By Donovan Johnson,
Recent headlines have raised concerns about the threat of artificial intelligence (AI) leading to job losses and economic disruption. Examples include reports of job losses at companies like IBM and Chegg, predictions of millions of jobs being lost or degraded by AI, and AI eliminating thousands of jobs in a single month.
Before the pandemic, the loss of high-paying manufacturing jobs was already a concern as many were outsourced overseas. The pandemic highlighted the vulnerability of our supply chains, which often rely on countries with differing views on democracy and human rights. This realization prompted a push for greater self-sufficiency and security, resulting in the passage of various acts aimed at boosting competitiveness and creating higher-paying jobs.
However, the fear of AI still looms large. A report from the National Bureau of Economic Research found that a significant portion of wage inequality in the U.S. over the past four decades can be attributed to the decline of routine tasks due to automation. The impact of automation on wages was even greater than offshoring, market power, markups, or de-unionization. This suggests that major changes in wage inequality can occur alongside modest productivity gains.
While AI may lead to small gains in productivity, businesses are still likely to implement it, resulting in greater wage inequality. The question then arises: if more jobs are lost to AI and automation, will the market be able to absorb a large number of newly skilled workers? Additionally, the growing number of senior citizens may create job opportunities in certain sectors, but the pay levels in overcrowded skilled trades may suffer.
Moreover, not everyone is suited for physically demanding manual labor. It is essential to ensure that other types of jobs, such as “high-touch” occupations in social work, teaching, healthcare, and senior care, are well-paying and supported.
Addressing the impact of the impending AI revolution will require strategic planning from future leaders. Affordability of secondary education and temporary support for workers displaced by AI and automation will be crucial. It is imperative to find a balance between harnessing the potential of AI and mitigating the negative consequences of job displacement and wage inequality.
Source: l.
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