"AI has delivered more than a 7% uplift in household wealth for U.S. consumers, Oxford Economics CEO Innes McFee told the company's Global Economic Outlook conference in London this week. However, this "powerful boost" has mostly landed in the pockets of high-income Americans. The "wealth effect" created by the blockbuster spending in AI (households feeling wealthier because the value of their assets is increasing, and thus increasing their spending) will reinforce the K-shaped economy, likely until 2035, McFee later told Fortune in an exclusive interview."
"Absolutely. Eventually, AI may well end up being a driving force to bring those two groups a bit closer together but in order to see that, you need to see the productivity gains at a low level. The productivity gains at a low level, low-skilled jobs, have to come through because that means ... real wages increase, and that's ultimately what drives living standards."
AI investment has increased U.S. household wealth by more than 7%, creating a pronounced wealth effect that raises consumer spending. The asset-value gains from AI spending have predominantly accrued to high-income households, concentrating benefits among the wealthy. The resulting wealth effect is reinforcing a K-shaped economy and is likely to persist through 2035. Broad-based improvement in living standards depends on productivity gains reaching low-skilled jobs, which would drive real wage increases. Such productivity-driven wage gains are not expected in the next five to ten years, so medium- and low-income fortunes may remain lagging for the medium term.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]