AI and the Future of Consumerism: A Prosperity Paradox from a layman's perspective

AI: The Genie That Grants Every Wish—But at What Cost?

Once upon a time, businesses wanted more efficiency. AI delivered. Businesses wanted more profits. AI optimized. Businesses wanted more customers. AI… well, AI might just be pricing them out of existence.

AI is like the genie from Aladdin—powerful, obedient, and eager to grant wishes. But as every fairy tale warns us, wishes come with consequences. If AI-driven automation eliminates middle-class jobs, who will be left to buy the products AI helps produce so efficiently?

The AI Boom... and the Consumer Bust?

AI is projected to add over $15.7 trillion to the global economy by 2030 (PwC). That’s more than the combined GDPs of Germany, Japan, and India today. But here’s the paradox:

- AI could increase consumer spending by 20% (IDC).

- AI is expected to automate up to 300 million jobs worldwide (Goldman Sachs).

- In the U.S., personal consumption accounts for nearly 68% of GDP (U.S. Bank). If middle-class jobs disappear, can consumer demand keep up?

The Snake Eats Its Tail

A study by the Bank for International Settlements (BIS) warns that AI investments are widening economic inequality, enriching top earners while leaving lower-income groups struggling. Meanwhile, the International AI Safety Report highlights that unchecked automation could destabilize economies rather than enhance them.

But here’s the irony: If AI eliminates too many jobs too quickly, it could end up crushing the very businesses that adopted it to boost profits. Imagine a world where production is at an all-time high—but no one can afford to buy what’s being produced.

The Ripple Effect of Declining Middle-Class Consumerism

The middle class has been the engine of global demand for over a century. If their purchasing power shrinks, we enter a vicious cycle:

? Economic Slowdown – Reduced consumer spending leads to sluggish economic growth.

? Business Revenue Decline – Lower demand forces companies to cut costs, leading to more layoffs.

? Rising Household Debt – To maintain their lifestyles, middle-class families might turn to borrowing. As of 2024, U.S. household debt has reached a record $17.94 trillion.

But AI Also Creates Jobs... Right?

One might argue: "AI isn’t just eliminating jobs—it’s creating new ones." And they’re not wrong. McKinsey estimates that AI could create 97 million new jobs by 2030. The problem? Many of these jobs require entirely new skill sets that millions of displaced workers may not have access to.

Consider this: The Industrial Revolution also led to mass job displacement—but unlike today, we had decades to adapt. AI is moving at light speed. Are we ready?

The Need for a Global AI Watchdog

Historian Yuval Noah Harari warns that AI could create "the most unequal societies in history" unless regulation keeps pace. Yoshua Bengio, one of AI’s godfathers, echoes similar concerns (The Guardian).

Regulation isn’t absent—it’s just lagging behind innovation:

The EU AI Act – The first major AI law in the world.

U.S. AI Executive Order – National security & fairness focus.

OECD AI Principles – A global attempt at AI coordination.

Yet, AI governance today still feels like a Wild West movie—exciting, dangerous, and largely missing a sheriff.

A Smarter Way Forward: Reskilling & Redistribution

The future of AI isn’t just about how fast it can work—it’s about whether it will serve the very people it was designed to help. What’s the solution?

Massive Investment in Reskilling – Amazon’s $1.2 billion upskilling initiative and Singapore’s SkillsFuture program show what’s possible.

AI-Responsible Policies – Without intervention, we risk an economy that’s all production, no consumption.

A Global AI Oversight Body – To prevent a "profit today, collapse tomorrow" scenario.

Lets continue to think on the lines of Are We Designing AI to Serve Humanity—Or Are We Designing Humanity to Serve AI?

#AI #Consumerism #FutureTrends #EconomicInequality #AIRegulation #Reskilling #Automation