Brandon Marc Finn (The Informal Sustainability Lab, School for Environment and Sustainability, University of Michigan)

The rise of artificial intelligence (AI) is culminating in the structural transformation of the global workforce. As AI moves to decouple formal employment from economic growth, we may be witnessing the mass informalization of labor everywhere. This paper challenges the ‘formalist bias’ in current scholarship on AI and the future of work by emphasizing the role of informality. It positions this future as tied to the informal/formal dialectic, where the state and technology companies, the state-capital alliance, work together to actively create and then selectively maintain informality. AI is already built on the hidden, informal labor of ‘ghost workers’ who perform the microtasks that enable algorithms to be trained and function. The future of AI and work will expand beyond this reliance and actively create the informalization of the workforce, where labor dynamics typically applied analytically to the Global South become increasingly more prevalent in the Global North. The state-capital alliance bifurcates informality by criminalizing it from below and celebrating it from above. Despite these contradictions and tensions, this essay does not argue for abandoning AI. Rather, it argues that the political left should contest the grounds and ownership of AI through autogestion. Turning away from AI creates a vast vacuum for political repression and economic exploitation and abandons the possibility of self-management without a fight.

Introduction

The rise of artificial intelligence (AI) is upending the formal job market. From journalists to janitors, teachers to technologists, and from professors to programmers, job cuts and labor replacement are already becoming the norm. Technology companies are redefining the job market and systematically using AI to reduce reliance on formal labor markets. The technology sector is instituting a broad macroeconomic strategy of decoupling capital accumulation from formal wage labor and contracts (Çetin and Gündüz 2024). Meta, for example, undertook a massive corporate restructuring in which 7,000 employees were reassigned to new AI initiatives, while the company purged 10% of its total workforce (Tan 2026). The nascent reality of AI suggests a strong trend towards economic growth without formal jobs. This, however, does not equate to an economy without workers.

AI may be driving the mass informalization of the global workforce. While the reaction to AI’s influence on the formal job market is justifiably concerned with job cuts, fewer accounts have asked the question of what people will do when they no longer have their formal jobs. Fewer still have considered that AI is actively increasing the barriers to entry for stable, well-paying jobs while simultaneously reducing the total number of jobs available. AI might increase demand for ‘high-skilled’ labor while suppressing it for more entry-level ‘low-skilled’ forms of work that have generally been more abundant (Salari et al. 2025).

Scholarship on the ‘future of work’ is focused primarily on formal job losses, overlooking the critical questions of how AI will affect the informal economy and how the transformation of the formal job market will impact the process of informalization (Bandauko and Finn 2026); an oversight that we can call the ‘formalist bias.’ The formalist bias assumes the global economy operates primarily through official wage contracts. Even before the widespread impact of AI, the formalist bias overlooked that 61% of the world’s total employed workforce is employed informally (International Labor Organization 2018): that is, without labor contracts and social safety nets, and with minimal governmental oversight and occupational protections. Because of the formalist bias, assessments of AI-induced job cuts focus on how formal work tasks will be reallocated, which skills people might need to be formally employable, and how impending mass layoffs can be mitigated through schemes like universal basic income. There is, however, an essential and glaring question we have yet to properly ask: when the formal workforce is forced into a major contraction by AI, what will people actually do?

Workers displaced from the formal job market cannot be expected to be fully absorbed into the AI-centered job market, and those who do not find work will not sit passively unemployed, even if welfare programs are significantly increased. There is no reason for displaced workers to rely on and trust a system that has seen a state-capital alliance actively working to kick them out of their careers and hard-earned employment to deliver sustained income and support. In countries that lack robust support systems, such as unemployment insurance and a broad, robust formal job market, the very concept of ‘unemployment’ breaks down (Benanav 2019). As AI increases the barriers to formal employment for the majority, workers are structurally forced to turn to the informal economy, which relies on ‘make-do’ and often piecemeal strategies to earn an income and survive (Finn and Oldfield 2015; Thieme 2018). When people lack formal job market opportunities, they use strategies that are both socially generative and structurally constrained to survive (Bandauko and Finn 2026). These strategies are often associated with the informal economy, which is mostly analyzed and understood through its relation to the Global South. The rapid proliferation of AI worldwide, especially in the Global North, suggests the potential for mass informalization on a planetary scale.

