How CHATGPT and other AI could affect IE employment
Nov. 30, 2022, will be marked in the history books as the day when a large share of the population, not only in the United States but in the world, started to become aware of artificial intelligence.
A new application called CHATGPT was released to the public, and was able to write entire texts, including essays, research papers, or news articles in a level of quality never seen before. If prompted, it could even mimic the style of authors such as Shakespeare.
The opportunities in terms of text creation and processing seemed limitless, at least at first. Websites and Twitter posts appeared, instructing users on how to best use this new technology. Newspaper articles discussed its potential and its limits. Reports emerged about people and even entire companies implementing the new technology into their workflows. No question, the age of the fourth industrial revolution, previously associated primarily with robots swarming the machine rooms of manufacturing companies, seemed to have arrived in a new form.
After the initial hype settled, limitations of the new technology became more apparent. Out of curiosity, I asked CHATGPT about who I am, just to find out that it attributed awards to me that I never received. Perhaps the program “thought” that by flattering me, I would be less critical of its development? While many questions, such as “Do we still need to teach our kids how to write or will this skill share the fate of mental arithmetic?” or “Will future students use CHATGPT to compose all of their essays?” remain open for discussion, the immediately relevant economic policy inquiry centers on whether or not this new technology will kill jobs.
Note that AI is just the latest addition to the “man vs. machine” book with the first chapter composed back in the early 1800s focusing on the Luddites. The latest entry started when every cell phone carried an assistant such as Siri, Cortana, Bixby or Google’s Assistant. What is new is the advent of a family of AI applications that can fulfill complex tasks.
What are the likely effects this new technology will have on employment and the workforce in the Inland Empire? The short answer is: Not that much more than what other automation technologies already will do to employment in the region. The reason for this perhaps surprising statement lies in the interaction between the occupational composition of the labor force and its educational attainment.
Before diving into details, note that CHATGPT is just one of many members of a large family of new AI applications. These are referred to as “generative artificial intelligence,” or short, “generative AI.” These types of programs are capable of creating seemingly entirely new content, such as long and consistent text, pictures, or computer code. They can answer questions about a text or summarize it automatically. Thus text generation, as it became available thanks to CHATGPT, is only one of many applications that have the potential to change the way we approach certain tasks.
Next, I asked CHATGPT to write a 750 word essay on the effect that generative AI will have on employment in the Inland Empire. The answer I received was stunning as it covered important aspects, but in a rather generic way. It came in typical high school/college style with definitions plus some examples on the industry level of its effects — some of which were actually incorrectly attributed to AI. Remarkably, CHATGPT recognizes its own potential as a job killer and advocates mitigating policies to help those displaced by its potential effects on employment.
Here are the reasons I see why Inland Empire employment likely will not be much affected by CHATGPT.
Consider some applications in the workplace: designers will use it to draft sketches, teachers to grade homework or exams, real estate agents to write their posts, and managers to generate drafts for memos. But this, in itself, will not eliminate many jobs — in excess of the general automation potential that already exists in the Inland Empire. Recall that the region is in the top five nationally in terms of susceptibility to automation — and No. 1 in California. Generative AI may cost a few extra jobs directly. However it will not add much to the existing threat, at least not directly.
CHATGPT has in common with many generative AI systems — they target white collar jobs.
The IE simply does not have as many of these as other regions in California. This does not mean that there is nothing to worry about. On the contrary, CHATGPT is only the overture to the arrival of a slew of new technologies that potentially will be highly disruptive. Due to its applicability in everyday life, CHATGPT has become highly visible. But many less visible systems are waiting, and the ones most consequential for the Inland Empire will be those in the logistics industry. These will find a rich environment for application: IE jobs in transportation and material moving occupations have increased from about 100,000 to almost 250,000 over the last decade; this concentration in logistics makes the region highly susceptible to general automation as about 75% of those jobs — with the largest total wage bill by occupation received by those workers — are technically automatable, even without generative AI.
Overall, 50% of our top 10 occupations face a technical automation potential of 75% or more.
The share of workers in our region susceptible specifically to AI (in excess of general automation) is roughly half that number — we simply do not have enough white collar workers who reside in the Inland Empire that could be affected — which sadly also means not enough to benefit from AI’S productivity increase.
A risk that lurks is how much generative AI will affect our coastal neighbors, namely the Greater Los Angeles area (Orange County, L.A. County) and San Diego County. Due to their higher share of white collar jobs in the workforce, those counties are more susceptible to AI driven automation. If those counties shed white collar jobs, this will spill over into the Inland Empire as laid off workers spend less money at the places they reside: This implies lower demand for services in the coastal communities, hurting blue collar commuters from the Inland Empire. As commuters from the Inland Empire who hold white collar jobs get laid off, this will also lower service demand for blue collar work in the Inland Empire.
The Inland Empire needs to keep a watch on automation.
While the initial wave arrived quite some time ago, it is now about to develop the potential to disrupt the local job markets. When and where this will be most visible, we will have to see, but one thing is clear: CHATGPT already writes the shadow of its own effects on the workforce onto the wall.
Dr. Johannes Moenius is a professor at the School of Business and Society at the University of Redlands and the director of the Institute for Spatial Economic Analysis. He is also a member of the Inland Empire Economic Council at the Inland Empire Economic Partnership. The Inland Empire Economic Partnership's mission is to help create a regional voice for business and quality of life in Riverside and San Bernardino counties. Its membership includes organizations in the private and public sector.