WASHINGTON, D.C.— Evan LeFlore, Director of AI, Innovation, and Economic Opportunity at Better Markets, issued the following statement in response to California Governor Gavin Newsom’s Executive Order N-6-26 directing state agencies to study and mitigate the workforce impacts of artificial intelligence:
“AI undoubtedly has great potential, but that has to be balanced by addressing its costs. Currently, AI development and implementation are decidedly unbalanced, as it crashes somewhat randomly through the economy with major consequences for workers, families, communities, and governments. Those consequences are hitting hardworking Main Street Americans hard, as those jobs that are most exposed to this early phase of AI-driven job losses are too often an afterthought. Governor Newsom’s AI Workforce Executive Order is exactly the kind of proactive, evidence-based action that other states and federal policymakers should be taking. Unfortunately, it stands in stark contrast to Washington’s current hands-off approach that has left working Americans to fend for themselves while AI companies—now a $375 billion global industry, with 33 of the top 50 private AI firms based in California—unilaterally and dramatically reshape the labor market.
“We strongly support the Order’s central premise: that the disruptions AI will cause to workers, families, small businesses, and communities cannot be left to profit-maximizing market forces alone, and that government has a duty to study those disruptions, give workers advance warning, and build the safety net that displaced workers will need. In particular, we applaud the Order’s ambitious data collection and early-warning best practices provisions. These are precisely the kind of empirical infrastructure that regulators and policymakers need to act so that the benefits of AI can be achieved and the costs addressed and minimized. Too much of the AI policy debate has been driven by speculation and industry self-reporting; California is committing to data.
“We also strongly support the Order’s focus on the safety net for hardworking Americans who are thrown out of work due to technology, including the reviews of severance programs and the directive to make it easier for Californians to navigate the full range of social services for which they are eligible. The need for government intervention in these areas highlights a basic truth: taxpayers, communities, and governments end up paying for the transition costs of technological change, and the old framework of layoff notices and unemployment insurance was built for an industrial economy that no longer exists. Fitting for purpose those now outdated frameworks—or building new ones for a new age—for the AI era, and making sure Main Street Americans actually know what’s available to them is overdue.
“Additionally, one provision of the Order deserves special attention. The directive to support small business adoption of AI through best-practice education is critically important and must be a priority. Small businesses are the backbone of the California and American economies, but they lack the in-house data scientists, the consultants, and the cash flow that the largest firms use to adopt AI on their own terms. Without dedicated support, the gap between AI’s beneficiaries and its bystanders will widen along the very same lines that already separate Big Tech from Main Street businesses. Done well, this provision can help small firms use AI to enhance their competitiveness while retaining and retraining their existing workforces rather than being forced into a false choice between adopting AI and keeping their workers. We urge the California Office of the Small Business Advocate to move quickly; to make best-practice guidance, training, and direct technical assistance broadly accessible to small firms in every region of the state; and to engage workers and worker organizations alongside employers in shaping that guidance.
“The contrast of California’s approach with that of Washington could not be sharper or more disappointing. Since taking office, the Trump administration has issued a string of AI-related executive orders, the most recent of which explicitly seeks to preempt state AI laws and threatens to withhold federal funding from states that try to address the AI-created costs to their workers, families, communities, and taxpayers. None of these federal orders properly addresses the serious AI workforce impacts the way California’s Order does, nor do any of these federal orders direct a single agency to give workers advance warning, build a safety net for displaced workers, or help small businesses adapt. That type of unbalanced system isn’t sustainable and will only create a backlash that will serve no one.
“Governor Newsom’s Order may not be perfect or complete, but it is an attempt to balance competing interests and address some of the immediate, very serious costs. Importantly, the Order is not a finished product, and its real test will be in the implementation, the recommendations it produces, and the follow-on legislation and regulation it spurs. But it is a serious, substantive step in the right direction, and it puts the key issues squarely on the agenda for federal and state policymakers. It is past time for the federal government to enact a balanced framework that addresses and enables AI’s potential while also addressing the costs and impacts.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies—including many in finance—to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.org.
