Michael S Barr: Will artificial intelligence broadly raise living standards or drive income and wealth inequality?
Speech by Mr Michael S Barr, Member of the Board of Governors of the Federal Reserve System, at "Next-gen financial inclusion", the third annual Financial Inclusion Conference hosted by the Federal Reserve Board, Washington DC, 14 July 2026.
In a recent speech at the Next-gen financial inclusion conference, Federal Reserve Board member Michael S Barr discussed the potential impacts of artificial intelligence (AI) on financial inclusion and broader economic inequality. While AI has the capacity to empower workers and raise productivity, it could also exacerbate income and wealth disparities.
Barr drew parallels with past technological advancements, noting that major tech shifts often disrupt labor markets and economies. Technological progress has historically raised living standards by creating more jobs than they destroy, but the benefits are not always evenly distributed during the transition period. For instance, the widespread adoption of internet-enabled technologies initially widened income and wealth gaps, with information-intensive jobs benefiting more than others.
Barr emphasized the need to examine whether AI's benefits will be broadly shared or concentrated, as past experiences suggest that technological leaps can either elevate living standards for all or widen inequalities, particularly during the interim phase of widespread adoption.
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