Impact of AI on the future of work

Artificial Intelligence(AI) is one of the most polarizing topics in the world today. Artificial intelligence has the potential to be more impactful than the most revolutionary technologies we have seen historically such as steam, electricity, and the internet, leading many experts to call the AI-led technological revolution the Fourth Industrial Revolution. AI is used in our inboxes to learn and identify emails that need to be regarded as spam. AI is used by websites such as Amazon and Netflix and Amazon in order to make suggestions based on past searches. AI has proven its ability to learn and analyze by beating humans in games such as Go and Chess and this is only going to increase in the future. Another area where AI is making significant strides and is likely to become more common is in driverless cars, Google is experimenting with the Waymo project and Tesla is incorporating those technologies into their cars. All of us encounter AI in our daily lives and it is a part of our world today.

Some believe that artificial intelligence is detrimental to society as it replaces jobs done by humans while others feel that like any of the other innovations mentioned above it will leave some jobs redundant but also create more in other areas and improve overall productivity and efficiency in the economy. We have to accept that the growth of AI is inevitable and it isn’t a question of whether we are for or against AI but rather how we regulate and enable it to have the greatest impact on society while reducing the negative consequences. Artificial intelligence is going to alter significantly the skills that are important and greatly change the structure of the workforce and will increase the importance of life-long learning. I feel that AI will at least create as many jobs that it destroys but so far there is no expert consensus on this topic.

AI can replace many of the tasks that workers engage in right now but there will still be tasks that require human involvement or supervision. A Mckinsey report found that about 50% of tasks can be automated and that between 30–60 % of each occupation could be automated with the current state of technology. The report also found that in the current state only 5% of jobs can be fully replaced by Artificial Intelligence. However, by 2030 that is expected to grow to about 15–20% of occupations. This all means that a majority of workers may not have enough tasks to do for a full-time job since 50 % can be done by machines in a significant number of occupations. This also requires human-machine collaboration. At least in the initial stages of the fourth industrial revolution, there could be a need for experts on collaborating with machines in order to use the machine's superior abilities in information processing to make decisions. This could further expand the gig economy, where workers are contracted for single projects that require human work or supervision. Workers will no longer be limited to one company but can offer their services to anyone who might find it desirable on a short-term basis. While this may mean less stability in the workforce and for individual workers, it could provide a way in which the benefits, provided by humans and that of machines can be maximized for greater efficiency and lower cost. We are currently seeing the gig economy in areas such as uber drivers, many of whom drive for competing companies, however, it is still mostly limited to low skills jobs. In the near future, it could become the norm even for high skill jobs such as programmers or AI supervisors, or data scientists. The gig economy will greatly change how people view their careers and will require workers to be a lot more flexible in terms of job structure.

The improvement in AI will greatly change the composition of the workforce. Initially, it was only low-skilled workers who were under threat to be replaced by AI but now many studies have shown that is mid-level workers who will be affected the most. While Artificial intelligence will continue to be able to replace low skilled workers, these jobs are much less in demand and consequently command less wages and are a very low economic cost to companies. Mid-Level workers on the other hand are a much more significant cost to companies due to the skills and the education they possess. Being replaced by AI could cause Mid-Level workers to have no other choice but to apply for Low-skilled jobs further decreasing the wages of those jobs due to the rightward shift of the labor supply curve, which causes the equilibrium to decrease further in terms of pay. High skilled jobs such as those which require high levels of people management skills and programming skills are the least likely to be replaced and are usually the highest paying jobs as well. This could lead to a rapid increase in inequality were those with the skills benefit and become a lot wealthier while the middle class becomes smaller due to reducing employment opportunities. To prevent a great shift towards low skilled labor, a strong focus on skilling becomes of utmost importance.

There is a consensus that AI will create a lot of jobs, but that doesn’t mean that they will be similar jobs to the ones that exist today. There is going to be a period where workers are replaced by AI and don’t have the skills to fit into any of the new jobs that are created. Skilling programs are extremely important, especially for Mid-Level workers. The jobs which are seeing the most growth according to the US labor bureau survey are in Architecture and Engineering, and in Computer Science and Mathematics. I personally believe programming and its different applications are going to be even more on the rise during the next 10 years. Re-skilling isn’t just a one -time effort. The skills required in the economy are changing at a faster rate than ever before. It is likely that within the next ten years skills highly relevant today will no longer be as important. Workers will need to engage in life-long learning where they retrain and re-skill themselves in order to keep with the rapidly evolving economy. During this period the government needs to take steps to allow workers who have been displaced to take time off to re-skill themselves. This could be done through a Universal Basic Income like program, or through an application-based process. I think this monetary aid shouldn’t be a one-time initiative since such a need will likely be a continuous one over the next several years. In addition to the job-related skills, soft skills are going to rapidly rise in importance as well. The abilities that humans possess that machines don’t is the ability to collaborate and manage large groups of people, critical thinking, problem-solving, and creativity. This is where higher education needs to play a part. In addition to teaching students, information and competencies schools and colleges need to give a lot of importance to soft skills and problem-solving abilities. Encouraging students’ creativity is essential in allowing more innovation and innovative problem-solving. If used properly AI can be used to aid in this process by helping personalize learning programs both for students and for professionals.

Artificial intelligence will also affect countries differently. There is less incentive for countries such as India or Bangladesh to automate as labor is very cheap even at more skilled levels. The reason why innovations are put in place is in the hope that it will make the production process cheaper and more efficient. Electricity began to be widely used only once it was proven that it reduced costs and increased the speed of production. In developed countries such as the US and those in Western-Europe, AI is likely to reduce costs, while in developing countries it could be more expensive and companies will have to decide if they value low cost or superior efficiency brought upon by AI more. In making this trade-off, countries like China despite having high populations have embraced AI due to its superior efficiency, whereas countries like India are lagging behind in automation. The difference between the previous industrial revolutions and AI is that while previously innovation replaced or increased the speed of physical tasks AI has the ability to match the intellectual capabilities of humans as well. Humans were never previously at risk of their technologies become superior to them or being unable to control them whereas now the singularity is a real possibility.