Raimondo Warns of 10–11% Unemployment If AI Transition Goes Unplanned

A 10–11% national unemployment rate — and 20% among workers in their 20s — within three or four years. That is the scenario former U.S. Commerce Secretary Gina Raimondo says the United States could face if artificial intelligence is deployed without a planned labor-market transition.

"If we just let AI loose, and wake up in, I don't know, three or four years with a 10-11% unemployment rate, 20% unemployment rate among young people, people in their 20s, I think we're screwed," Raimondo told CNBC's Julia Boorstin in the first episode of Season 2 of the "CNBC Changemakers" podcast, recorded in late August. "It's a non-technical term ... So let's get ahead of it."

Raimondo, who served as Commerce Secretary under President Biden and previously as Governor of Rhode Island, calls herself an AI optimist on net job creation. Her concern is the transition period. "I think the worst-case scenario is that we don't have a plan to make sure that every American can have a good job in the age of AI," she said. "Tens of millions of Americans will be put out of work or underemployed, and in that instance ... I worry deeply. I think you could have an economic recession that is deep and long. I think you could have rioting in the streets."

She said economic inequality is "through the roof" and American democracy is "fraying every day," conditions that make an unplanned displacement wave more dangerous than it would have been a decade ago.

Her fears stem partly from private conversations after leaving government. "CEOs of major U.S. corporations started to call me, saying that they were worried about massive job losses that could be coming because of AI and robotics. Not one or two CEOs, but a number would call, and almost as if to say, what are you going to do about that?"

What is actually being tried

Raimondo co-founded the nonprofit Raise Us with former Indiana Governor Eric Holcomb. Amazon, Anthropic, Microsoft, AMD, ADP, Bank of America, Blackstone, Cisco, Eli Lilly, GM, IBM, Mastercard and UPS are among the companies initially involved.

The organization is working with governors and employers in four states: Arkansas, Utah, Maryland and Connecticut. The policy experiments include year-of-service programs for Americans in their early 20s as a gateway to full-time roles, new unemployment insurance models, salary support and retraining for the jobless, and targeted help for workers in their 50s who risk losing jobs that paid comparably.

Raimondo also wants to revisit how the tax code treats labor. Employers pay payroll tax on every employee but nothing on an AI agent. "Your incentive is to get rid of your employees, not pay that payroll tax. And use agents," she said.

She argues the underlying workforce system is outdated: unemployment insurance dates to the Great Depression, and the college-subsidization model has barely changed since the GI Bill.

Congress and CEOs

Raimondo expects no federal rescue. "Congress isn't going to do a damn thing," she said, adding she would "bet a lot of money" that Congress will not pass effective bipartisan worker legislation in the next three years. And while some CEOs "get it," others do not: "Many CEOs you call say 'No, no, I'm just gonna do what I always do, which is maximize short-term profit and short-term share price.'"

"The incentive now is to hit the layoff button," she said — which is exactly the dynamic Raise Us's four-state experiments are designed to counter before displacement accelerates.