Ignoring the problem doesn’t help
The workforce in the United States and Europe will be drastically altered if generative AI lives up to its hype, according to Goldman Sachs in sobering and worrying research on the rise of AI. According to the investment bank, this rapidly developing technology could lead to the reduction or loss of 300 million employment.
As explained by Forbes, automation spurs innovation, which produces new kinds of employment. Companies will benefit from cost savings brought on by AI. They can use their riches to invest in starting and expanding enterprises, which will ultimately boost the annual global GDP by 7%.
In its first five days of operation, ChatGPT surpassed one million users, accomplishing this feat more quickly than any other company in history.
According to Goldman, the trajectory of AI development will be similar to that of earlier computer and tech products. Similar to how the world transitioned from enormous mainframe computers to contemporary technologies, the rapid expansion of AI will reshape the globe. AI is capable of producing original works of art, acing the SAT, and passing the bar test for attorneys.
Among industries that will be touched by automation include office administrative assistance, law, architecture and engineering, business and financial operations, management, sales, healthcare, and art and design.
The potential for a labor productivity boom, similar to those that followed the emergence of earlier general-purpose technologies like the electric motor and personal computer, is increased by the combination of significant labor cost savings, new job creation, and a productivity boost for non-displaced workers.
However, an academic study found that during the past 40 years, automation technology has been the main cause of income inequality in the United States. According to a survey by the National Bureau of Economic Research, the wage decreases among blue-collar workers who have been replaced by automation or whose jobs have been downgraded account for 50% to 70% of changes in U.S. earnings since 1980.
An enormous gap in wealth and income inequality has been created by the development of artificial intelligence, robotics, and other cutting-edge technology, and it appears as if the problem will worsen. For the time being, white-collar workers with college degrees have mostly avoided suffering the same fate as those without such degrees. Salary increases were observed among those with postgraduate degrees, whereas “low-education workers significantly declined.” According to the report, “Men without a high school degree’s real earnings are now 15% lower than they were in 1980.”
Robotics and technology have replaced and will continue to replace individuals who work in manufacturing facilities and factories, cashiers, retail sales workers, and truck and cab drivers. The majority of minimum-wage and low-skilled occupations will soon be replaced by driverless cars, kiosks in fast food restaurants, and self-help, quick-phone scans in retail establishments.
Systems using artificial intelligence are everywhere. Asking an inquiry to an AI-powered digital voice assistant will tell you everything you need to know +4% of the time. You can communicate with an online chatbot in place of a live person to solve a problem. In addition, AI can aid in the diagnosis of diseases like cancer. To look for fraud and noncompliance, banks deploy sophisticated technologies. AI is primarily in charge of job applications, newsfeeds, social media, and driverless cars.
“A new generation of smart machines, fueled by rapid advances in AI and robotics, could potentially replace a large proportion of existing human jobs,” the World Economic Forum (WEF) said in research from 2020. Since the pandemic forced businesses to accelerate the adoption of new technology to cut costs, boost productivity, and be less dependent on actual humans, robotics and AI will produce a significant “double disruption”.
PriceWaterhouseCoopers, a leading management consulting company, stated that “AI, robotics, and other forms of smart automation have the potential to bring great economic benefits, contributing up to $15 trillion to global GDP by 2030.” Yet a heavy human cost will accompany it. There are worries that this additional wealth could replace a large number of current jobs, but it will also increase demand for numerous jobs.
This raises another important but frequently disregarded problem. Advocates of AI claim that there is no need for concern because humans have always effectively adapted to new technologies. What does this indicate for the caliber of employment, though?
The changes brought on by artificial intelligence aren’t ready for even the most developed cities in the world, according to management consulting firm Oliver Wyman. According to estimates, over 50 million Chinese workers may need to undergo retraining as a result of the deployment of AI. 11.5 million Americans will need to be retrained in the necessary abilities to function in the workforce. The advances brought about by AI, robotics, and associated technology will require aid from millions of people in Brazil, Japan, and Germany.
In a 2019 Wells Fargo WFC +1.9% study, the bank found that during the next 10 years, robots would eliminate 200,000 employees in the banking sector. High-paid Wall Street workers, such as bond and stock traders, have already been harmed by this. These are the individuals who previously traded securities for their banks, clients, and themselves on the trading floors of investment banks. Before algorithms, quant-trading software, and other programs disrupted the industry and made their expertise obsolete.
Robots are impossible to avoid. Sophisticated robots that do delicate surgeries with greater accuracy and read X-rays with greater efficacy and precision to identify malignant cells that the human eye can’t easily see could replace well-trained and experienced doctors.
Even software engineers will become less in demand as artificial intelligence advances. The tech billionaire and creator of Twitter and Square, Jack Dorsey, predicts that soon, AI will be able to create its own software. That will make things difficult for some new software engineers. In an episode of the Yang Speaks podcast, Dorsey said to Yang “We talk a lot about the self-driving trucks and whatnot” when talking about how technology will replace human jobs. “[AI] is even coming for programming [jobs],” he continued. Many of the objectives of machine learning and deep learning are to develop the software itself over time, therefore, many entry-level programming positions will simply be less useful.
We should be concerned when management consultants and organizations that use AI and robotics suggest we shouldn’t be concerned. Companies will continue to use technology and reduce employee numbers in order to increase profits, whether it’s McDonald’s installing self-serve kiosks and laying off hourly employees to reduce costs or top-tier investment banks using software rather than traders placing multimillion-dollar bets on the stock market.
So the question is understanding that new technologies will produce new jobs, but the workers needed will have to be more skilled, and fewer of them will certainly be needed compared to those who have been replaced for tasks that can be automated. This is easy to see if you think about, for example, how many self-checkouts have replaced cashiers how many of those cashiers would be needed to program such checkouts, and how often they would be required. Certainly not every day.
Therefore, if fewer but more skilled jobs are needed, those people will have to be retrained first. But is it really possible to retrain every person for a required task? It is like saying that if only surgeons are needed, the available people will have to become surgeons. Yet can everyone become a surgeon, or are we forgetting about personal inclinations?
Besides, there is the fact that not everyone starts from the same level of education, and moreover, the time for retraining could be very long for complex tasks. Meanwhile, how would such people be supported economically?
The mistake is to consider jobs as something everyone has to do for a living when the trend is forcing us to have little, but very skilled, jobs. Therefore, it is clear that this is not sustainable and that we need to imagine a society in which work is not the foundation for livelihood but rather increasingly a niche activity.
