The Daily Struggles of Displaced U.S. Workers Amidst the Unchecked Surge of Artificial Intelligence: Is the Government Aware?
SchoolsFirst Credit Union Recorded Call
Logix Credit Union Banking Recorded Call
Introduction
As we await Governor Gavin Newsom’s decision on AI regulation through SB 1047, it’s essential to shine a light on the daily struggles faced by displaced workers like myself, who are unable to reenter an increasingly saturated job market. Despite Federal Reserve Chairman Jerome Powell's claims that the labor market is "normalizing," the reality for many of us is anything but normal. The financial hurdles we face daily are mounting, and the chaos stemming from the unchecked implementation of artificial intelligence (AI) continues to worsen. While inflation skyrockets and housing becomes more unaffordable, particularly in states like California, the frustration is palpable. It’s not just at the representative I’m speaking to on the phone but also at the banks and private institutions failing to understand the drastic shifts occurring in their customers' financial situations.
A Glimpse into the Shortcomings of Private Institutions
In two recent phone calls with Logix Credit Union and SchoolsFirst Credit Union, I found myself navigating the financial struggles that have become all too common for displaced workers like myself. Despite explaining my situation as a worker unable to reenter the job market due to AI advancements and market saturation, the assistance provided was limited and reactive, rather than proactive.
During these calls, I suggested that banks implement systems to flag accounts of displaced workers, preventing punitive measures such as overdraft fees during periods of joblessness. However, both institutions failed to demonstrate a structured approach to helping customers facing the economic challenges caused by unchecked AI implementation. The representatives I spoke to were courteous and offered short-term solutions, such as reversing overdraft fees, but no long-term measures were in place to support displaced workers.
This highlights a broader issue: private institutions are not adequately adjusting their policies to address the realities of job displacement caused by AI, leaving their customers without meaningful support. The unchecked growth of AI continues to saturate job markets, and companies like these fail to take into account the precarious financial situations of their customers, many of whom are struggling to survive.
This situation reveals a pressing need for these businesses to adapt their practices to better serve the growing number of displaced workers, who remain financially vulnerable in the face of rapid technological change.
This blog post, mostly written by me, is an urgent call to recognize the devastating impact of AI-induced job displacement and the lack of protections for workers against the rapid automation taking over industries.
The Unseen Toll on Displaced Workers
AI continues to evolve at an unprecedented pace, yet no regulations are in place to limit how private companies, such as banks and other customer-service-based businesses, use this technology. AI-generated customer service agents, for example, now have the capacity to answer thousands of phone calls per second in nearly any language, merely by recording a customer’s voice for a few seconds to alter the AI’s response language.
I experienced this firsthand a few months ago. A credit card company called me about a $250 minimum payment I couldn't afford to make. As a displaced worker, I’ve been explaining to all my creditors for nearly a year, “I lost my job in November 2023 and haven’t been able to return to the tech sector due to an oversaturated market and AI-driven hiring freezes.” Yet, as I explained my situation, I was met with an eerily consistent response: “Okay, are you able to make the $250 minimum payment today?”
The robotic tone and lack of empathy made it clear I was talking to an AI, especially when I heard a beeping sound every two seconds—an indicator of a pre-recorded interaction. Having worked in customer service a decade ago, I know that if you can’t resolve an issue in a few minutes, you politely put the customer on hold. This AI did just that. To my surprise, when the line resumed, I was finally speaking to a real agent—who sounded exactly like the AI! This raised an important question: is the person whose voice is being used getting compensated for the use of their voice by the AI? Have their full-time hours been cut to part-time?
At the very least, as AI-generated customer service voices start to sound indistinguishable from real human agents and become a common part of our lives, companies should be transparent with their customers. Letting them know upfront that they're speaking to an AI would set the proper expectation from the start. This simple step could help de-escalate frustration from customers who just want to vent or argue with someone. After all, would you be as angry if you knew from the outset you were talking to a bot? Most likely not.
