Government Won’t Help the AI Job Transition

By Phil Gramm and Michael Solon. Excerpts:

"our ability to generate and sustain higher living standards, has come in part from developing new technology and benefiting from being the first to implement it, and in part from our ability to move labor and capital dislocated by the wave of creative destruction efficiently into higher and better uses."

"On average, every month since 2000 some 5.1 million American workers were separated from their jobs or were laid off and more than 5.2 million new jobs were created. In 2025, three times as many Americans changed jobs as did workers in the European Union."

"most industrial subsidies in China are used to sustain noncompetitive businesses."

 "The 1962 Trade Adjustment Assistance program, which provided training, job-search and income support to workers harmed by foreign trade, has provided benefits to more than five million people. Numerous public and private studies have highlighted TAA’s failure by comparing the transition of TAA beneficiaries with workers who lost their jobs during the same period but didn’t receive TAA."

"TAA is insufficient in supporting dislocated workers to re-enter the labor market. It didn’t improve earnings. Benefits were used mostly as income support, and nonparticipants were re-employed faster than those who participated in TAA."

"for every week of extra benefits [of unemployment insurance], the covered worker was unemployed for as much as an extra day."

"many workers find jobs in the weeks immediately before and after their benefits run out."

"on average the longer unemployment insurance is provided, the longer the worker will remain unemployed."

"as the annual federal welfare spending surged to more than $70,000 per poverty family, labor-force participation among able-bodied persons in the lowest income quintile collapsed to 36%, from 68% in 1967."