Of course there can be some painful periods of adjustment, but that’s often caused by misguided policy trying to hold back the tide and delay the inevitable.
Ultimately yes, full no holds barred human level AI may well render human labour obsolete, but we’re a very long way away from that.
I know some people think LLMs are close to that already, but no, not even remotely close. I do believe strong AI is possible and maybe even inevitable. They’re a huge step forward, and are easily the biggest advance towards strong AI in my lifetime, but these things are just tools.