AI will create millions of American jobs, but that doesn’t mean jobs will disappear forever.
Joseph Briggs, head of Goldman Sachs Research’s global economics team, said on a recent episode of the bank’s “Exchanges” podcast that he expects about 9% of the U.S. workforce to be displaced from their jobs as AI is implemented throughout the economy.
“Nine percent of workers displaced by AI equates to 15 million workers,” Briggs said, comparing the scale of the change to the technology-driven disruption of the late 1990s and early 2000s. These workers will have to quit their current jobs and look for new jobs, he said.
The effects are already visible
Briggs estimates that in sectors where AI tools are used, such as technology, management consulting, and graphic design, the technology eliminates 10,000 to 15,000 jobs per month from job growth. But Briggs rejected the idea advanced by many technology leaders that jobs will be lost forever, arguing that it ignores the jobs created and fixates on the jobs destroyed.
History is on our side, he said: “If you look back over the last 80 years, about 85% of employment growth has come from the creation of new jobs through technology.”
The labor market is also constantly changing, with about 30 million jobs created and 29 million eliminated each year, he told podcast host Alison Nathan. Against this backdrop, even a 5% increase in the pace of job creation would be enough to reabsorb all the people lost to AI.
Not everyone expects major disruption
MIT’s Neil Thompson, who also appeared on the podcast, argued that change will be slower than AI’s rapidly improving capabilities would suggest. He said the capabilities are just step one, and that AI systems also need access to the right information, which can be difficult to handle in fields such as health care where privacy rules get in the way, and must be cheap enough to be worth implementing. These hurdles mean that adoption may be significantly slower than what AI is technically capable of.
Most jobs can be partially automated, rather than eliminated, Thompson said, and the outcome will depend on which tasks are taken over by machines. When GPS automated taxi drivers’ expertise on city routes, the number of drivers exploded, even as wages fell.
In his framework, AI isn’t a “rising tide” that workers are rushing toward, but rather a “rising tide” that workers can see coming and adapt to.
Cooling job market
Meanwhile, hiring is slowing. The June jobs report released Thursday showed the U.S. economy added just 57,000 jobs, about half of what economists expected. The figures for April and May were also revised downward by 74,000. The unemployment rate fell to 4.2%, mainly due to workers leaving the labor force.
It remains to be seen whether these numbers represent a rising tide or the first wave.