Big Tech is cashing in, workers are losing out, and college students are stuck in the middle.
In the 1990s, investors poured thousands of dollars into start-up internet companies in the hopes of striking it rich. Merely having an internet presence made otherwise lackluster companies seem destined for success during the internet’s emergence. However, most early internet start-ups struggled to turn a profit. Companies with very serious names like Flooz, Beenz, and ClickMango garnered a lot of hype and publicity, but ultimately failed to attract enough users to sustain operations long enough to become profitable. The market took a nosedive when investors realized the stock for these companies was artificially inflated by other investors. The so-called “dot-com bubble” burst, and venture capitalists learned their lesson about overhyping new technologies…or not.
In the last five years, artificial intelligence has progressed exponentially from Facebook-level nonsense to, well, Reddit-level nonsense. With the rapid progression of AI tech comes a flood of AI-related excitement. The summer saw a stock boom for companies like NVIDIA and Broadcom, which make the microchips essential for AI. Seemingly every social media platform, search engine, and customer service website is rushing to implement a chatbot. Microsoft has embedded its Copilot assistant into everything from Word to Windows, while Google is pushing its Gemini chatbot directly into Search. Even Meta has been rolling out AI personas across Instagram and WhatsApp. Everyone is trying to get a piece of the AI industry, but should they?
Companies like Microsoft, Oracle, and Wells Fargo have all been boasting to shareholders about the money they’re saving by replacing their labor force with AI. Even Geoffrey Hinton, the so-called “Godfather of AI,” has warned that AI is “going to create massive unemployment and a huge rise in profits.” While layoffs may bolster profits in the short term, companies are biting the hands that feed them. Layoffs drive consumer anxiety and reduce purchasing power, slowing economic growth. Fewer paychecks mean less consumer spending, and if workers can’t buy, companies can’t sell.
In addition, most of the jobs getting the axe are entry-level jobs and internships, the very roles designed to prepare the next generation of employees. Again, in the short term, layoffs will cut down on labor costs, but layoffs mean companies are not investing in their future labor force. Cutting jobs may save money now, but it leaves businesses scrambling later for experienced workers, driving up training and recruitment costs and missing out on valuable brain capital.
Ironically, the companies themselves will probably be fine. In the United States, corporations enjoy billions in government welfare every year, including subsidies, tax cuts, and bailouts when they screw up. Workers don’t have this luxury. In fact, the American government is desperately trying to reduce social spending. In a country with so much wealth disparity already, AI could just widen the gap: CEOs cash in while workers get left behind.
AI-driven economic turmoil is especially relevant for college students, as the seeds of this economic chaos will start to germinate just as they enter the workforce. Students will have to learn to navigate a world with fewer entry-level opportunities and uncompetitive wages, while consumer goods and housing grow more and more expensive. Even tech jobs, which should be thriving in the age of AI, are being cut. Seemingly, no one is insulated from these market trends.
All of this raises the question: Is there still hope? The answer is simple: Absolutely. The American workforce has endured massive transformations before, some positive, some brutal. Unlike the Industrial Revolution, at least no children are losing fingers in factories. But like that era, the AI revolution offers a chance to rethink how we protect workers.
One solution is a universal basic income (UBI), where the government provides citizens with a regular stipend regardless of employment. Critics argue it will discourage people from working; however, pilot programs indicate that people given a universal basic income are just as likely to continue working. With AI increasingly taking on many of the “less desirable” entry-level jobs, UBI could provide people the flexibility to pursue work that is safer, more meaningful, or better aligned with their skills. Other ideas include tax incentives for companies that retain human employees or tighter regulations on how quickly AI can be adopted. Together, these solutions reflect a broader effort to ensure that technological progress doesn’t come at the expense of human livelihoods.
I won’t pretend sweeping reform is as simple as calling your representatives, but young people don’t have to quietly surrender to their “AI overlords” either. The hype may fade once AI’s limitations are clearer, but AI is never completely going away. That leaves us with a choice: resign ourselves to an economy run by algorithms, or fight for one that still values people. If we don’t shape AI’s future, it will shape ours, and not in our favor.