State Council Document Sets the Tone for Mitigating AI Job Displacement, Scholars Propose Solutions

The new round of technological revolution and industrial transformation has strongly driven economic development, while also bringing profound impacts on employment and income distribution. How to avoid excessive job displacement and ensure that the fruits of technological development benefit more of the people has recently sparked extensive discussion in academic circles.

The General Office of the State Council recently issued the "Opinions on Adapting to the Development of Artificial Intelligence Technology to Help Build an Employment-Friendly Development Model" (hereinafter referred to as the "Opinions"), which proposes to actively enhance the positive effects of AI in creating employment opportunities, empowering traditional positions, improving employment quality, and stimulating entrepreneurial vitality, effectively mitigate the employment displacement impact of AI applications, and strive to achieve inclusive development in which technological progress and industrial upgrading are coordinated with employment promotion and improvement of people's livelihoods.

Industry experts point out that a distinction should be made between long-term development trends and short-term pains of transition, neither exaggerating the shocks nor evading the contradictions. On the policy front, on the one hand, new space for AI employment should be expanded and the development of new occupations in the AI field accelerated; on the other hand, the employment displacement impact of AI applications should be mitigated, AI governance improved, and reform of the worker rights protection system and the social security system accelerated.

In his 1845 book "The Condition of the Working Class in England," Engels, through personal investigation, described the phenomenon of the coexistence of a leap in productive forces and worker poverty during the Industrial Revolution. This phenomenon has been called the "Engels' pause" by economic historians. Recently, the "Engels' pause" has sparked extensive discussion in academic circles, reflecting people's concern and worry about the circumstances of workers under the wave of the new round of technological revolution.

Zhou Wen, a distinguished professor at Fudan University, wrote in Study Times that at present the AI industry is expanding at high speed and technological capabilities continue to break through, but problems such as insufficient inclusiveness of technological dividends, worsening imbalance in employment structure, intensifying competition over technological sovereignty, and prominent ethical risks are gradually emerging, which may form an "Engels' pause" in AI development. Exploring solutions that balance innovative development with risk prevention and control, and efficiency improvement with fairness and inclusiveness, is a major contemporary task for promoting the safe, orderly, and sustainable development of AI and realizing technology for good and benefiting the people.

At a seminar recently held by China News Service, Wang Song, a lecturer at the Department of Economics of the Party School of the Central Committee of the Communist Party of China (National Academy of Governance), said that the "Engels' pause" is a phased phenomenon manifested during the technological transformation period of successive industrial revolutions. Historical experience teaches us that the emergence of the "Engels' pause" problem does not lie in technology itself, but in the relations of production formed in the application of technology. In the development of technologies such as AI, we should adhere to shared development, promote the building of harmonious labor relations, support innovation by small and medium-sized enterprises, and advocate global collaborative governance. By building an institutionalized mechanism for sharing technological dividends, technological progress can be transformed into the material and technological foundation for promoting the free and comprehensive development of human beings.

During the 2026 Bund Summit, Cai Fang, a member of the Academic Divisions of the Chinese Academy of Social Sciences, emphasized that the current period may be a brief quiet period before AI produces a greater employment impact, and also a window period for analyzing the employment impact of AI and making theoretical and policy preparations in advance. To cope with the impact of AI on employment, one cannot count on technology to correct itself; government intervention and the joint participation of all parties, including finance, are needed to promote AI for good.

Cai Fang believes that the employment shock that AI will bring in the future is highly uncertain, so the most important thing at present is not to respond passively after the shock occurs, but to build a response platform at the institutional level so that government intervention, policy intervention, and various macroeconomic policies form common goals and coordinated means. Around this line of thinking, he put forward propositions in four areas: promoting AI equality; guiding AI well; cultivating in advance industries with high demand elasticity but currently low labor productivity, such as the service sector; and promoting institutional re-adaptation.

Optimizing distribution mechanisms

The "Opinions" propose to give play to the role of AI in improving the employment environment, raising occupational safety levels, and improving work quality and efficiency, giving priority to promoting applications in positions with labor shortages and high environmental risks. The scope, intensity, and pace of AI application in labor-intensive industries should be grasped steadily and prudently to minimize the impact on workers. Enterprises are encouraged to explore establishing an unemployment buffer period system, informing affected workers in advance and providing support for transition and job transfer during the large-scale promotion and application of AI.

Wei Qijia, a researcher at the State Information Center of the National Development and Reform Commission, said that crossing the "Engels' pause" requires upholding the approach of technology for good and the rule of law as escort. Technology itself is neutral, and the key lies in the orientation of application; a distinction should be made between long-term development trends and short-term pains of transition, neither exaggerating the shocks nor evading the contradictions. The scenarios in which new technologies are implemented should be classified and screened, and unnecessary substitutions lacking social welfare gains should be regulated. Governance should take into account both guidance at the source of technology and improvement of supporting systems, respect differences in enterprises' stages of development, and give play to the role of rules and regulations, so that technological progress truly serves people and protects the rights and interests of workers.

Zhou Wen said that to adapt to the rapid development of AI, it is necessary to accelerate efforts to shore up institutional shortcomings and build a modern governance system featuring "innovation incentives, risk prevention and control, clear rights and responsibilities, and full-process controllability," so as to achieve synchronous progress of technological innovation and institutional governance. The construction of the AI legal system should be accelerated, focusing on prominent problems such as algorithmic discrimination, deepfakes, data abuse, copyright infringement, and privacy leaks, improving special laws and regulations and industry norms, and clarifying the boundaries of rights and responsibilities, behavioral bottom lines, and accountability mechanisms of various entities, so that AI development has rules to follow and norms to abide by.

In order to enable all the people to share the fruits of AI technological development, while "making the cake bigger," reform to "divide the cake well" is also more important.

The "Opinions" propose to improve the income distribution mechanism adapted to the development of AI technology. Cultivate and develop innovative work forms such as intelligent agents, encourage enterprises to increase investment in public-interest AI technologies, services, and open-source communities, help workers expand the boundaries of their capabilities and enhance the value of their labor, and promote more workers to actively participate in technological progress and benefit from it.

Liu Enzhi, an associate professor at the School of Marxism at Tsinghua University, said that as far as the income redistribution mechanism is concerned, the social security system must be improved to provide basic protection for workers facing industrial transformation and upgrading. Social security is a basic institutional safeguard for protecting and improving people's livelihoods, safeguarding social fairness, and enhancing people's well-being, and it plays the role of a safety net for livelihoods, a regulator of income distribution, and a shock absorber for economic operation. At the critical period when the industrial structure undergoes major adjustment, the social security system especially needs to provide a bottom line for people's livelihoods and act as a shock absorber for the economy, helping workers affected by shocks obtain stable income during the transition period and avoiding sharp social and economic contradictions.

Cai Fang said that under the impact of AI on the labor market, it is increasingly difficult to identify whether the shock an individual suffers is a personal problem or a macro problem. To ensure that everyone is fully covered, inclusiveness must be continuously enhanced. In this sense, the concept of "investing in people" proposed in the 15th Five-Year Plan should incorporate addressing structural employment contradictions and coping with future AI shocks into its overall strategy.