The United States faces an "AI shock" akin to the "China shock," with artificial intelligence poised to destroy jobs at a faster rate and wider scope than current government assistance can address. While AI promises significant productivity gains—a McKinsey study estimated $2.9 trillion to $6.4 trillion in new annual economic value for the U.S.
by 2030—it is disproportionately affecting young, more educated workers across all industries, unlike the China shock which primarily impacted older, less educated manufacturing workers. Companies like Amazon, Verizon, and Bank of America have already announced significant AI-related job cuts, totaling 1.2 million in 2025. Policymakers must implement new labor-market supports, such as tax credits for skills training and wage-loss insurance, funded by a new tax on equity-related compensation, to mitigate political turmoil and ensure AI's benefits are broadly shared.
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