What if prices came down? It seems every politician is vying for this to buy votes. Has everything become simply too expensive for too many, even wealthier people who see much lower buying power?  Artificial intelligence is widely expected to be a significant disinflationary force by boosting productivity, reducing labor costs, and increasing efficiency. 

By substituting or enhancing human labor with cheaper technology, AI can push unit labor costs lower, helping to reduce inflation. Labor costs typically account for 25-35% of a company’s gross sales, though this can range from 10% in high-volume retail to over 70% in service-driven industries. Total labor costs generally include wages, salaries, employee benefits, and payroll taxes. However, the initial investment boom in AI infrastructure (such as data centers), could actually drive higher inflation in the short term, according to some models.

Could this further drive the divide between haves and have-nots, as some lose their jobs to automation or the digital world? It is happening already, and it's not just happening amongst manual labor or low-skilled jobs. All of a sudden, we are seeing some in high-paying jobs being laid off too.

While all sorts of promises are made by politicians about bringing prices down, it may be more important to focus on raising incomes, investment, savings and provide better education on budgeting, spending, saving, and long term investing. Even when inflation is lower, it results in prices rising. 3% per year is over 34% in a decade. For prices to come down, we would need to enter a deflationary period, which can cause all sorts of alternative damage, sometimes far worse than inflation.