The desperate race to escape AI’s ‘permanent underclass’

Leonie Tucker has poured two decades of her life into the film industry. As a graphic designer, she finesses the details on movie sets: the posters in the background of scenes, the packaging, everything that is copyrighted – from the branding of a tomato can to phone displays.

“I worked my way up to become successful, to become a lead graphic designer for things like Apple TV. I worked very, very hard for it. And then the work just disappeared,” Tucker says.

Until recently, the 36-year-old graphic designer was making more than £65,000 a year.

“Then last year, it was £26,000. A big old drop. In the past six months, it’s been drastic. I’m a homeowner. I’ve got a leased car. You can’t give up your car, and you can’t [not] pay your mortgage because something has happened that’s beyond your control.”

It wasn’t Covid or the Hollywood writers’ strikes that dealt the blow. Even after such big disruptions, the work always came back.

But AI has proved a different beast.

“Everything I’ve ever worked for is this industry, it’s now been ripped away from [under] my feet. I’ve been doing it for 15 years. I’m very qualified and sought-after in this job. Now, I’m on Universal Credit,” she says. “I’ve been telling everyone who will listen.”

Workers like Tucker are among the first to see their jobs disrupted by AI. Much of the sort of design work she specialised in can now be done with AI in post-production.

Rapid leaps in AI’s capabilities are upending jobs in everything from call centres to copywriting and coding. And law, consulting and finance could be next.

Within years, millions could experience the same fate as Tucker: a steep drop in income, carefully honed skills obsolete, an entire career path gone.

Anton Korinek, one of the world’s most influential economists studying transformative AI, says: “It may happen later this year or later this decade. Given the uncertainty, I think it’s prudent to be prepared for potential worst-case scenarios, like unemployment rising by several percentage points by the end of the year but with no end in sight.”

The professor at the University of Virginia is one of the growing number of voices warning we may be in a race against time.

“I’m worried, although there is tremendous uncertainty,” he says.

It is still too early to tell from employment data what is really happening. But it is clear that AI systems are “advancing rapidly and with them, their ability to perform many work tasks that used to be exclusively human.”

Less than a year ago, ChatGPT was so confident there were only two ‘r’s in the word strawberry that the chatbot said it would bet $1m (£732,000) on it.

Now, some of the world’s smartest people are warning that AI is making their skills obsolete. One of them is Aditya Agarwal, one of Facebook’s earliest engineers.

“I spent a lot of time over the weekend writing code with Claude. And it was very clear that we will never ever write code by hand again. It doesn’t make any sense to do so,” Agarwal wrote on X.

“Something I was very good at is now free and abundant.”

Dario Amodei, the chief executive of Anthropic, the creator of the Claude chatbot, warned in a recent essay that AI could create “an unemployed or very-low-wage ‘underclass’.”

On the current trajectory, “it cannot possibly be more than a few years before AI is better than humans at essentially everything,” he wrote.

Tech bosses like Amodei may have an interest in talking up the speed and capabilities of AI. But economists are also nervously considering such scenarios.

Daron Acemoglu, an economics professor at Massachusetts Institute of Technology and a Nobel Prize winner, says: “If AI is used ultimately as an automation tool and nothing else, or mostly as an automation tool, it will create an underclass because it will automate a lot of jobs, and it will make a lot of skills redundant as a result.

“Many people will either withdraw from the labour market or will work in menial, not so meaningful and low-paying jobs. And that’s the underclass.”

Acemoglu is slightly more optimistic than Amodei: “I am worried about a permanent underclass, not in two years but in 25 years.”

But the danger is real and he is urging politicians around the world to act fast or risk the vast majority of workers being sucked into the “permanent underclass”.

“Roughly speaking, anybody who is below the 75th income percentile would be at the risk of having their jobs either devalued, commodified or eliminated,” Acemoglu says.

In other words, you may only escape if you are already among the 25pc highest-earning workers. In the UK, someone earning at least £43,000 in 2023 would be at risk, according to the latest data.

“Jobs that require high levels of judgment are safe for now. I don’t think we’re going to have AI take over airline traffic control any time soon. We’re not going to have AI take over chief financial officers, chief executives or chief operating officers,” Acemoglu says.

“We’re going to have high-quality journalism. We’re going to have academic research. We’re going to have lawyers and judges.”

But many other white-collar office jobs could disappear – or those doing them could see themselves reduced to undervalued worker bees simply directing the AI.

The technology could do to their jobs what globalisation and automation did to factory workers, miners and other blue-collar workers over the last few decades.

Change is already under way.

Dr Ben Maruthappu, founder of Cera, one of Europe’s largest health tech companies, says: “We’ve deployed ‘Ami,’ our AI recruitment agent, who has fundamentally rewritten how we hire.

“Ami interviews thousands of candidates simultaneously, picking up the phone seconds after they apply – 24/7.”

Cera also uses predictive AI to flag everything from staff at risk of quitting to patients developing dehydration or UTIs.

The firm has also developed care robots, “physical, droid-like companions that sit in people’s homes” and remind them to take medications, drink water and check their mood.

