Gavin Newsom orders California to plan for aid to workers displaced by AI
Following his remarks about artificial intelligence resentment driving future elections, Gov. Gavin Newsom is now directing the state to prepare for mass AI-driven job displacement.
On Thursday, Newsom signed an executive order mandating a handful of state agencies explore a policy framework for how to support “workers, small businesses, and communities” at risk of displacement due to AI.
Agencies would need to research and draft regulations that would support workers who are laid off because of AI, like strengthening the state safety net to offer improved severance packages; universal basic capital plans, which allow citizens to invest in companies using public wealth funds; and other subsidies.
He previously teased the executive order while speaking at a liberal think tank conference in Washington, D.C., where he said the U.S. needed to “democratize the economy.” Newsom pointed to the concentration of wealth among AI billionaires, which has fueled protests against data centers and led to at least two threats against OpenAI founder Sam Altman.
California has adopted AI regulations in the absence of any federal-level policies. Last year, Newsom signed a bill into law that regulates major AI products like OpenAI’s ChatGPT model, and he has been outspoken about the effects of social media on children’s mental health.
AI company founders have increasingly claimed that their technologies could bring about mass unemployment in sectors from healthcare to education by as early as 2027. While the evidence has been mixed, major tech firms have laid off hundreds of thousands of workers as they pivot to AI, upending one of the state’s biggest employment sectors.
AI potentially factors into Newsom’s future, too
Newsom, a major Silicon Valley ally, will likely need to balance populist resentment towards AI while placating potential tech donors if he runs for president in 2028 as expected.
“This moment demands that we reimagine the entire system — how we work, how we govern, how we prepare people for the future — and that work is starting right here in the Golden State,” he said in a statement. “Today is just the first step as we rewrite policy and direction, creating a future of work that works for all.”
Per Newsom’s order, the Governor’s Office on Business and Economic Development, Department of Finance and Labor and Workforce Development Agency will be tasked to work with industry groups and academics to produce a report in the next three months with research into how AI is expected to “disrupt” the work force, along with recommendations for mitigating that.
After that, the Labor and Workforce Development Agency would need to draft regulations within the following six months for how to provide laid-off workers with state subsidies like severance and recommendations for how to strengthen existing employment programs and expand job training programs.
“This review should include, to the extent practicable, a comparative analysis of policies or common practices in other countries,” Newsom wrote, while touting his order as the nation’s first such state policy.
The Labor and Workforce Development Agency would also need to work with the California Jobs First Council to identify programs that could retrain workers, and work with organized labor groups to see how collective bargaining processes could address AI as a factor during labor negotiations.
The Employment Development Department will be tasked with launching a dashboard to track AI-related layoffs, and report back twice annually by the end of 2027 how businesses are using AI to make hiring or other workforce decisions.
This story was originally published May 21, 2026 at 11:36 AM with the headline "Gavin Newsom orders California to plan for aid to workers displaced by AI."
