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AI Layoff Trap - a game theory paper from UPenn + Boston University, indicating that AI layoffs can collapse the economy
(media.piefed.zip)
paper link: [2603.20617] The AI Layoff Trap
It goes deeper than that.
AI replaces entry level workers, but AI is less productive than even moderately experienced workers, so it actively harms whatever firms utilize it because they don't have entry level workers to become experienced. It's entirely parasitic. AI isn't good at its job, it's merely good enough. Replace enough of the economy with "good enough" and suddenly it isn't good enough anymore.