Earlier this year, when the Trump administration was focused on cutting the federal workforce, moving some functions to AI was one consideration.
“Josh Gruenbaum, who manages the Federal Acquisition Service at the
General Services Administration, said that “we won’t need staff in certain
areas of the country” and “will be cutting redundant business functions and
associated staffing.” He said “we’re also considering how we can utilize AI in
our portfolios.”
Many corporations are doing the same to
streamline operations.
Efficiency: Good for Reducing Costs and Emissions; and Fairness: A
Bio-social Concept that We Tend to Strive Toward
Increasing efficiency is a worthwhile goal
for improving economics and decreasing environmental and climate impacts.
Competition in business also makes efficiency a strategy for prosperity and
survival.
One way to increase efficiency is to reduce
waste. This may include making employees more efficient so that fewer employees
will be needed for a task or set of tasks. This means downsizing, whether
through laying off or firing employees. Currently, the new Trump administration
is in the process of downsizing the U.S. government workforce, the country’s
largest employer, which has involved firing and encouraging deals involving
voluntary resignations.
Humans also value fairness and strive to
feel that what they offer and are offered is fair. We want to be valued for our
input, and we want to be seen as more valuable than machines. Doing more with
less means fewer available jobs. This creates economic upheaval. Businesses are
often proud to present themselves as employers of people, but they also must
embrace efficiency, so if labor costs can be reduced by downsizing, they likely
will, especially when competitors are doing the same.
Labor and Technology
There is no doubt that labor intensity has
been decreasing over time as technology enables us to do more with less labor
input. Fields like agriculture used to be very labor-intensive, but are now
becoming technology-intensive. The same is true of industry, mining, oil &
gas, the tech industry, and those heavily involved with the tech industry. Now
in 2025, the tech industry and other industries have announced mass layoffs and
cite AI and automation replacing workers as partially responsible for the layoffs.
One might say labor is “de-humanizing” or that it is decoupling from humans.
Labor is one of the traditional inputs to economic systems, and in that
context, its role seems to be changing as well. Fewer laborers means less
people power in that input and perhaps less human influence or relevance.
Commenting on a New York Times article
about growing unemployment among the college-educated, leadership guru and
business analyst, Bill George, said the following about the shift in types of
open jobs that is happening and could accelerate:
“American job market is changing, likely for a long time.”
“With rapid advancements in AI, starting jobs for college graduates,
especially those without degrees in STEM, are declining.”
“Why? Companies, consultants, investment banks, law firms & health
care orgs don't need all those brilliant analysts running spread sheets,
writing reports on companies, studying legal briefs, etc., as AI can do these
tasks faster & better. After decades of computer science majors being in
high demand, they are being replaced by AI.”
“In contrast, "hands on" jobs in engineering will be in
greater demand than ever. We will live in a STEM world. So will trades like
electricians, welders, construction workers, et. al. are already in great
demand with high starting salaries WITHOUT college degrees.”
“After decades of economists telling people they had to get college
degrees, America needs to shift its focus to vo-tech & other practical
post-secondary training - while expanding opportunities in STEM education. This
is why Georgia Tech has seen 70% more applications & is expanding
acceptances.”
It’s a bit ironic that computer science
majors are being replaced by AI. The machine designers are being replaced by
the very machines they designed.
Theoretically, AI will improve efficiency
and profitability, as well as keep consumer prices low, as many technologies
have done. Right now, however, they are investing heavily in the high upfront
costs required to assemble the infrastructure for the technology. Perhaps, when
their profits increase, as is hoped, they will enable more human labor inputs,
but only where needed.
AI/Automation Backlash? And/or Will It Solve Worker Shortages?
Many people have fretted that machines will
replace human jobs. They were right. Many people have also argued that other
kinds of jobs will open up for humans. They were right, too. However, I think
there is a net loss of jobs, at least in the near term, as these companies
invest heavily in AI technology itself and the accompanying AI data centers.
Energy and environmental analysts are noting the increased power usage of this
technology and the accompanying carbon and pollution emissions from natural gas
and other fossil fuels. Utilities and power grid analysts are noting the stress
on the grid and the threat to grid reliability presented by this technology.
Consumers, including me, are noting rising electricity bills, which are
partially attributable to demand growth and forecast continuing demand growth.
Thus, people are noticing the negative effects of AI and automation as their
lives are being impacted. Will that lead to some kind of backlash? I don’t
know, but it is possible.
The dock worker strike of October 2024
involved the nexus of an aging workforce and a transition to a greater degree
of automation. In this case, there was a growing number and share of older
workers. However, many of these workers are over 55 and will retire early due
to the rigors of the work. When they do, there will be a shortage of workers.
