The Impact of Generative AI on the Labor Market: Insights from Mary Daly
While some may worry about artificial intelligence (AI) gaining sentience and taking over the world, a more immediate concern is how generative AI tools will impact the workforce. Opinions vary, with some experts predicting increased productivity and job satisfaction, while others foresee widespread unemployment and social disruption.
Mary Daly, CEO of the Federal Reserve Bank of San Francisco, offers a unique perspective on the situation. As a labor market economist, Daly is particularly interested in how generative AI could alter the employment landscape.
Early Adopters and Their Approach to Generative AI
In a recent interview with WIRED, Daly shared her observations from discussions with companies already implementing generative AI. Surprisingly, more firms than expected are exploring its potential, with some having more opportunities to replace workers and others to augment their capabilities. However, Daly noted that no company is using the technology solely as a replacement tool.
One example Daly provided was a company that utilized generative AI to assist in writing descriptions for their vast inventory of items. By employing AI to create first drafts, copywriters could focus on auditing and more engaging work, rather than the company continually hiring additional staff.
The Historical Impact of Technology on Employment
Daly expressed confidence that generative AI will not lead to an overall reduction in jobs, citing the historical impact of technology on employment. Over centuries, technology has never resulted in a net decrease in jobs for the country. Instead, the outcome falls somewhere in the middle, depending on how society engages with the technology.
Drawing from her experience as an economist during the computerization era, Daly acknowledged that while the surge in productivity led to inequalities, it also presented opportunities. Generative AI, in particular, has the potential to assist middle-skilled workers in becoming more productive, but this requires careful consideration and planning.
Educating and Encouraging Companies to Leverage AI for Augmentation
To ensure that companies deploy AI in a way that empowers workers, Daly suggests starting with education rather than compulsion. In a tight labor market where skilled workers are scarce, companies are naturally motivated to utilize less expensive talent more effectively. While the default thinking may lean towards replacing workers, this mindset is not immutable.
The companies that are developing and selling AI models and tools don’t seem to think that way. They seem exclusively focused on how AI can replace humans.
As the conversation around generative AI and its impact on the workforce continues, it is crucial to consider the insights and perspectives of experts like Mary Daly. By proactively engaging with the technology and focusing on augmentation rather than replacement, society can harness the potential of generative AI to create a more productive and equitable future for workers.
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