The gains in worker productivity provided by artificial intelligence (AI) are concentrated at the lower end of the skills and income spectrum, a phenomenon that economists and unions warn could overwhelm the practice of outsourcing jobs to regions of the world with higher wages lower.
Several recent studies show that introducing language-based AI software into the workplace benefits less-skilled workers more than highly-skilled ones, which could make lower-skilled work more valuable and attract more higher-paying jobs abroad. .
“If we consider the case of generative AI helping low-skilled workers in particular, this gives companies the opportunity to replace higher-skilled workers with lower-skilled, lower-wage labor,” said Carl Benedikt Frey, an economist at the University from Oxford, to The Hill.
“You might even [lead to] a significant wave of offshoring as companies begin to take advantage of large reserves of cheap labor in places like India, Bangladesh and the Philippines, where huge pay disparities exist,” he said.
AI programs like ChatGPT not only increase the overall productivity of workers, they also narrow the gaps between the best and least productive workers, essentially homogenizing the workforce.
“Inequality among workers decreases as ChatGPT compresses the distribution of productivity, benefiting low-ability workers more,” concluded an investigation by the Massachusetts Institute of Technology (MIT), led by Shakked Noy and Whitney Zhang and published last year.
Another 2023 study from Stanford and MIT found that while overall productivity increased by an average of 14% as a result of generative AI, it increased by 34% among less experienced workers. This study by Erik Brynjolfsson and Lindsey Raymond looked at cases where AI helped improve productivity and worker experience, specifically in outsourced environments like call centers.
The authors noted that their results were consistent with other studies, all of which found that generative AI systems “[compressed] the distribution of productivity, with less qualified workers benefiting more.”
Policymakers are already starting to sound the alarm about the long-term effects that AI could have on the job market.
International Monetary Fund (IMF) chief Kristalina Georgieva said on Monday that AI is hitting the global job market “like a tsunami,” Reuters reported.
She said AI could affect up to 60% of jobs in advanced economies and 40% of the global job market in the next two years.
North American unions are increasingly concerned about the pace of adoption of technology and the extent of its integration into the production process, as well as the fact that business owners are moving forward with these changes without consulting their strength of work.
“Employers are currently implementing increasingly sophisticated AI-enhanced technologies without workers’ consent in order to hire, monitor, evaluate, discipline, and even fire workers,” said the AFL-CIO, the country’s largest labor confederation, in a recent statement.
After the strike last year, entertainment workers at the Writers Guild of America obtained assurances from studios that AI would not be allowed to write any literary material and that AI-generated work would not be considered source material.
However, these guarantees could be undermined as consumer habits increasingly shift to social media and other online platforms that do not maintain employment contracts with content creators.
The standardization of productivity enabled by AI and the resulting opportunity it gives companies to reduce their overhead and outsource their work could exacerbate a phenomenon known as the productivity-pay gap, which has been around since approximately the beginning of commercial computing.
Although fears of mass unemployment resulting from computers have proven unfounded, the difference between how much workers have produced and how much they have received has gotten bigger since the 1970s, although it really took off in the 1990s and 2000s.
American workers have increased their hourly output by about 140 percent since 1973, while inflation-adjusted employee compensation has increased only 45 percent during the same period. This means that workers are being paid much less compared to the value they produce for employers. The magnitude of the difference differs depending on the inflation measure used, but it persists regardless of how it is calculated.
Over roughly the same period, the global share of the economy devoted to paid work, rather than returning profits to shareholders, fell from 64% of gross domestic product (GDP) to 59% in 2019. Meanwhile, the share of profits doubled. , increasing from 4 percent of GDP in 1974 to 8.5 percent in 2022.
Although significant changes to the U.S. tax code were introduced during this period, along with new labor and business practices associated with globalization, the coordination of production across international borders, made possible by widespread technological adoption, has also been a factor in the disparity between productivity and remuneration.
“Being at the forefront of the computer revolution was beneficial [to the United States] in terms of productivity, but we also see a growing disparity between productivity and wage growth since the 1980s,” said Oxford’s Frey, attributing the divide to increased offshoring as well as greater gross automation of manufacturing processes. production.
As for jobs that could eventually go extinct as a result of generative AI, Frey singled out jobs that involve repetitive tasks that occur in structured environments as those most likely to be automated. This includes transport, logistics and warehousing, where much of the labor is carried out in highly regulated processes.
Jobs that could see increasing wage stagnation as a result of outsourcing include software design, computer programming, and content creation, such as in the field of animation, where countries like South Korea and Canada produce a significant amount of animated content in the US. USA.
While physical and intellectual production work may be subject to increasing automation as a result of AI, the prospect of a fully automated enterprise is also conceivable, in which management functions such as pricing and procurement are also conceivable. become automated.
“It really depends on the type of company we’re talking about and all the operations involved, but I can certainly see parts of this being automated,” Frey said.
This story originally appeared on thehill.com read the full story
