Don’t panic – Labor Day will still be around in the future
This Labor Day, instead of celebrating work, many Americans may be worrying about how much longer they will even have jobs in the age of artificial intelligence. With critics warning millions of workers will be replaced by robots and computer programs, it is unsurprising many workers worry they’re about to be tossed aside.
Such concerns are not only overblown but may also have things backwards. It is just as likely that AI will lead to employment gains.
A recent study, apparently the first of its kind, by the financial technology firm Ramp looked at company payments to AI vendors and compared that to the payrolls for the same companies. It found that AI adoption was strongly associated with a 10 percent *increase* in employment at companies that invested heavily in it. That’s because the more AI tech a company has, the more people it needs skilled in using that technology.
That’s not to say AI won’t disrupt the economy. Jobs will be shifted around, and many workers will have to learn new skills to stay competitive. Some companies like Microsoft have laid off some workers and redirected the savings from that into AI research. But that is not the same thing as using AI to replace workers, and it has likely created jobs at the AI companies.
Technological innovation has historically created new, better jobs, as I note in a recent study of AI and jobs for the Competitive Enterprise Institute.
Earlier fears about technology stealing jobs focused on devices, usually in factories, that replaced manual labor. What is different about AI is that it supposedly threatens white collar jobs like journalism, graphic design, and legal research. Nobody, by contrast, worried about the Internet taking jobs away. As economist Bill Beach, former head of the Bureau of Labor Statistics, told me, AI is not only a new technology, “but it is also a new form of labor, and that is the part that is puzzling everyone.”
The notion that AI will lead to thinking-robots that replace workers remains science fiction. AI is a fundamentally backwards-looking technology: It takes information and synthesizes it. It can guess at what information a user wants (i.e., run the odds based on the data it has), but the output remains guesses, and the responses can be spectacularly wrong. Teaching AI the difference between fact and fiction isn’t easy. It can “hallucinate” and literally make stuff up.
In short, AI requires much handling to use effectively. The Ramp study noted that job growth at AI-using companies was greatest at those that used AI the most extensively. The hiring effect was negligible at companies that didn’t invest in AI as much. This is in keeping with the history of new technology and jobs. The benefit new technology brings is greater production. It requires workers with different skill sets, but not necessarily fewer workers. Companies that try to simply replace workers with AI programs will likely produce shoddy products and get their comeuppance from consumers.
Read the full article at The Center Square.