Front Running AI-driven Labor Glut?
Performance of the contract labor companies is saying something.
I’m a heavy user of AI tools and as they mature and increase penetration it will be possible to automate many “information jobs” and better robots will mean we can also do away with jobs like flipping boxes in warehouses so the bar code is facing up.
Markets generally like increases in “productivity” whether it comes from higher growth or lower costs. The big debate regarding AI is which one is it? The order of magnitude matters too.
At first I felt sure we’d see widespread layoffs and unemployment but after pushing deeper into it came away with a personal view that it was more like AI would allow us to do much more than we do now with the same number of people. Instead of laying anyone off or shrinking staff they are all now using Pro versions of AI tools. We’re just able to do a lot more because many tasks now take minutes versus hours or days.
What it does mean though is that incremental hiring seems unlikely. We can acquire more AI-based tools and even do quite a bit of our own automation and coding for hundreds or a few thousand dollars. This compares to 10 or 100x more cost to bring in an additional staff member.
One nugget that seems clear to me is the performance of the suppliers of temporary employment. The chart below speaks volumes. AI isn’t going to take all the jobs anymore than computers and spreadsheets eliminated all the accounting jobs. But it will mean higher productivity and make knowing how to use AI in the context of your job de rigueur.
