AI doomsday where many workers are ‘essentially unemployable’ is totally possible, Fed governor says

Federal Reserve Governor Michael S. Barr issued a stark warning on Tuesday regarding the potential trajectory of artificial intelligence, outlining a scenario where rapid technological advancement will create a “jobless boom” that leaves a significant portion of the population “essentially unemployable.”

Speaking before the New York Association for Business Economics on Feb. 17, Barr discussed the profound uncertainty surrounding how generative AI will reshape the labor market. While current data suggests a gradual integration of the technology, Barr urged policymakers not to underestimate the risks. “We should be clear-eyed about how painful these changes could be for affected workers and how challenging it would be for the government and the private sector to successfully manage the fallout.”

He laid out three scenarios for how AI will impact the labor market, noting that predictions range from “the utopian to the apocalyptic.” The pace of technological change—and the resulting debate—is evolving quickly, though.

In detailing what he termed a “scenario of rapid growth,” Barr described a future where AI agents replace a wide range of professional and service occupations, while robotics automate manufacturing and transportation. In this version of the economy, lab...