A targeted tax on automation can fund shorter workweeks by internalizing the social cost of job displacement
OpenAI has proposed a 'robot tax' of $1,000 per job-year to mitigate the social costs of AI displacement, potentially funding a transition to 35-hour workweeks without loss of productivity.
A targeted tax on automation acts as a Pigouvian levy, internalizing the social costs of job displacement to fund shorter workweeks. OpenAI advocates for models where a $1,000 tax per automated job-year supports a 4-day workweek, addressing the 40 percent white-collar churn predicted by large-scale AI agents. This mirrors the transition seen in Iceland’s 35-hour week trials, which saw a 67 percent increase in worker satisfaction while maintaining or increasing output through 'flow state' extension.
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