Legislative Responses to AI-Induced Job Displacement

States Address the Potential of AI Technologies to Reduce the Workforce

The flip side of AI technology’s economy-boosting potential is the assumption that if AI succeeds as currently imagined, it’ll replace much of today’s workforce. Unsurprisingly, this is a major concern for state lawmakers and their constituents. We’re already seeing headlines of companies using generative AI to replace jobs (e.g., Sports Illustrated and  Duolingo) and while the recent New York Times’ lawsuit against OpenAI is directly about copyright infringement, it’s also a response to the existential threat that AI represents to the journalism industry. Policymakers are again placed in the difficult position of balancing protections for individual workforces against the economic productivity gains promised by AI. So far, state lawmakers have proposed several strategies to address this issue.

In 2023, New York Assemblymember Pat Burke (D) took a broad approach by introducing legislation (NY AB 8179) that would tax companies for every employee displaced due to automation, which could include AI, manufacturing robots, and other technologies. The amount of the tax paid by the employer in the proposed bill would be the equivalent of any taxes or fees that the state or local government would have collected on that replaced employee’s wages. This is an aggressive approach; unsurprisingly, the bill did not make it out of committee in 2023.

Legislation like this arises from the very real fear that new technology will replace human workers, causing massive unemployment. It’s a concern as old as capitalism itself. Economists say it’s more complicated than that. They argue that advances in technology will boost production over time, growing the economic pie for the overall benefit of everyone. But that doesn’t mean that individual jobs won’t be replaced. When was the last time you needed an elevator operator, lamplighter, or telephone switchboard operator?

Proponents of AI argue that in the short term, AI will complement much of today’s modern workforce instead of replacing us outright, helping workers become more productive. They point to a history of fear-mongering about economic ruin every time a transformative technology comes along, yet our economic fortunes have not only survived these past technological waves but have prospered. But is today’s latest technological transformation faster, smarter, and more widely applicable than yesterday’s automated elevators, electric lights, and automated telephone switchboard systems? Is AI different? State lawmakers aren’t waiting to find out.