Automation is one solution to the impending worker shortage, but unions argue
that automation will instead displace workers. Others counter that there are
not enough younger workers to fill the impending gaps. In fact, automation is
already solving worker shortages in cities around the world.
According to Wall Street Conservative:
“To offer perspective, consider cities like Rotterdam, where there’s a
shortage of 8,000 workers, or Shanghai, which is automated to remain
competitive as its working-age population dwindles. Japan is not far behind in
its developments, employing a vast 311-mile automated conveyor belt to
transport cargo—an ingenious solution to missing truck drivers. The trend
towards automation highlights that this is not merely a question of efficiency;
it’s a necessary adaptation to demographic shifts that threaten the traditional
labor market.”
In 2018, the McKinsey Global Institute
wrote in a report that:
“Workers will need to acquire new skills and adapt to the increasingly
capable machines alongside them in the workplace. They may have to move from
declining occupations to growing and, in some cases, new occupations.”
The report estimated that about half of all
actions or tasks are automatable, but not half of all jobs. It also predicted
disruption in the form of jobs lost, jobs gained, but mostly jobs changed. More
worker education will be needed for some job types as needed skills change. The
predicted needed skill changes are shown below.
How Much Work is Too Much Work?
Economist John Maynard Keynes predicted in
1930 that technological progress and economic growth would solve the problem of
material scarcity in 100 years, and we would be working about 15 hours a week.
We are almost there, and that has not happened. In fact, many people are now
working more hours. Though I am unemployed now, just a few years ago, I was
working some consecutive 72-hour weeks. An article in Jacobin by Meagan Day
notes that both poor and wealthy people are choosing to work longer hours, either
to get by or to get ahead, respectively. According to the article, Keynes
thought that greater productivity would lead to more free time, but that did
not happen. It has led, however, to a situation where an executive management
class has reaped grotesque amounts of money compared to low-wage workers, even
at the same company. In other words, the higher profits enabled by greater
productivity have been used to reward the “fat cats,” instead of the workers.
As I am very close to retirement age, I can really see the value of having free
time, or rather, non-work time. It’s great. I’m baffled when people say they
wouldn’t know what to do if they didn’t have a job. There are millions of
things to do! Part of the problem, according to Day, is that people associate
working long, hard hours with virtue. Such goals are influenced by desired
social mobility and competition to survive and thrive. Since the 1970s, we have
called this the “rat race.” She offers a criticism of capitalism
that is perhaps accurate:
“Relaxation is a failure to grow wealth, which is in turn a failure to
live well. It’s a remarkable perversion: capitalism has actually weaponized the
concept of “the good life” against the notion of doing what we want with our
time.”
These days, we have tech workers shunning
sleep and bragging about working 100-hour weeks, as if that is something
required for success or something desirable. That seems masochistic to me.
While I have done long work weeks, I don't think tired workers are good
workers, so I don't think such behavior should be encouraged.
Bill Gates talks about a new era called “free
intelligence,” where most expertise will be provided by AI, basically for free.
This will result in AI replacing doctors and teachers. He sees AI making our
lives notably easier within a decade. I am not quite as optimistic. Gates also
thinks that only coders, biologists, and energy experts will remain safe from
AI for now. He thinks workers will be able to survive working part-time, but
people will need much more money than part-time work provides, so in such a
scenario, there will need to be vastly higher wages or some kind of government
support, such as a universal basic income. Thus, I am currently skeptical.
A more reasonable goal for AI and
automation is to use it for what it can do best, which is often tasks that
humans don’t like to do anyway, which can free up time for the worker to do
other, more agreeable functions of the job.
Indeed CEO Chris Hyams thinks that workers
should cultivate soft skills like curiosity and adaptability. These skills
foster emotional intelligence. AI and automation cannot replace them since they
are human-to-human skills.
“Companies seek out employees who can take and apply constructive
feedback, have critical conversations, effectively present ideas and manage
conflict in the workplace, Terry Petzold, a recruiter of over 25 years, told
CNBC Make It last year.”
The Advantages of Automation: Speed, Precision, Accuracy, Reliability,
and Simplification
Automation is machines replacing human
actions and human labor. According to Wikipedia:
“Automation describes a wide range of technologies that reduce human
intervention in processes, mainly by predetermining decision criteria,
subprocess relationships, and related actions, as well as embodying those
predeterminations in machines. Automation has been achieved by various means
including mechanical, hydraulic, pneumatic, electrical, electronic devices, and
computers, usually in combination. Complicated systems, such as modern
factories, airplanes, and ships typically use combinations of all of these
techniques. The benefit of automation includes labor savings, reducing waste,
savings in electricity costs, savings in material costs, and improvements to
quality, accuracy, and precision.”
