The coauthor of a viral research report says blue-collar jobs won't be safe from an AI-driven recession (www.businessinsider.com)

A recent AI research paper co-authored by Alap Shah, CEO of Littlebird.ai, has stirred concern within the financial and labor markets, leading to a global stock sell-off. The study forecasts a potential recession driven by significant white-collar job losses as AI technologies become more prevalent. Shah emphasizes that the ripple effects of this job displacement will not only impact white-collar workers but also threaten the stability of blue-collar jobs. He argues that if a portion of the workforce is laid off, the resulting overflow into blue-collar roles and the gig economy could exert pressure on wages and employment opportunities across the entire labor market. The implications of this research are profound. It paints a picture of an economy increasingly reliant on white-collar productivity growth, suggesting that a swift AI-induced displacement could jeopardize metro housing, mortgage markets, and ultimately lead to a downturn across all sectors. The paper argues that this interconnectedness creates a "daisy chain of correlated bets" that could exacerbate existing economic vulnerabilities, particularly as government spending—which currently supports growth in sectors like health and education—could falter if personal incomes decline. As the AI landscape continues to evolve, these findings challenge the notion that technological advancement will uniformly benefit all sectors of the economy, raising critical questions about the future of work.