I wonder how political leaders will address the looming AI blitz
Recent headlines concerning the threat of artificial intelligence and job losses are a real scream! Consider these examples: “Artificial intelligence is already causing disruption and job losses at IBM and Chegg,” J. Kelly, Forbes.com, May 2; “Goldman Sachs predicts 300 million jobs will be lost or degraded by artificial intelligence,” J. Kelly, Forbes.com, March 31; and “AI eliminated nearly 4,000 jobs in May, report says,” E. Napolitano, CBSNews.com, June 2.
Before the pandemic, we had been lamenting the loss of high-paying manufacturing jobs that went overseas over several decades. With the pandemic came the realization that our supply chains had become too interdependent — often on countries with which we are not on the same page regarding democracy and human rights. That set the stage for what we should have been doing a long time ago to remain competitive, more self-sufficient and more secure as a nation.
The result was the passage of the American Rescue Plan Act, the CHIPS and Science Act, the Inflation Reduction Act, and the Infrastructure Investments and Jobs Act — all between 2021 and 2022. While the projects being funded by these bills are necessary to keep the U.S. competitive and bring back higher-paying jobs (semiconductor manufacturing, renewable energy, etc.), the threat of AI hangs like a cloud over the exuberance.
More alarming than the aforementioned headlines is a June 2021 report from the National Bureau of Economic Research, “Tasks, automation and the rise in U.S. wage inequality,” which found that “between 50% and 70% of changes in the U.S. wage structure over the last four decades are accounted for by the relative wage declines of worker groups specialized in routine tasks in industries experiencing rapid automation.”
The same report notes that the changes in U.S. workers’ wages due to automation were greater than those due to offshoring of jobs, rising market power, markups or de-unionization. The upshot of their work was that “Major changes in wage inequality can go hand in hand with modest productivity gains.”
My takeaway is that even if AI will only provide small gains in worker productivity, it will still be implemented by businesses and the result will be greater wage inequality.
If we lose more jobs to AI/automation, will the market be able to absorb a slew of newly minted tradespeople?
The number of senior citizens is growing, so maybe there will be plenty of jobs for young people who are not inclined to study science/technology — but at what pay levels when the skilled trades sector becomes glutted with job seekers?
Furthermore, not everyone can do hard manual labor. The competitive edge the CHIPS and Science Act enables (along with other legislation) is a great start, but we will need to ensure that other kinds of jobs are well paying, including “high-touch” jobs (i.e., social workers, teachers, health care workers, at-home senior care, etc.).
In the next election cycle, I’m looking for leaders who can develop strategies that address the AI blitz that is surely coming. Secondary education must be affordable, and we need to provide temporary support for workers displaced by AI/automation while addressing wage inequality.