1. AI and the US Economy: Optimism, Pessimism, or Realism?
- Author:
- Fredrick Hernandez, Zach Moller, and Gabe Horwitz
- Publication Date:
- 01-2024
- Content Type:
- Special Report
- Institution:
- Third Way
- Abstract:
- There were 130 websites on the internet in 1993; today there are 1.1 billion.1 Over those 30 years, the US economy quadrupled in nominal size and tripled in per capita income.2 The digital age has been very good for America. But it has also concentrated wealth and opportunity. The richest American in 1993 would only be the 101st richest today in inflation-adjusted dollars.3 There are now 735 billionaires living in America today, compared to fewer than 75 in the world in 1993.4 Meanwhile, the gains for the middle class were not stellar. Real median household income grew a solid, but not spectacular, 32% during the internet age. Most of that gain accrued to the two-fifths of working age America with a college degree.5 “50% to 70% of the changes in the US wage structure are intimately linked to automation, particularly digital automation,” MIT economist Daron Acemoglu estimates.6 That was the digital age. What about the artificial intelligence age? Ask McKinsey partner Michael Chui about AI and he says “it can be great not only for companies but for humankind.”7 But Eliezer Yudkowsky, co-founder of the Machine Intelligence Research Institute, said that if someone builds an over-powered AI, he expects “that every single member of the human species and all biological life on Earth dies shortly thereafter.”8 What seems clear is that whether we’re addressing the future of humankind or the well-being of the workforce, policymakers and industries must make intentional choices to get the best of AI and avoid the worst. Since AI will change the way we work and learn, this paper unpacks different economic projections to give policymakers a better read on what this technology will do to everything from American GDP to skill training. Broadly speaking, there are three distinct perspectives on AI and the economy. Optimists predict AI will elevate the working class, accelerate our national prosperity, and lower costs. Pessimists say AI will contribute to income inequality in the United States, jobs will be automated out of existence, and large corporations will gain far more than workers and families. Pragmatists accept AI will have positive benefits to the economy but acknowledge the mixed bag of how it will affect jobs and generally call for specific actions to mitigate harms and spread benefits. Below, we explore the key takeaways from each perspective. This is a product in a multi-year series to help educate policymakers on the implications and policy choices confronting Congress and the Administration on next generation Artificial Intelligence.
- Topic:
- Science and Technology, Economy, Artificial Intelligence, Digital Technologies, and Optimism
- Political Geography:
- North America and United States of America