The coauthor of a viral research report says blue-collar jobs won't be safe from an AI-driven recession

A coauthor of a controversial AI research paper has voiced concerns after their findings led to a significant global stock sell-off. The study, produced by Citrini, a thematic equity investment firm, in collaboration with Alap Shah, CEO of Littlebird.ai, explores a daunting future where the AI revolution could potentially eliminate white-collar jobs and considerably diminish the spending power of these workers, hindering overall economic growth. During a recent appearance on the 'TBPN' podcast, Shah highlighted that while blue-collar jobs may currently appear stable, they are not insulated from the repercussions of a decline in white-collar employment. He pointed out that all job sectors are interconnected, emphasizing, "There is only one labor market. If we foresee a scenario where 5% of workers face layoffs in the coming years, those individuals may have no choice but to transition into the gig economy or blue-collar roles." This transition, he warned, would exert pressure across the entire labor market, not just in white-collar sectors. The report, published on Sunday, adopts a speculative look ahead to 2028, forecasting a chain reaction triggered by the AI boom that could lead to rapid white-collar layoffs. This, in turn, might adversely affect the housing and mortgage markets, potentially resulting in a global economic downturn and a stock market crash. The research posits that such a scenario could stifle AI growth due to dwindling funding opportunities. As Shah elaborated on 'TBPN', he expressed skepticism about the sustainability of growth in sectors like health and education, suggesting that much of it is fueled by government spending. He warned that if personal incomes decline, this funding could evaporate, leading to a cyclical problem where increased government spending is reliant on tax revenues generated from workers who contribute significantly more than corporations. These insights underline the complex interplay between AI advancements and job security, raising critical questions about the future of work in an increasingly automated world.