Bernie's AI Report Offers The Wrong Diagnosis and A Worse Remedy
The report fundamentally misunderstands how productivity, job creation, and technological revolutions actually work
Yesterday’s warning from the ranking member of the Senate Health, Education, Labor, and Pensions Committee is jarring to the casual observer: 100 million jobs will be lost thanks to AI and automation.
Yes, over half of the current jobs in America will be gone due to AI, per Sanders.
At its core, though, the report fundamentally misunderstands how productivity, job creation, and technological revolutions actually work. Even so, we suspect much of the media will blindly follow its findings and use it as a base case when discussing the technology’s impact.
Before addressing the report’s fallacies, it’s important to recognize that the underlying anxiety about technological change and its impact on workers is real.
A Pew Research poll from February found that 52 percent of adults were worried about the future impact of AI use in the workplace.
For those of us who believe the AI opportunity can deliver generational positive change, we can’t bury our heads and ignore how many Americans feel. But we also need to be honest with one another about what threats are real and which are merely perceived.
The Zero-Sum Fallacy
Sanders treats job displacement as permanent elimination—as if the economy is a fixed pie. “97 million jobs could be replaced” sounds alarming until you remember: in 1900, 41 percent of Americans worked in agriculture. Today it’s 1.3 percent. Yet we didn’t get a permanent 40 percent unemployment level; instead, we found and made entirely new categories of work.
As another example, Matt Lira pointed out a couple of weeks ago that there are more bank tellers per capita today than there were in 1980, following the emergence of the ATM machine and digital banking.
“The ATM would seemingly represent the death knell of the bank teller profession. But in reality, it unlocked a renaissance of that profession [making it] stronger today than it’s ever been.”
Every major technological shift—from electricity and automobiles to computers and the internet—has eliminated specific jobs while creating ones we couldn’t have imagined, lowering costs for the good or service in question while radically expanding the market overall.
A Proper Reframing
The question isn’t whether AI displaces work, it’s whether our institutions and our culture can adapt to take advantage of what’s next.
Unsurprisingly, the policy proposals contained in the report provide a wholly inadequate and incorrect answer.
32-hour workweek with no pay cut: Makes labor more expensive by legislative fiat, which accelerates automation—the exact thing Sanders fears.
Robot tax: Taxes productivity improvements, is administratively absurd (is Excel a robot?), and makes the U.S. more uncompetitive—all of which also contribute to joblessness. Instead, America should be embracing robotics as a tool to replace the jobs we long ago lost overseas, ensuring all Americans can work a rung above.
Banning buybacks: Confuses financial engineering with value destruction. If companies can’t find productive investments, returning capital for redeployment elsewhere is ideal.
Employee ownership/board seats: Interesting, but this obviously must be optional or beneficial, not mandated, and pursuing it comes with real tradeoffs.
If these sound familiar, then you have been listening to Bernie on the stump for a long time. Even before AI’s ascent into our lives, the Vermont Senator and former presidential candidate has been promoting these exact same ideas, including his regular pummeling of “tech oligarchs,” which is also prominently represented in the report.
It’s hard not to see this report as simply finding a new straw man to advance his ideas: namely, socialism cloaked in populism.
Worse, it distracts us from discussing what actually matters: Does America have the energy supply to compete? Are our markets competitive? Where does regulatory capture exist? How are we preparing our children for the massive shifts to come?
ALFA has been writing on these issues for months, as well as the opportunities we see growing out of them. Just last week, we reported that construction of a single proposed data center will create more than 500,000 new jobs over the next five years.
While Sanders treats technological progress that eliminates human toil as a problem, here’s an alternative view: labor-saving technology is civilization’s greatest achievement. The goal of policymakers, then, should be to ensure that economy-wide growth provides prosperity, meaningful opportunities, and human flourishing.
Workers deserve better than emotionally satisfying rhetoric. They deserve serious leaders to navigate genuine disruption–which requires understanding it correctly first.