The coauthor of a viral research report says blue-collar jobs won't be safe from an AI-driven recession
Business Insider
February 24, 2026
AI-Generated Deep Dive Summary
A new AI research paper has sparked global concern by suggesting that an AI-driven recession could lead to widespread job losses and economic slowdowns, particularly affecting blue-collar workers. The study, coauthored by Alap Shah of Littlebird.ai and Citrini equity research firm, warns that while white-collar jobs are often seen as the primary targets for automation, the knock-on effects could extend to all sectors. Shah emphasized that a 5% job loss in white-collar roles could force displaced workers into lower-paying gig or blue-collar positions, intensifying labor market pressure and potentially leading to broader economic instability.
The research presents a hypothetical scenario set in 2028, where rapid AI adoption triggers mass layoffs in white-collar sectors. This would destabilize housing and mortgage markets, leading to a global stock sell-off and recession across industries. Shah explained that the current growth in sectors like health and education may rely heavily on government spending, which could diminish if personal incomes decline due to job losses. He highlighted the interconnected nature of labor markets, suggesting that no sector is entirely insulated from the effects of AI-driven changes.
The study underscores the potential risks of over-reliance on white-collar productivity growth as a central economic driver. Shah warned that this system creates a fragile chain reaction, where a financial crash could accelerate existing negative feedback loops. The implications for businesses and investors are significant, as it raises questions about future economic resilience and job security across all sectors. Understanding these risks is crucial for policymakers and business leaders aiming to navigate the potential challenges of AI adoption.
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Originally published on Business Insider on 2/24/2026