AI-related layoffs have piled up this year, but dissent has grown about the overall impact the technology on the white-collar labor force going forward.
Dire predictions from the CEOs of both Anthropic and DeepMind have helped fuel growing anxiety among young professionals. The angst has grown to such a degree that debate now rages over whether young people should pursue a professional degree or go into a skilled trade.
Vanguard’s Adam Schickling is a skeptic when it comes to the AI doomsaying. The senior economist at the asset management titan doesn’t see a wipeout coming for the ranks of office workers, comparing the rise of AI to the introduction of ATMs in the 1980s.
“History offers a useful lens for understanding today’s debate around AI. If AI becomes a general-purpose technology like electricity and the personal computer before it – as developments increasingly suggest – it will enable products, services, and industries that we have not yet envisioned,” he wrote. “In short, fears of widespread job loss are likely overblown.”
Schickling said that some routine tasks were indeed automated away, just as they are now due to AI’s ability to perform basic administrative tasks.
However, despite the initial losses, the ultimate impact of ATMs on banking jobs was nowhere near as bad as initially feared. By automating some function, banks were able to lower operational costs and open more branches as a result.
“Just as we expect artificial intelligence to transform the labor market, the expansion of retail banking created demand for a wider range of occupations,” he stated. “Banks hired more loan officers, credit analysts, personal bankers, and fraud and risk specialists. The work performed inside a branch moved up the skill-value chain.”
Other economists have made similar arguments to Schickling’s on the ultimate impact of AI on white-collar jobs. Torsten Sløk of Apollo Global Management has repeatedly evoked Jevons paradox, an economic principle that argues that new technologies lead to more efficiency and, ultimately, more jobs.
Mobile banking also disrupted some jobs in the 2000s, but as Schickling notes, this shift created demand for new jobs in fields such as cybersecurity and payment-platform engineers.
“The lesson is that isolated task automation rarely results in large-scale job losses, except in occupations built around a very narrow set of activities,” he wrote. “More often, meaningful disruption occurs when technologies are combined with new workflows, business models, and institutional changes that fundamentally alter how work is organized.”