An IBM topic article defines automation as
follows:
“Automation is the application of technology, programs, robotics or
processes to achieve outcomes with minimal human input.”
Automation is ubiquitous. It has become
synonymous with digitalization. IBM lists three types of automation: Basic
or task automation takes simple, routine tasks and automates
them. Process automation takes more complex and repeatable
multistep processes (sometimes involving multiple systems) and automates
them. Intelligent automation is a more advanced form of
automation that combines artificial intelligence (AI), business process
management and robotic process automation capabilities to streamline and scale
decision-making across organizations.
Wikipedia summarizes the advantages of automation below:
Task automation may be as simple as a
controlled feedback loop. Operating a computer or a smartphone involves basic
automation of functions. Feedback loops are not just utilized by machines.
Humans also automate functions. We do it when we enter what are called trances,
according to Dennis Weir, who wrote the book Trance: from Magic to
Technology, which attempted a mathematical analysis of so-called trances.
Another way we do it is through what writer Charles Duhigg calls a habit loop,
in his 2012 book, The Power of Habit: Why We Do What We Do In Life and
Business. In both cases, we automate functions in order to sustain the
loop, either a trance, which is harder to maintain, or a habit, which can be
hard to break free from. Weir also described trances that are hard to break
free from, such as cults and charismatic leader worship. Athletes, musicians,
and artists also automate in a trance-like way when entering “the zone,” where
execution of actions becomes automatic. The habit loop involves rewards. These
are examples of biological or psychological feedback loops.
Automated solar panel installation can be done
three times as fast with fewer people and better accuracy. Automated hydraulic
fracturing can be done with fewer people, better precision, and more safety.
Automated mining has been around for decades and is evolving. Automation
eliminates what is known as human error. Machines rarely make mistakes. They
are reliable. Automation means fewer workers overall, which simplifies labor
management. The fact that automation increases productivity makes it usually a
good investment.
Elon Musk wrote early in 2025 that he
believed universal income is the future, presumably when AI and automation
mature:
“Musk believes that AI and automation will drive down the cost of
goods and dramatically boost productivity, creating abundance. In other words,
everyone will theoretically have access to whatever they need, and poverty as
we know it could dramatically diminish.”
The Disadvantages of AI and Automation
The biggest perceived problem with AI and
automation is the loss of jobs for humans, and that problem is very real. While
that is a very real possibility, it is likely that most job replacements will
come with new jobs opening up elsewhere. However, from a worker's standpoint,
those new jobs opening up may have requirements that they can’t meet, and they
may require things like relocation, which is a major disruption in workers’
lives.
Wikipedia lists some of the disadvantages
of automation below:
A recent issue with AI is the phenomenon
known as AI-generated workslop. According to CNBC’s Jennifer Liu:
“Niederhoffer and Hancock {professor at Stanford}, now have a name for
this phenomenon, the feeling you get when you're reading a message or document
that's so convoluted or incomplete in thought that you start to wonder,
"Wait, did a human even write this, or is this AI?"
“It's called workslop, and it's killing teams and productivity across
all kinds of businesses, they say.”
This is an acknowledgement that AI still
has a long way to go. While I use ChatGPT or CoPilot to research topics, I
rarely rely on its summaries, preferring to dig into the sources that they
provide. Workslop is work that is recognizable as AI-generated and is often
seen as subpar or, in extreme cases, meaningless gibberish. As models are
trained better and better, this phenomenon should decrease. Many people say
workslop ends up making them work more to correct it. As AI use has increased
over the last two years, productivity gains have been limited, and managing
workslop could be a factor. Managing companies’ use of AI is important. It
should be a pilot process, carefully managed by humans rather than a
copy/paste, fully automated process, at least until it’s proven to be
perfected.
“What reduces workslop is "a team's commitment to task
quality," Hancock says. Teams should spend time talking to one another
about how they use AI and critiquing the best applications for their needs.”
The Current Fluctuating Job Market
In 2025, several giant corporations
announced big job cuts and layoffs. These include Microsoft, Intel, Amazon,
Google, UPS, Target, ExxonMobil, Chevron, BP, and several others. U.S.
employers announced 892,362 job cuts through August 2025, the highest
year-to-date total since the pandemic began. This includes the downsizing of
the federal workforce. Economic uncertainty is a big factor. Market volatility,
store closures, bankruptcies, patent expirations (mainly in the pharmaceutical
sector), and AI implementation have been cited as reasons for the job cuts.
