Are labour economics ready for AI and Automation?

By David Stephen 

The Stanford Institute for Economic Policy Research (SIEPR) is hosting the All-California Labor Economics Conference in September, 2025. It does not appear that there is anything [or much] on AI or automation, on the agenda. The event is also proceeding after the recent situation of job numbers and the BLS.

It is possible that they had discussed AI and automation in past years. It is possible they also want to tamper AI fears, but what are the new models in labor economics to prepare for AI’s coming sweep? Universal basic income [UBI] is an option but it does not hold thorough promise. Profit-sharing from AI revenues may also be an option as some have discussed, but the questions are, what jobs may “guarantee retirement income, health insurance and a decent living” if AI replaces people?

Will labour economics manage AI and Automation?

This is the key question that should be consuming serious labor economics research at this time. Some people might say, if AI solves problems, it could bring healthcare costs down, but there is no guarantee that AI or AGI would do so. Also, retirement, decent living, something to do and so on are questions that necessitates urgency in labor economics research.

Healthcare

A simple permutation is that wherever AI cuts costs in healthcare could become a-subsidized-to-free cost for people. It could be explored with some social assistance programs or with insurance, but mostly ways that AI can shape better health, ensuring that costs remain for what AI can’t fix.

Also, it is possible to explore other cost-cutting modes, with generic drugs, assistant physicians, facilities sharing, conceptual brain science and so forth. Those with the jobs left can pay higher premiums and AI companies, with all the profits, can support the system maybe. People who were let go in other areas can also get trained for health roles, somewhat, within possibility.

Retirement

As AI shows up, the model of retirement may become anachronistic. People may never have to retire or only have to retire when absolutely incapacitated. There can be tier-based jobs, where hours are capped and income is below minimum wage, but everyone would have to contribute — wherever required — to something in the economy.

There can also be new non-monetary taxation, as well as reserves of products and services not just currency or precious metals. These reserves can also become new exchange standards outside fiat.

Labor Economics

AI would get work done, a lot of work. New structures for work in labor models must emerge to sustain human society, while preventing more inequities and other flaws.

There is a recent [August 13, 2025] insight by Goldman Sachs, How Will AI Affect the Global Workforce?, stating that, “Recent commentary by some public companies suggests the labor market is already experiencing effects related to AI. Executives from the technology and finance sectors say they are seeing efficiency gains from generative AI that are sufficient to slow their hiring, especially in operational and back-office capacities.”

“That said, AI adoption remains relatively low, especially among midsized and small enterprises. While adoption rates have accelerated recently, the vast majority of companies have not incorporated AI into regular workflows. In a recent US survey, only 9.3% of companies reported that they had used generative AI in production during the last two weeks.”

“To date, low adoption is limiting the overall labor-market impacts from AI, according to Goldman Sachs Research. Our economists found no significant statistical correlation between AI exposure and a host of economic measures, including job growth, unemployment rates, job finding rates, layoff rates, growth in weekly hours, or average hourly earnings growth.”

David Stephen currently does research in conceptual brain science with focus on the electrical and chemical configurators for how they mechanize the human mind with implications for mental health, disorders, neurotechnology, consciousness, learning, artificial intelligence and nurture. He was a visiting scholar in medical entomology at the University of Illinois at Urbana Champaign, IL. He did computer vision research at Rovira i Virgili University, Tarragona.

See more breaking stories here.