US Experts Warn AI Likely To Kill Off Jobs And Widen Wealth Inequality

Digital Zeitgeist – US Experts Warn AI Likely To Kill Off Jobs And Widen Wealth Inequality

Economists wary of firm predictions but say advances could create new raft of billionaires while other workers are laid off.

The introduction of ChatGPT is only the most recent example of a technology that has stoked concerns over its potential to displace millions of workers in fields as diverse as advertising copywriting, Wall Street trading, sales, the writing of basic computer code, and journalism.

But even though many workforce experts believe that ChatGPT and other artificial intelligence (AI) technologies will cause unemployment rates to skyrocket are exaggerated, they point to another fear about AI: that it will widen the already enormous income and wealth inequality in the United States and the world by creating a new wave of billionaire tech barons at the same time that it pushes many workers out of better paid jobs.

It is possible that AI will eliminate employment, just like many other innovative technologies before it. However, as has been the case in the past, experts suggest that AI will likely offset a large portion of that by fostering the creation of new employment in addition to improving the performance of many current occupations. The most important question is: what sort of jobs?

“AI will wipe out a lot of current jobs, as has happened with all past technologies,” said Lawrence Katz, a labor economist at Harvard. “But I have no reason to think that AI and robots won’t continue changing the mix of jobs. The question is: will the change in the mix of jobs exacerbate existing inequalities? Will AI raise productivity so much that even as it displaces a lot of jobs, it creates new ones and raises living standards?”

According to projections provided by Anu Madgavkar, who directs labour market research at the McKinsey Global Institute, one in every four workers in the United States will witness an increase in the amount of artificial intelligence (AI) and technology that is implemented in their occupations. She stated that fifty to sixty percent of businesses indicate they are exploring artificial intelligence-related initiatives. According to Madgavkar, “people are going to have to learn to work with AI one way or another,” regardless of how they feel about it.

According to Madgavkar, the positions most at risk from AI are those in the white-collar sector. This contrasts with previous waves of automation, which mostly harmed jobs in manufacturing. She stated that a growing number of office-based jobs, customer service jobs, and sales jobs are becoming available. They are the job categories that will have the greatest amount of job loss and the highest pace of adoption of automation technology. These workers will either need to learn to adapt to the new system or acquire new skills.

In other words, many office workers could face downward mobility.

AI has prompted several questions from specialists in the field of human resources, including the following: will it replace a large number of call-center employees, or will it only make those employees more productive by rapidly sending necessary information to them while they chat with customers? Will the capacity of artificial intelligence to read cancer scans lead to the displacement of radiologists, or will it aid radiologists by allowing them to focus on more complex and subtle concerns when interpreting images? Will it be possible for AI to one day replace some journalists by producing articles on baseball games or the daily ups and downs on Wall Street?

Some workforce experts say AI and other new technologies will hurt middle-level, white-collar jobs more than lower-paying, physically intensive jobs. McKinsey’s Madgavkar said it will be hard for AI or robots to do the jobs of janitors. In food service, she said, new technologies might be able to take customer orders, but “we’re not going to see many little robots that bring the food to a particular table”.

At law firms, AI might eliminate some attorneys’/solicitors’ jobs by being able to prepare first drafts of business contracts. But AI might also enable paralegals to oversee preparation of draft contracts, and that increased responsibility could mean higher pay for paralegals.

“If you make workers more productive, workers are then supposed to make more money,” said William Spriggs, an economics professor at Howard University and chief economist at the AFL-CIO, the nation’s main labor federation. “Companies don’t want to have a discussion about sharing the benefits of these technologies. They’d rather have a discussion to scare the bejesus out of you about these new technologies. They want you to concede that you’re just grateful to have a job and that you’ll pay us peanuts.”

Spriggs noted that when a wave of automation swept through the auto industry from the 1950s through 1970s, “the UAW said to Ford and GM, we’re a lot more productive and you’re a lot more profitable. As a result, the workers got a lot more money.”

David Autor, an economics professor at MIT, is wary of making predictions about ChatGPT and AI. “There’s just enormous uncertainty,” he said.

But he’s not concerned with the US running out of jobs. “If anything, we don’t have enough people for jobs right now,” he said. “I’m concerned about the change of composition in jobs.” He voiced concern that AI, by eliminating some middle-class jobs and de-skilling some jobs, will move many workers into lower-paying jobs like food service. “The concern is: will AI reduce the value of a lot of skill sets and make labor more commodified?”

In many cases, new technologies such as AI result in the creation of employment that no one could have envisioned before their introduction. For example, prior to the discovery of computers, who could have envisioned the work of a computer programmer? Workforce experts believe that artificial intelligence will create more jobs for engineers and certain types of managers, and that any decrease in jobs caused by AI could be offset by increases in the number of healthcare jobs as the overall population ages. In other words, AI will create jobs for engineers and certain types of managers. It is possible that AI will need the establishment of a more robust system of retraining in order to, for example, educate an unemployed salesman for a position in a hospital.

According to Juliet Schor, an economist at Boston College, it would be considerably preferable if businesses, rather than laying off workers as a result of AI, would reduce the work hours of employees, possibly by reducing the number of days a person works per week from five to three or four. “Work-time reduction is really the much better way to respond to labor-displacing technological change,” Schor said. “Work-time reduction is really the much better way.” She expressed her concerns that artificial intelligence could result in the creation of a large number of unemployed people in the United States, and she said that even with some kind of universal basic income system, “that would create inequality between the people who have work and the people who don’t.” That is a significant obstacle.

An MIT professor named Julie Shah, who is also the head of the Interactive Robotics Group at the MIT Computer Science and Artificial Intelligence Laboratory, has stated that she works with businesses to convince them to utilise AI and robotics to “augment and enhance workers, rather than replace them.” She stated that some employers want to use robots to have a lights-out factory without any human workers, while other companies want robots to work alongside humans to make them more efficient, and they want to have human workers on hand to propose future ideas for innovation.

Shah cited a study that looked at significant companies in France that had used robotics and found that those companies had boosted their total employment levels while their domestic competitors had decreased their workforce. She also referred to a study of Canadian businesses that had begun employing robots and had, as a result, decreased the number of middle managers while simultaneously increased the number of production employees. She pointed out that in the United States of America, some businesses have accepted robots and are offering higher salaries, while having less employment overall.

“These technologies are not leading to one future, but to many possible futures,” Shah said.

Harvard’s Katz is also worried about AI’s effects on income inequality. “It’s likely to continue to reduce labor’s share of income as many tasks get automated,” he said.

Katz said a big issue is who will share in the gains if AI yields major productivity growth, and how those gains will be shared. “How much will need to come through redistribution policies?” he asked. “If it’s really good and massively increases productivity, even if workers get a smaller share of the pie, they could end up with higher incomes.”

But these gains are unlikely to trickle down to workers in the US given current circumstances. “Having a stronger say for workers and their representatives in this process is an important element to adjusting to these changes. That’s happened in countries that have stronger unions and works councils. That’s an area where we in the US have fallen behind,” Katz said.

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