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The tech sector right now has a lower unemployment than the general US economy
https://www.google.com/url?sa=i&source=web&rct=j&url=https://www.wsj.com/cio-journal/tech-unemployment-ticks-up-to-3-8-in-april-amid-ai-driven-layoffs-214b0ca4&ved=2ahUKEwins7yEpNGUAxW7ZvUHHXKrPfsQ1fkOegoIAggACAAIHRAC&opi=89978449&cd&psig=AOvVaw0IYy6J7-fiZwA_vTGmEcwb&ust=1779690002348000
3.8% in the information sector vs 4.3%
I'm stating this first to sort of color the rest of my point in the context that a lot of what people say about what AI has already done is just bullshit. But furthermore, people fundamentally don't seem to understand how employment works. You can have mass layoffs and still have high employment. I'm not even sure tech layoffs are higher than other sectors, but I am sure thar every company that lays off tech workers gets front page news while if there's a cut in delivery drivers nobody notices.
The only smart prediction to make is that we don't really know. People here just don't realize how big and complex the economy is and the world at large is. Even if your job is gone, your skills are often still transferable. When horse carriage producers were put out of business they didn't all starve and never find jobs. They started working on building cars for the most part.
AI is just another step in a long line of automations. Is it an exceptional step? Probably. