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AI-Driven Shifts in the U.S. Labor Market and Economic Power: Can We Expect Progressive Institutional Change?

Author

Listed:
  • Novica Supic
  • Kosta Josifidis

Abstract

This article examines how predictable labor-market changes associated with the diffusion of generative artificial intelligence (Gen-AI) may affect economic power relations and institutional structures in the United States. Previous technological waves in the United States were largely routine- and skill-biased, contributing to job polarization and the concentration of labor-market power among highly educated, well-paid workers in nonroutine cognitive occupations. Gen-AI introduces a qualitatively different dynamic, as its disruptive potential is expected to be strongest precisely in these occupations, reducing the scarcity and exclusivity that underpinned their bargaining power. As technological displacement risks extend to influential segments of the labor force, broader societal support for institutional reforms aimed at redistributing rising economic output amid declining human input may emerge. This development points to the renewed relevance of insights from Original Institutional Economics, particularly regarding the distinction between property and economic power and the conditions under which technological progress may facilitate progressive institutional change.

Suggested Citation

  • Novica Supic & Kosta Josifidis, 2026. "AI-Driven Shifts in the U.S. Labor Market and Economic Power: Can We Expect Progressive Institutional Change?," Journal of Economic Issues, Taylor & Francis Journals, vol. 60(2), pages 406-412, April.
    • Handle: RePEc:mes:jeciss:v:60:y:2026:i:2:p:406-412
    DOI: 10.1080/00213624.2026.2657213
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