[Gangnam Perspective] The Real Problem Is Jobs for the Young

No one would have expected a future scenario written in a Sunday evening email newsletter by a fringe, non-mainstream research firm to shake up the U.S. stock market. Yet that is what happened with "The 2028 Global Intelligence Crisis," a report that three-year-old start-up research firm Citrini Research recently released to subscribers on its platform.
The background of James Van Gellen, the 33-year-old founder of Citrini Research who led the writing of the report, is unusual. He majored in biology and psychology, worked as a hospital paramedic, and has written investment columns for various media outlets and channels. The report is closer to a long memo than a finely tuned analytical paper. It is a retrospective essay written from the vantage point of 2028, three years after artificial intelligence (AI) began to be used as an office assistant. The year 2028 is assumed to be the point at which AI has replaced human intelligence to a significant extent.
The author insists it is not an "AI apocalypse novel," but most of the piece is framed around an AI dystopia. Capital owners with computing assets see their wealth explode, because labor costs are expected to vanish. This is where the concept of "ghost GDP" appears. AI-driven productivity boosts profits sharply, but income no longer flows to people and consumption stalls. Headline numbers grow, but the real economy feels dead, hence the reference to a ghost-like Gross Domestic Product (GDP). In June 2028, under this scenario, the U.S. unemployment rate soars to 10 percent and stock prices plunge 40 percent from their peak. Moribund consumption then comes back to strangle the companies that had revived, triggering a wave of bankruptcies and driving the middle class down the path of ruin, according to Citrini Research’s scenario.
Before anyone could coolly assess whether this was even plausible, the market moved first. The day after the memo spread, stocks mentioned in the report were hit hard across the board on Monday morning. Fear was amplified when Michael Burry, the real-life investor portrayed in the film "The Big Short" and known for his sensitivity to early signs of crisis, shared the piece. The situation escalated to the point where The White House, unable to sit by, stepped in and declared that the report was nothing more than science fiction. A memo from a small research outfit had turned into an episode serious enough to draw in The White House.
Analysts later argued that the scenario was overly dramatic and that policy would be mobilized long before such an extreme situation unfolded, which helped cool the market’s excitement. But did that really put the anxiety to rest? The fear we face now is of a different order than the danger Geoffrey Hinton warned of regarding AI’s potential for aggression. The coming clash and debate over AI that replaces not only human bodies but also human intelligence, and over jobs and distribution, is about to ignite in earnest.
In the scenario, the crisis erupts when AI begins showing up for work in white-collar offices staffed by high-income professionals. The image is as dizzying as that of Atlas, a highly intelligent humanoid robot far beyond simple robotic arms, working around the clock on dark factory floors. According to Hyundai Motor Company’s roadmap, Atlas will be deployed at its plant in the State of Georgia starting in 2028, moving into commercial use. In Citrini Research’s imagined future, AI is already handling office work around the same time in Silicon Valley on the West Coast and Wall Street on the East Coast. Knowledge workers in production roles have packed up and left before factory workers. Those who remain in the office accept pay cuts commensurate with the reduced amount of human labor. Mass layoffs are one problem, but even more brutal is the advent of an era in which no new hires are needed. The entry point for hiring closes, and the career ladder is inevitably severed.
The faces of young people in Korea are the first to come to mind. They fight through the harshest entrance-exam war on the planet, yet many still fail to land the jobs they want. Given the hardship and cost they poured into exams, they cannot easily lower their expectations for work. Now, in this already parched job market, they are confronted with AI showing up for work as well. The Citrini Research memo ends with the line, "the canary in the coal mine is still alive." It is a piece of advice to start preparing now, and pushing through rapid reforms is essential. Above all, the people who should open their eyes the widest are Korea’s education officials. They should stop tinkering only with entrance-exam systems and instead craft policies that take into account young people’s futures after graduation. Creating jobs that can coexist and win-win with AI is an area where the Ministry of Education has a crucial role to play.
jins@fnnews.com Reporter