The AI automation arms race layoff trap:
1 Competitive pressure pushes firms to automate using AI more than needed for market
2 Now jobless workers can't buy products/services, harming both labor & firm owners
3 Suggested solution by AI companies like UBI/upskilling/lower wages cannot stop the AI doom cycle
The study concludes that only a Pigouvian automation tax can fix the problem. Policy makers must address the competitive drive to automate, not just the post AI fallout afterward
1 Competitive pressure pushes firms to automate using AI more than needed for market
2 Now jobless workers can't buy products/services, harming both labor & firm owners
3 Suggested solution by AI companies like UBI/upskilling/lower wages cannot stop the AI doom cycle
The study concludes that only a Pigouvian automation tax can fix the problem. Policy makers must address the competitive drive to automate, not just the post AI fallout afterward
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