Some, like Microsoft, cited the need to fund AI infrastructure. Some economists
are saying that the data suggest we are in or close to an economic downturn.
Job cuts have accelerated in the retail and healthcare sectors as well.
According to an article by Rodrik Cassel in
PennyGem:
“Companies directly attributed 10,375 job cuts to AI implementation.
IBM eliminated thousands of HR roles after automating processes.”
“Microsoft reports that AI now generates 30% of its code, justifying
widespread engineering layoffs across development teams.”
Middle management, customer support, and
data analysis jobs face the highest elimination risk. Entry-level white-collar
positions are particularly vulnerable as AI begins to automate routine tasks,
with 50% of them expected to be lost in the next five years. That does not seem
like a bright future for new graduates. It’s perhaps unfortunate, but
increasing “operational efficiency” leads to many job cuts.
“Businesses are prioritizing short-term survival over employment
stability, suggesting that layoffs may continue regardless of broader economic
indicators.”
Part of the reason is that economic
uncertainty due to the usual culprits like competition and disruption is now
joined by uncertainty about tariffs and other policies.
“High-wage sector layoffs threaten middle-class prosperity and
consumer spending power. Areas dependent on major employers are particularly
vulnerable to economic ripple effects.”
“The psychological impact on remaining workers could lead to
productivity challenges that further perpetuate economic uncertainty across
industries.”
These days, many accomplished and highly
educated workers can’t find work, including me, although my situation is not
typical. We are over-qualified for many open positions and under-qualified for
many as well. Jobs with hundreds of applicants are more common since people
apply for everything online, and locality is less of a factor than it used to
be. College-educated long-term unemployment has been on the rise. There is
seemingly less need for college-educated workers. The need for
non-college-educated workers has risen a little bit, but those jobs may be less
desirable. There are many stories of people applying for hundreds and thousands
of jobs with no luck. In the last few years of being unemployed on and off and
underemployed, I have applied for several hundred jobs of a wide variety and
pay and have gotten about ten interviews and one actual job. It is not a fun
process to look for work. I have interviewed for state jobs, but I don’t like
how interviews for these jobs are structured, many with only very specific
questions about very specific workflows that many workers have not encountered
or only marginally encountered. Dealing with constant rejection, or rather,
silence, is annoying.
Basically, white collar jobs are shrinking,
but blue-collar jobs are growing. Fed chair Jerome Powell recently said that
the job market is fundamentally weak, stating that “job creation is pretty
close to zero.” He noted that many large employers are signaling that they
will reduce or keep employment levels low, in part due to AI and automation. At
the same time, building data centers and other AI infrastructure is helping to
drive growth in the economy. He does not think this will be a bubble since
these companies have earnings, and AI is likely to improve productivity in the
future. Thus, it is a good bet in the medium to long term. In many cases AI and
automation are improving productivity now and fewer workers are needed so that
fewer workers are required to keep GDP up. Amazon recently announced 14,000
white collar job cuts, pointing out that it was not AI but “culture” that
precipitated the layoffs. Many of these are middle managers, which Amazon is
apparently seeking to eliminate as it seeks to “remove organizational layers.”
According to Fortune’s Eva Roytburg, it is an “awkward balance—strong
investment but weak hiring.” Powell alluded to
“…a “bifurcated economy,” in which wealthier Americans continue to spend
freely but those at the bottom are trading down to cheaper goods.”
In another article for Fortune, Roytburg
notes:
“Yet there’s an irony here. Amazon—the company that pioneered
warehouse automation and made robots the poster child of blue-collar
disruption—is now signaling that the white-collar workforce may be first to
feel AI’s bite. Analysts at Gartner estimate that by 2026, one in five
organizations will use AI to eliminate at least half of their management layers.”
“According to the outplacement and executive coaching firm
{Challenger, Gray & Christmas}, U.S. employers announced 946,000 job cuts
so far this year, the highest year-to-date total since 2020, with over 17,000
explicitly attributed to artificial intelligence and another 20,000 tied to
automation and “technological updates.” Tech firms alone have shed 108,000 jobs
in 2025, and retail layoffs are up 203% year over year as companies brace for a
slower holiday season, the firm said. “It’s very likely job cut plans
are going to surpass a million for the first time since 2020,” Andy Challenger,
senior VP at Challenger, Gray & Christmas, wrote in the report. “Previous
periods with this many job cuts occurred either during recessions or, as was
the case in 2005 and 2006, during the first wave of automations that cost jobs
in manufacturing and technology.”