It is imperative to bring informality to the forefront of the current debate on AI’s relationship to the future of work. Challenging the formalist bias is the first premise in this argument. The second is the contention that AI will lead to a dramatic informalization of the global workforce. If this is correct, it brings the structural and relational argument on the informal/formal dialectic directly into conversation with AI’s impact on the future of work (Finn 2025). This dialectic shows how formal capital, in this case, the state-capital alliance, actively produces informality by failing to extend equal access to protections, access, services, and, in this case, economic opportunity to the broader population (Finn 2025; Roy 2005, 2009). The informal/formal dialectic hinges on a mutually co-constitutive relationship in which the formal economy both requires and creates an informal counterpoint. As AI and digital platforms strip away formal labor opportunities, retained industry jobs are increasingly casualized to produce a ‘just-in-time’ and informal workforce.

The informal/formal dialectic demonstrates how informality can be instrumentalized by political and economic elites to ‘justify’ further displacement and alienation. Analyzing informality across temporal and spatial scales demonstrates how colonial and postcolonial economic and governance policies have established the unequal terms of the informal/formal dialectic worldwide (Finn 2025). AI recreates these grounds but begins with the active informalization of the Global North.

Artificial Intelligence is Already Built on an Informal Workforce

The mass informalization of the global workforce is a structural design choice in the development and proliferation of AI, which is itself built on hidden human effort and labor. AI already exploits a vast, largely opaque human infrastructure to function effectively and ‘efficiently’ (Nemer and Sobral 2026). This human labor comprises ‘ghost workers’ who perform low-paid work essential to AI. They facilitate content moderation, data annotation, and algorithmic training that AI depends on (Gray and Suri 2019; Nemer and Sobral 2026). Such work, which is largely unregulated, exposes how the basic functioning of AI is built on casualization (De Stefano 2015). Additionally, the labor underpinning AI’s basic functioning strips its workforce of their own human discretion by standardizing microtasks for an informal, outsourced labor pool working on a click-by-click basis (Altenried 2020; Graham and Anwar 2020). Herein, we see how AI’s existing informal labor pool allows technology companies to bypass regulatory frameworks by using geography and precarity to offload the traditional employment costs necessary for social reproduction, such as healthcare, paid time-off, and parental leave (Graham and Anwar 2020; Wood 2021). This dynamic extends into the material infrastructure of AI, where formal capital and AI rely on informal labor to produce commodities and absorb the most toxic outcomes of global supply chains (Finn et al. 2025; Finn et al. 2026).

AI and digital platforms leverage legal geographies to discipline precarious workforces, keeping technological development tethered to social space. Such geographic and economic structures enable and deepen the vulnerability of marginalized groups and immigrants, who are already often operating in the informal economy (Cervantes-Macías 2026). Migrant workers in the Global North are consistently monitored through AI-generated bordering practices and law enforcement (Cervantes-Macías 2026). AI relies on flexible and informal labor so long as it is expedient and cheap. However, as soon as an informal labor pool begins to move across geographies, AI is deployed to monitor and expel it. The state-capital alliance benefits from the flexibility of informality so long as the informal worker remains geographically distant. As soon as this changes, AI and force are used to maintain law and order.

Continued spatial exclusion, however, may not be possible over the long term given the mass informalization of the workforce in the Global North. The formalist bias, which imagines informality to be the sole preserve of the peripheries of the Global South, stands to be robustly challenged. If economies in the Global North continue to experience ‘creeping informalization’ (Comaroff and Comaroff 2020), then the geographies of informality are in for a radical transformation. It will become increasingly challenging to cast informality as a Global South issue when wealthy countries like the United States see their own informal economies grow dramatically. This geographical convergence, as pointed out by Bandauko and Finn (2026), speaks to the salience of informality as a response to dispossession while also serving as a principal critique of capitalism’s vast inequalities, now specifically engendered by the rise of AI.

