Professors warn AI mass layoffs will trigger an economic trap ‘no CEO can stop’
A professor has warned the public that mass layoffs as a result of AI could end up triggering an economic trap that ‘no CEO can stop’.
This comes after a paper titled The AI Layoff Trap was published by Professor Gerry Tsoukalas and Professor Brett Falk, which details a future where artificial intelligence is sophisticated enough to take over most human operated jobs.
Tsoukalas sat down with BBC journalist Katty Kay for an episode of New Normal with Katty Kay where he explained just what this future could look like when AI takes over human jobs, effectively cutting off potential customers from boosting businesses, and what this might mean for the economy.
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In the interview, Kay said: “A few weeks ago, I read a paper called The AI layoff Trap by two professors, Gerry Tsoukalas and Brett Falk.
“It’s a warning about a possible future where AI is good enough to do a lot of our jobs. Companies would start replacing workers to cut costs, but those workers are also customers who spend money at businesses. If every company fires a lot of people, eventually hardly anyone is left with enough money to buy anything and keep the economy going.
“What scared me most though was the idea that mass layoffs could happen, it was that even if CEOs see this crisis coming and desperately want to avoid it, they might not be able to.”
Detailing what this could look like, Tsoukalas explained: “Waiting for the firms to figure out for themselves I think is the worst possible thing we can do. The CEOs are coming out, you know, from these foundational labs, and they’re constantly saying AI is going to replace everyone’s job.
“And the main question we wanted to understand is who’s going to be left to buy products if everyone gets automated and replaced by a robot.”
This scenario has been coined as the AI layoff trap, which Tsoukalas described as: “Imagine there's just one very large company, a monopoly in a market, and they're making widgets, and everyone's working at this company. And this brand new shiny technology arrives, AI. So the CEO is looking at this and saying, ‘all right, well, I could adopt this technology, but I would have to lay off, let's say, 90% of my staff. The problem is these people are also the ones buying widgets from me’.”
The professor has warned that the temptation to ‘over automate’ could end up costing the economy in the long run as, without human workers, there might not be any customers to keep companies afloat.