Labour’s AI tsar warns middle classes face biggest hit

TL;DR:

• Simon Johnson, the Nobel Prize-winning economist chairing Sir Keir Starmer’s AI Economics Institute, says AI’s main pressure will fall on middle-income, middle-skill jobs.
• He reports chief executives privately telling him they could manage without 10% to 20% of their workers, and warns the job market could “get worse, very quickly”.
• Johnson remains hopeful for the UK if policymakers act, pointing to his family’s experience of Sheffield’s deindustrialisation as the cost of leaving markets to self-correct.

The economist advising the government on AI’s labour-market risks has warned that middle-class workers will bear the brunt of the technology’s disruption. Simon Johnson, who chairs the AI Economics Institute, told The Telegraph the main problem is “a lot of pressure on middle-class, middle-income, middle-skill jobs” — mostly white-collar roles, with some blue-collar work affected too.

Johnson does not forecast mass unemployment in the UK or US. His concern is displacement: 10% to 20% of the labour force pushed out of decently paid work and down to “wherever they can scramble to make a living”, with inequality rising sharply on the default path. Chief executives, he says, are already telling him privately they could operate without a tenth to a fifth of their staff.

The scale of the exposure is contested but large. The Institute for Public Policy Research has put as many as eight million UK roles at risk without government intervention, while City Hall analysis suggests one in five London jobs is highly vulnerable.

The Sheffield lesson

Johnson’s prescription draws on his own family history in Sheffield, where his grandfather ran a steel mill and the surrounding industry was wiped out by deindustrialisation. “You can’t say, ‘Oh, the market will take care of it’, because the market took care of Sheffield,” he said. He wants active policy that works with the private sector, warning against both laissez-faire drift and blunt fixes such as taxing machines — and cautions that wealth taxes to replace eroding income-tax receipts must not drive entrepreneurs abroad.

The intervention follows the open letter from Nobel laureates and 200 experts demanding urgent action on AI’s economic effects — Johnson shares his co-laureate Daron Acemoglu’s fear that a permanent underclass could emerge within 25 years.

Looking forward

Johnson insists the UK can come out ahead, with higher productivity and income, if it follows the evidence. With Andy Burnham reportedly preparing to reshape AI policy around job protection, the institute’s recommendations may land in a rather different political climate from the one that commissioned them.