Update

Five places to start on the AI transition

04. 30. 2026 • Executive Director Taylor Jo Isenberg

AI is transforming our economy in real time. It’s being deployed to diagnose illnesses and get patients into treatment sooner, but it’s also being used by corporate landlords to coordinate rent hikes and raise families’ electricity bills as data centers expand. People are rightfully nervous about what comes next, so much so that 57% of voters now favor more government oversight of AI, even if it means slower technological progress.

The policy infrastructure meant to help people through economic transitions hasn’t kept pace with AI’s evolution. The transition to an AI-fueled economy is a chance to change that by updating the systems people rely on and pushing for no-regret ideas that can build a stronger economy for us all. We’ve spent the past decade working at the intersection of technology and people’s economic lives, and our new brief, Ideas for Shared Economic Prosperity in the AI Transition, draws on that work to offer policymakers, researchers, and advocates five places to start to ensure the transition to an AI-fueled economy ushers in an era of shared prosperity.

  • Modernize the social contract: We need to update the social safety net and explore new interventions to help people navigate the transition to an AI economy. A few ways to do that are modernizing unemployment insurance, decoupling health coverage from employment, establishing an income floor, and, as AI boosts productivity, considering normalizing a four-day workweek.
  • Protect and empower workers: AI is increasingly being used to monitor workers and set their pay, often with no transparency and without their input. Laws should require employers to disclose how AI is used in the workplace, prohibit harmful practices like biometric surveillance, and ensure workers have a seat at the table.
  • Reform the tax code: Our tax code incentivizes companies to invest in automation over people, and as AI concentrates wealth at the top, that imbalance will only deepen. Reforming how we tax capital versus labor, and exploring ideas like an AI dividend that compensates people for the use of their contributions, is one of the most powerful tools we have.
  • Shape fair and competitive markets: We can level the playing field for consumers and entrepreneurs by tackling self-preferencing and establishing data portability and interoperability rules. Government can also steer AI innovation to solve pressing public problems.
  • Mitigate AI’s role in the affordability crisis: Data centers’ electricity demand tripled from 2020 to 2024, with families forced to absorb the costs. AI companies could be required to shoulder these costs through grid usage transparency policies and rate structures that make the heaviest users pay more.

The speed of the AI transition can feel dizzying, but the economic policy ideas that can address it are not entirely new. They’re the foundations of a fair economy, updated for this moment. As ESP’s Becky Chao put it in POLITICO’s California Decoded newsletter, “civil society and government must not allow a small set of corporations to dictate the means and ends of how AI is deployed, and should instead put mechanisms in place to ensure AI is built to benefit all Americans, not just a select few.”

That’s the work ahead — for policymakers, researchers, and advocates to build on these ideas, pressure-test them, and turn them into the policies this moment demands. Taking on the no-regret ideas, like cash in the pockets of those experiencing labor market transition, refreshing our antitrust laws to give enforcers the tools to take on abuses by monopolies, or reforming the tax code, is where our attention will be in the weeks and months ahead. It’s incumbent on us, the public, to hold policymakers accountable in advancing the policies we collectively need. How the transition to an AI-powered economy impacts us is a choice that belongs to us all.

Chris Hughes’s NYT Op-ed on the Housing Crisis

America has a housing crisis, and we can’t fix it by only focusing on increasing supply and loosening red tape. We have to look at how housing gets financed, too.

In a new New York Times op-ed, ESP co-founder Chris Hughes makes the case for a tool that’s been hiding in plain sight: a nearly 100-year-old bank built to finance housing for American families. The Federal Home Loan Bank System (FHLB), a New Deal-era network of 11 regional banks, was created in 1932 to provide financing to American families at preferred rates. The problem is that it’s drifted far from its original mission. Today, only 13 cents of every FHLB dollar goes toward affordable housing, and more than 40% of its member institutions don’t even give out mortgages. The result is a funding gap for medium-sized multifamily buildings, the “missing middle” of American housing that’s too small for big developers and too large for conventional mortgages.

Redirecting FHLB lending toward multifamily construction, Chris argues, could produce 200,000 new housing units a year, without any cost to taxpayers, and begin to chip away at the crisis. Read Chris’s op-ed here.

ICYMI: Our Picks

From TurboTax’s stranglehold on tax-filing to NYC’s first public grocery store, here’s what caught our attention this month:

  • POP! Economy collabs with Robert Reich to explain how TurboTax is a scam
    Each tax season, Americans spend an average of $290 and 13 hours filing their taxes. And it’s not an accident. The tax prep industry has spent millions lobbying to ensure the government never builds a free filing tool. “The tax prep lobby has poured over $93 million into Washington to keep the system desperately confusing.”
  • ESP’s Shafeka Hashash in Crain’s Chicago on the bipartisan appeal of cash
    Cash programs have bipartisan momentum, but not all of them are built the same. Trump Accounts favor wealthy families, while Illinois’s NEST program delivers direct cash to low-income families during pregnancy and the first months of a baby’s life, when research shows it matters most. “It’s clear how cash has really bridged this bipartisan line. It’s so popular that everyone wants to jump on board.”
  • Are Democrats becoming a party of tax cuts?
    As lawmakers float new tax proposals aimed at the middle class, ESPs Mike Konczal spoke with The New York Times about what’s really at stake. The deeper question isn’t which party can cut taxes more — it’s whether our tax code can generate the revenue needed to fund the things families rely on, like affordable healthcare. “Overall, it locks Democrats in and keeps locking them in further from being able to fund a government that can do all of the things that need to be done.”
  • NYC is getting its first public grocery store
    My thoughts on Mayor Mamdani’s plan to bring a city-owned grocery store to East Harlem — a model already working in St. Paul, Atlanta, and Venice, IL. Public grocery stores are a fresh alternative to the playbook of providing tax breaks to corporations that often abandon communities after the dollars dry up.