Introduction
In recent years, AI has become a booming market with a strong footing in automation, leading to concerns about a potential surge in job losses. This article delves into the challenges and benefits of AI, and explores Universal Basic Income (UBI) as a solution to job displacement.
AI, UBI, Job Loss, and Nerd Data
Here’s the story by the numbers:
According to The Challenger Report, AI accounted for 3,900 job losses in May 2023, making it the 7th leading cause of job loss year-to-date and the highest number of job losses attributed to AI for any month tracked by the firm.
The second highest number of job losses to AI per month is only 800 in April 2024.
A separate IMF analysis reveals that nearly 40% of global employment is exposed to AI.
Many, including Sam Altman, suggest exploring UBI to mitigate the negative impact of future job loss. Altman believes UBI could support individuals displaced by AI-driven automation, ethically squaring his vision of a future where AI replaces millions of jobs.
Universal Basic Income: What Sam Altman Learned
OpenResearch, a company financially supported by Altman, delivered its first research results, published by the National Bureau of Economic Research. The study:
Spanned three years
Involved a sample size of 3,000 low-income participants (annual income of around $30,000)
Provided 1,000 households with $1,000 per month
Provided 2,000 participants with $50 per month
The results?
Participants earned about $1,500 less per year (~5% of their average income)
Labor hours worked per week reduced by 1.5%
Participants with partners reduced their labor hours by the same amount
Overall, the results indicated a moderate reduction in labor supply without significant positive impacts on human capital investment, such as continuing education. (So, that’s basically why Andrew Yang lost. Probably.)
Jobs Lost to AI and the Automation Boogeyman
As mentioned, The Challenger Report found that AI caused nearly 4,000 job losses in May 2023 and 40% of the global employment is “exposed to AI.” But before we get sensational and start stealing TV’s out of pawn shop windows, let’s dive into what the numbers actually mean. And along the way we’ll look at what “automation” is beyond just being some sort of boogeyman.
What is Automation?
According to Asana’s State of AI Work report, 29% of employees believe part of their tasks could be automated. Me, personally, it takes 3 meetings to schedule a meeting and two phone calls to schedule an email. But what if the process of scheduling was done by your computer?
What if car washes were no longer done by hand? What if pencil sharpeners were electric? There used to be floors and even entire buildings of typists, but now, I can write something like this in far less time.
All of these things represent automation. And the use of AI as a tool allows workers to focus on more strategic — ideally revenue generating — work.
Layoffs - By The Numbers
Automation or AI was cited as the 7th leading cause of layoffs, but let’s unpack this. The top causes were:
Company closures (19,598 layoffs)
Market conditions (14,617 layoffs)
No reason provided (12,917 layoffs)
Now, all three are inconvenient to the people laid off, but the pearl clutching at AI-related layoffs could be loosened up within this context.
AI-related layoffs were 3,900 for the entire year, while the other numbers were from one month. Additionally, AI is projected to create 97 million jobs globally, including roles for trainers, explainers, and sustainers, as well as white-collar workers who use AI collaboratively.
Wrap Up
In summary, automation can be a scary word, often sensationalized due to a lack of understanding. And that’s honestly part of the human condition, to be afraid or intimidated by things we don’t understand.
I don’t blame anybody for not knowing the benefits of automation or AI, but I do think it’s a silly move to not learn them before getting on your soapbox to the global workforce.
But, what do I know? I got all of this data from the Internet, not a handwritten tome.
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