Even if AI triples productivity growth, the resulting job churn would only equal that of 1870-1930. That period is historically remembered as one of vast opportunity and creation of new industries, suggesting fears of a jobless future are misplaced.
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Contrary to common fears, AI is projected to be a net job creator. Citing a World Economic Forum study, Naveen Chaddha highlights that while 92 million jobs will be displaced by automation, 170 million new roles will emerge, resulting in a net gain of 78 million jobs by 2030.
Unlike previous technologies that augmented specific skills, AI could eventually outperform humans in all domains, including creative and emotional tasks. This suggests the historical pattern of technology creating more jobs than it destroys may not hold true.
Contrary to the dominant job-loss narrative, a Vanguard study reveals that occupations highly exposed to AI are experiencing faster growth in both jobs and wages. This suggests AI is currently acting as a productivity tool that increases the value of labor rather than replacing it.
Contrary to fears of mass unemployment, research from the World Economic Forum suggests a net positive impact on jobs from AI. While automation may influence 15% of existing roles, AI is projected to help create 26% new job opportunities, indicating a workforce transformation and skill shift rather than a workforce reduction.
Fears of mass unemployment from AI overlook a key economic principle: human desire is not fixed. As technology makes existing goods and services cheaper, humans invent new things to want. The Industrial Revolution didn't end work; it just created new kinds of jobs to satisfy new desires.
Contrary to fears of mass unemployment, AI will create massive deflationary pressure, making goods and services cheaper. This will allow people to support their lifestyles by working fewer hours and retiring earlier, leading to a labor shortage as new AI-driven industries simultaneously create new jobs.
The narrative of AI destroying jobs misses a key point: AI allows companies to 'hire software for a dollar' for tasks that were never economical to assign to humans. This will unlock new services and expand the economy, creating demand in areas that previously didn't exist.
Rather than causing mass unemployment, AI's productivity gains will lead to shorter work weeks and more leisure time. This shift creates new economic opportunities and jobs in sectors that cater to this expanded free time, like live events and hospitality, thus rebalancing the labor market.
Fears of AI-driven mass unemployment overlook basic capitalism. Any company that fires staff to boost margins will be out-competed by a rival that uses AI to empower its workforce for greater output and market share, ensuring AI augments jobs rather than eliminates them.
The Jevons Paradox observes that technologies increasing efficiency often boost consumption rather than reduce it. Applied to AI, this means while some jobs will be automated, the increased productivity will likely expand the scope and volume of work, creating new roles, much like typewriters ultimately increased secretarial work.
