The artificial intelligence debate has a framing problem, and one of America’s most prominent economists has an idea about how to fix it.
“The first thing that people think about when they think about reducing work is unemployment,” Alex Tabarrok told Fortune. “But reducing work could mean, you know, a shorter work week. It could mean a longer retirement, a longer childhood, more holidays.”
The George Mason University economist made the case bluntly in a post this week on his influential blog Marginal Revolution: “Imagine I told you that AI was going to create a 40% unemployment rate. Sounds bad, right? Catastrophic even. Now imagine I told you that AI was going to create a 3-day working week. Sounds great, right? Wonderful even.”
His punchline: those two scenarios are, to a first approximation, identical: “60% of people employed and 40% unemployed is the same number of working hours as 100% employed at 60% of the hours,” he wrote. The difference between catastrophe and wonderland, he argues, boils down not to the raw economics of AI—but to how society chooses to distribute the gains.
“Everyone goes to the negative possibility instead of to the positive possibility,” Tabarrok told Fortune. “Which doesn’t mean that we’re guaranteed — the transition could be bumpy, that’s for sure. The Industrial Revolution was bumpy. But I also think we need to think about more leisure as a good thing.”
Keynes called this 100 years ago — and he was scared, too
Tabarrok is in good historical company. John Maynard Keynes famously predicted in the 1930s that by 2030, a 15-hour work week would be possible—and then asked, with obvious unease, what people would do with all that free time.
Baroness Dambisa Moyo, a renowned economist and member of the UK’s House of Lords, raised that same concern in a recent conversation with Fortune, noting that Keynes himself worried aloud whether people would be “contemplating God” — and that his anxiety about rootlessness in an age of abundance remains deeply relevant. “There are countless countries around the world right now where they have a lot of young men who are doing nothing,” she said. “They’re not contemplating God in the manner in which we would want them to.”
Tabarrok, for his part, said he was less worried. His core historical argument is that America has already lived through this once. He told Fortune that he made some calculations, based on data from Huberman and Minns’ Penn World Table, and found that between 1870 and today, working hours fell by roughly 40%—from nearly 3,000 hours per year to about 1,800—and unemployment did not rise to match. In 1870, roughly 30% of a person’s life was spent working. “You add on to that, well, how much is spent sleeping—that’s another 30% or so. So you’ve got work, you’ve got sleep, and there’s not much time left over for anything else. And today we’re down to about 10%.” If AI pushes that to 5% over the next 50 years, he said, “that would be great. No one’s complaining that, ‘Oh, we used to have so much more work to do, we used to be able to wash our clothes by hand, and now the machines have taken those jobs.'”
But companies aren’t giving the hours back
There is one significant obstacle standing between Tabarrok’s optimistic vision and reality: the boss.
This editor’s previous reporting found that even as AI has compressed what used to take eight hours into as little as two, executives are not sending workers home early — they’re filling the gap with more output. Michael Manos, chief technology officer at Dun & Bradstreet, put it plainly: “I got the eight hours to two hours—but now I can get 20 hours of work, because the work came down.”
Google Cloud’s Yasmeen Ahmad, who advises Fortune 500 companies on AI data infrastructure, confirmed the pattern, noting that executives are “a little bit nervous” about the implications but are quietly pocketing efficiency gains rather than sharing them. KPMG U.S. CEO Tim Walsh agreed that the gains are real, but said he expects the number of his employees to go up, not down, framing AI as a growth engine rather than a path to fewer hours. “That means I can put more volume through my business,” he said.
Research backs up the workers’ experience. A UC Berkeley ethnographic study found AI-enabled tech workers reporting “momentum and a sense of expanded capability”—but also feeling “busier, more stretched, or less able to fully disconnect,” as the Financial Times‘ Tim Harford noted. A Boston Consulting Group study found that workers who constantly supervise multiple AI tools report higher levels of mental fatigue and information overload: researchers dubbed it “AI brain fry.”
