Top earners are more afraid for their employment than lower income as AI threat increases

The prospect of being replaced by artificial intelligence is helping to scare higher-income workers and leading them to stay in their jobs longer, according to several recent surveys.

One closely followed gauge, the University of Michigan Survey of Consumers, show confidence in the labor market among high earners around its historic lows going back to the late-1970s. Likewise, the New York Federal Reserve’s monthly consumer survey shows unemployment angst also around record highs.

Finally, payrolls processing firm ADP notes that turnover among traditionally white-collar occupations is around record lows.

The reason for the trend? “Our guess is partially ‘AI fear’, as white collar jobs are possibly at greater risk, but we are open to other explanations,” UBS chief economist Arend Kapteyn said in a note.

The rise of AI is causing both excitement and fear among investors, employers and workers alike. Policymakers also are trying to gauge the impact of the new technology and how it will fit into the economy.

“In my lifetime, I have never seen a technological revolution like this — and I have seen the birth of space exploration, the rise of the personal computer, the explosion of the internet and then smartphones,” Fed Governor Christopher Waller said Tuesday. “Firms, households, and every government [agency] are all trying to incorporate it into the way they function and operate.”

For the moment, AI appears to be contributing to angst and caution.

Over the past year, the University of Michigan survey has found a general decline in sentiment over the labor market. However, it’s been most pronounced among the top one-third of earners, whose sentiment score on the labor market, in this case expectations for a higher unemployment rate, to be at its lowest level since the financial crisis ended in 2009. Sentiment among lower-income workers also has declined but is actually higher than those at the top end.

Likewise, the New York Fed’s month Survey of Consumer Expectations is showing that expectations of finding a job in three months if one loses their job today is around the lowest for a data sent that stretches to mid-2013.

And ADP’s extensive data on the private jobs picture shows that professions such as finance and information and business services is showing reduced turnover rate. In January, turnover for professional and business services was the lowest the firm ever recorded.

“The normal push-and-pull of job gains and pay growth — quantity and price — that once kept the labor market dynamic has weakened, giving way to a market defined more by inactivity than vigor,” said Nela Richardson, chief economist at ADP.

To be sure, the jobs picture is still very strong for higher-income groups.

While the Bureau of Labor Statistics does not break out the unemployment rate by income, it does classify it by profession. Finance, for instance, had a jobless level of just 2.1% in January, close to the same level a year ago. Professional and business services was somewhat elevated at 4.5%, but down 0.4 percentage point from January 2025.

“We immediately jump to the notion that a bunch ⁠of people are going to ‌be displaced” by AI, Richmond Fed President Thomas Barkin ‌said at an event Wednesday. “We should also remember ⁠people are going ⁠to be enabled.”

Similarly, Kansas City Fed President Jeffrey Schmid said in the long run, AI will be a benefit to the labor market and the economy.

“I personally think we’re going to need AI to supplement the fact that we aren’t having new entrants into the labor market like we did, let’s say 30 years ago or 40 years ago,” Schmid said during a separate event Wednesday. “So AI is going to have to be an enhancement to do jobs.”