Thus, it would seem that right now, job cuts are exceeding job additions and job changes, despite predictions that new jobs would be arriving. Young workers are facing many labor challenges, as are the unemployed, including the newly unemployed.
References:
Dockworker
Strike Highlights Crisis of America’s Aging Workforce and the Race to
Automation. Wall Street Conservative. October 2025.
Dockworker
Strike Highlights Crisis of America’s Aging Workforce and the Race to
Automation – Wall Street Conservative
We're
Getting Older, and the Labor Market Shows It. Federal Reserve Bank of Atlanta. January
12, 2023. We're Getting Older, and the Labor
Market Shows It - Federal Reserve Bank of Atlanta (atlantafed.org)
Japan
Wants To Build A 311-Mile Cargo Conveyor Belt Because It’s Running Out Of
Delivery Drivers. Chris Chilton. Car Scoops. July 1, 2024. Japan Wants To Build A 311-Mile Cargo
Conveyor Belt Because It’s Running Out Of Delivery Drivers | Carscoops
Automation.
Wikipedia. Automation - Wikipedia
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is Automation? IBM. What Is Automation? | IBM
AI,
automation, and the future of work: Ten things to solve for. McKinsey &
Company. June 1, 2018. AI, automation, and the future of
work: Ten things to solve for (Tech4Good) | McKinsey
Opinion:
Unions: Support automation that helps workers without sinking them. Opinion by
Harley Shaiken, opinion contributor. The Hill. October 16, 2024. Opinion: Unions: Support automation
that helps workers without sinking them (msn.com)
Musk
aims to hobble federal workers ahead of ‘buyout’ deadline. Holly Otterbein.
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ahead of ‘buyout’ deadline
'I
Don't Think We're Going to Have a Choice': Elon Musk Predicts Universal Income
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Mancini. Benzinga. February 26, 2025. 'I Don't Think We're Going to Have a
Choice': Elon Musk Predicts Universal Income Will Eventually Be 'High'—But
Fears People Will Feel 'Useless'
We
Shouldn’t Have to Work This Hard. Meagan Day. Jacobin. March 23, 2025. We Shouldn’t Have to Work This Hard
Bill
Gates: Within 10 years, AI will replace many doctors and teachers—humans won't
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Bill
Gates says only 3 jobs will be safe from AI (and it's bad news for creatives). Georgia
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safe from AI (and it's bad news for creatives)
Indeed
CEO: About two-thirds of jobs include tasks that AI can do—but there's no
posted role yet AI can do 'completely on its own'. Ashton Jackson. CNBC. March
31, 2025. Indeed CEO: About two-thirds of jobs
include tasks that AI can do—but there's no posted role yet AI can do
'completely on its own'
Bill
Gates announces the long-awaited change to the workweek: We should be working
“just like 2 or 3 days a week”. As
Actualidad. AS USA. March 31, 2025. Bill Gates announces the long-awaited
change to the workweek: We should be working “just like 2 or 3 days a week”
America’s
Largest Employers Trigger 100,000 Layoffs—Thousands More Set by November. Rodrik
Cassel. Penny Gem. September 16, 2025. America’s Largest Employers Trigger
100,000 Layoffs—Thousands More Set by November
The
Newest Face of Long-Term Unemployment? The College Educated. New York Times. Noam
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Unemployment? The College Educated. – DNyuz
AI-generated
'workslop' is here. It's killing teamwork and causing a multimillion dollar
productivity problem, researchers say. Jennifer Liu. CNBC. September 23, 2025. AI-generated 'workslop' is here. It's
killing teamwork and causing a multimillion dollar productivity problem,
researchers say
America’s
New Normal for White-Collar Jobs. Conor Grant. The Wall Street Journal. October
29, 2025. America’s
New Normal for White-Collar Jobs
Supply
vs. Demand: The Employment Puzzle in the U.S. Labor Market. Kris Paterson. What
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Jerome
Powell says the AI hiring apocalypse is real: ‘Job creation is pretty close to
zero’. Eva Roytburg. Fortune. October 30, 2025. Jerome
Powell says the AI hiring apocalypse is real: ‘Job creation is pretty close to
zero’
Everyone
thinks AI is replacing factory workers, but Amazon’s layoffs show it’s coming
for middle management first. Eva Roytburg. Fortune. October 29, 2025. Everyone
thinks AI is replacing factory workers, but Amazon’s layoffs show it’s coming
for middle management first | Fortune
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