Khanna Proposes $62 Billion Jobs Plan to Counter AI Threat

In an direct address to the growing anxiety over artificial intelligence, U.S. Congressman Ro Khanna on May 15 proposed a sweeping $62 billion annual jobs program called “Work for America.” The plan, outlined in the Wall Street Journal, aims to create one million living-wage jobs to preempt what Khanna calls a “generational emergency” spurred by AI-driven automation.

“Joblessness in your 20s reduces lifetime earnings, narrows your prospects, carries mental-health risks and weakens your sense of purpose,” Khanna, a Democrat from California, wrote. “This isn’t only a labor-market disruption. It’s a generational emergency.”

The proposal lands amidst a deeply conflicted U.S. economy. While the S&P 500 has touched highs of 7,230.12, fueled by AI-related investment, consumer sentiment has cratered to a preliminary reading of 48.2, the lowest since the survey began in 1952. The anxiety is compounded by rising jobless claims, which climbed by 12,000 to 211,000 for the week ending May 9, and persistent inflation fears driven by gas prices topping $5.00 a gallon in some areas.

At stake is the future of a generation of workers entering a labor market on the cusp of radical change. The “Work for America” proposal directly confronts warnings, such as those from Anthropic CEO Dario Amodei, of unemployment surging as high as 20 percent in white-collar sectors. With a recent Stanford study finding a 16 percent relative decline in employment for young workers in AI-exposed jobs, the plan seeks to build a government-funded bridge to a new economy.

A Modern WPA for the AI Age

Khanna’s proposal is explicitly modeled on President Franklin D. Roosevelt’s Works Progress Administration, which employed more than 8.5 million people during the Great Depression. Work for America would similarly provide up to three years of employment across public service, infrastructure, and technology, funded by a “modest tax on billionaires and a token tax on AI use.”

The program would aim to rebuild public-sector ranks, from teachers and social workers to civil servants tasked with modernizing government services. It would also fund “moon-shot projects” in renewable energy and quantum computing and establish 1,000 new trade schools to run apprenticeship programs with federal contractors, creating pathways into private-sector jobs.

Wall Street vs. Main Street

The call for large-scale government intervention highlights a growing divergence between financial market performance and household economic reality. The stock market’s Goldilocks narrative, driven by corporate earnings and AI productivity gains, clashes with grim consumer sentiment buffeted by inflation. The April jobs report showed a resilient, if slowing, addition of 115,000 nonfarm payrolls, but large-scale layoffs at tech firms like Meta, Coinbase, and Cloudflare suggest the AI-driven displacement Khanna warns of is already underway.

This Jekyll-and-Hyde dynamic—record stock prices and record-low consumer confidence—creates a precarious environment. BCA Research’s chief strategist Peter Berezin noted that the economic impact of shocks often comes with a significant lag, suggesting the full effect of geopolitical tensions and high energy prices has yet to be felt.

An AI-Proof Labor Market?

While AI poses a threat to many white-collar professions, some sectors remain insulated. A recent report from staffing agency Randstad found that while 52 percent of U.S. workers worry about AI’s impact on jobs, skilled trades like HVAC are experiencing labor shortages, with over 40,000 annual openings. This suggests a potential shift in the labor market, where manual skills and trades gain value as repetitive white-collar tasks are automated.

Khanna’s plan attempts to address both sides of this equation, creating roles in digital and AI ethics while also funding vocational training. The proposal’s core is a bet that the private market alone will not manage the transition smoothly, requiring public investment to prevent the “deaths of despair” and hollowed-out communities that followed previous economic shifts.

This article is for informational purposes only and does not constitute investment advice.