AI Could Eliminate 300 Million Jobs, Warns Goldman Sachs

A smartphone with a displayed ChatGPT logo is placed on a computer motherboard in this illustration taken on Feb. 23, 2023. (Dado Ruvic/Reuters)

Artificial intelligence (AI) could lead to the elimination of 300 million full-time jobs, according to a new study.

A March 25th report by economists at Goldman Sachs Group (GSG) stated that improvements in AI technology may cause almost a quarter of existing positions in the United States and Europe to be replaced, but that new jobs may be created in the process, leading to a future productivity boom.

The newest wave of generative AI platforms like ChatGPT could allow companies to replace people with automated technology and do their tasks more efficiently, said the study.

The Epoch Times already reported that the latest AI tech could complete tasks most white-collar jobs more efficiently than most human employees, according to a recent research paper by the University of Pennsylvania (pdf).

Although the new AI useful for most types of positions, the impact would tend to be greater on higher-paid jobs that require advanced education, wrote the the university report.

“Our findings confirm the hypothesis that these technologies can have pervasive impacts across a wide swath of occupations in the United States,” wrote the authors.

Eighteen percent of jobs worldwide could be computerized, with employees in advanced economies being the most vulnerable compared to those in developing countries, said the Goldman economists.

However, GSG said that the new technology could offset expected job losses by increasing the total annual value of goods and services produced globally in the long term.

AI Revolution May Change the World Within Months

Generative AI is the technology behind ChatGPT—the Microsoft-backed chatbot system and developed by OpenAI—that has been receiving much attention in the news lately.

Google earlier announced this month the trial release of it own chatbot called Bard, which will be integrated into its systems to compete and catch up with Microsoft.

The new AI platforms have improved to the point that they can produce creative content indistinguishable from that of humans and are being called by some to be the greatest technological revolution in the last 200 years.

Chatbots are currently able to answer prompts and write essays, and have led many businesses to rethink their current work models.

In March 2022, Open AI unveiled the latest version of the software behind the ChatGPT, GPT-4.

By the end of the year, GPT will give workers the ability to order a virtual AI assistant to transcribe meeting notes during a work call, quickly assist at writing long email responses, form a specific spreadsheet in Excel, and transform a Word document into a PowerPoint presentation within seconds.

The new upgrade has been praised by reviewers with an enhanced ability that simplifies coding, making the process of creating a website simpler with a simple sketch and pass exams with high marks.

White Collar Jobs May Be Lost to AI

White-collar workers would be more at risk than blue-collar workers, as administrative professions and lawyers would be expected to be most affected, the study said.

The impact of AI would vary across different sectors, with 46 percent administrative and 44 percent of legal tasks being automated.

The economists said there will be “little effect” on physically demanding or outdoor professions, such as in construction, manual labor, or repair work. Only 6 percent of tasks in construction and 4 percent in maintenance would be affected, the report stated.

Approximately two-thirds of current jobs in twenty-first century Western economies “are exposed to some degree of AI automation,” and up to a quarter of all work could be done by AI completely, the bank estimates.

If generative AI “delivers on its promised capabilities, the labor market could face significant disruption,” the researchers wrote.

Although further use of generative AI will likely lead to job losses, each technological innovation that has historically displaced workers initially would later create new employment opportunities over time, said the GSG report.

According to the report, 60 percent of workers are in occupations that did not exist in 194o, but research suggested that technological changes over the past 40 years have displaced workers faster than it has created jobs.

The generative AI revolution may reduce employment in the short term, similar to what happened after previous advances in information technology, but would become a boon as the economy adjusts, the report concluded.

Reduced Employment May Be Offset as Economy Adjusts to AI Technology

However, widespread adoption of AI could ultimately lead to a major boost in labor productivity and boost global GDP by 7 percent annually over 10 years, according to GSG.

“Although the impact of AI on the labor market is likely to be significant, most jobs and industries are only partially exposed to automation and are thus more likely to be complemented rather than substituted by AI,” the research team added.

“Most workers are employed in occupations that are partially exposed to AI automation and, following AI adoption, will likely apply at least some of their freed-up capacity toward productive activities that increase output.”

The GSG economists said that 25–50 percent of an average American worker’s workload can be replaced.

“The combination of significant labor cost savings, new job creation, and a productivity boost for non-displaced workers raises the possibility of a labor productivity boom like those that followed the emergence of earlier general-purpose technologies like the electric motor and personal computer,” they noted.

In Britain, Carl Benedikt Frey, future-of-work director at the Oxford Martin School, Oxford University, told BBC News about the effect of the introduction of GPS technology and platforms like Uber had on the taxi industry.

“Suddenly, knowing all the streets in London had much less value—and so incumbent drivers experienced large wage cuts in response, of around 10 percent, according to our research. The result was lower wages, not fewer drivers,” said Frey.

Meanwhile, Whitehall decided to heavily promote investment in AI in the United Kingdom in order to “ultimately drive productivity across the economy” and has attempted to reassure the public that it would not cost people their jobs.

“We want to make sure that AI is complementing the way we work in the UK, not disrupting it—making our jobs better rather than taking them away,” Technology Secretary Michelle Donelan told the Sun.