Thanks to Trump's neuronal and synaptic scarcity, and the rise of artificial intelligence, Americans and people around the world are facing tectonic shifts in their lives, not unlike the Industrial Revolution that emptied the rural world, killed craftsmanship and familial enterprises, created a large class of urbanized villagers known as "workers", ushered conflicts between capitalists and the working class, and spawned Communist/Marxist/Socialist ideologies.
Corporations are laying off tens of thousands of people who will join the ranks of the millions of Trump- and DOGE-laid off federal employees. Most of these people will never find a job any time soon, pending reaching an equilibrium between what the new markets can offer and the skills laid off people lack to match the declining but highly skilled job offers.
If history is any guide, lots of unemployed people wandering the streets without jobs, lining up for soup kitchens, white collar "managers" demoted and replaced by machines.... In the past, this led to major social and political changes because of poverty, unemployment, the need for government intervention and the New Deal. All of these factors work against a republican Radical Right platform that rejects government intervention and, ironically for people who claim religious values, prefers to let Darwinian mechanisms do their cruel selections in the hallowed "Free Market".
The difference between this AI revolution and the 19th century's industrial revolution is that back in newly industrialized countries of the 19th century, farmers, peasants and villagers became workers whose jobs were generally considered "low skilled". They just had to learn how to operate steam-powered and electric machines and factories. Today's AI revolution is targeting much higher-skilled jobs. AI will replace white collar engineers, service personnel, managers, desk-bound people, and even those software engineers who designed the robot taking their jobs. The robot in fact will henceforth write its own algorithms and software. Those "human" skills and the experience gleaned from them will be lost forever. Perhaps a small fraction of these newly unemployed people will learn to "assist" the robots and the machines now doing their jobs in their stead.
Universal salaries (for people who don't work) are currently contemplated to allow people to survive. Now isn't that a Socialist or Communist policy? The fact remians that just as with the industrial revolution, the AI revolution is already spawning political engagement, mass demonstrations against corruption and for a fairer wealth distribution, and political movements generally considered as "leftist".
Brace yourself. This upheaval is already taking place. I predict a return to economic communism or socialism, but without the political repression and dictatorships that accompanied them during the 19th century and early 20th century. There is no way to countenance a stable society in which a handful of billionaires make more profits with less employees (thanks to AI) while those laid-off unemployed people swell the ranks of the poor and disaffected.
==================================================
Jerome Powell says the AI hiring apocalypse is real: ‘Job creation is pretty close to zero’
Eva Roytburg
Thu, October 30, 2025
Jerome Powell, chairman of the US Federal Reserve, during a news conference following a Federal Open Market Committee (FOMC) meeting in Washington, DC, US, on Wednesday, Oct. 29, 2025. (Al Drago/Bloomberg via Getty Images)
Federal Reserve Chair Jerome Powell drew a stark picture of a labor market that looks fine on the surface—4.3% unemployment, solid consumer spending—but is quietly losing momentum underneath. Once you adjust for statistical overcounting in the payroll data, he said during a press conference Wednesday following the FOMC meeting, “job creation is pretty close to zero.”
He connected that slowdown, at least in part, to what CEOs are now openly telling investors: AI allows them to do more with fewer people.
He noted “a significant number of companies” have recently announced layoffs or hiring pauses, with many of them explicitly citing AI as the reason.
“Much of the time they’re talking about AI and what it can do,” Powell told reporters after the Fed’s rate-cut decision, warning large employers are signaling they won’t need to add headcount for years. “We’re watching that very carefully,” he added.
The comments come as the Fed cut interest rates by a quarter point to a range of 3.75%–4%, citing “downside risks to employment” even as inflation remains elevated. Powell said the U.S. economy is still expanding at a “moderate pace,” even as hiring slows. He described that spending as one of the “big sources of growth in the economy,” driven by companies building data centers and other equipment tied to artificial intelligence.
Powell also pushed back on the idea that all that spending is amounting to another speculative bubble. He drew a clear line between today’s surge in capital expenditure and the dot-com era, noting “these companies actually have earnings.” Those projects, he said, aren’t especially sensitive to interest rates, though, since they reflect long-term bets on higher productivity.
At the same time, Powell emphasized the boom creates a policy dilemma for the Fed. AI and automation are boosting output, but they’re also allowing companies to do more with fewer workers, leaving the labor market softer, even while GDP stays positive.
“We have upside risks to inflation, downside risks to employment,” he said. “This is a very difficult thing for a central bank, because one of those calls for rates to be lower, one calls for rates to be higher.”
A bifurcated market
Recent corporate announcements illustrate Powell’s warning. Amazon announced this week it laid off 14,000 middle managers—about 4% of its white-collar workforcein an effort to “remove organizational layers.” The layoffs come amid their rampant investments into AI. Target, Paramount, and other large firms followed with their own cuts.
According to a Challenger, Gray & Christmas report, U.S. employers have announced nearly 946,000 layoffs so far this year—the highest total since 2020—with more than 17,000 explicitly tied to AI and another 20,000 to automation.
“Job creation is very low, and the job-finding rate for people who are unemployed is very low,” Powell said.
The phenomenon is so widespread some economists have coined a new term—the “Great Freeze”—to describe the dismal labor market conditions. With unemployment among recent college grads topping 5%—and AI threatening to automate entry-level office jobs—many Gen Z workers are turning to graduate school as a strategic timeout.
That awkward balance—strong investment but weak hiring— is now at the center of the Fed’s decision-making. Powell said the economy increasingly resembles a K-shape, with higher-income households and large corporations benefiting from strong stock markets and AI-fueled productivity gains, while lower-income consumers pull back under the weight of rising costs.
He pointed to anecdotal reports from major retailers and consumer companies describing a “bifurcated economy,” in which wealthier Americans continue to spend freely but those at the bottom are trading down to cheaper goods. “
“Consumers at the lower end are struggling and buying less and shifting to lower-cost products,” Powell said, noting the uneven effects of growth make the Fed’s balancing act even more complicated.
“There is no risk-free path for policy,” Powell said. “We’re navigating the tension between our employment and inflation goals as carefully as we can.”
This story was originally featured on Fortune.com
No comments:
Post a Comment