While the public discourse focuses on the threat Artificial Intelligence poses to the labor market, Mark Cuban is shifting attention to a different, more traditional adversary: skyrocketing healthcare costs. The founder of Cost Plus Drugs argues that businesses are more likely to fire or refrain from hiring staff due to insurance premiums than because of algorithms.
The Mathematics of Employment
According to data from Yale’s Tobin Center for Economic Policy, there is a direct correlation between healthcare prices and employment. A 1% increase in healthcare prices translates to a roughly 0.4% decrease in payroll and employment in non-health sectors. As Cuban points out, for many companies, healthcare is the second-largest expense after payroll, reaching up to $30,000 per family for premiums and care.
AI: A Convenient Scapegoat?
Despite the fears, research from Yale’s Budget Lab shows there is no clear evidence yet of labor market disruption tied directly to AI. However, 21% of layoff announcements this year cited AI as a reason. Cuban believes it is far easier for management to blame technology than to address the structural failures of the healthcare system, such as hospital consolidation and administrative costs.
- U.S. healthcare spending reached $5.3 trillion in 2024.
- Cost per employee is projected to jump 8.2% in 2027.
- The U.S. spends $14,775 per person, double that of other wealthy nations.
