NEW YORK (PIX11) – New York City could be on track to lose thousands of jobs over the course of a few years – all thanks to artificial intelligence (AI), according to a report issued by the New York City comptroller.
“There is no city in America—and perhaps none on earth—more exposed to both the promise and peril of artificial intelligence than New York City, read the introduction of the report. “There are few places with more power to steer the transformation ahead.
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The report, titled AI and New York City’s Fiscal Future, highlights five scenarios in which AI impacts the city’s economy and job market.
Spoiler alert: Multiple scenarios involve negative outcomes for employment, economic growth, or tax revenue, and together account for 50 percent of the probability. In those cases, the City’s first obligation should be to maintain vital services despite significant budgetary strain, the report says.
The report notes that building such a forecast was difficult because AI’s trajectory is impossible to predict with precision. The comptroller’s office used national AI scenarios developed by Moody’s Analytics and adapted them to reflect risks specific to New York City.
The five scenariosScenario No. 1 – AI boosts productivity with limited economic disruption.
In this scenario, artificial intelligence increases moderately, with over 50,000 jobs added and a small annual growth rate of 1%. The industry also expands, and wages rise at a moderate pace.
Wall Street profits and tax revenue grow.
The report sees this scenario as 35% likely.
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Scenario No. 2 – AI falls flat and fizzles out.
In this scenario, the New York City economy and tax revenues are hit by a sudden shock, but the damage is temporary, as with any recession, according to the report. The private sector would lose 52,500 jobs over the course of the year, 5,000 of which would be in office-using industries.
Wages would stall, Wall Street profits would drop, and there would be a significant decline in financial markets.
The economic shock would cause tax revenues for that year to drop by over $3 billion.
The report says this scenario is 25% likely to happen.
Scenario No. 3 – AI sees rapid productivity gains, leading to widespread job replacement and increased unemployment.
In this scenario, AI is adopted in the workplace faster than expected, leading to rapid productivity growth and the widespread replacement of routine work. The city would shed 13,600 private sector jobs over the course of the year.
In this scenario, jobs will initially be lost, but the job market will recover. Private sector jobs increase by about 33,500 annually, with office industries adding 15,000, according to the report.
This scenario is 20% likely to happen, according to the report.
Scenario No. 4 – AI Boom
In this scenario, productivity growth and private-sector job gains are observed, though there is some lag. Wall Street profits outperform, and wage income grows at a 4.8% compound annual rate from 2025 to 2030.
This scenario is 15% likely to occur, according to the report.
Scenario No. 5 – The AI Shockwave
In this final scenario, labor displacement is intensified by a Wall Street valuation correction and a more pronounced near-term decline in office-using industries.
Employment effects begin to accelerate toward the end of 2026, with the private sector losing more than 110,000 jobs in 2027.
Nearly three out of every five jobs lost come from office-using industries. Wall Street profits decline year over year for three consecutive years in 2026–2028, according to the report.
Although the last scenario is grim, the report says it is only 5% likely.
For the full report, methodology, and in-depth analysis, click here.
Matthew Euzarraga is a multimedia journalist from El Paso, Texas. He has covered local news and LGBTQIA topics in the New York City Metro area since 2021. He joined the PIX11 Digital team in 2023. You can see more of his work here.
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