The CEO of artificial intelligence company Anthropic is warning that your fears about AI taking people’s jobs are absolutely correct.
Dario Amodei told Axios that he believed AI could eliminate half of all entry-level white-collar jobs within five years, a move that he said could cause unemployment to spike to between 10% and 20%.
It’s an alarming statistic—and Amodei said he was highlighting it to warn both the general public and government of what’s coming, in hopes that lawmakers and AI leaders can start preparing now to protect the nation.
“Most of them are unaware that this is about to happen,” Amodei said. “It sounds crazy, and people just don’t believe it. … We, as the producers of this technology, have a duty and an obligation to be honest about what is coming,”
Amodei isn’t turning away from AI, it should be noted. Anthropic has just released its latest chatbot, Claude 4, and is bullish on the advances the technology can bring. He also said there is still time to mitigate the doomsday scenario by increasing public awareness and helping workers better understand how to utilize AI and navigate the transition. Policy solutions can also still be put into place, but education has to take place on the congressional side as well.
“You can’t just step in front of the train and stop it,” Amodei said. “The only move that’s going to work is steering the train—steer it 10 degrees in a different direction from where it was going. That can be done. That’s possible, but we have to do it now.”
Amodei is hardly the first person to warn about AI’s impact on the job market. LinkedIn’s chief economic opportunity officer, Aneesh Raman, earlier this month said artificial intelligence is increasingly threatening the types of jobs that historically have served as stepping stones for young workers. And there are a growing number of stories from workers who saw their six-figure jobs disappear without warning, bringing chaos to their lives.
And venture capitalist Kai-Fu Lee has called predictions that AI will displace 50% of jobs by 2027 “uncannily accurate“.
The White House is terminating $400 million in funds for states meant to modernize their unemployment insurance systems.
These systems fell apart when unemployment soared in the pandemic, leading to rampant fraud and delays for beneficiaries.
- Without updates, similar problems could be on tap for the next recession.
Congress authorized the money in the $1.9 trillion coronavirus relief bill passed in 2021. Congress allocated $2 billion for the efforts, later cutting that funding in half.
- Those funds were wasted on equity projects, but only a fraction of the money appears to have been devoted to such measures, according to the Labor Department, which sent a notification letter to Congress last week to let lawmakers know "these grants are being terminated."
- About 28% of the funds granted to states, $219 million, were used specifically for equity, as outlined in a Labor Department report.
- In this case, "equity" is a term meant to describe efforts to make the unemployment insurance system easier for people to use and access, perhaps not what is typically considered DEI.
- Efforts to promote equitable access to unemployment insurance "include eliminating administrative barriers to benefit applications, reducing state workload backlogs, improving the timeliness of UC payments to eligible individuals, and ensuring equity in fraud prevention, detection, and recovery activities," according to the report.
$204 million was awarded for IT modernization, $134 million for fraud detection, and $93 million for system integrity, such as combating fraud and strengthening ID verification.
- The IT funds have been spent more slowly while states get projects underway, says Andrew Stettner, who led the modernization efforts during the Biden administration.
- "When I left in December, states had spent about $100 million of the $219 million specifically for equity but only $2 million of the $204 million for IT," says Stettner, who is now director of economy and jobs at the Century Foundation. 18 states are working on updates to their systems, he says.
Pulling this aid will be devastating for the states just getting started on these projects. "States were in the middle of all the planning and procurement. Now they're really holding the bag for finishing," Stettner says.
The grants were "squandered" on "bureaucratic and wasteful projects that focused on equitable access rather than advancing access for all Americans in need," the Labor Department says in an emailed statement to Axios.
- "We're committed to ensuring our unemployment system is free from fraud and abuse, and we look forward to partnering with state workforce agencies on real solutions that meet the needs of American workers."
To combat fraud, the Labor Department has pulled back money from states meant to help combat fraud.