In science fiction stories, artificial intelligence (AI) has been portrayed as both a destroyer and a savior of humankind. In the real world, one of the most discussed topics is what affect AI will have on jobs. For example, journalist Will Knight writes, “Forget artificial intelligence breaking free of human control and taking over the world. A far more pressing concern is how today’s generative AI tools will transform the labor market. Some experts envisage a world of increased productivity and job satisfaction; others, a landscape of mass unemployment and social upheaval.”[1] Much of the anger that dominates American political discourse arises from the belief that the middle class has been overlooked and that the so-called American dream is no longer in reach for rising generations.
There is evidence that the middle class is suffering. Rakesh Kochhar, a former senior researcher at the Pew Research Center, explains, “The share of Americans who are in the middle class is smaller than it used to be. In 1971, 61% of Americans lived in middle-class households. By 2023, the share had fallen to 51%, according to a new Pew Research Center analysis of government data. As a result, Americans are more apart than before financially. From 1971 to 2023, the share of Americans who live in lower-income households increased from 27% to 30%, and the share in upper-income households increased from 11% to 19%.”[2] The question is: Will AI help or hurt the middle class?
AI and Jobs
Journalist Megan McArdle insists, “[The 1970s marked the] twilight of the 20th-century manufacturing boom that had almost managed to compress the whole country into one vast middle class.”[3] It was during that period, she reports, that “manufacturing employment tipped into the final descent toward its current sub-10 percent share.” She now warns that AI is coming for professional class jobs. She writes, “As artificial intelligence starts coming for our jobs, I wonder how well the professional class will take its own medicine. Will we gracefully transition to lower-skilled service work, as we urged manufacturing workers to do? Or will we fight like hell to retain what we have, for our children as well as ourselves? For I suspect AI is coming for a lot of professional class jobs, despite how many people I hear say a machine can never do what they do.”
She is not alone in her conclusions. At an event earlier this year, Kristalina Georgieva, Managing Director at the International Monetary Fund, warned that AI is hitting the global labor market like a “tsunami.”[4] According to Georgieva, AI is likely to impact 40% of jobs globally, and 60% of jobs in advanced economies. She concludes, “We have very little time to get people ready for it, businesses ready for it. … It could bring tremendous increase in productivity if we manage it well, but it can also lead to more misinformation and, of course, more inequality in our society.”
Tech correspondent Hannah Murphy reports, “Research suggests that the technology will indeed shake up the workplace. One study published in March found that the introduction of large language models such as ChatGPT could result in some 80 per cent of the US workforce having at least 10 per cent of their tasks affected by the technology. Nearly a fifth of workers could have at least 50 per cent of their tasks affected, and the impact is likely to be felt far beyond tech roles, in more language-intensive areas such as law, advertising and finance.”[5]
David Autor, a labor economist and professor of economics at MIT, admits that, in many cases, the information age and AI have had a negative impact on jobs. He explains, “Information, it turns out, is merely an input for a more consequential economic function, decision-making, which is the province of elite experts — typically the minority of U.S. adults who hold college or graduate degrees. By making information and calculation cheap and abundant, computerization catalyzed an unprecedented concentration of decision-making power, and accompanying resources, among elite experts. Simultaneously, it automated away a broad middle-skill stratum of jobs in administrative support, clerical, and blue-collar production occupations. Meanwhile, lacking better opportunities, 60% of adults without a bachelor’s degree have been relegated to non-expert, low-paid service jobs.”[6] Painted against that backdrop, it’s little wonder that Autor reports, “A recent Gallup poll found that 75% of U.S. adults believe AI will lead to fewer jobs.”
Are lower-paying service jobs really the future of the American worker? Is the middle class doomed? Frankly, nobody knows exactly how AI will affect the future workforce — but the workforce will be affected. Historically, however, technology has always created more jobs than it has displaced. Will AI change that pattern? Murphy notes, “Some experts believe that the technology will not cause the jobs market to shrink but could instead be a boon for it — with new types of roles being created and the emergence of human-AI symbiosis.” Researchers from the Massachusetts Institute of Technology (MIT) believe AI will affect the job market less than many pundits currently predict. Tech journalist Kyle Wiggers reports, “MIT researchers found that the majority of jobs previously identified as being at risk of AI displacement aren’t, in fact, ‘economically beneficial’ to automate — at least at present.”[7]
More and more companies are coming to realize that AI is better at augmenting their human workforce than replacing it. Marco Iacoviello, President at OG Trading e Investimenti, explains, “AI has the potential to automate and simplify numerous repetitive and manual tasks that require less creativity and critical reasoning. This can enable workers to focus on more meaningful and high-value activities. For instance, in the manufacturing and logistics sectors, AI can automate assembly processes, allowing employees to engage in design, quality control and management tasks.”[8] Acquiring capabilities required for better collaboration with AI means many workers will have to upgrade their skills; however, they will eventually come to appreciate, rather than fear, AI in the workplace. Ryan Roslansky, Chief Executive Officer of LinkedIn, asserts, “In 2024, leaders will lean into this ever-evolving technology while simultaneously empowering their employees, and people will align their skill-building and continuing education with AI skills and practical people skills. The result will be a new world of work that’s more human and more fulfilling than ever before.”[9]
In the concluding part of this article, I will explore how Professor Autor believes AI can be used to rebuild America’s middle class and waylay fears about AI decimating the workforce.
Footnotes
[1] Will Knight, “No One Actually Knows How AI Will Affect Jobs,” Wired, 11 April 2024.
[2] Rakesh Kochhar, “The State of the American Middle Class,” Pew Research Center, 31 May 24.
[3] Megan McArdle, “AI is coming for the professional class. Expect outrage — and fear.” The Washington Post, 29 April 2024.
[4] Penny Horwood, “AI to hit jobs market like a ‘tsunami’,” Computing, 16 May 2024.
[5] Hannah Murphy, “How will artificial intelligence change the value of human skillsets?” Financial Times, 4 September 2023.
[6] David Autor, “AI Could Actually Help Rebuild The Middle Class,” Noema, 12 February 2024.
[7] Kyle Wiggers, “New MIT CSAIL study suggests that AI won’t steal as many jobs as expected,” TechCrunch, 22 January 2024.
[8] Marco Iacoviello, “How Does Artificial Intelligence Create New Jobs?” Forbes, 26 July 2023.
[9] Ryan Roslansky, “The AI-Fueled Future of Work Needs Humans More Than Ever,” Wired, 26 January 2024.