Economist argues AI job losses are outweighed by new hiring opportunities

THE ECONOMIST: The AI boom is creating employment opportunities faster than it destroys them.

A new article about AI in The Economist argues that "Initial effects of the technology on employment look positive." Perhaps AI will eventually make many humans unemployable — but there is no sign of it yet. On September 4th the Bureau of Labour Statistics reported that the American economy added 162,000 jobs in August, far above expectations. The unemployment rate is just 4.1%, lower than in almost 90% of months over the past half-century. Young workers, often cast as AI's first victims, are holding up remarkably well: the gap between unemployment among 20-24-year-olds and the overall rate is close to a multi-decade low. Some companies and workers are being severely disrupted by AI. Hiring in professional and business services is running about 10% below the average in 2015-19. Tech giants like Microsoft and Meta are trimming headcounts as they reorganise their businesses around the technology. Smaller firms such as Block, the owner of Square and Cash App, and Intuit, the maker of TurboTax and QuickBooks, are replacing people with bots. American companies have announced some 16,000 AI-related job cuts a month on average so far this year, according to Challenger, Gray & Christmas, an employment consultancy. But AI-related lay-offs gets lost in the churning jobs market where employers shed roughly 1.7m workers in a typical month. And the evidence so far is that AI is already creating a lot of jobs to replace those it has destroyed. The vast sums pouring into data centres and power generation have set off a race for construction and infrastructure workers. AI startups are hiring like there is no tomorrow. Incumbents racing to keep up are creating new AI roles. And by making some workers more productive, AI may be increasing demand for their services. Add it all up, and The Economist estimates that AI has so far created around 1m new jobs in America. That easily exceeds the roughly 200,000 lay-offs attributed to AI since mid-2023, and appears more than enough to offset weaker hiring in many back-office roles. Their article acknowledges that since January 2023 employment has fallen roughly 10% for customer-service workers and 15% for administrative assistants. But when The Economist looked at professions "closest to the AI boom" — engineers, software developers, mathematicians and data scientists — they found that since 2022 they've added roughly 730,000 jobs above trend. They see AI as creating new white-collar jobs for everyone from model and deployment engineers to new data annotators. The chief economist at the Burning Glass Institute agrees, estimating that roughly 1% of professional jobs are now "AI jobs" — about 1 million positions in the U.S. — while in computer occupations and life sciences it's between 4% and 5%. (Data-center construction spending also increased 60% in one year, according to Census Bureau data, creating jobs for electricians, HVAC specialists, grid engineers, and machine technicians.) And "Indeed finds that installation and maintenance jobs at data centres advertise wages about 40% higher than comparable work elsewhere." Read more of this story at Slashdot.