AI Unemployment Is Different
When jobs disappear but the economy keeps growing.
Classic unemployment meant less work, less output, and a shrinking economy. AI unemployment is different: the worker leaves, but the work accelerates.
Machines and software take over, output rises, and the economy grows. Classic unemployment is a problem of scarcity. AI unemployment is a problem of distribution.
When the economy keeps growing even as jobs disappear, the challenge isn’t affordability - it’s capture.
Classic Unemployment
AI Unemployment
Worker displaced
Output falls
Economy Shrinks
Scarcity Problem
Distribution Problem
Economy Grows
Output rises
Worker replaced
How the AI Surplus Is Captured
Two automatic, non-invasive mechanisms.
Dynamic VAT
AI lowers production costs → prices would fall
VAT adjusts upwards, capturing the deflation dividend while keeping prices stable.
Prices stay stable for consumers. Income and profit tax rates don’t change.
Ring-fencing Above-Trend Revenues
AI increases profits and capital gains, raising tax receipts without raising tax rates.
At the same time, it improves public-sector efficiency, reducing government costs.
The MOSAIC Model ring-fences both these AI-driven windfalls for redistribution.
The captured AI surplus is distributed as a Negative Income Tax.
Everyone has a guaranteed minimum income that tapers smoothly as earnings rise.
Work always pays, with no welfare trap - and no work still provides a middle-class income
Even under AGI-level unemployment, the two core mechanisms are sufficient to fund a basic income comparable to today’s lower-middle-class earnings.
Ends poverty · Preserves incentives to work · Scales with automation
A Guaranteed Income Floor
Funded by AI — without new bureaucracy.
From Basic Income to Universal High Income
An economic possibility — and a political choice.
The MOSAIC Model’s two core, non-invasive mechanisms capture only about one quarter of the AI dividend.
That is enough to fund a lower-middle-class guaranteed income floor and eliminate poverty, even under very high unemployment.
Capturing a larger share of the AI dividend — through less minimally invasive tools such as windfall taxes, AI-specific levies, or land and inheritance taxes — could raise the floor further, toward a universal high income.
The economics make higher floors possible.
Whether to go there is a question for society to decide.
Why The Mosaic Model Works:
It pays for itself
AI-driven surplus far exceeds the cost of eliminating poverty.
It fits political reality
keeping consumer prices stable and avoiding headline statutory rate hikes.
It uses what already exists
Leverages current tax instruments instead of creating new bureaucracies.
Future-proof
Works in a world of slow automation - and in one of rapid AI transformation.
About Mosaic