Traders Echo Pope Leo’s Warning That AI Could Trigger Mass Job Losses

Pope Leo XIV’s warning that artificial intelligence could produce a “social calamity” through mass unemployment has found echo on Wall Street, where prediction market traders are increasingly pricing in the possibility of a much weaker U.S. labor market before the decade ends.

According to a CNBC report, traders on Kalshi are giving a 60% chance that U.S. unemployment will cross 8% at some point before 2030 and a 47% chance that it will cross 9% during the same period. Those levels would represent a major deterioration from the current labor market.

The U.S. unemployment rate stood at 4.3% in April, with 7.4 million people unemployed, according to the Bureau of Labor Statistics. The report linked those bets to growing anxiety over AI-driven job displacement, a concern Pope Leo raised in his first encyclical, “Magnifica Humanitas: On Safeguarding the Human Person in the Time of Artificial Intelligence.”

In the encyclical, the pope called for stronger regulation of AI and urged developers and political leaders to place human dignity above profit as the technology transforms the world. Leo framed the document as part of the Catholic Church’s long social justice tradition, drawing a direct line to Rerum Novarum, Pope Leo XIII’s 1891 text on workers’ rights during the Industrial Revolution.

“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,” Leo wrote.

Traders cited by the outlet put a 78% chance on AI being the No. 1 reason for job cuts in May, a question expected to be tested against data from Challenger, Gray & Christmas, which routinely gathers such information.

CNBC reported that Kalshi odds put the chance of a recession in 2026 at just 16%, before rising to 45% in 2027. A 9% unemployment rate has historically been associated with severe recessions or extraordinary economic shocks. The COVID-19 crisis pushed unemployment to 14.7% in April 2020, the highest rate in the history of the BLS data series going back to 1948.

Outside of the pandemic, unemployment above 9% has been rare in the post-World War II economy. Leo’s argument is not that every new tool is dangerous. He acknowledged that new technologies can create temporary labor displacement, a point often made by AI supporters who argue automation will eventually generate new jobs and higher productivity.

But the pope warned that the transition itself can damage lives and communities if employment becomes available only to a smaller share of people. “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.