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How Does Artificial Intelligence Affect Americans’ Incomes?

New research conducted by Challenger, Gray & Christmas claims that 80,089 jobs cut were announced by US-based employers in May 2023. Their data also shows that about 4,000 or 5% of these occupations could be replaced by artificial intelligence (AI). This makes it the seventh highest factor for job losses. Unfortunately, this cannot but affect the national income.

Our team of experts conducted a comprehensive analysis and studied what jobs are the most exposed to AI, what impact artificial intelligence has already had on Americans’ incomes, and how this situation may change in the future.

What Are The Main Mechanisms of AI Impact on Americans’ Income?

The rise of AI has already resulted in a shift in the American workforce. It creates a foundation for changes in people’s income and opportunities. AI’s influence is revealed through several mechanisms, each with its consequences for individuals and the nation as a whole. Here’s a look at the key ones.

Job Displacement

AI can easily complete multiple tasks once performed by human hands. Manufacturing, transportation, and administrative roles are particularly vulnerable, as most repetitive tasks are already made by algorithms and robots. This displacement can lead to job losses, income insecurity, and permanent anxiety for those whose livelihoods are at risk.

Skill Shift

Although AI acts as a job destroyer in some spheres, it also creates modern ones. New industries that arise thanks to AI demand skills that are completely different from those required in the past. Data analysis, machine learning, and AI development itself become the new jobs of the future. They require analytical skills, computational fluency, and a deep understanding of the algorithmic mind. Thus, AI provides an opportunity for those willing to adapt and gain new knowledge.

Wage Disparities

The rise of AI could exacerbate existing income inequalities. The people who design, manage, develop, and use AI systems will get significant rewards, while their wages will be inflated by what they create. Those whose jobs are automated may face stagnant or declining wages, further widening this income gap. This trend threatens to create a society stratified by AI literacy, where the benefits accrue unevenly.

Productivity and Growth

Despite the challenges, AI also holds the potential to boost overall economic productivity and growth. By automating tedious tasks and optimizing processes, AI can free up human resources that can contribute to innovation. This, in turn, could lead to increased national output and positively affect the US economy.

However, the way these benefits will be shared remains a crucial question. The government should think about proper regulations to make sure AI innovations not only enrich the privileged few.

What Jobs Are The Most Exposed to AI?

If previously technology tended to replace manual and physical labor, AI poses a threat to human brain power. The research conducted by the Pew Research Center says that budget analysts, data entry keyers, tax preparers, technical writers, and web developers are among the jobs with high exposure to AI. At the same time, barbers, firefighters, child care workers, and dishwashers were named the jobs with the lowest exposure. This shows that AI can’t replace those who take care of others. Researchers also determined that about 19% of Americans had the most exposed to AI jobs in 2022. Here are shares of workers who are most likely to be affected by AI in their jobs.

% of us workers in the most exposed to aI jobs in 2022

Researchers from the University of Pennsylvania and OpenAI found some educated white-collar workers who earn up to $80,000 a year are the most likely to be affected by workforce automation. They name mathematicians, accountants, and writers among the most exposed to AI jobs.

According to an MIT and Boston University report, the automobile industry is the country most affected by AI and robots area. Notably, Michigan has the highest concentration of robots in the workplace.

A study by the McKinsey Global Institute reports that by 2030, at least 14% of employees globally could need to change their occupations due to digitization, robotics, and AI advancements. It named low-skilled and routine jobs among the most susceptible to automation.

However, the Nexford University research shows that AI could replace a quarter of work tasks in the US and Europe but may also create new jobs and cause a productivity boom.

How Has Americans’ Income Changed in Recent Years in the Most Exposed Spheres?

Even though AI is changing the labor market, its impact on Americans’ incomes in vulnerable areas is not yet visible. Below is a wage comparison for 2021 and 2022 based on the May 2022 National Occupational Employment and Wage Estimates provided by the US Bureau of Labor and Statistics, Employment and Earnings by Occupation for 2021 provided by the US Department of Labor, and the annual average CPI.

