Depending on who you read, artificial intelligence (AI) is either a job enhancer… or a job killer.
So… which is it?
And can it somehow be both?
Let’s look at what the data says.
In recent working paper by Stanford University’s Digital Economy Lab — Canaries in the Coal Mine? Six Facts about the Recent Employment Effects of Artificial Intelligence — Brynjolfsson, Chandar and Chen break it down.
Now, I’d recommend you take all of this with a LARGE grain of salt. The AI Revolution started in earnest with the launch of ChatGPT at the end of 2022. I can’t say definitively that three years is really enough time to draw meaningful conclusions.
Plus, we need to remember that there is a lot of noise in the job data these days… and I don’t know that it’s possible to completely separate the effects of AI from the other shocks to the system, such as tariffs, high interest rates, upheaval in the federal government, etc., though the Stanford professors try their best to isolate the effects.
But with all of that as a lengthly caveat, let’s see what Stanford found.
It Depends on Where You Are in Your Career
The single biggest takeaway is that, to the extend there are job losses, young workers are taking the most damage. More experienced workers are using AI to essentially replace some of their younger underlings.
Let’s dig into the specifics. The authors list six takeaways, but I’m going to condense this to the core points I believe are most relevant.
Employment for young workers has declined in AI-exposed occupations
Defining “AI-exposed occupations” might be a bit of a moving target given how quickly things are changing, but there are obvious cases. The authors mention computer programmers and customer service agents as jobs particularly vulnerable and jobs in health care or in logistics would be the least vulnerable.
Well, the numbers here are exactly what you’d expect. Look at the blue line below. Headcount among younger programmers (aged 22-25) and customer service reps is trending sharply lower.
Meanwhile, headcount for young people in healthcare (again, blue line below) is actually increasing:
Is this purely AI? Or is some of this due to the fact that Big Tech massively over-hired during the pandemic and what we are seeing today is just normal rightsizing?
It might be a mixture of the two. But the trend is clear. This is a rough time to be a young person pursuing a career in tech or customer service… at a time when the hiring environment is generally pretty good in other industries.
Entry-level employment has declined in applications of AI that automate work, with muted changes for augmentation.
I could replace “AI” with “industrialization” or “technology” and the statement would be true across the centuries. If a process can be automated with tech, it will be. That’s not inherently bad. We wouldn’t want to go back to a time when elevators required manual operators of when you had to call an operator at a switchboard to route your telephone calls.
Of course, this becomes a slippery slope. The job that is “augmented” today might be automated tomorrow.
So, what conclusions can we draw from this?
To start, AI isn’t causing a jobs apocalypse, or at least not yet. But it absolutely is affecting youth employment, particularly in “AI exposed” fields. The Stanford authors found that the most AI-exposed young workers have seen a 13% relative decline in employment after stripping out other factors. And remember, AI has really only been accessible to the general public for about three years.
So, what do you do about it? Or specifically, what do you tell your children to do about it as they prepare to start their careers?
I’ll be straight with you.
I don’t know, and this is hitting close to home. My oldest kid will be starting college in another two years.
What do I tell him? Work on your jump shot? Become a TikTok influencer?
I have to remind myself that there will always be opportunities for hungry young people with drive, creativity and grit. It’s just not particularly easy to condense that into an action plan.
Let’s try anyway.
Here is a less-than-perfect list of ways to AI-proof your career or business.
Most critically, keep your costs down. This is always good advice, but it’s even more critical today. Whether you’re working for a company or trying your luck as an entrepreneur, assume that AI will disrupt your world. It will likely mean more job turnover or stiffer competition from companies using AI to lower their own costs. The leaner you are, the better position you’ll be in to roll with the punches.
Use AI. Incorporate it into your day-to-day tasks. Be one of those people using it to augment your abilities. If nothing else that might help you avoid having your job automated away or to see it happening ahead of time so that you can get out of the way.
Build relationships. It’s easy to fire or replace a faceless company (think cancelling an online subscription or your cable package) but harder to fire or replace a person.
This list doesn’t come close to answering the specific questions a college kid would have, such as What should I study? Or Should I go to college at all?
But it’s a start.
Do you have any specific recommendations you’d give a young man or woman about to start their careers? I’d like to hear it. Please post it in the comments section.
Until next time,
Charles Sizemore