AI's Class Betrayal
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The Dark Roast of Inequality: How AI’s Promise Fell Flat
The rollout of artificial intelligence was touted as a game-changer, poised to dismantle class barriers and liberate workers from mundane tasks. However, two years and trillions of dollars in investment later, it is clear that the technology has been co-opted by the very powers it was meant to disrupt.
Research by Wall Street economists reveals that households most exposed to AI-related risks – those with large stock portfolios – are also the ones cushioning themselves against its impact. The data shows that while AI may not have caused mass layoffs, it is effectively suppressing wage growth for low-skilled workers in sectors like service and management. In other words, the jobs aren’t disappearing; the raises are stagnant.
Morgan Stanley’s economics team found that high-exposure occupations are concentrated among college-educated, high-income individuals who hold nearly 70% of these positions. Those at the bottom rung of the economic ladder, however, are feeling the pinch, with real wage growth running 6.7 percentage points slower in AI-exposed work than in low-exposure sectors.
The same research from Apollo Global Management shows that the pain isn’t being felt through layoffs – it’s being inflicted through stagnant wages and suppressed raises. Workers in AI-exposed occupations are not only failing to get raises but are also seeing their existing wages stagnate.
Companies have used AI as cover to raise prices while holding wages flat, resulting in corporate profit margins near postwar highs. This isn’t because AI made them more productive – it’s because firms used the tech to justify price hikes. The data suggests that corporations have been preparing for this moment all along by hiring fewer juniors relative to mid-level staff and limiting entry points for those with the least capital, seniority, or leverage.
The outcome is a widening wealth gap between the top 20% of earners and everyone else. The top 20% hold 87% of direct equity and mutual fund exposure; college-educated households own 85%; and households over 55 possess 79%. For the bottom 40% of earners, equity wealth roughly equals a year’s wages – a paltry $1.7 trillion against $1.8 trillion in labor income.
As AI continues to be rolled out across industries, it is clear that its promise has fallen flat. The technology has been absorbed by the very powers it was meant to disrupt, and the result is a further entrenchment of class inequality. Policymakers must now intervene to address this growing wealth gap or risk allowing AI to continue being used as a tool for corporate profit-making at the expense of workers.
Reader Views
- RVRohan V. · home roaster
The narrative that AI is a class-neutral force is finally crumbling under its own weight. What's striking, though, is how the tech has allowed corporations to sidestep the most contentious aspects of productivity and efficiency. By framing their cost-cutting as an "AI-driven imperative," companies have deftly shifted blame away from their own labor practices. The crux lies in the power dynamics, not AI itself – this technology merely provides a convenient smokescreen for corporations to continue exploiting cheap labor and suppressing wages.
- TCThe Cafe Desk · editorial
The AI hype has given way to class betrayal. While companies tout their tech as a game-changer, they're using it to pad profits while holding wages flat. What's often overlooked is how this dynamic is affecting job mobility. With raises stagnant in AI-exposed sectors, workers are finding themselves stuck in low-wage positions with limited career advancement opportunities. This isn't just a matter of stagnant pay; it's about the loss of social mobility and the perpetuation of class inequality through technological means.
- BOBeth O. · barista trainer
"The real travesty here isn't that AI has failed to deliver on its promises of class disruption – it's that corporations were willing to use it as a Trojan horse for price gouging and wage stagnation all along. What's often overlooked is how the 'job displacement' narrative serves as a smokescreen for the more insidious reality: that AI is being leveraged to further entrench income inequality, not dismantle it. As we move forward with AI development, we need to re-examine who benefits from these technological advancements and hold corporations accountable for their true intentions."