A reality check on the AI jobs hysteria

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David Rotman writes, A reality check on the AI jobs hysteria.
Haven't you heard? White collar jobs are going away, decimated by AI. Waves of layoffs in the tech sector, most recently at Coinbase and Meta and Cisco, are said to presage what will soon come for all of us knowledge workers. But before you quit your job as a software developer or financial analyst or tech journalist, and look to join the plumbers union, it's worth considering today's economic research on whether artificial intelligence has actually begun to devour white collar work. The short answer is no. Despite the warning by some of an imminent jobs apocalypse that will destroy much of, if not most, such work, or the rumblings about a permanent underclass, there's scant evidence that AI has yet had any large scale impact on the US labor market. Analysis of the data gathered for the US Bureau of Labor Statistics, BLS, shows that the unemployment rate for the jobs potentially most affected by AI is actually lower than that for occupations less exposed to the technology. And critically in the mind of economists, there are no signs that large numbers of people are shifting from jobs threatened by AI to supposedly safer ones, such as those involving mostly manual labor.
While the current labor statistics don't preclude a sudden job upheaval in the coming years, they do throw doubt on the inevitability of the doomsday scenarios and the pace at which they'd unfold. Everyone in the AI community, it seems, is predicting that the technology will soon wipe out jobs, and everyone, it also seems, knows some young wannabe workers who can't find one. Perhaps, we haven't seen any major disruption in the labor market statistics yet. People often say, but just wait.
But maybe we should pay attention to what the data is showing us. And right now, the numbers paint a picture of a relatively stable labor market in which AI disruptions remain largely speculative. All of the available evidence to date suggests that AI's impact on current labor market conditions is likely small right now, says Erika McIntarfer, a labor economist who headed the BLS until President Trump fired her last fall after a jobs report that displeased the administration. Not surprisingly, BLS reports of sluggish job growth have continued since her dismissal. McIntarfer, who is now a fellow at the Stanford Institute for Economic Policy Research, says the relatively small impact that AI is having so far on today's labor market surprises many people, but it shouldn't. What we know from history is that it takes time for innovations to work their way through changes in industries and changes in occupations. AI is unlikely to transform labor markets until it first transforms businesses.
McIntarfer points to US census data showing that only one in five companies are using AI in any business function. The data are a great reality check on the fear that AI will be enormously disruptive, she says. It could be. It likely will be disruptive, but the data is telling us right now that disruption is not yet here, and that we have time to plan.
The US job market, to be sure, sucks for many, especially younger would be workers. Unemployment rates for recent college graduates stand at around 5.6 percent, well above the level for all workers. It's a rate not seen since the pandemic and the years immediately after the 2008 recession. Even more troubling is that hiring rates have been particularly dismal during the post-COVID economy, a trend that hits hard at young people trying to enter the workforce. If you're a recent college graduate and looking for a tech job, no one, it can seem, is hiring. There are signs that AI is contributing to the pain for the 22- to 25-year-olds seeking jobs in software development and other occupations that are feeling a big impact from AI. But these professions represent just a sliver of the overall labor market. What's more, it's uncertain how much blame AI should get for the job woes. Similarly unknown is whether the loss of entry-level jobs in AI-exposed occupations is a harbinger of what's coming for others, or simply an isolated symptom of what economists refer to as a low-fire, low-hire labor market caused by a variety of macroeconomic forces.