{"id":161303,"date":"2025-11-03T23:27:14","date_gmt":"2025-11-03T23:27:14","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/161303\/"},"modified":"2025-11-03T23:27:14","modified_gmt":"2025-11-03T23:27:14","slug":"jobless-profit-boom-has-cemented-a-permanent-payroll-loss-as-ai-displaces-labor-at-faster-rate","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/161303\/","title":{"rendered":"‘Jobless profit boom’ has cemented\u00a0a permanent payroll loss as AI displaces labor at faster rate"},"content":{"rendered":"

Booming corporate earnings and a slumping labor market have been telling very different stories lately, and AI is the likely explanation, according to Chen Zhao<\/a>, chief global strategist at Alpine Macro<\/a>.<\/p>\n

That dichotomy is exemplified in the tech sector, which has seen profits soar while employment has been in a \u201crecession\u201d for three years, he said in a Monday note titled \u201cA Jobless Profit Boom.\u201d<\/p>\n

\u201cWe suspect that job losses in tech have been driven mainly by AI displacement,\u201d Zhao added, pointing to recent cuts at Amazon<\/a>, Meta<\/a> and Salesforce<\/a>. \u201cThese layoffs, however, are happening amid exceptionally strong profit growth in these companies\u2014a significant departure from the past, when job cuts typically followed declining profitability.\u201d<\/p>\n

This jobless profit boom isn\u2019t limited to the tech sector and has quickly become an economy-wide phenomenon, he said.<\/p>\n

In fact, while overall private-sector payrolls have rebounded from the early days of COVID, it is still 5% below where the pre-pandemic trend would have been by this time.<\/p>\n

\u201cIn other words, there has been a permanent loss of jobs since the pandemic crisis, even as corporate profits have surged to record highs,\u201d Zhao said.<\/p>\n

\"\"<\/p>\n

Alpine Macro<\/p>\n

At the same time, productivity has been surging in recent years, and it is currently growing more than twice as fast as it did in the previous decade.<\/p>\n

Zhao thinks AI is the reason and noted the technology is displacing labor at an accelerating pace. But while labor demand is down, aging demographics and President Donald Trump\u2019s immigration crackdown have weakened labor supply as well.<\/p>\n

Those trends have created a new equilibrium that are keeping a lid on unemployment even as hiring stays subdued. <\/p>\n

\u201cUnder normal circumstances, slower labor force growth should weigh on economic growth,\u201d Zhao explained. \u201cHowever, rising productivity has allowed the U.S. economy to produce more output\u2014and higher profits\u2014with fewer workers.\u201d<\/p>\n

The analysis from Alpine Macro, which is part of Oxford Economics, reinforces what computer scientist and Nobel laureate Geoffrey Hinton has been saying about AI\u2019s impact on the labor market<\/a> and the role of companies leading the charge.<\/p>\n

In an\u00a0interview with Bloomberg TV\u2019s\u00a0Wall Street Week<\/a>\u00a0on Friday, he said the obvious way to make money off AI investments, aside from charging fees to use chatbots, is to replace workers with something cheaper.<\/p>\n

Hinton, whose work has earned him a Nobel Prize and the moniker \u201cgodfather of AI,\u201d\u00a0added that while some economists point out previous disruptive technologies created as well as destroyed jobs, it\u2019s not clear to him that AI will do the same.<\/p>\n

\u201cI think the big companies are betting on it causing massive job replacement by AI, because that\u2019s where the big money is going to be,\u201d he warned.<\/p>\n

The remarks\u00a0echo what he said in September<\/a>, when he told the\u00a0Financial Times<\/a>\u00a0that AI will \u201ccreate massive unemployment and a huge rise in profits,\u201d attributing it to the capitalist system.<\/p>\n","protected":false},"excerpt":{"rendered":"Booming corporate earnings and a slumping labor market have been telling very different stories lately, and AI is…\n","protected":false},"author":2,"featured_media":161304,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[174],"tags":[79,179,18,19,17,227,3796,309],"class_list":{"0":"post-161303","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-eire","11":"tag-ie","12":"tag-ireland","13":"tag-jobs","14":"tag-productivity","15":"tag-the-future-of-work"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115488361546450383","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/161303","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=161303"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/161303\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/161304"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=161303"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=161303"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=161303"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}