Federal Reserve Governor Michael Barr warns that AI could widen inequality if a few companies hold much of its power and most businesses have limited access to its resources.
That imbalance could reduce labor income.
Adoption is still relatively early, with no evidence yet of large AI-linked job losses.
The policy question is how to establish safeguards before the risk grows.
According to the Fed official, a central risk scenario is the overconcentration of power in a limited number of companies. Such a development could lead to a rapid increase in wealth for executives and shareholders of the technology giants, while smaller businesses and their workers would see their market share shrink. Limited access to advanced artificial intelligence tools by the wider business world is estimated to lead to lower benefits for workers, ultimately reducing the overall share of income that goes to work.
Barr noted that while the evidence so far shows increased productivity and does not document massive job losses, the adoption of the technology is still relatively early and its ultimate impact remains unknown. For this reason, he stressed that policymakers must be prepared for the possibility of serious short-term labor market disruptions.
"Now is the right time for society to begin considering how to manage these potential challenges," Barr said, noting that the necessary protective measures must be put in place immediately so that technological progress can bring long-term benefits to society as a whole.
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