“In our pilots, they achieved a 96pc success rate in medication compliance – numerous care companies and local governments have adopted them. We are effectively turning the home into a digitally enabled hospital ward, preventing admissions and saving the NHS millions,” Maruthappu says.

“We are moving from a model where humans do everything, to one where technology handles the routine so humans can handle the complex.”

The care robots highlight another worrying trend: even manual jobs may not be safe.

“Are we going to have blue-collar workers? Yes, for the next 10 years,” Acemoglu says. “But if there are big breakthroughs in robotics and AI’s sense of geography and spatial understanding, there is a possibility of much greater automation.”

In other words, even retraining as a plumber may not be enough to escape the underclass.

The Institute for Public Policy Research (IPPR) has warned that without intervention, AI could destroy some eight million jobs in the UK “in the near term”.

“2026 will be the year of adoption. 2027 will be the year where we will see the early, more significant labour market impacts that can be felt. Then the big, worrying macro impacts will probably still take a bit longer,” says Carsten Jung at the IPPR.

Fears of the looming AI jobs bloodbath appear to have given rise to a new type of “prepper” – with a distinctly different profile to people who hoard tinned beans and toilet paper as they brace for a possible world war.

On the Reddit forum HenryUK, for people who describe themselves as “High Earners, Not Rich Yet”, users are already exchanging advice on how to future-proof their finances from the “AI jobs apocalypse”.

One user writes: “Getting some serious existential dread about the medium-term jobs outlook and the prospects for our young family.

“Household is double high-earner with a chunky London mortgage – husband a finance director in retail and me a marketing director in financial services.

“In both workplaces, the direction of travel is towards replacing people with automation and AI. It’ll start further down the food chain of course, but we’d be naive to think it’s not a major threat to our employability fairly soon.”

They fear house prices crashing if there are sharp rises in middle-class unemployment over the next three to 10 years.

“It sounds rash, but should we sell up now? We’ve enough equity to be mortgage-free outside London,” they ask.

The most-liked advice ranges from not sending the kids to private school, saving aggressively and doing AI training.

The observation that further down the chain, AI is already starting to wreck jobs is apt.

Morgan Stanley analysis suggests the UK suffered the biggest net loss in jobs from AI in the last 12 months when compared to Japan, Germany and Australia. The finding was based on a survey of employers.

Of course, AI may be just part of the story. A weak economy and Rachel Reeves’s £26bn tax raid on employers are also driving companies to rethink their staffing needs.

Adrian Cox at Deutsche Bank says: “There is some evidence that suggests that graduates are finding it harder to get jobs now than they did three or four years ago. But there’s a lot of noise in that data. It’s really hard to strip out what is caused by AI, if anything.

“I suspect that is where we will see the first evidence – employers saying, ‘I will upskill my existing workforce and hold off on new hiring at a very junior level, and see how things play out’.”

Ed Newton-Rex, an entrepreneur, composer and founder of the AI non-profit Fairly Trained, says: “I know of people who have taken job ads down because they have realised that AI can do the job of a junior person.

“In the creative spaces, I have spoken to a lot of artists, musicians and writers who have lost work because of AI. We’re in this interim phase where I think people are being lulled into a false sense of security. People are starting to see the productivity benefits of AI without seeing the trajectory that it’s on.

“We should take these claims and these predictions and these explicit statements incredibly seriously. There is a chance they’re wrong, but clearly, there is also a chance they’re right. And if they are, the job market is frankly going to be destroyed.”

He adds: “The Government is not taking this seriously. [It] has been hoodwinked by Silicon Valley and people in the tech ecosystem into believing that it can solve all its growth problems. That is a huge mistake.”

Lucy, a 28-year-old copywriter, is one of the young workers already bearing the brunt of AI. She has worked for a major financial company for the past four years but soon will be without a job.

Last summer, she experienced what any worker fears – a sudden meeting invite with no explanation. It quickly became clear it was bad news.

“It was on a big call with everyone who might be affected. The initial call was just someone talking at us, saying: ‘This is what is happening.’ There wasn’t really any detail about why.

“Across marketing, it’s around 50 people who were impacted by the restructure. This increased talk of AI has happened at pretty much exactly the same time,” says Lucy, who preferred not to use her real name.

She is still in her job, but knows she’ll be let go in a few months.

“The job market is pretty rough, and from my own job hunting so far, it’s not easy, so I am quite worried about finding something after this. I’m on £48,000, which I’m not expecting to get again any time soon,” she says.

More than just the loss of a comfortable salary, she also worries that AI is taking the writing out of the job, making it much less fulfilling.

She explains: “The main part that I like about it is the ability to be creative and solve problems with copy. That’s what feels the most rewarding for me. I can see that being watered down if AI is doing most of the writing.”

Such disruption doesn’t just impact the workers losing their jobs. The few still clinging on to employment in affected sectors are also seeing the ground move beneath their feet.

Joanna, 36, is a lead graphic designer for TV shows airing on BBC, ITV, Netflix and Apple TV. She too preferred not to use her real name for fear it could impact her work.

