AI, Jobs & Floridians – Top 3 Takeaways – May 3rd, 2023
- Will AI be coming for your job? Love it or hate it, the era of AI has arrived. And even now in its infancy it’s already proving to be disruptive. Take, for example, the e-learning company Chegg. Just two weeks ago Chegg’s CEO was saying ChatGPT would create a unique user experience which would enhance learning through their platform. Yesterday, when the company reported earnings, it became clear that ChatGPT was, in reality, making the need for Chegg’s platform less relevant. The result was a loss of effectively half of the company’s value overnight. One might imagine that many, if not most of the 3,073 jobs on the line at the company are already at risk of succumbing to AI. That’s but one company and one example from yesterday. What’s the broader outlook? What about your job. Well, if the folks at the World Economic Forum are right...it turns out AI really could be coming for your job. In a detailed 296-page report entitled “Future of Jobs”, AI is set be felt by many and at least over the next five years, is set to take many jobs. In the analysis, 23% of all jobs will be directly impacted by the implementation of AI. What does “impacted” mean exactly? It means 83 million jobs as they exist today won’t exist at all in five years. At the same time, 69 million new jobs, brought about by AI innovation will emerge. So, it’s not all bad news, however you might have noticed that it’s a deficient of 14 million jobs. So yes, AI is theoretically coming for the jobs of a net 14 million Americans over the next five years. As for where the biggest losses are set to occur...those which are most easily automated. At the top of the list were administrative roles, security and factory positions. But while just under a quarter of all jobs are set to be disrupted by AI, the number flips entirely when asking if AI will affect your job. The answer is almost certainly yes. Nearly 75% of all companies sampled are already using AI or fully intend to integrate AI within the next five years. The question I have is what the future beyond five years will be. Historically, at least in the United States, technology and innovation have always led to more innovation and more opportunity with even more jobs in the end. At the advent of the consumer internet similar questions were being asked and similar concerns about job loss were brought up. Very quickly we saw that while the internet did lead to the demise of some businesses, it led to far more opportunities and jobs in others. And over 30 years later what industry, what business, what job hasn’t been impacted by the internet in some way? I suspect the advent of the consumer AI age will develop in a similar, albeit faster, way. And that leads me to feel more optimistically about our future prospects, given our country’s history, provided we make sound decisions with political leadership along the way. Speaking of fewer jobs...
- JOLTS heard ‘round the economy. Yesterday the US Bureau of Labor Statistics released their monthly JOLTS, or Job Openings and Labor Turnover Summary. The takeaways weren’t great, though not especially surprising either. Fewer job openings and higher layoffs. While there still remain more posted job openings than unemployed people looking for work, it’s not nearly as easy to find new opportunities as it’s been. And that’s being aided by an increase in more people being introduced to new opportunities by their previous employers. The JOLTS survey shows that it’s now 20% harder to find a new job than it was entering the year, as layoffs have also increased by 20% since the start of the year. Much like last week’s report showing especially weak first quarter growth, those numbers were both worse than analysts’ expectations. Which takes us to what will be today as the Federal Reserve will make its decision on interest rates. The widely held belief is that they’ll raise rates by another quarter percent today but that this will be the last. What the Fed does and what they say will be another jolt heard ‘round the economy today. And closest to home...
- We’re still faring better than most. The University of Florida’s just released consumer sentiment survey showed this... Despite challenges such as elevated inflation, hikes in interest rates, and turmoil in the banking sector, consumer sentiment remained resilient in the first quarter of 2023. However, in April, Floridians' expectations about the national economy took a downturn, resulting in the first drop in consumer confidence for the year. Floridians are still far more economically optimistic than the country overall as our consumer sentiment is 5.2% higher than the country’s overall, so there’s that...though it’s clear that we’re becoming increasingly concerned about what’s happening economically outside of our state. And rightfully so.