AI automation is transforming our economy. Job losses over the coming decades may be as high as 47 percent, some analysts predict. But how accurate are these warnings? Is your job at risk?
Take a deep breath
As is usually the case, the reality of the situation is far more nuanced than many analysts let on. In fact, dire warnings about machine learning and augmented intelligence can be dangerously misleading.
Context is key. So let’s take a step back and look at how many jobs (and what kinds) will be impacted by AI automation.
- AI automation won’t blow up the economy but will reshape it
- Repetitive work tasks are the most likely to be automated
- Automation will most likely have a net positive impact on employment
- We must consider the social impact of automation
First, some real data on AI automation
Automation (by AI and other means) will displace almost 22.7 million jobs by 2025, according a recent report. However, the same report found that automation will create 13.6 million new jobs. The result will be a net loss of 9.1 million jobs between 2015- 2025.
So, which jobs will be automated?
A recent study by McKinsey & Company found that repetitive work activities are most likely to be affected by AI automation. This includes data collection, data processing, and many types of physical or service work. See this infographic from the same report:
Let’s continue putting data into context. Next up: recent national employment trends.
AI automation job losses in context
Automation will eliminate nearly 900,000 jobs each year between 2015- 2025, according to the above report. However, the U.S. economy adds an average of 2,000,000 jobs each year.
This means the ratio of jobs lost from automation, to jobs created by the larger economy, will be nearly 2:1.
In addition, the natural ebb and flow of the economy eliminates around 6 percent of jobs every 3 months. In the same period, the economy adds a slightly larger percentage of jobs. This results in a stable and declining unemployment rate (atypical circumstances, such as recessions, change things).
To put this in perspective: since 2012, the unemployment rate has steadily declined by nearly 50 percent, according to the U.S. Bureau of Labor Statistics. The current unemployment rate of 4.4 percent is an all-time 10-year low.
All this is to say that yes, AI automation will result in the loss of many jobs. However, these losses will be offset (as they usually are) by the creation of more jobs.
AI automation armageddon: fact or fiction?
Automation will create short- and long-term gains for both companies and workers. But it will also drive a fundamental reshaping of vast swathes of the economy. Many jobs will be run entirely by robots, while entirely new industries will arise to support those robots.
Related article: Artificial Intelligence Will Double Economic Growth
The upshot: AI automation will not blow up the economy. But it will reshape it, top to bottom.
The social impact of AI automation
Now, this isn’t the end of the discussion. There are huge social implications here, because the burden of automation will fall disproportionately on lower-skilled, lower-paid workers.
What is the future of labor, in a world powered by augmented intelligence? How will we reorganize our society when robots handle most physical and repetitive tasks?
I don’t pretend to have an answer.