Traders share Pope Leo’s worries on AI’s job market impact

Pope Leo warned over the weekend of a “social disaster” that could result from mass unemployment due to the adoption of artificial intelligence technologies. Prediction market investors seem to think the concerns are not unfounded.

His first circularIn a document that is a form of teaching by the leader of the Catholic Church, Pope Leo called on the world to regulate artificial intelligence. He also warned about its effects on the labor market.

“The pursuit of greater profit cannot justify choices that systematically sacrifice jobs, because man is an end, not a means, and the economic order must remain committed to human dignity and the common good,” he wrote.

Traders on Kalshi place a 60% chance that U.S. unemployment will surpass 8% at some point before 2030. They believe that there is a 47% probability that it will exceed 9% in the same period.

An unemployment rate of 9 percent would likely result from a severe economic recession or displacement of workers. Excluding the Covid-19 recession in 2020, there have been only three economic contractions in the US since World War II that have raised the unemployment rate above 9%.

Kalshi traders think the chances of a recession in 2026 are low, at just 16%. However, they see that this probability will increase to 45% in 2027. There are no contracts for possible recessions in 2028 or 2029.

At the same time, traders think AI is currently leading to layoffs. Investors see a 78% chance that AI will be the number one cause of layoffs in May, and this will be confirmed or denied by Challenger, Gray & Christmas data.

Pope Leo wrote in his first encyclical that “unemployment is a great evil.” He acknowledged that any new technology leads to temporary workforce displacements; Supporters of artificial intelligence have also accepted this view, even as they reassure workers that there will be no mass workforce disruptions due to automation.

But the pope still worries about what the consequences of any disruption might be.

“Work remains a fundamental dimension of the human experience because it is not only a source of livelihood but also a context for expression, relationships, and contribution to society,” Leo wrote. “A society that has a high level of technical development but guarantees employment to only a small part of the population risks exposing many to forced inactivity, lack of responsibility and absence of daily tasks and incentives, leading to human and cultural impoverishment.”

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