Permanent loss of white-collar jobs due to AI revolution

Investment Analysis Clubs Macro Economic Trends and Risks
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Since the 1700s, technological developments have resulted in permanent loss of jobs as the new tech was more efficient than the workers.

The early industrial revolution (1780-19th century), which used steam-powered machine looms to produce fabric, displaced English home-based weavers. Macro impacts included displacement of farmers to switch land use to sheep. Many of the displaced farmers emigrated to the U.S.

The gasoline-powered industrial revolution (early 20th century) displaced farm workers with tractors and combines.

The computer and robotics revolution (1990s) displaced many production workers, secretaries, telephone operators and customer service people.

None of these lost jobs returned.

The AI revolution is displacing white-collar knowledge workers.

The Disappearing White-Collar Job

A once-in-a-generation convergence of technology and pressure to operate more efficiently has corporations saying many lost jobs may never return

By Chip Cutter and Harriet Torry, The Wall Street Journal, May 15, 2023

For generations of Americans, a corporate job was a path to stable prosperity. No more.

The jobs lost in a monthslong cascade of white-collar layoffs triggered by overhiring and rising interest rates might never return, corporate executives and economists say. Companies are rethinking the value of many white-collar roles, in what some experts anticipate will be a permanent shift in labor demand that will disrupt the work life of millions of Americans whose jobs will be lost, diminished or revamped through the use of artificial intelligenceā€¦

Long after robots began taking manufacturing jobs, artificial intelligence is now coming for the higher-upsā€”accountants, software programmers, human-resources specialist and lawyersā€”and converging with unyielding pressure on companies to operate more efficientlyā€¦

For the year ending in March, the number of unemployed white-collar workers rose by roughly 150,000, according to an analysis from Employ America, a nonpartisan research group. That included workers in professional services, management, computer occupations, engineering, and scientistsā€¦

The professions with the best prospects for growth that require a college degree include software developers, operations managers and registered nurses. Those jobs pay around $100,000 a year and are forecast to be better protected than other white-collar work from AI displacement. ā€¦ [end quote]

White-collar workers may be unceremoniously dumped while the prospects for finding a similar new job are narrowing. College students will need to be even more strategic to develop skills that will be needed in an increasingly AI-dominated workplace.

Wendy

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My experience is that many middle managers donā€™t really contribute much of anything. Workplace Integrators had a RIF every year I was there. The first cohort tossed was an armload of middle managers, including my boss. For the remaining 5 years, before the company went toes up, I apparently didnā€™t have a ā€œbossā€, among that constantly shrinking cohortā€¦and that was 20 years ago.

The last place I worked riffed some middle managers too.

My boss at the pump seal company was an empty suit. He would get a project messed up, then drop the file on my desk and go visit a field rep for a week, while I cleaned up after him. What I consistently found, in looking over those files. was everything was going fine, until someone made the mistake of CCing Bill on something. Bill would have some objection, and get everyone confused and going in different directions. Then he would drop the file on my desk and blow town. All it took to straighten out the job, was to stop Billā€™s agitation. Why did he start agitating everything, other than to justify his existence as a ā€œmanagerā€?

Steve

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I saw corporate trainer as well on the chopping block. Very convincing ad on FB. You type in what the AI/human lookalike will say and it is as if a human being is saying it. Any 22 year old college grad for $40k can train the entire companyā€¦so funny to meā€¦so believableā€¦sarcasm

So now someone earning $40k per year can make these decisions and give a hint of her or his decision to a computer that makes up stuff as a wild guess.

Okay that is going to work well. We definitely do not need accountants or lawyers any longer.

:rofl: :rofl: :rofl:

Meanwhile my sister keeps screaming STblankU Alexa! The plug will be pulled when people realize it does not work well at all.

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Any idea how many programmers there are? uTubers? Now, if shoveling horse manure is better, letā€™s bring back horses.

The Captain

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The other side of the equation is that generally, technological advances tend to create far more new jobs than are lost.

What is not clear is whether the wide-scale disruption of the job market due to AI will generate a similar wave of new job creation. It may be different this time.

With non-intelligent technology a machine can replace a human but more humans are needed to make and maintain the machine. With AI, the machine makes and maintains the machine. There may soon not be a need for humans in the equation.

Ideally, AI and robotics will not replace humans, but instead allow humans to work less. Instead of a 40 hour work week, people might be able to work 20 hours for the same pay. This requires a way of distributing wealth from the owners of the machines to the people who work with the machines. This could be done at least in part by greatly increasing the corporate income tax but then allow deductions for human workers.

