How to Survive the AI Shock
Publish Date: 2026-06-23 00:00:00
Source Domain: www.foreignaffairs.com
Here are six key highlights from the article:
1. The emergence of artificial intelligence (AI) portends a major productivity renaissance for the U.S. economy and the world. Estimates suggest AI could generate $2.9 trillion to $6.4 trillion in new annual economic value for the U.S. and $28.7 trillion globally by 2030.
2. AI will drive productivity gains through both capital investment in AI infrastructure like data centers, and innovation in discovering efficiencies and automating tasks. However, this will also lead to job losses, particularly for younger, more educated workers.
3. The speed and scale of AI’s impact on jobs could outpace the government’s ability to respond, leading to political turmoil and resistance that could stifle future AI-driven productivity gains in the U.S.
4. To realize the full gains from AI, the U.S. government needs to institute policies like tax credits for retraining programs and wage-loss insurance to support displaced workers.
5. This funding should come from a payroll tax on executive equity compensation, which could raise $100 billion annually. This revenue could fund retraining and reemployment support to mitigate the negative effects of AI-driven job losses.
6. Failure to respond adequately to AI’s job transition risks a similar backlash as seen from the earlier “China Shock,” when low-cost Chinese imports displaced U.S. manufacturing workers. Proactive policies now could prevent a future political and social crisis.
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