Right now, a good chunk of Americans feel threatened by artificial intelligence.
A recent Reuters/Ipsos poll found that more than half of Americans are worried that AI could put them or someone in their household out of work.
One economic concept that can help explain how new technologies tend to impact the labor market is known as the “lump of labor fallacy.”
“The lump of labor fallacy is simply the notion that there's a fixed amount of work to be done,” said Edouard Wemy, an associate professor of economics at Clark University. “And if one person [were] to gain one job, then it must be at the expense of somebody else.”
Catalina Amuedo-Dorantes, a professor of economics at the University of California, Merced, said in that scenario, the economy would be like a big game of “musical chairs,” where one player equals one worker and one chair equals one job. “So if one more worker is going to enter the labor market, someone else must lose a seat.”
But history tells us that the economy is not, in fact, a game of musical chairs. “Technology does not simply eliminate labor; it changes basically what workers do, and it can raise productivity, lower cost, and create new products, firms, and occupations in general,” said Amuedo-Dorantes.
That’s the fallacy part of the “lump of labor fallacy.”
If you think about the new technologies of the past, like mechanized agriculture, sewing machines, or word processors, those technologies did not lead to mass unemployment. Instead, they freed people up to work in other industries, create new businesses, and make new jobs.
“It's actually that they bring more chairs,” Amuedo-Dorantes said. “Some jobs will be lost,” said Wemy. “But more jobs overall are going to be created in terms of total employment.” | 
