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What if Senator Bernie Sanders was right and Federal Reserve Chairman Jerome Powell was wrong?
What if the AI revolution causes mass layoffs of American workers, as the Vermont senator warned in a recent Fox News op-ed? What if Powell was wrong in saying that the slowdown in the labor market is due primarily to supply-side issues – lower immigration and lower labor force participation rates – rather than the “efficiencies” produced by AI?
What will be the response of political decision-makers? What should it be?
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AI will soon become a political battleground. Democratic socialist Sanders, ever a class warrior, once questioned whether AI would help all Americans or just “a handful of billionaires.” Like trade deals that sent millions of jobs overseas, Sanders fears that massive investments in AI could cause up to 100 million Americans to lose their jobs over the next decade. He might be right; imagine the repercussions.
Young people are already losing confidence in capitalism and moving closer to socialism. Two-thirds of Democrats now view socialism more positively than capitalism. Nothing could undermine our capitalist system faster than widespread job losses resulting from a technological advance lauded by the investor class.
It’s the crucial question of our time—one that gets little attention, even from Powell, who describes himself as “data-driven,” and who constantly looks backward rather than forward. At his most recent press conference, Powell responded to a question about employment by saying, “The supply of workers has fallen very, very sharply due primarily to immigration, but also to declining labor force participation.” So that means there’s less need for new jobs, because there’s not that flow into the labor pool where people need jobs. Excuse me, what?
The economy is growing, but hiring is decreasing. Even though the government shutdown has blocked the release of the usual monthly employment reports, plenty of data suggests the job market is weakening. Companies are increasingly citing investments in AI as a factor in downsizing.
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American companies are spending tens of billions of dollars on AI, promising their shareholders significant productivity gains. But where will this productivity come from, if not downsizing? Certainly, people with artificial intelligence can provide information and analysis more quickly, making them and their organizations more productive. But ultimately, this will also result in some people being laid off and slow down new hires. The impact on the US job market will be profound – and is largely overlooked.
Amazon recently announced the layoff of 14,000 employees. A senior human resources official at the firm sent a memo titled “Stay agile and continue to strengthen our organizations.” She wrote that “the world is changing rapidly. This generation of AI is the most transformative technology we’ve seen since the Internet, and it’s enabling businesses to innovate much faster than ever before.”
What types of workers are at risk? Factory workers and truck drivers, of course, who are already being replaced by robots and AI, but also white-collar workers. Fortune notes that the layoffs at Amazon “show that it’s aimed at middle managers first.” The world’s largest retailer employs around 1.5 million people; 14,000 is a drop in the ocean. But the trend is worrying – and devastating for these 14,000 people.
Amazon is not alone. UPS recently announced it would cut 48,000 jobs this year, including 14,000 management positions and 34,000 operating positions. UPS started the year with about 500,000 employees. Target also made headlines recently, announcing it would cut 8% of its corporate workforce — its first significant layoffs in a decade.
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Outplacement firm Challenger, Gray & Christmas cites market and economic conditions as the primary reason for most company layoffs to date, but also points to AI. That makes sense. After all, the economy is growing rapidly: real GDP growth in the second quarter was 3.8%, and it looks like we’ll see a robust expansion in the third quarter as well.
The adoption of new technologies has never been faster. Already, it is estimated that a third of Americans use AI; ChatGPT receives 5.4 billion visits per month. Global AI revenue is expected to total $391 billion this year and could reach $3.5 trillion by 2033. These estimates may be optimistic, but the biggest tech companies are investing about $400 billion this year alone to expand their capabilities, according to the Wall Street Journal. They clearly believe in the projections.
Bernie Sanders aside, no one should want to stop the AI revolution. Artificial intelligence promises extraordinary advances in medicine and other sciences – and could radically improve the education of America’s children.
It is also largely American companies that will benefit from the explosion in AI spending, reaping the rewards and influence that come with a new technology’s global domination. Rising productivity will boost hiring in certain sectors and increase real wages. It will also allow the retirement of the more than 20 million baby boomers who are still working.
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But there may well be a period of adjustment when layoffs outpace job creation. Unemployment could rise, fueling anger over innovations that drive more Americans out of work and resentment toward the companies causing the disruption.
Senator Bernie Sanders joined “The View” co-hosts to discuss his new book on Monday, October 20, 2025. (ABC/LaVue)
Lawmakers and financial leaders must prepare for this eventuality – one that could reinforce voters’ growing affection for socialism and their rejection of capitalism. This would be a disaster for a country that has outperformed every other country on the planet, producing unprecedented opportunity and wealth.
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Otherwise, it will be Bernie Sanders and his colleagues on the left who will dictate the response. Sanders advocates a 32-hour work week with no loss of pay, giving workers far more power and imposing a “robot tax” on big tech companies. Such measures would slow American competitiveness and growth, as they have in Europe.
We cannot allow this to happen.
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