Pope Leo XIV holds his weekly general audience at St. Peter’s Square in Vatican City, June 11, 2025.
Massimo Valicchia | Nurphoto | Getty Images
Pope Leo warned over the weekend that a “social calamity” could come from mass unemployment due to the adoption of artificial intelligence technologies. Prediction market traders appear to think that worry isn’t misplaced.
In his first encyclical, a document that is a form of teaching by the leader of the Catholic Church, Pope Leo urged the world to regulate AI. He also warned about the effects it may have on the labor market.
“The pursuit of greater profits cannot justify choices that systematically sacrifice jobs, because the human person is an end, not a means, and the economic order must remain subordinate to human dignity and the common good,” he wrote.
Traders on Kalshi place 60% odds that U.S. unemployment will cross 8% at some point before 2030. They also give a 47% chance it will cross 9% in the same period.
A 9% unemployment rate would likely stem from a severe recession or displacement of workers. Not including the Covid-19 recession in 2020, there have been only three economic contractions that have pushed the unemployment rate in the U.S. above 9% since World War II.
Kalshi traders think there’s a low chance of a recession in 2026, with odds at just 16%. However, in 2027, they see those odds climbing to 45%. There are no contracts about potential recessions in 2028 or 2029.
At the same time, traders think AI is driving layoffs right now. Traders place a 78% chance that AI is the No. 1 reason for job cuts in May, which will be confirmed or denied by data from Challenger, Gray & Christmas.
In the encyclical, Pope Leo wrote that “unemployment is a grave evil.” He acknowledged that any new technology leads to temporary labor displacements — a view supporters of the AI buildout have acknowledged even while reassuring workers that they project there won’t be a mass labor disruption by automation.
But the pope still worries about what the consequences of any disruption may be.
“Work remains a fundamental dimension of the human experience, for not only is it a means of sustenance, but it is also a context for expression, relationships and contributing to the community,” Leo wrote. “A society that guarantees employment to only a small fraction of the population, despite having a high level of technical development, risks exposing many to forced inactivity, a lack of responsibility and the absence of daily tasks and stimuli, resulting in human and cultural impoverishment.”
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