AI May Not Steal Many Jobs After All

Alorica — which runs customer-service centers around the world — has introduced an AI translation tool that lets its representatives talk with customers in 200 different languages. But according to the Associated Press, "Alorica isn't cutting jobs. It's still hiring aggressively." The experience at Alorica — and at other companies, including furniture retailer IKEA — suggests that AI may not prove to be the job killer that many people fear. Instead, the technology might turn out to be more like breakthroughs of the past — the steam engine, electricity, the internet: That is, eliminate some jobs while creating others. And probably making workers more productive in general, to the eventual benefit of themselves, their employers and the economy. Nick Bunker, an economist at the Indeed Hiring Lab, said he thinks AI "will affect many, many jobs — maybe every job indirectly to some extent. But I don't think it's going to lead to, say, mass unemployment.... "

[T]he widespread assumption that AI chatbots will inevitably replace service workers, the way physical robots took many factory and warehouse jobs, isn't becoming reality in any widespread way — not yet, anyway. And maybe it never will. The White House Council of Economic Advisers said last month that it found "little evidence that AI will negatively impact overall employment.'' The advisers noted that history shows technology typically makes companies more productive, speeding economic growth and creating new types of jobs in unexpected ways... The outplacement firm Challenger, Gray & Christmas, which tracks job cuts, said it has yet to see much evidence of layoffs that can be attributed to labor-saving AI. "I don't think we've started seeing companies saying they've saved lots of money or cut jobs they no longer need because of this,'' said Andy Challenger, who leads the firm's sales team. "That may come in the future. But it hasn't played out yet.''

At the same time, the fear that AI poses a serious threat to some categories of jobs isn't unfounded. Consider Suumit Shah, an Indian entrepreneur who caused a uproar last year by boasting that he had replaced 90% of his customer support staff with a chatbot named Lina. The move at Shah's company, Dukaan, which helps customers set up e-commerce sites, shrank the response time to an inquiry from 1 minute, 44 seconds to "instant." It also cut the typical time needed to resolve problems from more than two hours to just over three minutes. "It's all about AI's ability to handle complex queries with precision,'' Shah said by email. The cost of providing customer support, he said, fell by 85%....

Similarly, researchers at Harvard Business School, the German Institute for Economic Research and London's Imperial College Business School found in a study last year that job postings for writers, coders and artists tumbled within eight months of the arrival of ChatGPT.
On the other hand, after Ikea introduced a customer-service chatbot in 2021 to handle simple inquiries, it didn't result in massive layoffs according to the article. Instead Ikea ended up retraining 8,500 customer-service workers to handle other tasks like advising customers on interior design and fielding complicated customer calls.