Tuesday, May 28, 2024

Happy Talk about "No Job Losses Because of AI" is Wrong

if automation destroys jobs, then why has the total number of jobs not decreased as we have automated more? The obvious answer is that new jobs in new areas get created as demand for older jobs decreases. 


So some might argue AI will not decrease jobs in many industries. But that might strike you as unrealistic happy talk. Automation and other new technology such as the internet always seems to reduce existing jobs, even as new possibilities are created elsewhere. 


Since 1900, the percentage of people employed in U.S. agriculture has shrunk considerably, from nearly 40 percent to less than two percent today. And though there are other key issues besides the application of new technology, U.S. manufacturing jobs also have declined over time. 


Since the 1950s, the United States, for example, has seen a dramatic decline in manufacturing jobs, dropping from a peak of over 25 percent of total employment to less than 10 percent today (though issues other than applied technology were involved as well). 


Since 1990, the United States has lost over half of its newspaper journalism jobs, with a similar decline in other traditional media sectors, as well. 


Industry

Pre-internet (1990)

Post-internet (2020)

Change

Television

2.0 million (estimated)

1.6 million (Bureau of Labor Statistics)

-20%

Print Journalism

625,000 (American Journalism Review)

338,000 (Pew Research Center)

-46%

Radio

140,000 (Bureau of Labor Statistics)

103,000 (Bureau of Labor Statistics)

-27%


That noted, new jobs are created in new industries as well. Today, more than 80 percent of jobs in the U.S. are in the service sectors. In 1900, service industries only accounted for around 30 percent of total employment. 


As the introduction of other general-purpose technologies such as the steam engine, electricity and computers also led to job displacement, so will AI have a similar impact, reducing demand for existing jobs. 


Industry

Impact of Computers

Estimated Job Change (Pre- vs. Post-Computer Era)

Finance

Automated back-office tasks like recordkeeping and calculations. Enabled online banking and trading, reducing need for tellers and some brokers.

Bank tellers: -25% to -50% but financial analysts +20%

Manufacturing

Automated production lines and quality control processes. Reduced need for assembly line workers and some inspectors.

Production workers: -30% to -50% 

Education

Created online learning platforms and educational software. May impact roles like teacher's aides for repetitive tasks.

Teacher's aides: Potential decrease, but overall teacher demand may remain steady. 

Hospitality

Self-service kiosks for check-in and reservations. Online travel booking platforms reduce reliance on travel agents.

Hotel front desk clerks: -10% to -20%. Travel agents: -40% to -60%

Banking

ATMs replaced tellers for basic transactions. Online banking reduces foot traffic in branches.

Bank tellers: -25% to -50% 


Happy talk about how AI will not lead to job losses in content or media industries, for example, seems completely out of line with past precedents when major new technology is introduced. 


Sure, there are all sorts of reasons why executives in those industries would say such things. But history suggests the predictions are incorrect. AI will lead to job losses in existing areas. 


Just as surely, new jobs will be created elsewhere. But it always is reasonable to assume that those losing existing jobs and those taking newly-created jobs will not typically be the same individuals. 


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