Hicks Commentary: The Real AI Effects Will Be Felt Across Places, Not People

Source Domain: indianacitizen.org

This column was originally published on the Ball State University Center for Business and Economic Research Weekly Commentary blog.

By Michael J. Hicks
May 3, 2026

I’ve spent a lot of time studying the potential labor market effects of artificial intelligence. I
think the greatest uncertainty isn’t what AI will do to workers, but what it will do to
communities.

There is an enormous amount of fearmongering about AI. It is easy to find a smartly written
piece warning of machines on the loose and the end of humanity. But, it is worth remembering
that alarmism about the labor market effects of the power loom caused actual riots in Britain two
centuries ago, leading to trials and executions.

Technology doesn’t replace jobs. It replaces tasks that people perform. If you suppose that
technology kills jobs, you also need to admit that the wheel was probably the biggest job killer in
history. Somehow, we muddled along.

Technology creates new demand in two ways. First, a widely adopted technology reduces costs
for something, say, the transport of goods or the manufacture of clothing. Second, technology
frees up spending power to buy other things, like leisure or health care.

This is a fancy way of saying technology makes us richer.

Labor economists looking at rapid technological change take these things into account. In doing
so, there are few, if any, examples of job-killing technology. Take the most recent example: the
vast productivity growth and imports of manufacturing goods in the U.S.

From 1979, when factory employment peaked, until the last month of the Great Recession, we
lost 7.9 million factory jobs. But, over the same period, we gained 68.4 million jobs. So, for
every factory job we lost, we gained 8.7 non-factory jobs, and inflation-adjusted disposable
income more than doubled.

One cannot objectively examine national labor markets from 1979 to 2009 and conclude that it
was anything but a smooth and advantageous adaptation to technological change. I’d wager we’ll
look back on…

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