Policy Snapshot
Giving citizens a direct ownership stakes in AI infrastructure via equity stakes
Scenario
Gradual
Augmentation
All Scenarios
Rapid
Automation
Scope
Near Term
(Volatility Risks)
Medium Term
(Transition Risks)
Long Term
(Structural Risks)
Governance Level
Local
National
International
Target
Entrepreneurs
Displaced Workers
Primary Actor
Governments
Private Actors
Labor Subsidies
Government funding that partially or fully covers wages for displaced or at-risk workers, incentivizing employers to maintain employment during periods of AI-driven disruption.
What it is:
Labor subsidies are direct government interventions where the state pays a portion (or all) of a worker's wages for a defined period, reducing the cost burden on employers and preserving employment during economic transitions. In the context of AI displacement, these programs serve two functions: (1) they prevent mass unemployment by making it cheaper for firms to retain workers whose roles are being automated, and (2) they create "transitional jobs" — time-limited, wage-paying positions paired with reskilling services — that help displaced workers rebuild work experience and access unsubsidized employment. Unlike passive unemployment insurance, labor subsidies keep workers economically active and socially connected to the labor market. However, research suggests that employment gains often diminish once subsidies end unless paired with strong pathways to permanent, unsubsidized jobs.
Recommended Reading:
University of Notre Dame & Americans for Responsible Innovation
Proactively Developing & Assisting the Workforce in the Age of AI
July 2025
A Notre Dame and Americans for Responsible Innovation workforce report recommends that policymakers establish the infrastructure for wage insurance and subsidized jobs programs in advance of AI-driven displacement, with pre-planned trigger mechanisms that automatically activate if sudden unemployment spikes occur, avoiding the operational chaos of creating ad hoc programs during crises.
Yale Journal of International Law
AI, Job Displacement, and the WTO: Identifying Legal Gaps and Charting a Worker-Centered Path
November 2025
This analysis calls for reforming WTO rules to explicitly protect "AI-transition subsidies" that support retraining and worker-augmenting technologies, while constraining subsidies that finance automation-driven displacement.
Real-world precedents:
Subsidized employment programs have been deployed during past economic shocks, most notably after the Great Recession of 2007-2009, where programs like the Temporary Assistance for Needy Families (TANF) Emergency Fund created hundreds of thousands of subsidized positions.
Germany's Kurzarbeit (short-time work) program, which subsidizes reduced working hours rather than layoffs, successfully preserved hundreds of thousands of jobs during the 2008 financial crisis and 2.2 million jobs during the COVID-19 pandemic.
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