AI job loss update: For over two years, artificial intelligence has been cast as the villain behind sweeping job cuts, especially in the tech industry. From boardrooms to earnings calls, the fear of AI replacing human workers has dominated conversations, with several US CEOs sounding the alarm over its potential impact on employment.
However, a new study from Yale University offers a sobering counterpoint: the AI job-loss narrative may be more of a myth than reality.
AI job loss: What does Yale study say?
The Yale report says that the spooked reaction at Silicon Valley and other tech hubs of the world relating to AI replacing jobs at a large scale remains speculative.
Conducted by Yale’s Budget Lab, a policy research centre on economics, the study analysed US job data from the past 33 months since ChatGPT was released in 2022. It examined the employment status of college graduates and how workers at different levels are exposed to AI.
The report says, “While anxiety over the effects of AI on today’s labor market is widespread, our data suggests it remains largely speculative.”
Are you immune to AI?
In one of the analyses, researchers compared three groups of workers with varying levels of exposure to AI: high, medium and low. The result? No significant change. Even those most exposed saw little disruption, suggesting the technology isn’t yet the job-stealer it’s made out to be.
Comparing technologies
Separately, the study also analysed the rate of change in the composition of the US workforce and compared the data with two different time periods — when computers became popular in 1984, and the boom in internet entrepreneurship in 1996.
Surprisingly, researchers found that the US labour market’s composition in the AI era closely matches the pace when computers and the internet were getting popular, suggesting that the new technology is no more disruptive than the preceding ones.
What about college graduates?
The Yale study also took into account how AI might be affecting recent college graduates, comparing the job distribution of people between the ages of 20 and 24 with older adults in the age group of 25 to 34.
The researchers found that both groups had similar occupational mix and career paths, suggesting that AI had little impact on entry-level jobs.
So, what’s behind job loss?
The disruption over the last few months among entry-level jobs has been attributed to a cooling job market rather than AI, according to the Yale study.
“The picture of AI’s impact on the labor market that emerges from our data is one that largely reflects stability, not major disruption at an economy-wide level,” the study reads.
But who really is the culprit?
According to the study, the depressing Bureau of Labor Statistics can be attributed to various factors, including the US Federal Reserve’s decision to end the zero-interest rate policy in 2022, the year ChatGPT was launched. Before that, companies could borrow massive amounts of capital at cheap interest rates that would fuel their business.
Another reason for the data is that now there are simply more college graduates with high degrees than entry-level jobs, a phenomenon that predates the ChatGPT era.
“While generative AI looks likely to join the ranks of transformative, general purpose technologies, it is too soon to tell how disruptive the technology will be to jobs,” as per the Yale study.
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