Asger Risom
Corporate profits are soaring while payrolls stagnate — and experts say artificial intelligence is behind the split.
Corporate profits are soaring while payrolls stagnate — and experts say artificial intelligence is behind the split.
A strange split in the economy
Corporate earnings have reached record highs even as job growth weakens across major industries.
Tech’s three-year employment recession
Amazon, Meta, and Salesforce continue to lay off staff despite booming profits — a reversal of past cycles where job cuts followed downturns.
AI’s invisible layoffs
Analysts believe these cuts are tied directly to automation, with AI replacing human roles faster than any previous technology.
Private-sector jobs lag behind
Overall U.S. employment remains 5% below its pre-pandemic trend, despite years of recovery and rising output.
Productivity surges without people
Labor productivity has more than doubled its growth rate from the 2010s, largely thanks to automation and AI integration.
Profits without payrolls
“Rising productivity has allowed the economy to produce more output — and higher profits — with fewer workers,” said Chen Zhao, chief global strategist at Alpine Macro.
A fragile new balance
Zhao argues that falling labor demand is meeting restricted supply — a mix of aging demographics and reduced immigration under Trump-era policies.
A permanent structural shift
He warns that the U.S. economy has found a new equilibrium: stable growth on paper, but dependent on shrinking payrolls.
Echoes of Hinton’s warning
The trend echoes Nobel laureate Geoffrey Hinton’s view that Big Tech can’t profit from AI without replacing human labor.
The corporate calculus
“The big companies are betting on massive job replacement,” Hinton said. “That’s where the big money is going to be.”
Efficiency or exclusion?
AI is driving record profits and productivity — but at the cost of fewer opportunities and a hollowed-out middle class.
This article is made and published by Asger Risom, who may have used AI in the preparation
