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.
AI's ability to generate ideas and initial drafts for a few dollars removes the high cost of entry for new projects. This "ideation" phase, once proven successful, often justifies hiring human experts for full execution, creating net-new work that was previously unaffordable.
Increased developer productivity from AI won't lead to fewer jobs. Instead, it mirrors the Jevons paradox seen with electricity: as building software becomes cheaper and faster, the demand for it will dramatically increase. This boosts investment in new projects and ultimately grows the entire software engineering industry.
AI makes tasks cheaper and faster. This increased efficiency doesn't reduce the need for workers; instead, it increases the demand for their work, as companies can now afford to do more of it. This creates a positive feedback loop that may lead to more hiring, not less.
If AI were perfect, it would simply replace tasks. Because it is imperfect and requires nuanced interaction, it creates demand for skilled professionals who can prompt, verify, and creatively apply it. This turns AI's limitations into a tool that requires and rewards human proficiency.
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.
Instead of fearing job loss, focus on skills in industries with elastic demand. When AI makes workers 10x more productive in these fields (e.g., software), the market will demand 100x more output, increasing the need for skilled humans who can leverage AI.
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.
The initial impact of AI on jobs isn't total replacement. Instead, it automates the most arduous, "long haul" portions of the work, like long-distance truck driving. This frees human workers from the boring parts of their jobs to focus on higher-value, complex "last mile" tasks.
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 idea that AI will enable billion-dollar companies with tiny teams is a myth. Increased productivity from AI raises the competitive bar and opens up more opportunities, compelling ambitious companies to hire more people to build more product and win.