Economists, tech leaders urge governments to prepare for AI job disruption

An open letter, signed by Nobel laureates, tech leaders from OpenAI, Google and Anthropic, and economists, warns AI could reshape the economy faster than the Industrial Revolution

Artificial Intelligence (AI) could transform the global economy faster than any previous technology, prompting economists, AI researchers, and technology leaders to jointly warn governments that they must prepare now for the possibility of widespread labour market disruption.

 

The open letter, titled "We Must Act Now", has been signed by almost 200 people, including 15 Nobel Prize-winning economists, former Google chief executive Eric Schmidt, OpenAI chief economist Ronnie Chatterji, Anthropic co-founder Jack Clark, venture capitalist Vinod Khosla and Stanford economist Erik Brynjolfsson.

 

Unlike previous warnings that largely came from technology executives, the latest statement reflects a growing shift among economists, many of whom had previously argued that AI's impact on employment would unfold gradually, similar to earlier technological revolutions.

 

AI could reshape the economy faster than previous technologies

In the statement, the signatories said AI could become "radically more powerful" over the next decade and drive an economic transformation larger than the Industrial Revolution, but compressed into a much shorter period.

 

According to the statement, such a transition could raise living standards and improve productivity, while also creating significant risks including large scale job displacement if governments fail to prepare appropriate policies and institutions.

 

The group called on economists, policymakers and technology leaders to better understand the economics of transformative AI and create incentives, guardrails and institutions that ensure AI complements human workers instead of replacing them. The statement, however, does not recommend specific policy measures.

A notable shift among economists

For years, many economists argued that while new technologies would inevitably disrupt some occupations, they would also create new ones over time, much as previous industrial and digital revolutions did. The prevailing view was that labour markets would adjust gradually, allowing workers to reskill and move into emerging roles.

 

"There has been a notable change in the profession," Erik Brynjolfsson, director of the Stanford Digital Economy Lab, told The New York Times. He said economists and policymakers were still underestimating how disruptive AI could become. According to the report, the debate is increasingly shifting from whether AI will affect jobs to whether its adoption could happen quickly enough to leave workers, businesses and governments with little time to adapt.

White collar jobs seen as most exposed

While many of the signatories continue to believe AI will eventually improve productivity and boost living standards, they also caution that the transition could be painful.

 

According to the New York Times, economists fear millions of white collar workers could face displacement over a relatively short period, while existing unemployment insurance systems and other social safety nets may not be prepared to support workers affected by such rapid changes.

 

MIT economist, Daron Acemoglu, who is also a signatory, told the New York Times that if AI affects office work the way industrial robots transformed manufacturing, but over a much shorter timeframe, the consequences could be highly disruptive for workers' livelihoods. He has previously argued that AI developers should prioritise systems that augment human work rather than automate it entirely.