Will AI Destroy the White Collar Job Market ?

Living in the Pacific Northwest, we're a lot closer to news about AI-related tech layoffs and other digital developments in the job market. But will AI destroy some industries, as some 'doomsday' predictors claim?

Experts Discuss the Future of Various Industries after AI

Our economy, and that of the world, are so vastly complex and varied, it takes a LOT to make waves, or even ripples. But we've seen thousands of workers at Microsoft, and especially Amazon dumped in favor of Artificial Intelligence.

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Amazon plans to automate at least 70-80 percent of the functions in its fulfillment warehouses by anywhere from 2036 to 2040. We're hearing about how AI us being used to 'speed up' computing, coding and other functions, replacing human workers.

Geekwire recently ran an opinion piece from a noted UW Professor, and venture partner at major Seattle-based venture capital firm Madrona. He compared what he called the 'doomsday' view of some experts, who say the explosion of AI will cause white collar workers from tech to real estate, from sales, to business to implode. Blue collar jobs stay relatively stable, according to the doomsdayers'.

The UW Professor, Orin Etzioni, says the doomsday approach is based upon the idea that if machines can think, why would anyone pay humans to do white collar work? A recent hypothetical study by Citrini Research compares normal business economic cycles to that of AI.

This is What a 'Normal' Business Cycle Looks Like

Sectors and businesses often 1) overbuild, overshoot inventory. In response, they 2) slow down production and construction, and destock what product they have. Then there's what's called 3) lower rates (growth) and restocking. And finally, 4) new construction, business building and recovery. This cycle is repeated in many facets of the economy. No sector can explosively grow forever. Witness the tech and real estate bubbles and busts we saw over the last 20 years.

How does AI driven Economic Cycles Differ from 'Normal?'

But Etzioni says the doomsdayers claim the AI boom has no 'brakes' in its cycle. The AI cycle we are beginning to see with Amazon and a few others is 1) AI investment increases and it's capability goes up. 2) Companies need fewer workers. 3) White collar layoffs increase. 4) Displaced workers spend less, weakening the economy. 5) this is where the brakes are missing like the normal model: Companies invest more in AI to protect their margins (lower labor costs). And this cycle spins faster and faster with no correction.

Etzioni points out that a rush to automate everything that can be, leads to a need to actually hire more humans because of the cost of computing, and businesses will realize AI might not be the catch-all, and development will slow. And, companies will also automate, if the choose, at different speeds. Those are some of those 'brakes' on the explosion of AI.

SO, will AI wipe out white-collar jobs?

Etzioni believes down the road there will be eventual shakeups of the white-collar industry, but it's still far enough off that governments and societies still have time to develop and implement policies and plans to help prepare for AI changes.