What happens to work, wealth and prices
The mechanisms in pieces 2 through 10 are inputs. This piece is about outputs: what the system does to the people in it. Three questions matter most. Do people stop working? Does wealth concentrate or spread? Does the money turn into inflation? The answers come from three side-models that hang off the master model, and each has gaps we name.
Work
The master model assumes machines do 65 percent of work by 2045, rising from zero in 2027 on a straight line. By sector the shares are not even, and the unevenness is where the human economy of 2045 lives.
| Sector | Machine share, 2035 | 2045 |
|---|---|---|
| Information | 55% | 85% |
| Finance and real estate | 50% | 80% |
| Professional services | 45% | 75% |
| Manufacturing | 40% | 75% |
| Retail and wholesale | 35% | 65% |
| Transportation | 30% | 70% |
| Government administration | 30% | 60% |
| Hospitality | 20% | 45% |
| Health care | 15% | 35% |
| Construction | 10% | 30% |
| Whole economy | about 30% | about 58% |
Human hours fall about 25 percent by 2045. Real hourly pay for human work rises about 2.2 times by 2045 and 4.5 times by 2060. Three things drive the pay rise: leverage (a person directing machines produces more), bargaining power (a person with $52,000 does not have to take the job), and a human premium for the work people want done by people: care, teaching, craft, hospitality. The largest cash study to date4 found recipients of $1,000 a month worked 1.3 fewer hours a week and spent the time on family, education, health, leisure and starting businesses. The system pays four times that, and we expect the effect to be larger, and to be the point rather than the problem. "Burning off steam" through paid caretaking and new supply is how the design describes it.
Wealth
A Monte Carlo simulation of 200,000 adults, starting from today's wealth distribution2, was run under the system and under today's rules. It was run before the land tax and local grant were added to the master model, so it is directional.
| Measure | 2027 | 2045, system | 2045, today's rules | 2060, system | 2060, today's rules |
|---|---|---|---|---|---|
| Adults who are millionaires | 10% | 26% | 21% | 67% | 40% |
| Median adult wealth | $80k | $419k | $269k | $1.46M | $663k |
| Top 1 percent share of wealth | 36% | 23% | 40% | 15% | 42% |
| Adults with net debt | 8% | 0% | 3% | 0% | 2% |
Today's dollars. Household debt disappears within about five years under the system, because a weekly $400 to $1,000 deposit retires consumer debt fast and the payday, overdraft and subprime businesses lose their customers. The over-$10 million band ends up about 4 percent of adults in both worlds: the system shares, it does not level.
Prices
The inflation model is by spending category, because a universal income raises demand for some things while automation cuts the cost of others, and the net depends on the mix. Housing is the largest weight and the biggest early risk, which is why piece 8 exists; care, education and recreation get steadily more expensive because they are human work with a premium (Baumol's cost disease5, now a feature); goods, health care delivery and energy get cheaper.
| Category (weight) | 2027 | 2035 | 2045 |
|---|---|---|---|
| Housing (33%) | +5.0% | +1.3% | +1.0% |
| Care, education, recreation (22%) | +3.5% | +3.9% | +4.5% |
| Goods (20%) | −1.0% | −2.3% | −3.0% |
| Food (13%) | +1.5% | +1.1% | +0.5% |
| Health care (8%) | +2.0% | −2.0% | −2.0% |
| Household energy (4%) | 0% | falling | falling |
| All items | about +2.6% | about +0.8% | about +0.6% |
Price level, 2027 = 100, compounding the category rates above with straight-line interpolation between the three anchor years and holding 2045 rates after; today's rules at about 1.8 percent a year. This page's simple compounding reaches about 134 by 2060; the master model's fuller version, with goods and energy falling further after 2045, gives 117. Both are far below today's rules at about 180. Transportation, 17 percent of spending, is not yet in the model and should be, because the proposed mobility fund would move it.
What AI makes cheaper, and by how much
| Activity | Share of GDP | Cost cut by 2045 |
|---|---|---|
| Paperwork and administration | 8% | 70% |
| Knowledge work | 10% | 60% |
| Financial middlemen | 7% | 50% |
| Retail and customer service | 8% | 50% |
| Logistics | 6% | 40% |
| Manufacturing | 10% | 35% |
| Health delivery | 18% | 30% |
| Care and construction | 10% | 10% |
These cuts are what let a lean government (piece 10) and a shrinking local grant (piece 6) hold while the economy grows, and they are the most uncertain numbers in the series. Every one of them is a judgment anchored on the automation literature1 rather than an observation. If health delivery does not get 30 percent cheaper, the public option costs more and the payment is lower. The honest reading of this piece is that it describes a world, not a forecast of one.
Sources
- A new future of work — McKinsey Global Institute, 2023 · original · automation potential by sector; the model's sector shares are judgment calls anchored on it. Not yet locked.
- Survey of Consumer Finances, 2022 — Board of Governors of the Federal Reserve System · original · starting wealth distribution for the simulation: about 10 percent of adults are millionaires, median wealth about $80,000 among adults, top 1 percent hold about 36 percent. Not yet locked.
- Consumer Expenditure Surveys, 2024 — U.S. Bureau of Labor Statistics · original · spending weights by category; transportation ($13,318 per household, 17 percent) is not yet in the inflation model. Not yet locked.
- Unconditional cash study: findings — OpenResearch, 2024 · original · 1.3 fewer hours a week; more time on family, education, health, leisure and starting businesses. Not yet locked.
- Baumol, W. J., The Cost Disease (2012) — Yale University Press · original · why care, education and recreation get more expensive as everything else gets cheaper. Not yet locked.
Numbered references in the text point to this list. "Locked" means we hold a dated copy of the file on the PLACES platform so the figure can be checked later even if the publisher changes the page.