🦾 AI will not lead to mass unemployment (but something much bigger will happen)

Reading the latest news on Warp News, it's easy to assume that AI will lead to mass unemployment:

• 💵 JPMorgan reduces manual labor by 90 percent thanks to AI
• 🩺 Kry achieves profitability thanks to AI
• 🤖 Klarna's new AI assistant does the same job as 700 people, after one month

In all the news, AI does jobs that people previously did, which should lead to unemployment. But that doesn't have to be the case, according to David Autor. He is a labor economist and professor of economics at MIT, where he studies how technological change and globalization affect workers.

Autor is the kind of people I've been calling for in the debate on AI. AI researchers like Yoshua Bengio, Geoffrey Hinton, and Stuart Russell are good at AI and machine learning. That doesn't make them experts on how AI will affect the job market. Which hasn't stopped them from making drastic claims. Hinton urged people to become plumbers, for AI will take many of the other jobs. In the pause AI letter, which some of these gentlemen signed, the question is raised whether we "should automate away all jobs."

In a brilliant essay, Autor explains why it doesn't have to be this way: AI Could Actually Help Rebuild The Middle Class. It's long (30 minutes reading time) so I'll try to summarize.

Jobs exist and will remain

He starts by stating that "the industrialized world is awash in jobs, and it’s going to stay that way."

"This is not a prediction, it’s a demographic fact. All the people who will turn 30 in the year 2053 have already been born and we cannot make more of them. Barring a massive change in immigration policy, the U.S. and other rich countries will run out of workers before we run out of jobs."

Even if some lose their jobs to AI, there will be many other jobs. Quite undramatic for society, even if it can be dramatic for the individuals who lose their jobs.

But, David Autor sees a much bigger change could be on the way.

Many can level up to expert level

In industrialized countries, expertise is the main source of a job's value. Occupations that require no or little expertise, such as waiters and cleaners, are usually found far down the wage ladder. While jobs that require high expertise, such as doctors, lawyers, and software developers, offer high salaries.

What he believes can happen now is this:

"For workers with foundational training and experience, AI can help to leverage expertise so they can do higher-value work."

Those who already have a foundation to stand on, can level up their knowledge with AI so much that they reach expert level. A nurse could, with the help of AI, achieve the same expertise as a doctor, at least within parts of the doctor's expertise. This would raise the value of the nurse's work, while at the same time driving down the cost of healthcare.

He then cites several studies that show just how people with lower competence can catch up or surpass those with higher competence, by using AI in the right way.

What happens to those at the very bottom and very top of the wage ladder?

But won't this make the current experts unnecessary? No, probably not. We will be able to do more in their field and consistently raise the level, which creates continued space and jobs even for them.

What about those at the very bottom of the wage ladder, who lack a foundation on which AI can help them level up? Will robots take their jobs? No, Autor believes, based on the fact that we are not even close to being able to produce such broadly competent robots. (Here I think he is wrong. It won't happen tomorrow, but it's also not decades away.)

"AI will automate the core tasks of some occupations, eliminate others and dramatically reshape some of those that remain. It will simultaneously instantiate new goods and services, generate new demands for expertise and open new possibilities for human advancement — though it is always difficult to predict what those will be."

Autor is careful to point out that this is not a forecast, but what could happen if we make the right decisions and do the right things.

Become a centaur

This is what I've been talking about in several texts here on Warp News, talks, courses, and in the book The Centaur's Edge. Like the two amateurs who beat the grandmasters in chess, those who become good at using AI can play at a higher level.

It's not just individuals who can become centaurs. Companies, organizations, and entire countries can level up in this way. This is the recipe I advocate for Sweden.

Besides amateurs being able to beat grandmasters, a multitude of new jobs will be created when AI unleashes the creativity that has been stuck in our heads.

Not outcompeted by airplanes

Autor's essay is long, but very worth reading. He gives a fascinating history of work and how different categories in the job market have been affected by various technological developments.

AI Could Actually Help Rebuild The Middle Class | NOEMA

AI doesn’t have to be a job destroyer. It offers us the opportunity to extend expertise to a larger set of workers.

NOEMADavid Autor

And he is not gentle with the AI experts' view of how AI will affect the job market:

"The most charitable thing I can say about these ominous statements is that they are likely wrong — a flattening of the complexity of innovation into a single dimension of automation. Do these technology visionaries believe that Black & Decker tools make contractors’ skills less valuable and that airplanes outperform their passengers? The latter question is of course nonsensical. Airplanes are not our competitors; we simply couldn’t fly without them."

Mathias Sundin
The Angry Optimist