Me, Myself and AI

„Most debates over artificial intelligence begin with the same question: Which jobs will AI destroy? But the first labor-market shock may not be mass job loss. It may be worker migration from traditional firms.

 

AI is making it easier for one worker to do tasks that once required a small team. In industries where AI can handle research, drafting, coding, editing and analysis, the result isn't necessarily unemployment. It may be independence.

 

New Census Bureau business-formation data suggest as much. The bureau tracks business applications and flags those likely to hire employees. The remaining applications are the best measure of one-person business formation.

 

Since early 2024, solo business applications have risen nearly 27% in professional services, information, education, finance and insurance -- sectors the that have among the highest AI-adoption rates.

 

In construction and wholesale trade, where AI is less likely to enable independent work, solo business applications have been essentially flat.

 

An event-study confirms the timing. In 2022 and 2023, solo applications moved similarly in sectors with both high and low AI exposure. The divergence emerged after 2024 and then took off.

 

Business applications with payroll intent fell by 6.4% in AI-exposed sectors, while applications unlikely to hire employees rose by 26.8%.

 

People are starting businesses, but not businesses designed to employ workers.

 

Federal labor-market data tell a similar story. Among occupations most exposed to AI, solo self-employment rose about 20% from 2022 to 2025. In the least AI-exposed occupations, it barely moved. For management analysts, a useful proxy for consulting work, overall employment grew 12% from 2022 to early 2026, while solo self-employment within the occupation grew more than twice as fast.

 

None of this proves that AI is the main driver of the shift. The evidence is preliminary, and AI may still be squeezing entry-level hiring.

 

But it's becoming cheaper to operate as a one-person business, and workers are responding.

 

That's unsurprising. A consultant who once relied on junior analysts, editors and designers can now perform many of those functions with AI tools. A researcher can prepare work for publication with far fewer institutional resources.

 

The firm isn't disappearing, but for some knowledge work, the advantages of being inside one are. Labor-market institutions have yet to adjust. Unemployment insurance assumes one employer, a clean separation, and a search for another job. Health insurance remains heavily tied to employment, and many retirement plans, leave benefits, and tax advantages are organized around the employer.

 

The most immediate question isn't whether AI will eventually replace workers. It is whether AI is already making workers less dependent on the firm while policy remains anchored to it.

 

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Ms. Palagashvili is a senior research fellow and director of the Labor Policy Project at George Mason University's Mercatus Center.“ [1]

 

1. Me, Myself and AI. Palagashvili, Liya.  Wall Street Journal, Eastern edition; New York, N.Y.. 02 July 2026: A13.