Silicon Valley may summon a permanent underclass through its own market logic
Most people I know in the A.I. industry think the median person is screwed, and they have no idea what to do about it. I live in San Francisco, among the young researchers earning million-dollar salaries and the start-up founders competing to build the next unicorn. While Silicon Valley has long warned about the risk of rogue A.I., it has recently woken up to a more mundane nightmare: one in which many ordinary people lose their economic leverage as their jobs are automated away.
Whether you talk with engineers, venture capitalists, founders or managers, or with doomers, accelerationists, lefties or libertarians, the so-called San Francisco consensus on the impact of A.I. for workers is bleak. Many are convinced that advanced A.I. will soon surpass human capabilities. This would produce tremendous growth and scientific achievement, but it would also displace millions of jobs as fewer humans are needed to make the economy run. The technology will depress economic mobility and exacerbate inequality, while ferrying power and wealth to the A.I. companies and the existing owners of capital.
This premonition is not a well-kept secret. It shows up in the Anthropic chief executive Dario Amodei’s public pronouncements about a white-collar blood bath and in the disappearing-message Signal chats in which tech executives boast about the roles they plan to automate. You feel it in the fretting of recent college graduates who apply to hundreds of jobs without landing a single interview. You hear it in the gallows humor of the software engineers who joke about replacing themselves with Claude Code.
Some even believe that artificial general intelligence, or A.G.I., will create a permanent underclass. In the United States, the term “underclass” gained currency in the 1960s to describe the factory workers left behind by the postwar automation boom. Today, it has become repopularized as a viral term for a theory that posits that people have a limited window of time to build wealth before A.I. and robotics are advanced enough to fully replace human labor. At that point, everyone will get frozen in their current class positions: The rich will be able to deploy superintelligent machines to do their bidding, and everyone else will be rendered useless and unemployable, left to live off welfare scraps.
Hyperbolic? Perhaps. But even those who view the idea of a permanent underclass as overblown tell me that the meme contains a kernel of truth. Yash Kadadi, a 23-year-old start-up founder and Stanford dropout, summarized the sentiment of his peers: “There’s only a matter of time before GPT-7 comes out and eats all software and you can no longer build a software company. Or the best version of Tesla Optimus comes out,” and can perform all physical labor as well. In that world, this year is a human’s “last chance to be a part of the innovation.”
Most economists and A.I. experts do not expect this scenario, but the persistence of the permanent underclass idea should concern all of us. First, because it signals how much collateral damage the A.I. companies will tolerate en route to A.G.I. And second, because the production of a social underclass is a policy choice. Instead of waiting for impact, we need to think seriously — now — about how we plan to support workers through A.I. disruption. [Continue reading…]