The Effect of AI on the Labor Market

The image shows a computer, tablet, phones, headphones, and loud speaker on a dark brown table.

To gain something we need to give up on something else. This is the scenario in the job market at the moment with the emerging technology, especially Artificial Intelligence (AI). There are heated discussions about the extent of damages and benefits of AI for people and companies.

According to Goldman Sachs, an investment bank, it is estimated that 300 million jobs in various fields can be lost or see a decrease in demand in the United States and across European countries. The World Economics Forum reported in the Future of Jobs Report 2020, it is estimated that in 2025 the labor market “across 16 industries and 26 economies” will be affected by AI. It is reported that 85 million jobs will be lost or influenced, while 97 million jobs will enter the market or will see an increase in demand. Most of the newly emerged and increased jobs are tech-related jobs, such as Data Analysts, AI and Machine Learning Specialists, Robotics Engineers, Software and Application developers, and many more.

Jobs that are going to take the negative impact include Data Entry Clerks, Administrative and Executive Secretaries, Accounting and Bookkeeping and Payroll Clerks, Accountant and Auditors, Business Services and Administrative Managers, etc.

According to a report done in 2023 by McKinsey Global Institute, generative AI can replace and take over 30% of work hours done by human forces in the United States. Besides, low-wage workers are 14 times more at risk of losing their jobs than higher paying workers. Additionally, the LinkedIn's 2020 Emerging Jobs Report reports that the demand for the AI specialists has seen an annual increase by 74% in their job listings.

There are reports about the loss of jobs in the market because of AI, and the gains of jobs because of AI. Now, is AI beneficial or not?

Claiming something in absolute terms is not the correct way. To make a decision about the influence and use of AI at the moment doesn’t seem to be logical since there are still areas to improve and discuss. AI is still under further development and people have begun to shift their focus on enhancement of their skills and learning new ones. The best way is to embrace this innovation and use it as an opportunity to resolve the current crises and improve our creativity and skills.

By M. Nargis

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