Artificial Intelligence and Job Loss

There is growing concern about an AI-driven future in which there aren’t enough jobs to go around. Not just a shortage of good jobs, mind you, but a shortage of jobs, period. A swelling chorus of economists, and other experts, foresee a future in which highly-skilled, well-paid jobs exist only for a shrinking minority. For everyone else, there will be low-skilled, poorly-paid jobs for some, and no jobs at all for an ever-larger portion of the population.

This idea was argued persuasively a few years ago in the book, The Second Machine Age, by MIT professors Erik Brynjolfsson and Andrew McAfee. They wrote that the first machine age replaced muscle power with machine power, especially as a result of James Watts’ steam engine. The longterm effect was that more and more individuals were hired for their brains instead — as workers in the new knowledge economy.

Now, however, we are well into a second machine age, this one a digital revolution in which it’s brain power that is being replaced. As a result, we now face a frightening question: What happens when machines are better, and cheaper, than humans at many of the ‘brain’ jobs as well? Farfetched? Not according to Brynjolfsson and McAfee, whose book details how thoroughly AIempowered computers and robots are invading the knowledge jobs that were once considered the exclusive province of humans.

Recently, the job-loss alarm has been sounded more emphatically still by Kai-Fu Lee in his book AI Superpowers. Lee is eminently qualified to assess the current state of artificial intelligence and where it’s going. Lee got his AI start as a Ph.D student at Carnegie Mellon, followed by executive positions at Microsoft, SGI, and Apple, eventually becoming the founding president of Google China. Then in 2009 he launched Sinovation, a VC firm focused primarily on China’s AI entrepreneurs. He was selected as one of the 100 most influential people in the world by Time magazine in 2013.

Lee says AI threatens to usher in cataclysmic job loss on a scale unprecedented in human history. He estimates that within ten to twenty years AI will be capable of automating close to half of all jobs in the United States. Though he doesn’t expect actual job losses to be that high, he does envision a larger and larger pool of unemployed workers competing for an ever smaller pool of jobs, ratcheting down their bargaining power in the process. In case that doesn’t sound sufficiently grim, he notes that a recent Bain study calculated that if we include both job displacement and wage suppression, “a full 80 percent of all workers will be affected (emphasis added).”

Compounding the problem, Lee notes that the AI revolution will be on the scale of the Industrial Revolution — but probably larger and definitely faster. “Whereas the Industrial Revolution took place across several generations, the AI revolution will have a major impact within one generation.”

And because AI success largely accrues to those with the most data, its natural effect is toward monopoly and winner-take-all economics. The net effect will be a bifurcated job market which squeezes out the middle class. “The ‘great decoupling’ of productivity and wages has already created a tear between the 1 percent and the 99 percent. Left to its own devices, artificial intelligence, I worry, will take this tear and rip it wide open.”

Fortunately, Lee doesn’t leave (most of) us there on the ledge, contemplating our imminent, machine-driven demise. Instead, he proposes a radical, but eminently hopeful, solution for how humans can survive, even thrive, in the coming age of AI. Specifically, Lee proposes that we (both entrepreneurs and governments) focus on creating a large number of service jobs for displaced workers:

Social impact in the age of AI must also take on a new dimension: the creation of large numbers of service jobs for displaced workers. As a venture-capital investor, I see a particularly strong role for a new kind of impact investing. I foresee a venture ecosystem emerging that views the creation of humanistic service-sector jobs as a good in and of itself. It will steer money into human-focused service projects that can scale up and hire large numbers of people: lactation consultants for postnatal care, trained coaches for youth sports, gatherers of family oral histories, nature guides at national parks, or conversation partners for the elderly. Jobs like these can be meaningful on both a societal and personal level, and many of them have the potential to generate real revenue—just not the 10,000 percent returns that come from investing in a unicorn technology startup.

Kick-starting this ecosystem will require a shift in mentality for VCs who participate. The very idea of venture capital has been built around high risks and exponential returns . . . Service-focused impact investing, however, will need to be different. It will need to accept linear returns when coupled with meaningful job creation. (emphases added)

As radical as this sounds, it merely echoes a picture of business purpose and practice that Jesus offered for our consideration more than two thousand years ago. In Matthew 20:1-16, Jesus presents us with a vineyard (business) owner pointedly intent on hiring lots of workers into his harvest. Admittedly, Jesus’ motive in telling the story was not, primarily, to provide a business lesson. Still, this is Jesus’ story to tell — and he intentionally shows us a business owner calibrated to a very different business objective than the one we take for granted.

Jesus’ businessman is not looking to accomplish what most modern business people assume as a given: getting the most work from the fewest workers. Just the opposite. He seems intent on providing generously-paid employment to an abundance of workers. It’s as if Jesus’ business owner simply hates to see people go unemployed.

In fact, Jesus gives us an owner who seems to be thinking, ‘Jobs are the pressing need for so many poor, unemployed workers. I am blessed to be the steward of a business engine — an engine that creates both jobs and profits. I’m going to tune my business engine to create more jobs than are absolutely necessary. In other words, I’m going to use my business to bless my community, not just my pocketbook.’

Presumably, Jesus’ business owner is not only generous, he’s also prudent. He knows full well that he cannot employ so many workers, nor pay them so bountifully, that his business becomes unprofitable and fails. After all, should that happen the number of people he can employ falls to zero.

We can reliably assume, therefore, that Jesus’ owner, just like other business people, aims to be profitable. Nevertheless, he doesn’t believe that maximum profitability is the ultimate goal. Rather, Jesus gives us a business owner whose priority, above some reasonable level of profit, seems to be maximized employment instead — exactly the approach to business that Kai-Fu Lee believes can save us from the job-loss apocalypse on our horizon.