Tabarrok acknowledged this tension but held firm. “I think there’ll be interesting ways people are going to have to figure out how to best organize work life when fewer hours are involved—like whether you want to do them all together at a certain period and then have days off, or just less per day, or longer retirement. There’s a whole bunch of things we’re going to have to figure out.” His prescription remained policy-oriented: Declare an AI dividend and create some more holidays.
The big picture
Tabarrok was also skeptical of the most alarming AI timelines. “I think the transition will be slower than the doomsters are thinking, which is consistent with what most economists think,” he told Fortune, also pushing back on the idea that it’s much too early to conclude that we are in an “Engels pause” moment where wages stagnate as technology surges ahead. “Look around the world right now—the only thing AI has done is increase the number of jobs. There’s been no decrease whatsoever.” He noted that the headline monthly jobs figures mask a much more dynamic reality: roughly 5 million new jobs are created each month in the U.S. while 4.8 million are destroyed. “AI will just be another one of those sorts of changes.”
The view finds support on Wall Street. Fundstrat Global Advisors’ Tom Lee—one of the most closely followed market strategists in the country—has been arguing that the U.S. is in “the third epoch of labor shortage,” a structural demographic trend running from 2018 through approximately 2035 that will necessitate heavy investment in AI simply to fill the labor shortfall. He has repeatedly compared the current moment to the invention of flash-frozen food in the 1920s, which, per Fundstrat research, reduced farm labor from 30%-40% of the U.S. workforce to just 2%-5%, while also lowering food costs. “It freed up time, right? And it created, it allowed people to be repurposed, and it created a completely new labor force,” Lee said in a January appearance on the Prof G Markets podcast.
The philosophical dimension runs even deeper. In a recent Financial Times essay, Stephen Cave, the director of the Institute for Technology and Humanity at Cambridge, identified what he called the “presentist fallacy”—the presumption that current jobs are the best benchmark for meaningful human activity. Most of what we consider work has only existed for a few decades, he argued, and whether sitting at a desk sending emails constitutes the pinnacle of human flourishing is far from obvious. Tabarrok pointed to the leisure economy itself as a preview of what comes next, noting the growth over time in sports, entertainment, and the arts. “There’ll be plenty of things for people to do,” he said.
He also flagged one more upside case that he thinks is being widely underestimated: AI’s potential impact on medicine. Citing groundbreaking research by University of Chicago economists Kevin M. Murphy and Robert H. Topel, he said a cure for cancer entirely would be a $50 trillion boost to the world economy. Even a 10% reduction in cancer mortality would be transformative, he added. “I mean, that would be tremendous, absolutely tremendous, like living longer, better lives. You know, AI right now has a little bit of a bad publicity [and] image, but the moment that AI creates a medical breakthrough, I think that will go away. And I don’t think that’s all at all unrealistic.”
Tabarrok cited a quote by the Italian philosopher Niccolò Machiavelli, that new things are harder to comprehend than old ones, even if the new ones might be better. In Chapter Six of The Prince, Machiavelli wrote, “It ought to be remembered that there is nothing more difficult to take in hand, more perilous to conduct, or more uncertain in its success, than to take the lead in the introduction of a new order of things. Because the innovator has, for enemies, all those who have done well under the old conditions, and lukewarm defenders among those who may do well under the new. This coolness arises partly from fear of the opponents, who have the laws on their side, and partly from the incredulity of men, who do not readily believe in new things until they have had a long experience of them.”
“It’s always harder to wrap your head around the new thing precisely because it creates change,” Tabarrok said, while acknowledging that economists risk looking as if they’re brushing people’s objections aside. “It’s hard to imagine the future because it’s going to be much different than the past, but it’ll still be good.”
The honest answer may be that the Keynesian 15-hour workweek is coming—just not through voluntary corporate generosity. Whether it arrives as liberation or is forced by policy, demographics, or the sheer weight of technological change, it is shaping up to be the defining labor question of the decade.