JobAnnual mean wage 2021Real wage 2021 (adjusted for inflation)Annual mean wage 2022Real wage change (%)
Automotive technicians and repairers$44,015$47,537$50,170+5.54
Budget analyst$77,987$84,987$87,680+3.17
Data entry workers$37,328$40,315$39,450-2.14
Mathematical science occupations$89,573$96,741$108,620+12.3
Tax preparers$56,182$60,678$59,100-2.6
Technical writer$79,905$86,299$86,760+0.5
Web developer$79,457$85,815$124,940+45.6

As we can see, most professions reviewed experienced a real wage increase in 2022. At the same time, these occupations may be subject to layoffs. This means that despite income growth, people may lose their jobs. Also, job entry level increases.

6 Times AI Replaced Humans and Took Their Jobs

Although income statistics show that the serious impact of AI on Americans’ earnings has not yet been traced, history already knows real cases of mass layoffs and AI replacement. Here are 6 high-profile examples.

  1. Google. Google laid off around 12,000 employees in 2023, making it the biggest job cut in the company’s history. The company said it was its way to focus on artificial intelligence and cost-efficient operation.
  2. Amazon. Amazon cut hundreds of jobs in its Alexa division as it plows more resources into AI. Previously, Amazon’s gaming and music teams were also laid off and added to the 27,000 employees the company already made redundant.
  3. Disney. Disney announced massive layoffs have hit its media and communications divisions. A total of 7,000 employees are expected to lose their jobs. This way, the company will be able to cut around $5.5 billion in costs.
  4. Warner Bros. The company’s CEO David Zaslav said he was forced to lay off hundreds as a measure of WarnerMedia’s restructuring for the future that had never been made before.
  5. Discord. Discord said it was trimming 17% of its staff. CEO Jason Citron said it was meant to improve the way the company works and bring more agility.
  6. Unity Software. The maker of technology used in popular mobile games said it was cutting 25% of its workforce, which is about 1,800 jobs.

More than that, the data compiled by Layoffs.fyi shows there have been more than 5,500 tech employees who have lost their jobs less than two weeks into 2024. All this suggests that we face a real-time problem that may leave thousands of people without their jobs in the blink of an eye.

What Are The Predictions of The US Bureau of Labor and Statistics?

The US Bureau of Labor and Statistics (BLS) provided occupational employment projections for 2022-2032 to highlight the fastest growing overall jobs. Wind turbine service technicians (+45%), nurse practitioners (+45%), data scientists (+35%), statisticians (+32%), and information security analysts (+32%) make up their top 5. Home health and personal care aides (+22%) and software developers (+26%) were named the occupations with the most new jobs. 

BLS also predicts translators and interpreters will grow by 20% by 2031. At the same time, the bureau estimates customer service representatives will decline by 4% over the next 10 years, while technical writers will grow by 6%. Finally, the projection says that data entry clerks will lose 5,200 positions over the next decade.

How Will the AI Exposure Affect the US Economy?

According to the paper—Does the U.S. Tax Code Favor Automation by Daron Acemoglu and Andrea Manera of MIT and Pascual Restrepo of Boston University, the tax treatment of investments in robots and software is the key factor that results in too much automation. This destroys jobs while only marginally improving efficiency.

All these come with dubious consequences for the US economy. Job losses and lower incomes will not only influence the people affected. First, it will reduce tax revenues, as the state encourages companies to invest in technology by offering various tax benefits. The research conducted by the Brookings Institution shows that while labor taxes stand above 28.5%, the effective tax rate on capital invested in equipment and software has declined to about 5%. 

AI exposure can also greatly affect the unemployment rate and worsen the Americans’ standard of living. However, we can also say that these negative effects will be temporary. The labor market will change, and the new professions related to AI and its servicing will appear. This will increase the demand for certain jobs. Unfortunately, not all employees who could potentially lose their jobs due to AI intervention will be able to quickly retrain and find a place in this new system.

