AI job disruption may be compounded because nearly 75% don’t apply for unemployment benefits

Source Domain: fortune.com

It’s been a tough year for tech workers as the industry has been hit a record number of layoffs. Nearly 120,000 tech workers have been let go this year as companies slim down their staffs in the name of AI productivity. As consensus grows in Silicon Valley and Wall Street about an incoming artificial intelligence “job apocalypse,” there are few answers on what comes next.

OpenAI CEO Sam Altman and Anthropic CEO Dario Amodei have recently tempered their previous apocalyptic predictions for the future of white-collar work, but Wall Street and their fellow Silicon Valley CEOs are holding fast to their predictions that AI will reshape how people work forever.

Regardless of which predictions are correct in the long term, AI layoffs are creating looming economic uncertainty for newly unemployed workers in a volatile job market. Many could turn to unemployment insurance benefits designed to tide workers over while they find new work, and Amodei has repeatedly called on the government to prepare for high unemployment.

But in 2022, nearly 75% of unemployed people didn’t even apply, according to the Bureau of Labor Statistics (BLS). Experts who spoke to Fortune say that number is still accurate today.

Over the past year, new unemployment insurance claims have held at a relatively stable range of 200,000 and 250,000 claims per week, even as the unemployment rate has held steady at 4.3% the past three months, signaling that many workers are not taking advantage of a key safety-net measure.

Why people don’t apply for unemployment benefits

According to a 2023 BLS survey of 2022 unemployment filings, 55% of people didn’t apply because they didn’t believe they were eligible for benefits. Potential eligibility issues included their work not being covered by unemployment insurance, voluntary departures from their job, termination for misconduct, insufficient past work, and previously exhausting benefits.

Meanwhile, another 17%…

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