The AI middle way

Weekly Updates

The economics profession exhibits a rare degree of unanimity when it comes to the impact of technological change on employment. Technology destroys some jobs but creates new ones. Over time, the two forces tend to balance each other.
Some people who lose their jobs lack the willingness or skills to undertake the new or available jobs. That creates the innocuous sounding but often devastating “frictional unemployment.” It might mean permanent unemployment, especially for older workers.
There is also the bit in the middle. For a sizeable group of workers, AI is likely to change rather than destroy their jobs. If more than 50% of a job’s tasks can be automated, the job will likely be lost. If fewer than 50% of tasks can be automated, the job changes but remains. As the job continues to exist, whether these workers become unemployed depends on the worker’s ability to change.
There are reasons to be optimistic about this middle group. AI might be less disruptive. Unlike the first industrial revolution, workers adopting AI are not forced to give up working at home to move to a dark, satanic mill in a city. Many workers required to use AI are already computer literate. If workers find it easier to evolve, they can adapt and stay employed.