“They’re using AI to cut corners where before they might have employed an assistant. The impact that has on people like me, the lead designers, is that we are worked harder. I’m getting the jobs, but I’m seeing the squeeze everywhere. It’s happening bit by bit.

“I’m concerned for my own mental health. The whole middle, which makes up all teams, is being cut out. That leaves very, very stressed heads of departments, no work for people in the middle climbing up, and very stressed juniors.

“Personally, I don’t want to be in an industry where I’m that stressed all the time.”

Such disruption will inevitably soon rip through other industries. Today it’s copywriters and graphic designers finding themselves unemployed, but tomorrow it could be bankers and lawyers.

For now, there are some technical barriers holding back such change. Banks, for example, do not have real-time data in the right format to make the most of AI yet, says Stuart Cheetham, chief executive of AI fintech MPowered Mortgages and former boss of Lloyds in Hong Kong and Japan.

He adds: “For a bank to change its tech stack, think five or six years. It’s not going to be tomorrow.”

But when it happens, change could be widespread. “There are very few jobs I see within financial services that AI will not be able to perform in the current state that they’re in today,” Cheetham says.

AI is hardly the first technological revolution to hit the world. From the spinning jenny to the internet, the world has experienced wave after wave of disruption.

Past breakthroughs have destroyed jobs that became obsolete but ultimately created new ones – avoiding the creation of a permanent underclass.

But experts question whether the same will hold true this time around.

“This time is different from previous technological waves that we have experienced over the past few centuries,” Korinek says. “Intelligence is what has made humans into the most powerful species on the planet, and we are now creating machines that may end up more intelligent than us.

“So you can say the most relevant previous historical episode is the emergence of homo sapiens.”

Acemoglu adds: “The Industrial Revolution has lessons because it goes against the common narrative that somehow automatically new technologies benefit us all. Workers didn’t benefit for about 80 to 90 years in the Industrial Revolution.

“Some groups of workers, like weavers, lost two thirds of their real earnings as weaving was mechanised. But the Industrial Revolution was in a few sectors and slowly acting. We have AI impacting all the sectors and acting fast.”

These ruptures leave political leaders around the world grappling with how to handle possibly the biggest disruption to the jobs market in modern history.

Experts have suggested anything from “universal basic capital” – giving every newborn a portfolio of AI stocks – to wage insurance.

There are already talks within the Labour Government about introducing a universal basic income (UBI) for workers in industries about to be wiped out by AI.

Lord Jason Stockwood, the investment minister, said in a recent interview that the Government would “undoubtedly” have to consider UBI for impacted workers and ensure they have options to retrain.

However, the polls suggest it could be Nigel Farage and Richard Tice overseeing what comes next.

Tice, the deputy leader of Reform UK, tells the Telegraph that “net negative immigration” may be needed to ensure there are enough jobs for British people.

“AI will disrupt the jobs market significantly. With sizeable job reductions likely in certain trades, the challenge will be to keep employed those already here, so the last thing we need is more immigration.

“The maximum should be net zero, but we may need net negative immigration to respond to AI,” Tice says.

Net migration will already fall to a near three-decade low this year, according to Oxford Economics projections, dipping below 100,000.

Reducing it below zero suggests even tighter rules – possibly even forcing out people who are living legally in the UK.

Andrew Griffith, the shadow business secretary, says the Government needs to make hiring as easy as possible.

Griffith says: “We don’t know definitively how AI will impact jobs, but the two things that will help are a growing economy and an agile jobs market. Unfortunately, this Government is delivering neither.

“As careers change, tying up employers of humans with expensive red tape is a sure-fire way to accelerate the rise of the machines.”

Acemoglu hopes politicians steer clear of UBI. He believes they should instead use the levers they have to ensure companies develop AI in a way that complements jobs, rather than destroys them.

He arns: “If 60pc of the population live off just UBI without a job, they’re going to become an underclass no matter how generous that UBI is.

“Whether you’re in the underclass or not is not about how much money you have to buy video games or the newest sneakers. It’s about the social status that you command in society.”

Back in London, Lucy is still mourning the copywriting job she will soon lose.

“It’s just frustrating. In the grand scheme of things, a job like mine is not massively consequential or important, but it helps me live comfortably,” she says.

Joanna, meanwhile, is plotting her way out of graphic design, feeling defeated by the unsustainable pressure AI has put on her job.

“As a millennial, you were brought up to believe that if you worked hard, everything would work out. You would own a house and have a good life. That just doesn’t seem obtainable any more at all,” she says.

She is thinking about retraining in “something to do with sociology or wildlife or something that helps other people. It’s a total rejection of everything,” she says.

Fellow graphic designer Tucker is trying to reinvent her career. She is putting her design skills towards setting up an e-commerce business. Her savings are decimated.

“I’m very angry, not at anyone in particular. It’s incredibly disheartening. Not only have I worked my whole life for this, I’ve also invested a lot of money in kit which I now have in my garage.

“I’m trying desperately to sell it, because I can’t afford to live.”

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