The AI job suck is the China shock of today

REARVIEW-mirror policymaking seems as unavoidable as it is self-defeating. President Donald Trump is falling into this trap with his focus on reversing the past quarter-century of trade policy — trying to put the toothpaste back in its tube. In attempting to undo the so-called China shock, he is missing the opportunity to preempt collateral damage from the coming artificial intelligence shock, which will reshape labor markets over the coming decade.

Even relatively positive economic changes hurt some workers. As did the decline of America’s manufacturing hubs, AI is likely to prove a challenge for millions of workers. At the more apocalyptic extreme, Anthropic chief executive officer Dario Amodei told Axios this week that AI could eliminate half of entry-level white-collar jobs and push unemployment as high as 20 per cent over one to five years. While I’m not expecting anything that dire, there are subtle signs — as The Atlantic’s Derek Thompson pointed out last month — that the impacts may be already materialising in the unique and recent increase of the unemployment rate for recent college graduates to the highest since 2021.

Brookings Institution research projects that about 30 per cent of the workforce could see at least half of their tasks disrupted by generative AI. That could include close to 19 million people in office and administrative support; 13 million in sales and related jobs; and 10 million in business and financial operations, according to Brookings’ analysis of OpenAI and Bureau of Labour Statistics data. Geographically speaking, economists Scott Abrahams and Frank Levy found that such work is most concentrated in expensive coastal areas, including the Bay Area and the nation’s capital. For the government, the key is to stand ready to provide help to those who need it.