The rise of artificial intelligence is doing more than automating tasks or streamlining workflows—it is fundamentally redefining what it means to be middle class in the 21st century. This is not an article about how AI will reshape connectivity, but a personal piece to share some thoughts on this important societal issue.
The end of the Middle Class?
Traditionally, the middle class has been characterized by economic stability, reliable employment, access to healthcare, a path to homeownership, and the promise that hard work would be rewarded with upward social mobility. However, as AI accelerates throughout the economy, that foundation is being destabilized in real-time.
According to Pew Research Center, middle-income Americans are defined as those with a household income that is two-thirds to double the national median income. Lower-income households typically earn less, while upper-income households earn more. Income tiers are adjusted for household size and cost of living in a specific area. The middle class is shrinking, a process that began well before the advent of AI, but AI is accelerating this trend.
Source: Pew Research Center
Nearly 600,000 tech jobs have disappeared since the recent AI boom. This is particularly significant because tech jobs have long been considered a safe haven for middle-class workers—relatively high-paying, skilled roles that offer not only financial comfort but also long-term security. The erosion of these jobs signals a broader transformation that extends beyond the technology sector. Government agencies, such as the IRS, are adopting automation to streamline operations, reducing the need for human labor. This is not a distant or speculative future; it's already underway.
As AI systems become more capable, they are not only replacing routine or manual labor but also encroaching on white-collar and knowledge work. Tasks once thought to require human judgment—such as customer service, coding, legal research, and even medical diagnostics—are increasingly being handled, or at least supplemented, by AI. This undermines a core assumption that the middle class could insulate itself through education and specialization. When AI can write code, answer support tickets, or draft contracts faster and cheaper than a trained professional, the definition of “skilled labor” itself is upended.
Identity Crisis
For middle-class workers, this means a fundamental identity crisis. The job stability that once underpinned middle-class life is giving way to a more precarious reality, where contract work, gig platforms, and AI-assisted productivity tools are increasingly prevalent. The benefits packages, career ladders, and retirement plans that came with traditional employment are no longer guaranteed. In their place is a patchwork of freelance opportunities, short-term projects, and algorithmically assigned tasks.
The societal impact is profound. Homeownership—often a hallmark of middle-class achievement—becomes more elusive when income is volatile and credit is less accessible. Family planning, education, and even healthcare are affected when individuals can't rely on long-term employment. The stress and anxiety caused by this uncertainty also ripple outward, impacting mental health, community cohesion, and trust in institutions.
Reduced Consumer base
At its core, capitalism depends on a steady flow of consumer spending. Middle-income earners, due to their large numbers and relatively predictable spending habits, form the foundation of that system. They buy homes, cars, insurance, and appliances. They pay for healthcare, education, and entertainment. They travel, dine out, and invest in their futures. But when middle-class wages stagnate or disappear—replaced by lower-paying gig work or nothing at all—demand begins to falter. As the graph below
This erosion of demand is not just theoretical; it’s already visible in slowing retail growth, reduced homeownership rates among younger generations, and increasing household debt.
If families no longer feel confident in their financial future, they delay large purchases, reduce discretionary spending, and become more risk-averse. Businesses, sensing weaker demand, scale back investments, freeze hiring, and focus on short-term cost savings rather than long-term growth. In a technology-driven economy, productivity may continue to rise, but the benefits become concentrated in fewer hands, while the broader base of society struggles to keep pace.
Reduced middle-class spending power also affects innovation. Many of the world’s most successful companies have thrived by selling affordable, high-quality products to a broad consumer base. When that base contracts, startups and established firms alike face shrinking markets. Products that depend on scale—whether it’s mass-market electric vehicles, home tech, or subscription services—suffer from reduced adoption. Economic dynamism falters as both demand and entrepreneurial opportunity narrow.
Furthermore, a weakened middle class places strain on public resources. As incomes decline, so do tax revenues, especially income and payroll taxes that fund public services. Meanwhile, demand for safety nets such as unemployment benefits, food assistance, healthcare subsidies, and housing support increases. This imbalance forces governments to either raise debt, cut essential services, or increase taxes on remaining earners and businesses—each option with its own set of economic trade-offs.
Governments and policymakers face a daunting challenge. They must reconsider not only how to regulate AI, but how to redefine economic security in an age where full-time employment may no longer be the norm. This could involve reimagining benefits as portable, decoupled from employers, or investing heavily in reskilling programs to help displaced workers transition into new roles. It may also require stronger social safety nets to protect those who cannot keep pace with the rapid technological change.
Reinventing Oneself
But the responsibility doesn't lie solely with institutions. Individuals, too, must adopt a mindset of continuous adaptation. This means not only acquiring new technical skills, but also developing a capacity for reinvention—learning to navigate an economy where agility matters more than tenure, and where success may be measured less by job titles and more by resilience, creativity, and the ability to collaborate with intelligent systems.
The AI revolution offers immense promise, but it also threatens to hollow out the economic core that sustained generations. If we are to preserve the spirit of the middle class—its aspirations, its sense of security, its role as a stabilizing force in society—we must confront this transformation head-on. AI is not just a tool; it is a force reshaping the very structure of work, and with it, the fabric of everyday life.
In this new era, the middle class won't disappear—but it will look profoundly different. Its future will depend not on resisting change, but on how effectively we respond to it.
Maravedis is an independent research and analysis firm founded in 2002. We focus on managed connectivity and the convergence of WiFi with 5G/6G. We are recognized for our long-standing collaboration with the Wireless Broadband Alliance and our relationships with MSPs and ISPs. Contact us to learn more about our syndicated reports, custom research, consulting, and bespoke marketing services.