by spwa4 | 2025-09-04 08:54:22+00:00
Seems to me like the jobs disappeared in reaction to the extremely obvious: a certain president causing a crisis to get himself a tax cut, the latest in a very long series of government decisions to make labor extremely unattractive for the private sector. AI is an excuse, nothing more. And I mean both Macron and Trump.

AI is not even remotely close to the point where it can replace a human working for you, that's just not it. Everybody keeps screaming "NOT YET", and perhaps that's true, but either case, it's not currently true.

However, economic conditions are so that companies now want to not hire, because price rises due to tariffs mean much less spending happening, with the outlook steeply downward. It will very mean widely spread layoffs soon. The first to suffer are new entrants to the job market and the close-to-pension near-the-exit people as well, but let's not kid ourselves: they will hardly be the only ones.

The irony is that to me, this seems to be the reverse of what people think they see: AI is a clear investment target at the moment. It's being accused of killing jobs, but reality? It's one of the few clear investment targets. It is a portion of the economy that is entirely opposing the general trend. AI is not just not causing of firings, but actually is putting a break on the firings (by providing jobs funded by investment). It's a huge positive for the economy at the moment, and I bet it's a huge positive for jobs at the moment. Like most investments, the gains it promises have barely materialized right now: it's promising to replace people but it isn't. Frankly, the only other large investment target I see is weapons. And, while AI can be used in weapons, it's still leagues better than making actual weapons in my book. Nobody is literally blowing off anyone's head by firing an AI model at them.

I find this an obvious insight once you look at what companies are actually doing: they're not killing jobs and providing the same services. They're killing jobs and providing less services, for less money, to try to survive. If AI was replacing people, they'd be providing more service for less money. Money is the problem here. Money is artificial, entirely a decision of society. Where is the money going? Look at the stock market: it certainly isn't going to investors (look at an EU stock market, outside of weapons manufacturers)

And there's the key, fundamentally, businesses' desire to replace people is not a desire of business. It's a government decision. A tax decision. A very large portion of government income is income tax of various kind. People-based taxes. This means: you generate revenue from the means of production, capital (ie. "a factory"), input goods, and people's labor? It's people's labor that is taxed. Everything else is actually tax-exempt. Capital is free (you can spend 100% of your investor's money on buildings, no tax, assuming you follow standard practice). Input goods are free (VAT/Sales tax exempt, you don't even have to pay it initially). You want to keep more of your company's revenue? I don't think enough people realize this: but you lose a LOT more on the people than on anything else. In fact you only lose on people in some sense (because capital and input goods can at least theoretically be sold or more likely subleased for similar value as you got them for, they're "free", or only historically low interest is required). You almost only pay the government for the privilege of getting labor from someone else.

In France, the actual tax is over 70%, if you measure it fully. By that I mean: let's say I pay you $100. Any tax, patronal (employer tax), income tax, insurance, pension (which are all government), import tax, VAT, ... is all to be paid from the $100. You like the product my company makes. You buy all you can from it, you spend all of that $100 on my product. How much do I see on my bank account? $28.7, by my last count. That amount, by the way, is then taxed at 40% before it goes into my bank account, so it's comfortably under $20. The $28.7 is what I could reinvest into my company (and need to buy the input goods in the first place). Even this is not counting many forms of tax that are effectively mandatory for everyone, such as rental tax, garbage tax, park tax ...

In other words, if I didn't have to pay any tax at all, I wouldn't bat an eye to have your work done by 3 or even 4 people, as that would be a much better deal. I'd be looking for extra services people would pay for and provide them.

Now I get that government is necessary, but we're paying for government services in the west by artificially increasing the cost of labor 500%. That is where tax comes from. There's other taxes, but they're perhaps not rounding errors, but obviously it's not what I'm worried about. And you are complaining that CEO's, or AI, or greed, or ... is costing jobs?

No. The fact that in at least one view something like 80% of all efforts (all "economic value", mostly labor) in France is just keeping the government running, nothing more, that is making it critical for the private sector to avoid using labor, to avoid providing jobs like the plague. Oh, and of course, then the government allows foreign (read: US) companies to come in and "use contractors", in other words: to not pay labor tax (Uber, Deliveroo, ...), which they of course don't allow for French companies.

And then, because the government is never happy with a big disaster unless it grows into a nice huge well-fed catastrophe, government makes it really hard to stop spending on people, so over hiring is a huge, extremely expensive, mistake. 100-person companies go bankrupt due to 5 unnecessary hires at the wrong time. I get that this is people's lives we're talking about, but given that the government gets 80%+ of the value of people's labor, I feel like it's perfectly reasonable to ask the government to take care of these people. Of course, they don't, not well.

Of course, it's "companies' greed" that gets blamed for all the effects. Truth is this just isn't true, frankly not even at huge companies like Total. Or, to put it differently, if party A's greed is not even 20% of the total, and B demands over 80%, I feel like a healthy amount of blame needs to go to party B.