AI models will quickly automate the majority of expert work, but they will struggle with the final, most complex 25%. For a long time, human expertise will be essential for this 'last mile,' making it the ultimate bottleneck and source of economic value.

Instead of outright replacing entire roles, AI is more likely to cause significant wage compression. As AI makes certain skills more common, it floods the labor supply for those tasks, driving down pay for both displaced workers and incumbents in affected fields.

The optimistic scenario for human labor in an AI-driven economy is one of complementarity. If there are crucial tasks that only humans can perform (e.g., final approval, strategic oversight), they become a valuable bottleneck. The immense productivity of the machines they oversee would then drive their wages up significantly.

The idea that AI will create net new jobs is challenged by the Jevons paradox. Even if demand for work increases, AI's ability to increase the supply of that work even faster leads to wage compression for humans, as seen with London cab drivers post-GPS/Uber.

When AI automates only a fraction of a job's tasks, it increases the worker's overall productivity. This can lower the cost of the service, increase demand, and lead to more hiring and higher wages for that role, as seen with radiologists and bank tellers.

AI's impact on labor will likely follow a deceptive curve: an initial boost in productivity as it augments human workers, followed by a crash as it masters their domains and replaces them entirely. This creates a false sense of security, delaying necessary policy responses.

Unlike past technologies that automated specific tasks, AI threatens to automate all economically valuable human labor. This removes the fundamental, non-seizable leverage that the general populace holds, creating a power vacuum that can be filled by capital owners.

AI's economic impact is far more benign if it automates a small fraction of tasks across many professions rather than entire jobs. If AI handles 10% of everyone's workload, it results in a direct 10% productivity increase for the whole economy, making society wealthier with virtually no job displacement.

Capitalism values scarcity. AI's core disruption is not just automating tasks, but making human-like intellectual labor so abundant that its market value approaches zero. This breaks the fundamental economic loop of trading scarce labor for wages.