Job losses are accelerating due to AI, robotics, and automation. Current AI technologies and other advancements have the potential to automate a significant portion of employees’ tasks, with projections indicating that up to 70 percent of employees’ time could be absorbed by automated work activities. The impact of AI on the workforce is difficult to predict due to various influencing factors such as trade imbalances, exchange rates, technology deployment rates, business model shifts, political developments, geopolitical forces, and corporate strategies toward their workers.
Given the uncertainty, it is essential to consider ways to mitigate the impact of AI-related job losses on workers. Policy reforms can play a crucial role in helping individuals navigate the transition to a digital economy. Encouraging companies to retrain workers is a fundamental step. Businesses, being on the frontlines of worker layoffs, have a responsibility to invest in job reskilling and upskilling for their employees. Governments should consider expanding tax credits for businesses that retrain laid-off employees, as these investments benefit society as a whole. Failing to support workers in this transition could lead to a permanent underclass struggling to meet their financial obligations, creating a host of social, economic, and political problems unique to AI’s role in worker displacement.
Ensuring that workers retain access to health insurance is vital
Since much of American healthcare is employer-based, job-related disruptions can be particularly harmful. Workers may lose access to insurance or be forced to shift to another medical network, disrupting their healthcare continuity. The Affordable Care Act exchanges offer healthcare coverage for those between jobs, and policymakers should ensure these mechanisms remain robust to safeguard American workers’ access to healthcare as job disruptions increase.
Reducing vesting requirements for retirement benefits is another important consideration
Many organizations have lengthy vesting periods, sometimes spanning three to six years, before employees become eligible for employer matches for retirement. With increasing job churn due to AI and automation, workers may move between multiple organizations in a short period, jeopardizing their financial futures post-retirement. Reducing vesting time to three or six months can aid those transitioning between jobs.
Loosening job licensing requirements can facilitate easier transitions into new occupations
Many new roles require specialized training, certification, and testing that can take months or years to secure. While certifications related to health and safety are necessary, other requirements should be loosened to make it easier for experienced individuals to enter new fields. This is particularly important for those with nontraditional education or language proficiency barriers. Policymakers could adjust these requirements to allow educational credentials or work experience to fulfill certification needs.
Creating worker retraining accounts can incentivize society-wide upskilling
These accounts, functioning similarly to retirement accounts, enable workers to use tax-deferred money to pay for job retraining. This program helps individuals gain new skills to keep up with innovation and navigate the digital marketplace. To sustain American innovation, policymakers should explore creative ways to maintain a digitally adept workforce.
Paying earned income tax credits monthly can provide more flexibility and continuity for workers
Currently, individuals receive these credits annually, which may not help with monthly expenses or provide a regular source of income. Making these payments monthly would benefit workers in vulnerable jobs, offering more consistent financial support.
Clarifying independent contractor rules is essential
Many full-time workers are not classified as full-time employees and are ineligible for health, retirement, or disability insurance benefits. Having clearer rules would ensure that full-time workers receive the benefits traditionally associated with full-time employment. This is particularly important in the tech industry, which relies heavily on temporary workers for core functions.
Funding job retraining programs in higher education can assist in the transition to a digital economy
Community colleges and other institutions offer retraining programs for adults needing to upgrade their skills. Governments should support these programs to help individual workers suffering from job losses. Colleges and universities play a vital role in the retraining ecosystem and deserve financial support for their mission.
Ensuring laid-off workers have access to high-speed internet is crucial
Twenty-four million Americans lack access to high-speed internet, hindering their ability to utilize digital job boards and resources for learning new skills. Many adult retraining programs are online, and policymakers must guarantee all Americans have access to high-speed internet to ensure they can participate in these programs.
Ensuring data-based job evaluations are fair is essential
As employees increasingly perform tasks on computers, generating data analytics known as key performance indicators (KPI). Hybrid work environments may allow employers access to online activity on company equipment or networks, potentially leading to unfair job evaluations. Business leaders must ensure these analytics are fair and impartial, respecting employees’ privacy in the hybrid workplace. Employers should also consider the integration of AI into job functions and judge performance fairly.
Mitigating disparate job impacts is necessary
As not every worker will share the same workplace experiences. Disparities exist by race, gender, age, disability, immigration status, and veteran status, among other characteristics. Policymakers must ensure that AI-related job losses do not disproportionately affect marginalized populations, who may struggle to retrain, find new jobs, or obtain appropriate visas.
Considering a 4-day workweek as workers become more efficient and productive is a viable option
As workers gain efficiency and productivity through AI and digital tools, companies should share the profits by exploring four-day workweeks. Some employers have seen positive results, such as increased revenue and fewer sick days. Forward-looking companies should experiment with novel work management methods and reward employees whose hard work and efficiency improve the bottom line.
These recommendations require careful consideration by policymakers, industries, and employees to ensure the AI transition succeeds with fewer casualties in the workplace and the broader labor market. Policymakers must address these issues to create a more resilient and equitable workforce in the face of rapid technological change.
