What if Senator Bernie Sanders is right and Federal Reserve Chairman Jerome Powell is wrong?
What will be the response from policymakers? What should it be?
SEN SANDERS: AI SHOULD BENEFIT EVERYONE, NOT JUST A HANDFUL OF BILLIONAIRES
AI will soon become a political battlefield. Democratic socialist Sanders, ever a class warrior, has already wondered whether AI will help all Americans or just “a handful of billionaires.” Like the trade deals that sent millions of jobs abroad, Sanders worries that the massive investments in AI could result in as many as 100 million Americans losing their jobs over the next decade. He could be right; imagine the consequences.
Young people are already losing faith in capitalism and joining socialism. Two-thirds of Democrats now view socialism more positively than capitalism. Nothing can undermine our capitalist system faster than widespread job losses resulting from a technological breakthrough welcomed by the investor class.
This is the crucial issue of our time – an issue that receives little attention, even from the self-described “data-driven” Powell, who continually looks backward instead of forward. At his latest news conference, Powell answered a question about employment by saying, “The supply of workers has fallen very, very sharply, mainly due to immigration, but also due to lower labor force participation. So, and that means there’s less need for new jobs because there’s no flow into the labor pool where people need jobs.” Excuse me, what?
The economy is growing, but the workforce is shrinking. Although the government shutdown has stalled the usual monthly labor reports, much data suggests the labor market is weakening. Companies are increasingly citing AI investments as a factor in lower workforces.
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Corporate America is spending tens of billions of dollars on AI, promising major productivity gains for shareholders. But where will that productivity come from, other than reducing headcount? Certainly, people armed with artificial intelligence can deliver information and analysis faster, making themselves and their organizations more productive. But ultimately it will also make some people redundant and slow down new hires. The impact on the US labor market will be profound – and largely ignored.
Amazon recently announced that it will lay off 14,000 employees. A top human resources official at the company sent a note entitled, “Staying agile and continuing to strengthen our organizations.” She wrote that “the world is changing rapidly. This generation of AI is the most transformative technology we’ve seen since the internet, enabling companies to innovate much faster than ever before.”
What types of workers are at risk? Certainly factory workers and truck drivers, who are already being replaced by robots and AI – but also white-collar workers. Fortune notes that Amazon’s layoffs “show that it’s middle management first.” The world’s largest retailer employs approximately 1.5 million people; 14,000 is a drop in the ocean. But the trend is worrying – and devastating for those 14,000 people.
Amazon is not alone. UPS recently announced that it has cut 48,000 jobs this year: 14,000 management positions and 34,000 in operational positions. UPS started the year with approximately 500,000 employees. Target also recently made headlines, saying it will cut 8% of its corporate workforce – its first major layoffs in a decade.
Jobs most at risk from AI according to MICROSOFT
Outplacement agency Challenger, Gray & Christmas cites market and economic conditions as the main reason for most company layoffs to date, but also points to AI. That makes sense. After all, the economy is growing strongly: real GDP growth in the second quarter was 3.8%, and it looks like we will see robust growth in the third quarter as well.
There has never been faster adoption of new technology. An estimated one-third of Americans are already using AI; ChatGPT receives 5.4 billion visits per month. Global AI revenues are expected to reach $391 billion this year and could reach $3.5 trillion by 2033. These estimates may be optimistic, but top tech companies are investing about $400 billion this year alone to expand capacity, according to The Wall Street Journal. They clearly believe the projections.
Apart from Bernie Sanders, no one should want to stop the AI revolution. Artificial intelligence promises extraordinary advances in medicine and other sciences – and could radically improve education for American children.
It is also largely American companies that will benefit from the explosion in AI spending, reaping the profits and influence that come with the global dominance of a new technology. Rising productivity will boost hiring in certain industries and increase real wages. It will also enable the retirement of the more than twenty million baby boomers who are still working.
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But there may well be a period of adjustment in which layoffs exceed job creation. Unemployment could rise, fueling anger over innovations that are creating more unemployed Americans and resentment toward the companies behind the disruptions.
Senator Bernie Sanders joined the co-hosts of “The View” on Monday, October 20, 2025, to discuss his new book. (ABC/TheView)
Lawmakers and financial leaders must be prepared for this possibility — one that could deepen voters’ growing affection for socialism and rejection of capitalism. That would be a disaster for a country that has outperformed all others on earth and produced unprecedented opportunity and wealth.
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Otherwise, it will be Bernie Sanders and his left-wing colleagues who dictate the response. Sanders advocates a 32-hour work week without losing wages, which would give workers significantly more power and impose a “robot tax” on big tech companies. Such measures would slow American competitiveness and growth, just as they do in Europe.
We can’t let that happen.
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