Rethinking Income in an
AI-Generated Economy

The central argument in this piece is that AI is already weakening the wage labor system that has distributed purchasing power for generations. Firms can raise output without hiring in proportion, so labor demand erodes gradually through smaller teams, slower entry-level hiring, longer job searches, and intensified competition for remaining roles. The paper frames this as a coordination failure in which wages remain the main distribution channel even as more gains flow to owners of capital, platforms, data, and intellectual property, increasing economic insecurity and social strain.

It then proposes three institutional responses and stresses their design trade-offs.