The model outlines a dangerous feedback loop. Individual companies that replace workers with AI reduce labour costs and gain short-term efficiency. But when this strategy is repeated across an entire economy, displaced workers lose wages and cut spending. Since workers are also customers, aggregate demand begins to shrink.

As consumer spending falls, firms respond rationally by cutting costs even further — usually through more automation. The cycle then accelerates: layoffs reduce demand, falling demand encourages more layoffs, and the process becomes self-reinforcing.

In effect, every firm behaves logically in isolation while collectively driving the economy toward systemic failure.

About eight in ten employees had strong concern about at least one AI angst item. For example, 65% of people agreed that they “worry about being replaced by someone who knows how to use AI better than I do,” 61% worry “AI might make others think I don’t bring unique value,” 60% worry “that using AI to help with my work will make colleagues question my personal competency,” 54% feel AI is impacting the way they connect with others at work, and 44% feel it’s “making them dumber.” One in three employees had an average score of four or greater across the AI angst composite score.

Overall, we found that approximately 86% of people felt AI will make work at least a little better with 14% feeling AI will have a neutral or negative impact on the experience of work.