The Asymmetrical State: Criminalized Survival versus Institutionalized Innovation

If the reader accepts the premise that AI will lead to the informalization of labor, then it is important to consider what this reveals about how the state-capital alliance governs space and labor. The state bifurcates informality into two distinct categories: corporate exemption and criminalization. Corporate exemption sees technology companies operating in grey zones, where workers are given zero-hour contracts or employed as independent contractors to minimize corporate costs and responsibilities. When technology companies exploit these loopholes by drawing on the logic of informal labor, they are rewarded with further investment and classified as market disrupters. The state actively supports these companies, whose actions can be classified as ‘informality from above’ (Marume and Finn 2026), thereby enabling the accumulation of additional surplus capital extracted from the boundaries of the law (Banks et al. 2020). Indeed, the state itself operates informally by deregulating industries, exploiting patronage networks in exchange for services, and through blatant corruption (Roy 2005, 2009). In many ways, informality from above has been institutionalized at the cutting edge of AI-led economic growth.

On the other hand, ‘informality from below’ is routinely criminalized and pathologized by the state-capital alliance. When the marginalized or displaced workforce operates informally, they are subject to repression, containment, and violence (Bandauko, 2026). The state-capital alliance criminalizes ‘informality from below’ in the name of public order and security, even though it reflects survival strategies in the face of systematic exploitation and structural neglect (Bandauko and Finn 2025). Informal housing is targeted for demolition, networks are actively disbanded, and informal economies are framed as the social problem to be solved, rather than as a symptom of formal capital’s ongoing dispossession.

The state has no interest in dissolving all forms of informality, but rather in policing it from below and exploiting it from above. The state-capital alliance comes into sharp focus within this framing, as AI increases inequalities between capital and labor and relies on and abuses informal labor as a fundamental operational strategy of capital accumulation. As inequalities grow, the state-capital alliance may turn to welfarist mechanisms to mitigate the threat of working-class unrest, reflecting its self-knowledge of the contradictions and exploitation at the heart of AI proliferation and the concentration of ownership among a minuscule political and economic elite. If, and when, welfare costs rise, the state-capital alliance may turn to explicit and violent repression to maintain order over a now largely informalized labor force that it created.

Conclusion: Artificial Intelligence and Autogestion

Because AI relies on informality in such complex ways, the state-capital alliance has an interest in both manufacturing and selectively maintaining it, as long as it holds the monopoly over its execution. The informal/formal dialectic demonstrates how formal capital produces the informality associated with precarity and basic survival, and how elites institutionalize it as innovation to further extract surplus value. The informalization of global labor is a distinct possibility because of the enclosure and concentration of ownership over AI, which tethers capital accumulation to the dialectic process outlined above. However, a practical and radical critique of AI is not synonymous with an argument for abandoning it entirely. Turning away from AI as a tool for knowledge creation and dissemination is an unproductive and potentially harmful political position, as it cedes the terrain of struggle to the state-capital alliance before it has even begun. Rather, the political left must take advantage of AI’s immense informational processing capacity while simultaneously contesting its ownership and production relations. Why walk away from AI and hand it over to the people actively working to use it to decouple the workforce from economic growth?

The informal/formal dialectic illustrates how wealth and poverty are co-created and mutually co-constitutive. If the global workforce is on the precipice of mass informalization, the risks to social, economic, and political life are clear. Five decades of scholarship on informality show that it cannot be read only as a site and outcome of repression and victimhood; it also contains tremendous generative and political potential. People rely on networks of trust and solidarity in response to their own marginalization. They do this to contest their exclusion, but also to enact a provisional sense of agency in the face of structural abandonment; in so doing, they actively create alternative forms of social life.

Once workers are displaced from the formal market, they often adopt informality as a praxis of autogestion—a term Lefebvre uses to conceptualize the radical self-management of social and political life in pursuit of democracy (Brenner and Elden 2009; Finn 2026; Lefebvre 2009). Autogestion points to how informality can be mobilized from below to contest its own production specifically because it is created as dialectically related but functionally distinct from formality (Finn 2026). Ultimately, the capacities of informality can be harnessed through autogestion to pursue AI that serves the needs of the global population, who are entitled to a share of the immense wealth it is already generating.

Acknowledgement

The author would like to thank an anonymous source who pointed out the extent of AI’s impact on the labor market. This insight has a direct bearing on the conceptual framing of this essay.

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