New research indicates artificial intelligence could displace 12% of the U.S. workforce, raising concerns about widespread job losses under the current administration. The findings, detailed in a new “Iceberg Index” from MIT, come as economic anxieties mount among voters heading into the 2026 midterm elections, with a recent Fox News poll showing 76% rating the economy negatively.The report focuses on the growing trend of AI replacing roles previously considered safe, impacting sectors from IT to finance and beyond.
Potential for Significant Job Losses Under Trump AdministrationResearch: AI Could Replace 12% of the Workforce
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While many agree that artificial intelligence will boost economic productivity, the short- and medium-term effects could be devastating. A new index measures the potential for AI to displace human labor in the United States.
The job market is undergoing a significant shift. Tech901, a Memphis-based nonprofit that has spent the last decade training and placing IT professionals, is now seeing a dramatic decline in companies seeking entry-level programmers. “It’s devastating,” says CEO Aaron Lamey, wearing a tie printed with a circuit board design. “We can’t just leave an entire generation behind.” The organization had focused on providing certifications to ease the path to employment for newcomers.
At its Memphis center, a small team of Tech901 instructors train approximately 400 individuals annually, emphasizing practical skills over a traditional academic approach, according to Lamey. “But the golden age of ‘trained on the job’ seems to be over.” Companies are now prioritizing generalists capable of utilizing various digital tools, including AI, to solve problems, rather than specialists. Despite this trend, the two specialist courses offered Thursday evening were well-attended – perhaps aided by the pizza available in the open kitchen.
Voters Increasingly Blame Trump for Economic Concerns
Lamey and his team at Tech901 are witnessing firsthand a trend impacting industries across Tennessee and potentially the broader U.S. economy: the disruptive force of AI and its tools on the labor market. A Stanford University study found that 13% of jobs in affected sectors – including customer service, accounting, and software development – have disappeared since the introduction of ChatGPT in early 2023 due to AI adoption.
The economy is currently in a precarious state, with current growth largely driven by investments from major AI companies in new data centers. However, many feel a sense of decline, uncertainty, and impending crisis. A Fox News poll conducted in mid-November revealed that 76% of voters rated the economy negatively. This sentiment is particularly relevant as the U.S. heads towards a crucial election cycle.
The changes extend beyond IT professions, according to researchers at the Massachusetts Institute of Technology, representing only “the tip of the iceberg,” as detailed in their recent study. The researchers estimate that roughly 12% of all U.S. jobs could currently be performed by artificial intelligence. They’ve termed this measure the “Iceberg Index”, designed to illustrate the theoretical impact of current AI capabilities on employment across IT, finance, healthcare, and other sectors.
Researchers Argue Traditional Indicators Are Insufficient
In a simulation of the entire U.S. labor market, researchers analyzed the jobs of 151 million people, considering 32,000 skills and comparing them to over 13,000 AI tools. The results suggest that millions of jobs could theoretically be automated by AI, potentially saving the economy $1.2 trillion in wages – nearly 12% of total employee compensation.
This figure forms the basis of the Iceberg Index, representing the amount of labor and associated wages that would be eliminated if AI were able to perform all tasks it currently can. However, the actual impact will depend on factors such as corporate strategy, societal acceptance, and government regulations. In other words, just because AI *can* do a job doesn’t mean it *will*, nor does it necessarily mean it will have a negative long-term impact on the labor market.
The researchers explain that traditional indicators like GDP, income, and unemployment rates have shown less than 5% of the potential disruption from AI. They argue that new indices, like their Iceberg Index, are necessary to highlight this emerging factor and recommend their analytical model to policymakers and business leaders for risk assessment and investment decisions.
In the Fox News poll, 60% of voters described their financial situation as “not good” or “bad.” This is compounded by high living costs, for which voters are increasingly holding President Trump accountable, rather than his predecessor, President Biden. Republicans fear a potential landslide defeat in the upcoming 2026 congressional elections, which will see a third of the Senate and all members of the House of Representatives up for renewal.
While many analysts believe the infrastructure investment boom signals the beginning of a substantial productivity surge, significant uncertainty persists among consumers and businesses outside the tech sector. Some companies cite the unpredictable trade policies of the White House, while others point to internal restructuring or necessary investments in AI. The labor market remains stagnant.
Warnings Even From Within the AI Industry
Layoffs are becoming increasingly common within the tech industry itself: HP announced up to 6,000 job cuts, Verizon 13,000, Amazon is reducing its workforce by 14,000 – roughly 4%, Intel is cutting 15% of its staff, Microsoft has announced 15,000 layoffs, and Meta CEO Mark Zuckerberg plans to eliminate approximately 5,000 positions. Zuckerberg anticipates soon being able to replace programmers with AI.
Even within the AI industry, warnings are emerging about the potential consequences of the new technology and the speed of change. The discussion has moved beyond tools that simply assist with tasks to so-called “agents” – AI systems designed for specific job profiles that can also communicate with each other. “It’s going to be ten times bigger than the industrial revolution – and maybe ten times faster,” predicted Demis Hassabis, founder of Google’s DeepMind, in August. “We’re not building tools anymore. We’re building entities that could make us obsolete.” Hassabis emphasized that the resulting increased productivity and wealth must be distributed fairly.
Anthropic founder Dario Amodei estimates that AI could eliminate half of all entry-level jobs within five years, potentially leading to 10-20% unemployment in the U.S. He identifies the sectors most at risk as technology, finance, law, consulting, and other white-collar professions. CEOs of many other companies have expressed similar concerns. The situation could be described more dramatically: Axios reported in May that a “job bloodbath” could occur during Trump’s presidency, which is scheduled to end in January 2029.
