Artificial intelligence will produce significantly more severe job losses for low-wage workers relative to high-wage workers, according to a recent analysis from McKinsey Global Institute.
Generative artificial intelligence solutions, which have drawn attention for their capacity to complete tasks such as writing emails and debugging code in a matter of seconds, have been rapidly adopted by knowledge workers in recent months. McKinsey Global Institute found that workers earning less than $38,200 each year are between ten and fourteen times more likely to need a change in occupation by the end of the decade relative to the highest wage earners.
Even as some 1.1 million positions in the two lowest wage quintiles could disappear in the next seven years, there may be as many as 3.8 million new positions in the highest wage quintiles, especially those which require additional education and training.
“Helping workers in lower-wage, shrinking occupations move into better-paying jobs with more stability will require widespread access to training programs, effective job matching, different hiring and training practices by employers, and better geographic mobility,” the analysis said. “The overall labor market will have higher demand for social-emotional and digital skills. Although the demand for basic cognitive and manual skills is likely to decline, physical work is not going away.”
The most resilient occupations are expected to be in the healthcare sector, where labor demand is forecasted to increase 30% within the next decade. Labor demand in the customer services and sales sector is predicted to decrease 13% over the same time horizon.
Additional economic growth could nevertheless occur as generative artificial intelligence increases labor productivity. Combining the nascent technology with existing forms of automation may induce annual productivity growth between 3% and 4% each year.
Generative artificial intelligence tools such as ChatGPT, which was developed by OpenAI and unveiled at the end of last year, have been increasingly adopted in the corporate world as professionals leverage the tool to assist with time-consuming elements of their work. Another study from Goldman Sachs found that professions without physically intensive elements of their work will experience the most severe unemployment as a result of the technology.
“The good news is that worker displacement from automation has historically been offset by creation of new jobs, and the emergence of new occupations following technological innovations accounts for the vast majority of long-run employment growth,” the analysis added. “The combination of significant labor cost savings, new job creation, and higher productivity for non-displaced workers raises the possibility of a productivity boom that raises economic growth substantially, although the timing of such a boom is hard to predict."
Researchers at the University of Montana, on the other hand, found that ChatGPT was able to compete with the highest percentiles of creative human thinkers. Other studies have demonstrated that ChatGPT can earn competitive scores on the MCAT and LSAT exams, which are respectively required for admission into medical and law school programs.