Coming Soon: The AI Recession

AI and inflation are making the world very unstable for many people. We are about to go into a very complex redistribution of wealth that might cause a significant recession; we are about four months from the inflection point.?

AI is destroying quality jobs at a rate I have never seen before. Tasks that would have taken me days to get done are done in hours. Do you want a will or a contract that is 30 minutes, please? Want to get a document written that explains a process that is 20 minutes, and I want to get reports done for work and 20 minutes to lay out the problem. So many tasks that took hours will now take minutes, and suddenly, we have a massive surplus of middle management people in office/data roles.?

Inflation has made the cost of essential goods and services much more expensive. For people on the edge of life, it has become about 20-30% more expensive over the last three years for the essential goods and services they consume. That stresses the bottom 60% of the world in brutal ways.?

I was interviewing for a marketing assistant position with a decent pay of $30 an hour and got over 80 qualified applicants. This was for a 25-hour-a-week part-time position that does not pay a living wage without a second job. Five years ago, I would have gotten five applications.?

So inflation blew out the lower income cost structure, and AI is dropping many people who used to have decent jobs into that service economy; everything from voice recording to graphic design to legal has imploded. Suddenly, my nanny friends face competition from 100 applicants for one nanny position.?

I get it, I empathize with it, and I am going to take advantage of it, but that is the problem: in situations like this, those who can expand their teams, do exciting things with cheap labor, and don’t have the sunk cost of existing cost structures will win. But the people who were on the edge are going to get pretty damn desperate, and it is not going to be funny.?

So what is the long-term solution? We will use people more thoughtfully on the other side, but the safety of many jobs evaporates; a whole generation has to learn how to do new things, and wealth and privilege will shift. See you on the other side.?