How to Adjust to the Real Economic Impact of AI (and Labor Market Disruptions in General)

In previous posts we reviewed the impact of globalization and (likely) impact of AI on the economy. Both these forces will fundamentally reshape local economies through changing which skills are in demand. Globalization has diffuse benefits and concentrated costs because countries optimize around their competitive advantage, harming local economies that rely heavily on particular industries and outputs susceptible to import competition. Similarly, AI (and other technology) will automate various tasks and change existing occupations while creating new ones, harming locations that heavily relied on those existing jobs. Even today we see the uneven impact of globalization and automation on the US economy.