{
  "id": 14629081,
  "title": "The impact of bubbles on lifetime earnings",
  "url": "https://urgent.news/2026/10/15/the-impact-of-bubbles-on-lifetime-earnings",
  "topic": "finance",
  "section": "Finance & Markets",
  "published": "2026-10-15T06:01:02.000Z",
  "source": {
    "name": "Klement on Investing",
    "slug": "klement-on-investing",
    "url": "https://klementoninvesting.substack.com/p/the-impact-of-bubbles-on-lifetime"
  },
  "original_language": "en",
  "account": "If you recently transitioned into the rapidly expanding AI job market, hoping to reap the benefits of higher salaries or greater earning potential, you might be in for a surprise. According to a recent study, your lifetime earnings could potentially be significantly reduced due to the increased competition and rapid skill obsolescence brought about by artificial intelligence.\n\nThe research, conducted by Johan Hombert from HEC Paris and Adrien Matray from the Atlanta Fed, analyzed the earnings trajectory of highly skilled IT professionals before and after the tech bubble that emerged in the late 1990s and early 2000s. The study suggests that the current AI bubble may be even more substantial than the tech bubble of the past, both in terms of stock market investments and the labor market.\n\nDuring the tech bubble's peak, approximately one-quarter of highly skilled workers in the United States gravitated towards the tech and telecom sectors, enticed by the prospect of substantial profits and higher wages compared to their counterparts in other industries. However, this surge in demand was fueled by substantial debt and other forms of low-cost financing, such as private equity and venture capital. When the bubble eventually burst, many businesses went bankrupt, and numerous individuals lost their jobs.\n\nEven those who managed to retain their positions within the tech industry found themselves at a disadvantage. Over time, their skills became outdated due to the rapid pace of technological advancement. For instance, the pinnacle of skill during the 1990s and early 2000s was that of a \"web designer,\" a role that no longer exists today. As a result, the value of these workers diminished as their productivity declined due to the changing nature of the workplace.\n\nThe implications of this trend are evident in the wage disparities that emerged after the tech bubble burst. In the late 1990s, tech workers who were either previously employed in the sector or joined during the boom earned 5% to 10% more than their peers in other sectors. However, once the bubble burst, this wage advantage rapidly eroded, and by 2005, tech workers were actually earning less than their counterparts in other fields.\n\nFifteen years after the tech bubble reached its peak, the earnings gap between tech workers and their peers in other sectors remained significant. On average, tech workers who entered the industry before or during the bubble were making 7-8% less than their counterparts in other sectors. This suggests that the promise of a \"greener pasture\" in the AI job market may not always hold true, as the competitive landscape and the rapid pace of technological change can quickly render specialized skills obsolete.",
  "summary": "If you recently switched careers to join the booming marketplace for AI jobs and profit from the higher salaries or greater upside on offer there, I have bad news for you.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}