AI Could Turn Democrats Into the New Welfare Class

The New York Times’s jeremiad last week about AI’s impact on entry-level jobs — particularly in tech — merely underscores trends that have been clear for well over a year. Silicon Valley firms have been slashing jobs despite record profits, and since 2022 California has actually shed positions in the information sector. An astonishing 82% of millennials fear AI will drive down their compensation. They have every reason to be concerned.

This trend could create a political storm of massive proportions. In recent decades the Democratic Party has been able to compensate for its ebbing support among blue-collar workers by winning over college-trained professionals. Almost all college-educated professionals — excluding those in the military and airline pilots — lean overwhelmingly Democratic. College degrees, particularly graduate ones, are among the strongest indicators of a Leftist tilt, yet are becoming ever less salient in terms of garnering higher salaries.

This base is under increased assault, as universities are forced to confront declining enrollments and ever less public approval. At the same time, the supply of entry-level graduate jobs at major firms such as Salesforce, Meta, Amazon and Lyft are dwindling due to the introduction of AI. Google, most notably, has recently laid off 12,000 workers — a number that is expected to grow to 30,000.

The damage may be even greater at the grassroots level. Within months of AI’s emergence, freelance work in software declined markedly, along with pay. In a survey earlier this month, two-thirds of business leaders suggested that ChatGPT will lead to large layoffs of white-collar workers over the next five years. Already, new AI programmes are allowing software firms to do without lower-level programmers, particularly new hires.

To be sure, Americans without college degrees are not immune to the effects of AI. But in the near term, it’s college professors, administrators, lawyers, accountants, and psychologists — largely Democratic-leaning professionals — who are increasingly in the crosshairs. Even Hollywood, a traditional Democratic stronghold, faces mounting threats: as entertainment becomes more digitised, layoffs have accelerated, and studios find it far easier to shift production to lower-cost regions such as Eastern Europe.

Who wins here? It will be those professions that use AI to build things, such as drones, spaceships and robots. These firms are not as heavily concentrated in places like Silicon Valley, which has largely embraced software, social media and consumer services, leaving its once proud industrial heritage behind.

This is a huge opportunity for Texas in particular, since the state has always been oriented towards tangible engineering. Texas may have missed the social media boom, but its industrial legacy has left it well placed to dominate the “deep tech” builder space. This field often requires reliable and affordable energy — something not easy to get in states such as California or New York.

Beyond elite AI engineers, the other likely winners may be those in physical, hands-on jobs — mechanics or oil rig workers — that are much harder to automate. AI pioneer Rony Abovitz told me that the big winner in the coming years will be the “sophisticated, technically capable blue-collar worker”. Young people might be better off ignoring Joe Biden’s famous advice to “learn to code” and instead consider trade schools which teach practical, in-demand skills.

Read the rest of this piece at: UnHerd.

Joel Kotkin is the author of The Coming of Neo-Feudalism: A Warning to the Global Middle Class. He is the Roger Hobbs Presidential Fellow in Urban Futures at Chapman University and and directs the Center for Demographics and Policy there. He is Senior Research Fellow at the Civitas Institute at the University of Texas in Austin. Learn more at joelkotkin.com and follow him on Twitter @joelkotkin.

Photo: Province of British Columbia, via Flickr under CC 2.0 License.