OPINION:
Many people are fearful about how artificial intelligence will affect the labor market. Some predict double-digit unemployment with depressionlike headline numbers.
Others forecast job losses with absurdly wide ranges of 5% to 47%. Imagine the reaction from the same sort of range for a weather forecast.
It doesn’t make much sense to engage in this kind of prognostication or give the purveyors of such foolishness any attention.
So far, the data doesn’t seem to align with the predictions of the doomsayers. In 2024, AI created more jobs than it displaced. Businesses are taking a cautious and thoughtful approach to AI adoption.
It’s challenging work for state legislators to understand the costs and benefits of new laws. Tight state budgets mean states often lack the resources to hire the staff needed to perform careful review of regulations so they are balancing prosperity and safety.
Here’s where AI can help. A small investment in an independent regulatory review agency staffed with an economist can have a big positive impact on a state’s residents. They wouldn’t have to reinvent the wheel. Virginia’s Office of Regulatory Management provides an excellent blueprint. Through the office’s efforts, more than a quarter of unnecessary regulations were eliminated. Estimates suggest this has saved Virginia taxpayers more than $1.2 billion annually.
Regulations are a costly drag on economic growth. A recent working paper finds that a 10% increase in the number of regulatory restrictions reduces gross domestic product by slightly more than one-third of a percentage point in U.S. states. A fraction of a percentage point can make a massive difference in people’s prosperity and job prospects.
I don’t suggest that policymakers place blind trust in AI recommendations. That would be a mistake. Yet complementing an independent regulatory review office with AI can supercharge the impact of a small investment.
Doomsayers will continue to spout nonsense regarding the prospects for an AI apocalypse. States should ignore these attention-seekers.
EDWARD TIMMONS
Vice president of policy, the Archbridge Institute
Washington
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