The AI boom could go one of 2 ways, and the path companies choose could make or break the US workforce

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The AI boom could go one of 2 ways, and the path companies choose could make or break the US workforce
Sam Altman, the CEO of OpenAI, and an illustration of GPT-4.JASON REDMOND/AFP via Getty Images; Jaap Arriens/NurPhoto via Getty Images
  • Generative AI such as ChatGPT could impact millions of jobs in the future.
  • Businesses are expected to use AI to boost productivity and their profits.
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It's getting clearer that AI will likely boost productivity and profits for companies in the not-so-distant future.

The biggest question now is whether workers will share in that wealth once these changes take effect.

In the years ahead, generative AI including ChatGPT could disrupt — not necessarily replace — 300 million full-time jobs across the globe, according to Goldman Sachs. Experts expect AI to mostly impact white-collar jobs.

While the adoption of AI could help some workers become more productive, spend less time on boring tasks, earn higher wages, and even have a four-day workweek, others could face more competition, earn lower wages, or even see these technologies replace their jobs.

"It is a new game, and we don't know what that new game is going to be," Daron Acemoglu, an economist at MIT, previously told Insider.

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Insider asked AI experts about the key factors that will determine how this "game" plays out for US workers — and how to ensure the game plays out in your favor.

Higher productivity should lead to higher wages — but it doesn't always

In March, Goldman Sachs analysts estimated that nearly two-thirds of US workers could become more productive using AI. Over the next decade, that AI productivity boost could increase S&P 500 profits by 30% or more, Ben Snider, a senior strategist at Goldman Sachs, told CNBC last week.

Historically, increasing worker productivity has been tied to increases in worker pay, so, in theory, Americans could someday thank technology such as ChatGPT for their big salary bumps.

But money saved from productivity gains doesn't always end up in workers' pockets. Since 1979, US worker-productivity growth has outpaced hourly-pay growth by 3.7 times, according to the Economic Policy Institute, a left-leaning think tank, which attributes the divergence to a stagnant minimum wage, the decline of unions, and the scaling back of antitrust policy, among other factors.

Some experts say this dynamic has contributed to rising economic inequality over the past decades. And if AI brings about a future in which it enriches business owners and investors, but leaves out workers, any progress made on the inequality front in recent years could be reversed.

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Additionally, while many S&P 500-sized corporations might be well positioned to reap the rewards of the AI boom, smaller companies — and their employees — might not see the same benefits, Carl Benedikt Frey, an Oxford University economist, told Insider.

"AI will make superstar companies more productive and profitable, but those profits might be achieved at the expense of other companies," he said. "Think of Amazon, which has expanded enormously, using both AI and robots, while local retailers have paid the price."

Even among workers at large companies that effectively incorporate AI, not every worker will see the benefit of these increased profits, Mark Muro, a senior fellow at the Brookings Institution who has researched AI's impact on the American workforce, told Insider.

"Workers' experiences may be more dependent on the nature of their firms' adoption of these technologies," he said. "Are they adopted in a spirit of improving processes and creating more and better output? Or are they used crudely just to get rid of workers? That's a difference between 'good AI' and 'bad AI.'"

"Where the profits go will depend on how AI is used," he said. "If AI is used to automate existing tasks, or simply to monitor the workforce, turning employees into robots dancing in tune, the gains will go to owners of capital. If, on the other hand, we use AI for innovation, to create new products or even industries, that will increase the demand for workers — prompting wages to rise," Frey added.

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Many fear the rise of AI could see companies cut jobs

For Americans to have any chance at seeing any of the profits the AI productivity boost could drive, they have to actually be working — and not have been replaced by these technologies.

In March, Sam Altman, the CEO of OpenAI, the company behind ChatGPT, admitted he's "a little bit scared" of his ChatGPT creation and warned that it could "eliminate" many jobs. In a Microsoft survey of 31,000 people across the globe conducted in February and March, 49% of responding workers said they were worried AI could take their jobs.

Earlier this month, Arvind Krishna, the CEO of IBM, told Bloomberg that 30% of the company's non-customer-facing roles — roughly 7,800 jobs — could be replaced by AI over the next five years, though the company has no immediate plans to let these workers go. The British telecommunications giant BT Group, meanwhile, said it's planning to cut as many as 55,000 jobs by 2030 — and that some form of artificial intelligence could replace at least 10,000 of those jobs.

And as AI technologies such as ChatGPT make it easier for people to write and code, today's writers and coders might face additional competition from ChatGPT-assisted writers and coders for a limited number of jobs — a dynamic that could keep wages down, according to Frey.

Frey compared it to the introduction of ride-hailing companies including Uber, which resulted in more drivers, increased competition, and ultimately led to incumbent drivers experiencing "wage cuts by around 10% or so," his research found.

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"In my view, it's less about automation," he said. "It's more about democratization and competition, potentially leading to lower wages for people in some of these professions."

AI could make people's jobs easier, and create new ones

But there are also more optimistic predictions out there. Acemoglu said that a plausible outcome would include generative AI not replacing many jobs, and some workers using productivity gains to boost their wages.

"We tend to underestimate how complex human tasks are," he said, adding that it's possible AI could complement the work of journalists, managers, and radiologists, for instance, rather than replace them, which could lead to higher wages for workers.

It's also possible that AI adoption will not only replace jobs, but create new ones — in some cases, providing workers the opportunity to jump to a new, higher-paying role.

In 2018, 60% of responding workers were employed in jobs that didn't exist in 1940, according to a study that the MIT economist David Autor led. This suggests that "technology-driven creation of new positions" drove about 85% of job growth over the last 80, according to Goldman Sachs economists.

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AI could be a boon for the workers who are willing to learn how to use it to boost their productivity

Plenty of experts see a path in which widespread AI adoption makes many workers better off — and wealthier. Altman has said that a universal basic income could compensate people with jobs that AI replaces and let them pursue more creative work.

"I think AI is going to be the greatest force for economic empowerment and a lot of people getting rich we have ever seen," Altman said in an April tweet.

And there are ways many employees can set themselves up to thrive during the AI boom. Familiarizing themselves with this tech, and figuring out how they can apply it to their jobs, is one way to prepare.

"Many workers' experience will depend on their ability to guide or use AI," Muro said. "Are they able to leverage it and give it prompts that yield valuable outputs and increase productivity. Can they use ChatGPT to produce a high-quality business report or client memo?"

"Employers will want to work with the enlightened users," he added. "They will have more of a chance to flourish and adapt."

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