Employment and Workplace
While AI technologies are likely to have a profound future impact on employment and workplace trends in a typical North American city, it is difficult to accurately assess current impacts, positive or negative. In the past fifteen years, employment has shifted due to a major recession and increasing globalization, particularly with China’s introduction to the world economy, as well as enormous changes in non-AI digital technology. Since the 1990s, the US has experienced continued growth in productivity and GDP, but median income has stagnated and the employment to population ratio has fallen.
There are clear examples of industries in which digital technologies have had profound impacts, good and bad, and other sectors in which automation will likely make major changes in the near future. Many of these changes have been driven strongly by “routine” digital technologies, including enterprise resource planning, networking, information processing, and search. Understanding these changes should provide insights into how AI will affect future labor demand, including the shift in skill demands. To date, digital technologies have been affecting workers more in the skilled middle, such as travel agents, rather than the very lowest-skilled or highest skilled work. On the other hand, the spectrum of tasks that digital systems can do is evolving as AI systems improve, which is likely to gradually increase the scope of what is considered routine. AI is also creeping into high end of the spectrum, including professional services not historically performed by machines.
To be successful, AI innovations will need to overcome understandable human fears of being marginalized. AI will likely replace tasks rather than jobs in the near term, and will also create new kinds of jobs. But the new jobs that will emerge are harder to imagine in advance than the existing jobs that will likely be lost. Changes in employment usually happen gradually, often without a sharp transition, a trend likely to continue as AI slowly moves into the workplace. A spectrum of effects will emerge, ranging from small amounts of replacement or augmentation to complete replacement. For example, although most of a lawyer’s job is not yet automated, AI applied to legal information extraction and topic modeling has automated parts of first-year lawyers' jobs. In the not too distant future, a diverse array of job-holders, from radiologists to truck drivers to gardeners, may be affected.
AI may also influence the size and location of the workforce. Many organizations and institutions are large because they perform functions that can be scaled only by adding human labor, either “horizontally” across geographical areas or “vertically” in management hierarchies. As AI takes over many functions, scalability no longer implies large organizations. Many have noted the small number of employees of some high profile internet companies, but not of others. There may be a natural scale of human enterprise, perhaps where the CEO can know everyone in the company. Through the creation of efficiently outsourced labor markets enabled by AI, enterprises may tend towards that natural size.
AI will also create jobs, especially in some sectors, by making certain tasks more important, and create new categories of employment by making new modes of interaction possible. Sophisticated information systems can be used to create new markets, which often have the effect of lowering barriers to entry and increasing participation—from app stores to AirBnB to taskrabbit. A vibrant research community within AI studies further ways of creating new markets and making existing ones operate more efficiently.
While work has intrinsic value, most people work to be able to purchase goods and services they value. Because AI systems perform work that previously required human labor, they have the effect of lowering the cost of many goods and services, effectively making everyone richer. But as exemplified in current political debates, job loss is more salient to people—especially those directly affected—than diffuse economic gains, and AI unfortunately is often framed as a threat to jobs rather than a boon to living standards.
There is even fear in some quarters that advances in AI will be so rapid as to replace all human jobs—including those that are largely cognitive or involve judgment—within a single generation. This sudden scenario is highly unlikely, but AI will gradually invade almost all employment sectors, requiring a shift away from human labor that computers are able to take over.
The economic effects of AI on cognitive human jobs will be analogous to the effects of automation and robotics on humans in manufacturing jobs. Many middle-aged workers have lost well-paying factory jobs and the socio-economic status in family and society that traditionally went with such jobs. An even larger fraction of the total workforce may, in the long run, lose well-paying “cognitive” jobs. As labor becomes a less important factor in production as compared to owning intellectual capital, a majority of citizens may find the value of their labor insufficient to pay for a socially acceptable standard of living. These changes will require a political, rather than purely economic, response concerning what kind of social safety nets should be in place to protect people from large, structural shifts in the economy. Absent mitigating policies, the beneficiaries of these shifts may be a small group at the upper stratum of the society.
In the short run, education, re-training, and inventing new goods and services may mitigate these effects. Longer term, the current social safety net may need to evolve into better social services for everyone, such as healthcare and education, or a guaranteed basic income. Indeed, countries such as Switzerland and Finland have actively considered such measures. AI may be thought of as a radically different mechanism of wealth creation in which everyone should be entitled to a portion of the world’s AI-produced treasure. It is not too soon for social debate on how the economic fruits of AI-technologies should be shared. As children in traditional societies support their aging parents, perhaps our artificially intelligent “children” should support us, the “parents” of their intelligence.
 Jeremy Ashkenas and Alicia Parlapiano, "How the Recession Reshaped the Economy, in 255 Charts," The New York Times, June 6, 2014, accessed August 1, 2016, http://www.nytimes.com/interactive/2014/06/05/upshot/how-the-recession-reshaped-the-economy-in-255-charts.html.
 R Dana Remus and Frank S. Levy, “Can Robots Be Lawyers? Computers, Lawyers, and the Practice of Law,” Social Science Research Network, last modified February 12, 2016, accessed August 1, 2016, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2701092.
 John Markoff, “Armies of Expensive Lawyers, Replaced by Cheaper Software,” The New York Times, March 4, 2011, accessed August 1, 2016, http://www.nytimes.com/2011/03/05/science/05legal.html.
 For example, Brynjolfsson and McAfee, Second Machine Age, have two chapters of devoted to this (Erik Brynjolfsson and Andrew McAfee, The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies, (New York: W. W. Norton & Company, Inc., 2014)) and Brynjolfsson, McAfee, and Spence describe policy responses for the combination of globalization and digital technology (Erik Brynjolfsson, Andrew McAfee, and Michael Spence, Foreign Affairs, July/August 2014, accessed August 1, 2016, https://www.foreignaffairs.com/articles/united-states/2014-06-04/new-world-order).
 GDP does not do a good job of measuring the value of many digital goods. When society can't manage what isn’t measured, bad policy decisions result. One alternative is to look at consumer surplus, not just dollar flows. As AI is embodied in more goods, this issue becomes more salient. It may look like GDP goes down but people have better well-being through access to these digital goods. See Erik Brynjolfsson and Adam Saunders, “What the GDP Gets Wrong (Why Managers Should Care),” Sloan Management Review, vol. 51, no. 1 (October 1, 2009): 95-96.