685. How to Survive the A.I. Shock

**Stephen Dubner** (0:04)
All right, let's start with a statistic and then a few questions. Here is the statistic. Roughly 60% of the jobs that people do today did not exist in 1940 Now for the questions. Five years from now, do you think you'll have the same job you have today? Or do you think that maybe your job will be replaced by AI?
And if so, what's your plan?
These are increasingly common and urgent questions, so I wanted to hear from someone who is looking for answers.

**Gina Raimondo** (0:40)
What I'm fundamentally trying to figure out, working with companies and governors, is how do we implement AI without triggering giant job losses?

**Stephen Dubner** (0:51)
Gina Raimondo was Commerce Secretary in the Biden administration. One of her signature projects was the CHIPS Act, which we'll hear about later. Before running the Commerce Department, she was a two-term governor of Rhode Island, and now she is leading an unusual startup called Raise Us, which is what?

**Gina Raimondo** (1:10)
Raise Us is a nonprofit, non-political organization dedicated to making sure that the US can both lead in the technology of AI, but also make sure that workers are brought along to an AI economy.

**Stephen Dubner** (1:25)
For anyone who's been around for a while, this may sound like a familiar song. Think back to what economists now call the China shock, the offshoring of millions of American manufacturing jobs, a loss that can still be felt in our economy and our politics.
And now with the AI boom?

**Gina Raimondo** (1:45)
I'm saying to these companies, come on, let's get ahead of it and be part of the solution and have an intentional transition.

**Stephen Dubner** (1:54)
So what would this transition look like? Will there be job guarantees or wage guarantees? How about a universal basic income?

**Gina Raimondo** (2:02)
We're opposed to universal basic income.
And we are opposed to anything that looks and smells like a path towards socialism. I don't think job guarantees or wage guarantees are the way to go. I think that's too heavy handed and the market should set those things. I will say, you didn't probably have me on to talk about this, but you have me on, so I'm going to talk about it.

**Stephen Dubner** (2:28)
It's your microphone. I can't stop you.

**Gina Raimondo** (2:30)
I am strongly of the view that we need to do a better job tempering the way capitalism is playing out in America if we want to preserve capitalism, which I think we want to do.

**Stephen Dubner** (2:46)
If that makes Raimondo sound like someone who might like to be president someday, well, we can talk about that later too. Today on Freakonomics Radio, how to survive the AI shock with Gina Raimondo.

**SPEAKER_3** (3:12)
This is Freakonomics Radio, the podcast that explores the hidden side of everything, with your host, Stephen Dubner.

**Stephen Dubner** (3:28)
Gina Raimondo likes to refer to herself as a recovering politician, which seems to be a popular diagnosis these days. She is a solidly centrist Democrat, known for playing well with Republicans.
Her co-chair at the new nonprofit Raise Us is another recovering politician, the Republican Eric Holcomb, former governor of Indiana. Here is a bit of background on Raimondo. She studied economics as an undergrad, Harvard, then got a PhD in sociology, Oxford, and a law degree at Yale.
Before getting into politics, she co-founded the only venture capital firm in Rhode Island. Raimondo has come to see economic instability as perhaps the biggest driver of political instability.

**Gina Raimondo** (4:14)
I think everything that we hate about our politics now, more divisive, more partisan, more violent, less rational, people don't actually want to solve problems, they want to fight about them.
A lot of that stems from, I believe, this worsening inequality or economic insecurity. When people are insecure and feel powerless to change things, it's only natural that you would get angry, pissed off, and it bubbles over.

**Stephen Dubner** (4:49)
I see that corporate profits have been rising strongly, and this has been going on for some time. This predates the AI boom. But the share of national income going to workers is at, or maybe near, but I think at a record low.
I'm curious what you see as the causes of this big gap between wages and corporate profits, and I especially want to know what you see as the consequences. Like, are we already living in the consequences, and do they continue to worsen?

**Gina Raimondo** (5:16)
I think they will continue to worsen unless we do something about it. People and companies don't change out of the goodness of their heart. No one does. We all need to have the right guardrails and incentives. You can ask economists who will know more than I do about why the vast majority of the gains have gone to capital and not labor in the past 20, 30 years.