In the press, there are two details in the VC/founding circles and in the boardroom. About an AI automation and work displacement. The other is about the shortage of trim, frozen frozen and the shortage of entry-level positions. As expected, we assume that they are involved.
Have a problem. Data does not support any relationship at the moment.
A broad Recent analysis by Yel’s budget lab By logic, the current wave of AI Tech has no clear effect on the labor market. Studies have shown that the change of professional mixture is mostly matched with the previous technology wave. In other words, AI is another tool that we know follows the curve of adoption of the same technology.
There is legitimate concern that AI will affect the roles. Some will see the profit of skill, reduce the number of people needed to achieve the same results; Some will automatically replace staff. Although the current story’s timeline does not match the truth on the ground.
Real culprit
What is happening in the labor market is more (and worldly) than the AI disruption. We love to think that we are living in unprecedented times. Nevertheless, we are looking at the same patterns from the corporations that we have seen during the financial crisis of 20, and in the 21st dot-com bost: trimmed, frozen, expenses, etc.
The difference between these two crises and now is that we have been in the last five years of multiple ten-centuries.
Five explanations of what we are seeing today is not related to AI.
Covid Correction: Companies, especially in technology, are dramatically more tenants during the “Covid Boom”. Amazon has doubled his power. Peloton expands the production capacity. Zoom was in stock a sure bet for buying. Microsoft, Microsoft, Google, Salesforce and other technical vendors demanded the improvement of technology stacks to enable remote workers, and operates large adoptions across the industry. Companies were recruiting talent, projecting an extra-loyal growth curve. In some cases, the Big Tech was hiring talent to prevent any contestant from their appointment!
Supply Chain Hangover: Covid has not only closed the production centers for months, but it also affects shipping and transportation. There were many single points of failure in our Global Supply-Chain system. Combine it with high demand for certain products and the result was a deficit that enhances inflation. To today, we have not fully recovered at the level of historical inflation.
Completion of cheap money: For more than a decade, zero interest rate policy (ZIRP) has encouraged aggressive growth strategies. Cheap capital money companies prioritize growth and investors give priority to long -term strategies than short -term profit. Suddenly the last one causes a fundamental change in the business strategy. It has not been able to help from 2022, a provision of Section 174 of the Internal Revenue Code has changed how companies can categorize their research and development expenditure (such as a software engineer’s expense), to encourage innovation and enthusiasm for startups for innovation and startups.
Uncertainty of trade: The threats of new tariffs and additional trade restrictions create uncertainty of the business. When companies cannot predict with their expense structure or market access to access to the market, they delay the investment and slow the appointment.
Performance Management: This is not a camouflage as the CEOs have clearly called the employees to be the reason for cutting and frozen the performance of the staff. Meta’s Mark Zuckerberg 2023 was called the “year of skill” to justify the trims in the organization. If you ask people working on Big Tech, they will agree that the parties are swollen, and some people are doing very little.
AI to check the reality of receiving
AI will play a role in big jobs like other major technical progress. This will make it faster than the previous shift, which makes it more difficult for society to adapt during the transition period. The US labor force has 1,057 unique roles (using the NAICS classification) 1,05 million people. Some of these roles will pass through large transformations in the coming years, taking a decade or more for a few decades and will not take or not be affected.
On the one hand, you have a role such aircraft pilot that will not go away at any time soon. A technology that we don’t have to build an autonomous aircraft today need a technology and society will not feel comfortable with it soon. On the other hand, you have customer support and call center operators that are already displaced by AI. Although there was there Push It is almost certain that in the next five years, we work with this role in the next five years to go from a 2.5 million labor force to tenth.
The question is not whether AI will finally re -shape more occupations, but rather, how fast and at a degree. Most predictions in the past few years were not just wrong, but they were greatly wrong! Most predictions about what’s coming will be similarly wrong. The solution to calm this anxiety is to accept uncertainty and adaptability.