AI is about to take a lot of jobs.
There are two categories of people:
- Those that think this is going to be a slow process and we will slowly adapt
- Those who think this is going to be a fast process and we won’t.
Well… I’m in the second category.
The AI advancements over the past year are huge. In software industry AI is already achieving productivity gains by an order of magnitude.. We are not very likely see demand for software increase tenfold. That means staff reductions are going to follow once the companies catchup to the tools and procedures.
Software is just the first to fall, as we have a lot of data and good feedback loops to train the models. But AI is also good with law, writting, data analysis and many other things. And as more subjects get attention of model “trainers”, it will get good at those too.
White-collar jobs are going to shrink and by a lot. So, much and so fast, that I believe this will trigger a slump in demand, which will take other sectors with it and trigger a recession. And this time, one that we might not even know how to grow out of.
So, what do we do?
I think for high-value economies like US, EU, Canada, South Korea, Australia, Japan and others there is still some hope, at least in the short term: move to sectors that will (for now) be less affected.
For this, 3 things are needed:
High debt-fueled investments into onshoring and building out blue-collar work base. Bring back full supply chains from mines, to refineries, to manufacturing. There is still a lot that can not be fully automated and at current automation level workers are actually going to be quite productive.
Invest into reeducation, pay to get educated (largely the case in EU already), we will need the workforce to adapt to working in industries we bring with #1.
Follow US and protect yourself with tarrifs against outside competition in those industries. This will reduce requirements on #1. Yes, this is inflationary, but recessions are deflationary, so this will somewhat balance out. This is a tax on survining and so - well worth it.
In the longer term
I’m not sure anyone has a clue. Most jobs are automatable. You can have full supply chane be automated: robotic miners, loading driverless trucks delivering material to unattended factories.
As we go towards the future, maybe Keynes ideas of lowering working ours to match increased productivity may be another backstop. But all world needs to agree on this, or at the very least, economic zones that do that need to close off the walls from those who don’t.