AI and the Future of Work: Lessons from History for 60 Million U.S. Workers
A new analysis released today, November 5, 2025, highlights the parallels between historical technological shifts and the current impact of artificial intelligence on the U.S. Labor Economy, a sector comprising 60 million hourly workers and driving $1.7 trillion in annual consumer spending.
The report, from PYMNTS Intelligence, draws a comparison between the displacement of lamplighters in the late 19th century and blacksmiths in the early 20th, noting that while both professions faced obsolescence, blacksmiths possessed transferable skills that allowed them to adapt to new industrial roles. Lamplighters, however, lacked such readily applicable expertise, leading to more difficult transitions. This historical pattern underscores the importance of skills development and retraining as AI reshapes the workforce. The findings suggest that proactive investment in worker upskilling is crucial to avoid widespread economic disruption.
Unlike previous waves of automation that primarily impacted white-collar jobs, AI’s initial effects are being felt in the “physical economy” – roles requiring hands-on work like warehousing, delivery, food service, and healthcare support. While these jobs may be augmented by AI, complete automation is unlikely in the near term, making this workforce a foundation for economic continuity. However, long-term prospects depend on workers acquiring new skills to utilize and adapt to increasingly integrated AI tools. PYMNTS data indicates that 69% of Labor Economy workers have remained with their current employer for over two years, demonstrating loyalty and reliability, but lacking structured pathways for advancement. For more information on the evolving workforce, see the Bureau of Labor Statistics website.
The analysis proposes a focus on “upward innovation” – applying new technology to create pathways to higher-skill, higher-value work, such as a warehouse worker becoming a robotics technician or a retail clerk specializing in customer data analysis. Innovations in instant pay and flexible benefits platforms are also playing a role in stabilizing this workforce, with over 20 million U.S. workers now utilizing on-demand pay options. As detailed in PYMNTS Intelligence reports, these developments are crucial for addressing the financial fragility common within the Labor Economy, where households hold significantly less liquid savings than the general population.
Officials emphasize the need for collaboration between innovators, business leaders, and investors to create infrastructure and incentives that facilitate worker advancement and ensure the benefits of technological progress are widely shared.
