Cross-posted from Substack.

EDIT 12/04/2025: The last two paragraphs were logically inconsistent and overly strong. I’ve updated the final paragraph to fix the issue and better reflect my position after more thought. Thank you to Julian for pointing this out.

AI job displacement will affect young people first, disrupting the usual succession of power and locking the next generation out of our institutions. I’m coining the term youth lockout to describe this phenomenon.

Youth Lockout

We are on track to build AI agents that can independently perform valuable intellectual labour. These agents will directly compete with human workers for roles in the labour market, often offering services at lower cost and greater speeds.

In historical cases of automation, such as the industrial revolution, automation reduced the number of human jobs in some industries but created enough new opportunities that overall demand for labour went up. AI automation will be very different from these examples because AI is a much more general-purpose technology. With time, AI will likely perform all economic tasks at human or superhuman levels, meaning any new firm or industry will be able to use AI labour instead of human labour. If this becomes true, then the long-term equilibrium is an almost-fully-automated economy, save for specific areas where a human touch remains essential, like childcare.

In the short-term, however, the transition to AI labour will happen in stages as capabilities improve unevenly. Moreover, organisations will be slow to fire existing employees, even after their work can be automated, since mass layoffs are disruptive, unpopular, and often illegal.

A hiring freeze, on the other hand, is much easier to implement and saves the organisation money as hiring is expensive. The process of screening CVs, interviewing candidates, and performing work trials takes up dozens of hours of employee time, while hiring entry-level employees is even more costly as inexperienced hires must be extensively trained before becoming productive.

With AI labour available as a substitute for this expensive process, companies will therefore reduce their hiring of new employees, or even stop hiring entirely.

There are already signs of reduced hiring in AI early-adopter industries. In tech for example, the CEO of IBM said in 2023 it would stop hiring for roles that could be done b...

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