Baseline Assumptions
- No global war that resets labor demand
- Governments respond slowly (no immediate universal basic income)
- AI productivity gains are real and accelerating
- Ownership of AI systems is highly concentrated
- Blue-collar automation lags white-collar by 5–10 years
- Capital markets remain functional
10-Year Simulation
Years 1–2: Invisible Collapse
- AI commoditizes analysts, junior lawyers, coders, marketing, finance ops, HR
- Teams shrink quietly by 20–40%
- Job titles remain; wages and leverage collapse
GDP appears healthy. Careers quietly break.
Years 3–4: Demand Shock
- White-collar consumption declines (housing, travel, subscriptions)
- Urban real estate weakens
- Universities lose value proposition
- Venture capital concentrates almost entirely in AI
Years 5–6: Structural Break
- White-collar work becomes task-based and gig-like
- Salaries detach from productivity
- AI firms dominate equity markets
- Tax base erodes; welfare demand rises
The belief that education guarantees mobility collapses.
Years 7–8: Social Repricing
- Luxury and automation boom; mass-market stagnates
- Underemployment explodes despite stable headline unemployment
- Anti-AI movements and protectionist politics intensify
Years 9–10: New Equilibrium or Crisis
Path A: Managed Transition
- Redistribution via AI dividends or sovereign AI funds
- Work redefined around care, creativity, human services
Path B: Depression-Like Breakdown
- Persistent demand collapse
- High unemployment and social unrest
- Capital trapped in AI with insufficient consumers
Comparison to the Great Depression
| Dimension | Great Depression (1930s) | AI Job Collapse Scenario |
|---|---|---|
| Trigger | Financial crash | Technological displacement |
| Speed | Sudden | Gradual and stealthy |
| Unemployment | 25% visible | 20–40% effective |
| Productivity | Fell | Soars |
| Capital | Destroyed | Hyper-concentrated |
| Psychology | Scarcity and fear | Futility and loss of meaning |
Key Difference:
The Great Depression was defined by people wanting to work but being unable to find jobs.
This scenario is defined by people no longer being economically necessary.
The Great Depression was defined by people wanting to work but being unable to find jobs.
This scenario is defined by people no longer being economically necessary.