Silicon Valley thinks AI will kill jobs. Economists are not convinced:
The most worrying development is a cross-country slowdown in entry-level hiring in tech-related occupations — consistent with AI turbocharging the productivity of senior staff while taking over routine tasks done by juniors.
But there is no consensus on the cause. “Unemployment of young graduates has worsened since 2015. It’s a long-term trend. AI is clearly not the only factor,” Broecke argued, citing a potential oversupply of graduates, the rise of remote work and high interest rates.
The absence of aggregate job losses may simply be the calm before the storm. “Talk to executives in the non-tech sector — those who use AI as customers — and many say they don’t need as many workers as they did before AI,” Johnson said. “It is not yet in the numbers . . . but the automation threat is very real.”
Modelling by the Anthropic Institute, published last month, included an extreme scenario where rapid gains in AI’s capabilities cut “cognitive” employment by a fifth by 2030, leaving one in five white-collar workers and one in 10 of all workers unemployed.
The model is highly sensitive to underlying assumptions. The extreme scenario assumes AI will rapidly become able to perform most tasks without human oversight, will be widely adopted and will generate big productivity gains.