What We Can Do – Potential Mitigation Strategies

While AI’s impact on income presents considerable challenges, it’s important to remember that technology doesn’t operate in a vacuum. Proactive policy interventions and initiatives can mitigate the negative consequences and ensure everyone surfs the AI wave, not just a select few. Here are some potential strategies:

Education and Retraining Programs. The key to navigating the AI revolution lies in education and skills development. We need robust programs that equip workers with the digital literacy, data analysis, and critical thinking skills required in the new AI-driven economy. This includes targeted support for displaced workers, providing them with opportunities to reskill and re-enter the workforce in relevant fields.

Social Safety Nets. The move to an AI-powered economy requires a strong social safety net that protects those most vulnerable to job losses and income insecurity. This might involve expanding unemployment benefits, creating guaranteed minimum income programs, and enhancing the accessibility of affordable healthcare and childcare. These safety nets would provide a critical buffer while individuals navigate the retraining process and find new opportunities.

Income Redistribution Policies. As AI can potentially result in wealth inequality, progressive taxation, and other income redistribution strategies become crucial. By ensuring a fairer distribution of the economic gains generated by AI, we can bridge the gap between those who thrive and those who struggle in the new system. This could involve measures like higher taxes on wealth and corporations, coupled with increased investments in social programs and infrastructure.

Investment in Complementary Skills. It’s important to recognize that AI’s greatest strengths lie in areas where it complements human capabilities, not replaces them. Fostering creativity, critical thinking, emotional intelligence, and social skills becomes paramount in the age of AI. This means investing in education, promoting collaboration between humans and machines, and nurturing skills that cannot be easily replicated by algorithms.

By embracing these mitigation strategies, we can turn the potential pitfalls of AI into opportunities. The path forward lies in proactive planning, innovative social programs, and a commitment to ensuring that the benefits of AI are not confined to the privileged few but reach all corners of society.


Although AI is impacting the job market and causing massive layoffs at companies ranging from Google to Warner Bros., its impact on American incomes has not yet been particularly noticeable. However, AI and machine learning can lead to a decline in wages for workers in affected industries, as well as income inequality due to the displacement of workers by automation.

At the same time, AI and machine learning can boost productivity and economic growth by increasing efficiency and reducing costs. Management needs to see and understand workers as a key resource. Thus, their training should be a priority. Employees also need to have the right to decide how technologies will be used. This voice is critical not only for resisting excessive emphasis on labor cost-cutting and automation. It is also essential because workers are usually more aware of the parts of their jobs that would benefit from automation.


BadCredify’s team of experts conducted the research based on government data, industry experts, and original research from other reputable publications. Specific sources for this article include:

  1. May 2023 Layoffs Jump on Tech, Retail, Auto; YTD Hiring Lowest Since 2016” by Challenger, Gray & Christmas Inc.
  2. “Which U.S. Workers Are More Exposed to AI on Their Jobs?” by Pew Research Center
  3. GPTs are GPTs: An Early Look at the Labor Market Impact Potential of Large Language” Models by Tyna Eloundou, Sam Manning, Pamela Mishkin, and Daniel Rock form the University of Pennsylvania, in collaboration with OpenAI
  4. How many jobs do robots really replace?” by MIT and Boston University
  5. The Impact of AI and Machine Learning on Job Displacement and Employment Opportunities” by McKinsey Global Institute
  6. How Will Artificial Intelligence Affect Jobs 2024-2030” by Nexford University research
  7. May 2022 National Occupational Employment and Wage Estimates by the US Bureau of Labor and Statistics
  8. Employment and Earnings by Occupation for 2021 by the US Department of Labor
  9. Summary of annual and semi-annual indexes by the US Bureau of Labor and Statistics
  10. Data provided by Layoffs.fyiDoes the U.S. Tax Code Favor Automation by Daron Acemoglu and Andrea Manera of MIT and Pascual Restrepo of Boston University