Companies would be motivated to find productive jobs for humans instead of just laying them off.

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Yes. The leaps forward have, thus far, caused the loss of many ā€œkindsā€ of jobs, but not caused the loss of the number of jobs.

Ideally, AI and robotics will not replace humans, but instead allow humans to work less. Instead of a 40 hour work week, people might be able to work 20 hours for the same pay. This requires a way of distributing wealth from the owners of the machines to the people who work with the machines. This could be done at least in part by greatly increasing the corporate income tax but then allow deductions for human workers.

Aah, yes. George Jetson. And also everything I heard about the future when I was a little boy. We all (the old people here) remember those little films about how in the future the standard of living would be much higher and people would only work 20 hours a week. Hasnā€™t happened and I see no tendency toward it. In fact, they always try quite mightily to keep it from happening. Wages havenā€™t gone anywhere but productivity is off the the top of the chart. They just find quiet, furtive ways of, in effect, cutting wages.
There is no ā€œmarketā€ solution. Quite the opposite. If it is to happen something like you suggest will have to make it happen. But that will be very political and anti-business/Gov meddling.

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Anthropologist David Graeber wrote a 2018 book on the subject of ā€œUseless Jobsā€ (TMF wonā€™t let me post the actual title of this seminal work.) The existence of these white collar jobs are whatā€™s keeping the rest of us from the 15 hour work week John Maynard Keynes predicted back in 1930. Glad Iā€™ve been retired for the past 29 years

intercst

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Seems to be a pretty strong tendency towards it. Work hours per worker has declined steadily for the past 150 years at a pretty steady rate. This is both globally and in the U.S.

Working Hours - Our World in Data

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Not what Iā€™m talking about

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Get on the bus gus and set yourself free

We have heard this story beforeā€¦

Artificial intelligence (AI) software revenue is expected to increase at 42% annually to reach $14 trillion by 2030, according to analysts at Ark Invest. Other experts measure the impact with different numbers, but every estimate makes one thing abundantly clear: Analysts believe demand for AI software will skyrocket in the coming years.

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Another anecdote about AI and corporations.

Last night I gave the olā€™ AI machine a quarter, just to hear it gin up a framework for one of our most pressing issues in my business. The topic is tough enough that many operators with 5+ years experience attend a dayā€™s training session just to better understand it.

I prompted OpenAIā€™s GPT-4 to:

In the style of a teacher and with 7th grade english, describe the most critical process considerations in aluminum extrusion. Explore all inputs and outputs to support this lesson.

The 5 paragraph response returned in 2 seconds and, if not better, equaled the text in the first 20 slides of our presentations for concept exploration, development, application and considerations.

And Iā€™m currently paying a TEAM of professionals to fly all over the country to teach the same lesson plan that AI can provide in 2 secondsā€¦

BY ASKING THE RIGHT QUESTIONS.

I believe there will be a long list of question askers who will need to be employed to empower these algo bots.

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In and around 1980 the major layoffs were happening. A steel plant in PA laid off 30,000 workers. One of those workers was a buying agent. The next shipment of ore that came it was wrong. That buyer was the only employee who would have caught that error. The plant went out of business.

today that is an old wiveā€™s tale but it was so real at the time. I will never know the source.

Wait till that main ā€˜rightā€™ question placer is gone. The recent college grad who asks the wrong question will sink the business. It will cost more than doing it right in the first place.

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IMG_1784
IMG_17841170Ɨ708 76.4 KB

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Materially if you ask safe from what, you end up with what.

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You end up with pretty much what you DONā€™T WANT (i.e. the consequences of not knowing what is needed to do the job).

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Population USA in 1800, 5 million. Population 2023, 330,000,000. Unemployment rate 2023 under 5 percent.

Cheers
Qazulight

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Fail.

Now it wants minimum of 20 charactersā€¦

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Dealbook by Andrew Ross Sorkin NYT column

The rest of the column today edges too much into politics to copy and paste.

snippet

The Department of AI

The biggest surprise: consensus on creating a new A.I. agency. Altman proposed creating a new government body that issues licenses for developing large-scale A.I. models, safety regulations and tests that A.I. models must pass before being released to the public.

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Shareholder Value uber alles!

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I couldnā€™t read it as I am not a premium membrian but I got the gist from the headline. I guess I should be happy I am 50% in QQQ this time instead of all SPYā€™s.