Exclusive | Nobel Laureate Stiglitz: America’s Job Market Is Freezing—Young Workers Hit Hardest

Buoyed by an AI investment boom, U.S. economic data appears robust, with the impact of the Trump administration’s tariff policies yet to be fully reflected in broader economic indicators. In an exclusive interview with Storm Media, Nobel laureate and former World Bank Chief Economist Joseph Stiglitz casts doubt on this optimistic narrative, bluntly stating, "The U.S. economy is not as good as it seems."

After a 35-year absence, Stiglitz returned to Taiwan to participate in "The Road to Freedom: Economics and the Good Society," a forum organized by the Yu Kuo-Hwa Education Foundation, Storm Media, and the International Peace Foundation, and co-hosted by TSMC and Taiwan Bridges. Following the event on January 13th, he spoke exclusively with Storm Media, sharing his observations on U.S. economic conditions and global situations.

Discussing the realities of the U.S. economy, Stiglitz first focuses on the employment market. "If you take a close look at employment data, it's actually dismal," he points out. The U.S. is experiencing virtually no employment growth, falling far below normal levels, leaving the labor market in a stagnant state, which particularly impacts young job seekers.

Stiglitz asserts that the external perception of the Trump administration's tariff impact often overestimates its immediate effects.

"While tariff increases are indeed significant, rising from about 2% or 3% up to around 14%," he says, "imports account for only about 15% of U.S. GDP, so even a 10% rise in import costs is relatively limited in its overall economic impact."

"The key point is that the tariffs implemented did not reach the scale of the initial threats," Stiglitz notes, explaining why, in the short term, the U.S. economy has not experienced the substantial downturn predicted by conventional theories.

However, he quickly emphasizes that this does not mean the tariff impact is over.

"The second issue is that the real impact will come later, as it has to work its way through the supply chain," Stiglitz describes. He explains that tariff effects do not show up overnight but take time to accumulate.

With policy directions shaky and uncertain, businesses struggle to decide whether tariffs will rise, fall, or fluctuate, attempting to adjust supply sources. "If not from China, then from Vietnam," he says, illustrating how companies are reorganizing supply chains, introducing significant time delays in these adjustments.

Stiglitz indicates that the labor market’s changes are the real cause for concern.

"If you look at employment numbers, they are truly poor," he sharply criticizes. The U.S. shows almost no job growth, well below normal levels, indicating a frozen labor market rather than continuous expansion.

"This is causing massive stress and anxiety, especially for job seekers," Stiglitz says, particularly affecting young people entering the labor force. He notes a palpable shift from students, with graduates and career switchers facing a market with noticeably shrinking job opportunities.

In Stiglitz's view, the absence of a dramatic decline in the U.S. economy is temporarily supported by other factors.

"What’s keeping the economy going right now is the AI investment craze," he notes, observing that a significant portion of U.S. business investments are related to artificial intelligence. This wave has indeed buoyed market confidence and economic activities in the short term. （Related： Japan Heads for Snap Election as Takaichi Seeks Mandate at Home and Alignment Abroad ｜ Latest ）

Nonetheless, he cautions that this support does not equate to long-term stability.

Three Economic Reasons for an AI Bubble

Stiglitz outlines three structural economic reasons why the AI boom may be overestimated.

First, intense competition within the industry. "Even if AI is a successful innovation, it doesn't guarantee profits," he highlights, noting that when multiple companies compete, profits are often eroded by competition.

Second, China's strategy to promote open-source software effectively sets a price floor for AI services, further compressing profit margins for U.S. companies.

Third, the most destructive risk in his view: if AI succeeds as rapidly as predicted by businesses, it will cause massive job displacement. "The question is, when people lose their jobs, who will buy these goods?" he questions.

Stiglitz elaborates further, "If these companies are technically as successful as they believe, economically, they might actually be destructive."