The AI Jobs apocalypse gets postponed, as CEI predicted

The prophesies of doom that artificial intelligence would destroy jobs have been put on hold recently. Businesses, including the ones that use AI technology, have begun hiring again, having realized that they need more people to manage the technology rather than using it to replace those workers.

That’s according to a recent Wall Street Journal report. “The push to expand head count, at least modestly, is a reversal from the prevailing corporate messaging during much of the AI era… executives say the costs and limitations of AI now demand that more people be added.”

The Journal’s report won’t surprise anyone who read the Competitive Enterprise Institute’s recent study, Don’t Panic: A Skeptic’s Guide to the AI Jobs Doomsday. The study explains how innovation historically has been associated with greater overall job gains rather than losses. These gains come from industries adapting to the changes brought on by the new technology, especially the increases in productivity. AI may seem different from earlier innovations because it can seemingly do tasks that previously required human creativity. Yet AI is ultimately still just a tool and tools require humans to use them.

The Journal noted, “[T]he change in hiring also reflects a recalibration among employers about what AI can do … Many companies stopped hiring entry-level employees, thinking AI agents could pick up the slack. They have since realized that humans are necessary to work alongside AI.”

AI’s greatest benefit may be that it will allow workers to make things they previously couldn’t and turn out work faster than they ever could. Consider, for example, AI’s potential effect on the legal profession. Many parts of legal work are labor-intensive: researching cases and precedents, drafting memos and discovery summaries, etc. This work still requires significant editing and oversight, but using AI to create first drafts could speed the process, reducing billable hours. Legal work would become less costly and, therefore, potentially more accessible.

Or think of the retail merchant who writes and stars in their own tacky late-night TV advertisements. Generative AI will allow that merchant to create the graphics and animations on their own, resulting in far more elaborate and ambitious tacky late-night ads.

Predictions that AI would eliminate millions of jobs were once commonplace, with corporate leaders often making the claims. They’ve since quieted down that talk.

Some managers will inevitably still try to downsize their workforce on the assumption that AI can pick up the slack. Such an approach is short-sighted. AI needs managers and editors to watch over it and direct what it does.

The smart managers will be the ones who realize they can get a lot more out of their existing workforce if they give them the latest tools. That will free the workers from the most tedious and repetitive tasks at their jobs and instead allow them to be creative. Firing people means there is no one left around to use the AI programs the workers now have available. That won’t benefit anyone.