classes – with political voice, media access, and higher expectations of security – the political consequences could intensify. A “white-collar rust belt” could begin to take hold in cities that today are hubs for knowledge and services, generating a powerful, angry, political force. The impacts of labour-market disruption will be vast, affecting households, communities and political systems, with consequences that may prove even harder to reverse than the economic dislocations themselves. Political gridlock could worsen as societies become more polarized under economic duress. Some countries could enter a vicious cycle of economic contraction and social discontent, as AI-driven productivity gains co-exist with widespread disruption and profound inequality. A generation of university graduates may need to work gig-economy jobs as they struggle to keep pace with relentlessly improving AI capabilities. If highly educated young people remain unemployed for long periods, this could become a destabilizing force in society, with some potentially becoming more inclined towards antisocial extremism.157 The GRPS finds Inequality to be the most interconnected risk for the second year in a row, reflecting its role as a transmission mechanism: labour displacement feeds inequality, which drives societal polarization. Even if there are massive productivity gains from implementing AI, as more of the middle class is hollowed out and the pathways to social mobility rapidly dissipate, incomes would decline and consumer confidence would erode, depressing spending and potentially triggering an economic downturn. Policy-makers are likely to have fewer options as the next decade progresses: high public-debt servicing costs will constrain fiscal responses, with rising middle-class unemployment negatively affecting the tax base and housing markets. Advanced economies may face the kind of permanently K-shaped economies prevalent in many highly unequal developing economies. If AI systems continue to improve and exhibit more forms of autonomy, reasoning, and adaptability that extend beyond human-programmed constraints, achieving or approaching general intelligence, the implications for labour markets and economies could become more profound. Entire categories of cognitive and creative work could face automation. At that stage, disruption might no longer unfold linearly but exponentially, possibly compressing adaptation timelines – for aligning education, reskilling, and social protections to the new technology environment – to months rather than years.158 The gains from implementing AI would be concentrated in the hands of capital owners (individuals or organizations). Without new frameworks for taxation, redistribution and rapid reskilling, current inequalities would ossify into structural divisions between those who control intelligent infrastructure and those who depend on it. Purpose in drift In geographies and sectors where waves of automation restructure labour markets, a new class could emerge: workers defined not by job loss alone but by the erosion of professional identity and social belonging. If unaddressed, this crisis of occupational identity could drive alienation, social withdrawal or anti-government and anti-technology backlashes.159 Many governments may aim to put in place emergency measures to maintain social stability, ranging from income safety nets to training facilities and job centres to harnessing AI for learning and job-matching. While universal basic income (UBI) – or greater access to free services (universal basic services) – generated from the windfalls of AI are a best-case scenario for the unemployed, the question of purpose, identity and meaning remains an open one. A society where large segments, especially young people, subsist on UBI could experience a crisis of meaning. Unemployment has been found to be associated with a heightened, low-to-moderate risk of increased mental health issues (compared with being employed) - including depression, anxiety and psychological distress - even in societies with welfare states. Conversely, re-employment reduces the risk of these mental health issues.160 Prolonged, mass unemployment might result in a “lost generation” that feels it has no role to play in contributing to society. Jack Lucas Smith, Unsplash Global Risks Report 2026 63