Robert A. Manning, and Matthew Burrows
Rarely has such an unfolding transformational change been in plain view yet elicited so little forethought of the large-scale social repercussions. While the extent and speed with which jobs are lost is unclear, the United States should take a lesson from its earlier China Shock episode and prepare ahead of time for a wave of lost employment by upping workers’ skills for the jobs that artificial intelligence (AI) will create. Moreover, with inequality already approaching unprecedented levels, US democracy won’t survive with all the benefits of AI flowing to capital as happened during globalization. Some of the productivity gains would be better spent on avoiding a new cohort of losers.
The Middle Class Will Be Hurt This Time
There is no end to the warnings. The IMF has proclaimed that about 60 percent of jobs may be impacted by AI in advanced economies. Roughly half the exposed jobs may benefit from AI integration, enhancing productivity. For the other half, AI applications may execute key tasks currently performed by humans, which could lower labor demand, leading to lower wages and reduced hiring. In the most extreme cases, some of these jobs may disappear. With rapid advances towards agentic AI capable of perceiving the environment around it, reasoning, planning, and taking action to achieve complex, multi-step goals with minimal human intervention, the balance could shift to more jobs lost.
JP Morgan has said that “half of the vulnerable jobs in the United States will be automated away over the next 20 years.” They believe that, unlike with past technological advances, where lower-skilled jobs were made redundant, those most at risk with AI would be “white-collar professional service jobs such as budget analysis and technical writing,” going on to say that “[these jobs] look more vulnerable than childcare work or pipelaying.”
A 2023 Pew Research Center study found that “workers with a bachelor’s degree or more (27%) are more than twice as likely as those with a high school diploma only (12%) to see the most exposure” and be at risk of losing their jobs.
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