The rise of artificial intelligence has been surrounded by plenty of doom and gloom. Debates about AI inevitably shift to its risk of replacing professionals and even entire industries—from doctors and radiologists to Tom Cruise’s “Maverick” in Top Gun.
America’s AI-related anxieties are even uniting Democrats and Republicans on Capitol Hill. Senate Majority Leader Chuck Schumer recently revealed a bipartisan plan to tackle AI and protect traditional jobs.
While there are still many uncertainties about AI’s impact, there is room for positivity when it comes to the economics of flourishing. AI’s current iteration of Large Language Models can strengthen the American Dream by increasing social mobility and decreasing inequality. This potential to foster flourishing should be at the front and center of today’s policymaking discussions.
Starting with the glass half-full, AI has already improved education and learning, providing unprecedented access to knowledge. Besides just access to information, AI algorithms offer personalized learning experiences tailored to individual needs, irrespective of geographic location or socioeconomic background.
Education leads to employment. While concerns about AI’s impact on employment persist, there are still more job openings than people looking for work. Labor force participation remains very low, showing that more people can and should join the labor market.
The danger of AI automating our jobs is far into the future. Historical evidence suggests that new technologies often complement human capabilities rather than replace them entirely. AI LLMs can augment human intelligence, improving productivity and efficiency across various industries. As a result, individuals can transition into more complex and rewarding roles that require higher-order thinking, creativity, and emotional intelligence. For instance, “new-collar jobs” are on the rise, with AI and LLM helping develop skills through non-traditional education paths. This in turn leads to other types of jobs and even new employment categories.
AI can also lower the barriers to entrepreneurship and innovation. AI-powered tools enable entrepreneurs to analyze vast amounts of data, identify market trends, and make informed decisions, leveling the playing field for startups and smaller enterprises. This fosters innovation and drives economic growth, ultimately leading to job creation across various sectors. AI can kickstart an entrepreneurial revolution and create new jobs, which still represent the most important source of income for people in the future.
In many parts of the world, access to essential services such as healthcare, legal advice, and financial planning is limited, particularly for marginalized communities. Fortunately, AI has the potential to bridge this gap by offering virtual assistance and expert advice. Indeed, AI tools will potentially contribute trillions of dollars to the global economy by 2030.
Flourishing also relies on a wide range of other factors that AI cannot replace or replicate. Some of the most important literature in the social mobility field has shown the importance of family structure and parental engagement at a young age. The work of Nobel laureate James Heckman, along with various co-authors, suggests parental engagement and early childhood education are crucial in improving mobility and reducing inequality. Disparities in socioeconomic outcomes during teenage years and later in life can be traced back to early childhood.
Two-parent households lead to more parental engagement, such as reading to children and playing with them. Mellisa Kearney calls it the “two-parent privilege.” Lenore Skenazy also points to the importance of free play in developing capabilities at an early age. AI may help parents and kids, but it can’t replicate love.
AI aside, policymakers should also identify other opportunities to boost economic prosperity, especially in terms of entrepreneurship. One essential, bipartisan issue is occupational licensing, which imposes barriers on certain occupations. If those barriers aren’t removed, it won’t matter whether different people learn new skills through AI, when they are not able to act on those new skills. Burdensome occupational licenses have been shown to be detrimental to upward social mobility, increasing income inequality.
Another issue crucial to social mobility is social capital, community, and connectedness. AI may help address it by making people more productive at work and helping them gain free time that they can use to volunteer in their communities or spend it with their families. But, at the end of the day, building community is a human and social endeavor by nature.
Human psychology still matters. If people don’t feel like they have the agency to overcome the barriers in their way, no amount of AI will push them to climb the income ladder. The same goes for the importance of meaning and purpose in their lives. If these are missing, no amount of AI tools will create them.
AI will be a powerful catalyst for social mobility in the 21st century—but let’s not overstate its potential. AI is called “artificial” for a reason. There are many other foundational pillars to flourishing, and we ignore those at our peril.