Will AI bludgeon Arizona, U.S. job markets or just some of the numbers?

Bruce Yandle

Submitted photo/InsideSources.com

When we add the importance of AI to small businesses, as reported by the U.S. Chamber, the result strongly suggests that U.S. employment growth, fully considered, is healthier than reported and that better things are eventually in store for the overall economy.”

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OPINION — Hardly a day passes without new announcements of layoffs in high-tech and other fields attributed to the artificial intelligence economy’s ability to replace and reshuffle workers.

While the Bureau of Labor Statistics and other experts attempt to identify which forms of work are most vulnerable to the transformation many of us also receive personal AI assistance in writing our wills, planning our investments or completing complicated income tax returns, underscoring just how dramatically the world of work is changing. Others are using AI as a basis for starting new businesses. 

All of this affects Gross Domestic Product growth and the measurement of employment in the economy. If we’re to understand what’s going on, we must take a harder look at the data.

When it comes to GDP, the wind that AI puts in our sails may come with a cross-breeze. Economists have long recognized that if a person marries a housekeeper, and thus stops paying for the service while the house stays clean, GDP goes down. In other words, the economy as traditionally measured shrinks a bit. For the opposite reason, if one places a cared-for family member in a nursing home, GDP rises. 

Something similar happens when a person uses ChatGPT or another AI service for tax, medical or even engine repair advice. As recently suggested by Oxford University economist Carl Frey, you might find yourself with less leisure time than if you’d visited the accountant, clinic or mechanic. At the same time, the do-it-yourself AI approach reduces earnings for businesses that previously provided the service. GDP growth, as traditionally measured, encounters a setback. 

So, we may marvel at what AI seems to be doing for free while failing to realize that we are doing more. Wouldn’t you know? Few things are truly free in this world. 

As for the employment picture, in 2025 the U.S. Chamber of Commerce found that 60% of small businesses use AI for core operations, double the share reported two years earlier. AI activity is helping many of these expand their commercial operations, and small-business growth lies at the heart of the U.S. economy.

There’s something else to consider: Many small businesses emerge because a person previously employed with another enterprise starts a new one. We need to acknowledge the people moving from employed to self-employed, because they don’t show up in the Bureau of Labor Statistics employment head count each month. 

Just how large might their effect be in the current economy? In March 2026, there were 491,000 businesses formed in the United States. That same month, 157,769 workers were added to U.S. payrolls. Last year, more than 5 million new businesses were formed, and only 181,000 were added to U.S. payrolls. 

While we don’t know how many of the owners of all these new businesses were previously on a payroll, new business leadership has been larger than new hiring for years. 

When we add the importance of AI to small businesses, as reported by the U.S. Chamber, the result strongly suggests that U.S. employment growth, fully considered, is healthier than reported and that better things are eventually in store for the overall economy. 

Yes, we need to dig deeper when seeing the latest GDP and employment growth numbers. Our economy is undergoing an AI-led revolution that warrants more formal recognition.  The White House should name an OMB-led task force that includes the Department of Commerce, Bureau of Labor Statistics, Bureau of the Census and  Council of Economic Advisers to provide recommendations on how to track and report on the newly emerging economy. We are no longer a smokestack economy. 

Who knows, maybe this really is America’s golden age, but not as traditionally measured.

Bruce Yandle is an adjunct fellow with the Mercatus Center at George Mason University, dean emeritus of Clemson University’s College of Business and Behavioral Sciences, and former executive director of the Federal Trade Commission. He wrote this for InsideSources.com. Please submit comments at yourvalley.net/letters or email them to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.