AI Promises Abundance But Wages Are Falling

Economists Warn of AI Bubble

While leading figures in the technology sector claim that artificial intelligence will bring 'unthinkable abundance' to everyone, including the poorest segments of society, economists reveal that this optimistic picture does not align with real data. Economist Dean Baker, writing an article for the Center for Economic Policy and Research, states that for current AI company valuations to be meaningful, either these companies would need to generate truckloads of cash over the next five years, or the profits of all other companies in America would have to collapse.

Wages Cannot Cover Consumption

According to data cited by Baker, the share of labor income in consumption remained in the 75-76% band from 2013 until the pre-pandemic period. This ratio increased with stimulus payments in 2020 and 2021. However, contrary to expectations post-pandemic, this share showed a dramatic decline instead of returning to its former level, falling below 72% in the second half of 2025.

This seemingly small percentage drop points to an annual consumption gap of approximately $1 trillion. In other words, Americans are spending beyond what their salaries can cover, and this situation is being fueled by the AI bubble. This $1 trillion in spending stems from inflated stock portfolios, venture capital investments, and data center construction; not from workers whose income is not increasing.

Employment Risk in White-Collar Jobs

Concerns on the subject are not limited to macroeconomic data. The CEO of AI company Anthropic warns that artificial intelligence could create a permanent 'unemployed or very low-wage underclass'. The same CEO predicts that within five years, up to 50% of entry-level white-collar jobs could disappear. This reinforces assessments stating that 'if AI does to white-collar jobs what globalization did to blue-collar jobs, we need to confront this directly.'

While technology workers face mass layoffs, economist Baker argues that the bursting of the AI bubble would actually be an 'extraordinary economic development' for the working class. Baker states, "The sooner the AI bubble bursts, the better it will be for almost all of us, except for the AI geniuses."

These developments further fuel debates about the impact of AI on business and society. Alongside technical developments such as some AI assistants turning to unusual sources, the socio-economic consequences of the technology are also increasingly coming under scrutiny.