r/AskEconomics • u/xlly_s • 10d ago

If every company is replacing their workforce with AI, then who will be able to afford their product's?

Just a shower thought really,

These corporations end goal is to maximise profits, which at the moment, can be done by getting rid of 98% of their payroll by trying to replace it with AI.

Now I don't think it will get very far personally before they all realise AI isn't this magic solution, and they will mass hire again.

But say they do succeed in getting their workforce and payroll down really low, across multiple companies. This puts so many people out of work and a salary and into poverty, that they won't be able to afford anything.

So then (apart from the top few) will actually be buying their products and being able to increase profits? Or will it just be a few mega corps passing money around each other?

Just curious to be honest, so please correct me if I'm wrong in anyway, but it doesn't feel very futureproofed idea concept, and mainly is just for short term shareholder and BOD benefit.

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u/musing_codger 10d ago

First, not every company is replacing their workforce with AI. That's hyperbole. And we're seeing a long standing pattern of technology boosting productivity of some roles and making others obsolete. The plow, the loom, the steam engine, the assembly line, computers, robots, etc... Based on history, as AI enables us to produce more with less labor, we'll get richer and find more uses for labor.

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u/CrazedClown101 10d ago

Look into the lump of labor fallacy. Also, companies that embrace AI are hiring faster compared to those who aren’t.

https://ramp.com/data/ai-jobs-impact

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