The Impact of Unregulated AI on Employment
The implications of this AI-driven transformation go beyond personal anecdotes. Consider that AI is set to replace millions of workers across various fields. From fast-food employees to factory workers assembling car parts, the scope is staggering. Tesla's CEO, Elon Musk, has already announced plans to begin employing humanoid robots in his factories next year, with the ultimate goal of eliminating human labor in his global operations.
This shift is vastly different from the industrialization of the past. When machinery replaced manual labor in Detroit, it took decades for the transition to occur, and workers had time to adapt. But AI has no comparable timeline—its growth is exponential, and it’s capable of fully replacing human jobs in ways we’ve never seen before.
The alarming statement from Musk—“AI will not only take your job away but also the meaning of life”—might sound like a dystopian exaggeration, but without regulation, it could become a reality. AI isn't just taking jobs; it’s redefining them and leaving millions displaced without recourse.
The Case for AI Regulation
Regulating AI through legislation like SB 1047, which would regulate models worth over $100 million, is the first step in averting a catastrophic displacement of workers. It would set a precedent for further necessary regulations, ensuring that companies can’t simply eliminate vast portions of their workforce to boost profits.
For example, a customer service company employing 100 agents today might decide to lay off 90% of its workforce tomorrow, relying solely on AI to handle simple tasks like password resets or payment inquiries. Without regulation, companies have no incentive to protect jobs, and AI could decimate employment across industries.
We need to act now to ensure AI enhances human potential rather than rendering us obsolete. If AI advancements continue unchecked, the U.S. could find itself in a downward spiral of economic instability and social unrest as displaced workers struggle to survive.
The Myth of Universal Basic Income (UBI)
The idea of a universal basic income (UBI) has gained traction as a solution to mass job displacement, but it’s not as simple as it sounds. OpenAI’s CEO, Sam Altman, conducted a trial, giving participants $1,000 per month for three years. The result? While it may provide significant reduction in financial stress at first, it is questionable how this would work for millions of people just handing out cash for free.
The study found that many recipients of Universal Basic Income (UBI) were more likely to consider starting their own businesses. This is likely due to the financial stability provided by the guaranteed income, which gave people the cushion they needed to take risks. When people aren’t consumed by the immediate need to cover basic expenses, they have the freedom to think long-term, plan, and invest in entrepreneurial ventures. This "financial breathing room" can inspire individuals to pursue ideas they may have previously been too financially constrained to explore.
However, the question remains: Is it realistic for millions of displaced American workers to become business owners? While UBI can provide initial support, the reality is more complex. Entrepreneurship involves competition, resources, and market demand. If millions of people attempted to start their own businesses at once, the competition would likely be fierce, and not everyone would succeed. Furthermore, for capitalism to function, consumer spending must thrive. If a large segment of the population remains unemployed or financially insecure, consumer demand could shrink, reducing the success rate of new businesses.
This cycle could lead to further economic instability. If millions of people lose their jobs to AI and automation but are unable to start successful businesses, the economy could collapse due to decreased purchasing power, leading to less demand for goods and services. In a capitalist system, the balance between production and consumption is critical, and UBI alone might not address this broader challenge.
While UBI can foster entrepreneurship for some, it's not a panacea for widespread unemployment, and larger economic strategies would need to be considered to avoid collapse from reduced consumer spending.
Conclusion: The Urgency for Regulation
The unchecked rise of AI has created a perfect storm for displaced workers, leading to financial instability, job loss, and societal uncertainty. While AI can be a powerful tool for progress, we must implement regulations to protect workers and ensure AI is used responsibly.
Governor Newsom has a unique opportunity with SB 1047 to define the future of AI safety in the U.S. By passing this bill, he can set the stage for future regulations that balance innovation with humanity. Let’s ensure AI empowers us, rather than displaces us, and avoid the dystopian future Musk alluded to. The time for action is now—before it’s too late.
#DemandEthicalAI
