Renowned economist and Former Secretary of Labor, Robert Reich highlighted the role of artificial intelligence (AI) in driving stock market gains while jobs and wages stagnate in the real economy.
“This is the reason the stock market is completely disconnected from the real economy,” Reich wrote on X on Sunday.
Reich shared a video clip from “Coffee Klatch,” where he discusses how AI allows companies to reduce payroll costs, thereby increasing profits and boosting stock market performance, while the average working population loses jobs.
The economist said payroll makes up about two-thirds of corporate costs, so cutting it to around 50% would largely boost profits.
“And so you have profits going up. And as profits go up, the stock market goes up,” explained Reich.
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