluate various policies to alleviate the impact of AI-related job losses, including temporary subsidized employment programs and workforce training programs, as well as “universal basic capital concepts.”

Tech mogul Elon Musk, who previously suggested AI will make work “optional” in the future, has pushed for universal basic income, or direct payments to individuals from the federal government.

Since the rollout of ChatGPT in late 2022, Silicon Valley leaders have expressed caution about the potential for AI to replace jobs. OpenAI CEO Sam Altman said in early 2023 that the technology could “eliminate a lot of current jobs,” while also suggesting “we can make much better ones.”

Anthropic CEO Dario Amodei made waves last year when he said AI could wipe out half of all entry-level white-collar jobs and cause unemployment to rise to 10 to 20 percent within the next few years.

So far, AI has yet to cause major shocks in the labor market. Even as numerous companies point to the technology as they conduct thousands of layoffs, there is limited evidence to suggest AI is causing large-scale disruption.

Some tech leaders have recently softened their prognoses. Altman suggested last week that AI would not lead to a “jobs apocalypse,” adding he is “delighted to ⁠be wrong,” according to Reuters.

The recent spate of proposals comes at a moment when Americans are expressing concerns about both AI and the economy. U.S. consumer sentiment hit a record low in May, as the country grappled with higher prices amid the Iran war.

Meanwhile, more Americans think AI will impact the economy negatively than positively. An Economist/YouGov poll released Tuesday found 41 percent of respondents believe the technology will have a negative economic impact, compared with 17 percent who believe it will be positive.

Tahra Hoops, director of economic analysis at the Chamber of Progress, suggested the rapid rise of new AI companies is “bringing a lot of eyes” to the jobs issue, “especially at a time where the economy does not feel so stable.”

“When people are already feeling not financially stable outside of this, it feels like a lot of compounding impacts, where anything new immediately starts to feel almost like an attack on your future,” she told The Hill.

“They’re doing everything they can to just throw something at the wall and see what sticks,” Hoops added of recent proposals by Democrats. “But I do think it’s important to take a step back and figure out how we are going to accurately measure this in order to make policy ideas that come from evidence.”

She pointed to legislation introduced last November by Sens. Mark Warner (D-Va.) and Josh Hawley (R-Mo.) that would require major companies to report AI-related layoffs, which would eventually be compiled by the Department of Labor.