Is artificial intelligence taking our jobs?
It’s arguably the single biggest question facing the labor market right now, all the more so after Tuesday’s midterm elections showed widespread public animosity toward A.I. and data centers, in particular.
The evidence, though, is far from clear.
White-collar industries like accounting, legal services and finance mostly added jobs in October, but their growth has been decidedly weak over the past few years. The information sector — a broad category that includes much of tech but also media companies — has been cutting jobs steadily since late 2022. Microsoft last week announced that it was offering buyouts to tens of thousands of employees, making it the latest tech giant to cut jobs.
Economists are cautious about attributing that softness to A.I., however. Other forces, such as high interest rates and shifting demand patterns following the pandemic, could also be playing a role. And despite announcements like Microsoft’s, layoffs remain low, even in white-collar sectors.
Similarly, some economists have highlighted relatively high rates of unemployment among younger workers, especially young college graduates, as evidence that A.I. is displacing entry-level jobs. But that, too, could be the result of other factors, including the generally low rate of hiring and turnover, which is particularly hard on people trying to break into the job market.
To the extent there is a consensus among economists, it looks something like this: A.I. hasn’t had a striking effect on employment, but it may be starting to show up in some corners of the labor market.
Even if A.I. is taking a toll on hiring, it isn’t quite clear what that means. Are companies using A.I. to replace workers? Or merely pressing “pause” on hiring while they figure out where these new tools will be most useful? Or are they spending so much on tokens and A.I. infrastructure that they are looking to cut costs elsewhere? Those explanations could all look similar in the moment, but have very different implications over the longer run.
The impact of A.I. is showing up clearly in one place, however: blue-collar jobs. The data center build out is helping to prop up employment in the construction sector, even as high interest rates have led to a sharp pullback in home building. Demand for chips and other A.I. equipment is also creating jobs in manufacturing, offsetting losses elsewhere in the sector.
The future of that boom now looks uncertain following this week’s election results, however. The plunge in share prices for tech companies on Thursday — partly reversed on Friday — reflected investors’ concern that public backlash to data centers could lead to a slowdown in construction, which could have broader economic implications given the extent to which A.I. has been driving growth.
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