Pope Leo XIV held his weekly general audience in St. Peter’s Square in Vatican City on June 11, 2025.
Massimo Varricchia | Null Photo | Getty Images
Pope Leo warned over the weekend that mass unemployment due to the introduction of artificial intelligence technology could lead to a “social disaster”. Prediction market traders seem to think the concerns are not misplaced.
In his first encyclical, a teaching document by the leaders of the Catholic Church, Pope Leo called on the world to regulate AI. He also warned of the potential impact on the labor market.
“The pursuit of the greater good cannot justify the choice to systematically sacrifice jobs, because humans are ends, not means, and the economic order must remain subordinate to human dignity and the common good,” he wrote.
Karsi traders see a 60% chance that the U.S. unemployment rate will exceed 8% at some point by 2030. Also, the probability of exceeding 9% during the same period is 47%.
The 9% unemployment rate is likely due to a deep recession and an exodus of workers. Excluding the 2020 coronavirus recession, there have only been three economic contractions since World War II that have pushed the U.S. unemployment rate above 9%.
Karshi traders believe the chances of a recession in 2026 are low, at just 16%. However, by 2027, that probability is expected to rise to 45%. There is no contract for a potential recession in 2028 or 2029.
At the same time, traders believe that AI is now driving layoffs. Traders believe there is a 78% chance that AI will be the biggest reason for layoffs in May, and this will be confirmed or refuted by data from Challenger, Gray and Christmas.
Pope Leo said in his encyclical that “unemployment is a grave evil.” He acknowledged that any new technology will lead to a temporary loss of workforce. Supporters of building AI agree with this view, even as they reassure workers that automation will not lead to large-scale workforce disruption.
But the pope remains concerned about the consequences of any disruption.
“Work remains a fundamental aspect of the human experience, because it is not only a means of survival, but also a context for expression, relationships, and contribution to community,” Leo wrote. “A society that guarantees employment to only a small part of the population, despite high technological development, risks exposing large numbers of people to forced inactivity, lack of responsibility, lack of daily work and stimulation, resulting in human and cultural poverty.”
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