The concept of technological unemployment, which gained notoriety from famed economist John Maynard Keynes during the Great Depression, explains how innovations can lead to long-term job loss. However, evidence of this has been elusive. Notwithstanding the fact that automation has severely impacted industries like manufacturing, there is often a transition of the workforce as people adapt.
But could the AI revolution be different? It very well could. For example, California Governor Gavin Newsom fears that his state could see massive unemployment in areas like trucking and warehousing—and soon.17
Here’s another example: Harvest CROO Robotics has built a robot, called Harv, that can pick strawberries and other plants without causing bruises. Granted, it is still in the experimental phase, but the system is quickly improving. The expectation is that one robot will do the work of 30 people.18 And of course, there will be no wages to pay or labor liability exposure.
But AI may mean more than replacing low-skilled jobs. There are already signs that the technology could have a major impact on white-collar professions. Let’s face it, there is even more incentive to automate these jobs because they fetch higher compensation.
Just one category that could face AI job loss is the legal field, as a variety of startups are gunning for the market like Lawgood, NexLP, and RAVN ACE. The solutions are focused on automating areas such as legal research and contract review.19 Even though the systems are far from perfect, they can certainly process much more volume than people—and can also get smarter as they are used more and more.
True, the overall job market is dynamic, and there will be new types of careers that will be created. There will also likely be AI innovations that are assistive for employees—making their job easier to do. For example, software startup Measure Square has been able to use sophisticated algorithms to convert paper-based floorplans into digitally interactive floorplans. Because of this, it has been easier to get projects started and completed on time.
However, in light of the potential transformative impact of AI, it does seem reasonable that there will be an adverse impact on a broad range of industries. Perhaps a foreshadowing of this is what happened with job losses from manufacturing in the 1960s to 1990s. According to the Pew Research Center, there has been virtually no real wage growth in the last 40 years.20 During this period, the United States has also experienced a widening gap in wealth. Berkeley economist Gabriel Zucman estimates that 0.1% of the population controls nearly 20% of the wealth.21
Yet there are actions that can be taken. First of all, governments can look to provide education and transition assistance. With the pace of change in today’s world, there will need to be ongoing renewal of skills for most people. IBM CEO Ginni Rometty has noted that AI will change all jobs within the next 5–10 years. By the way, her company has seen a 30% reduction of headcount in the HR department because of automation.22
Next, there are some people who advocate basic income, which provides a minimum amount of compensation to everyone. This would certainly soften some of the inequality, but it also has drawbacks. People definitely get pride and satisfaction from their careers. So what might a person’s morale be if he or she cannot find a job? It could have a profound impact.
Finally, there is even talk of some type of AI tax. This would essentially claw back the large gains from those companies that benefit from the technology. Although, given their power, it probably would be tough to pass this type of legislation.
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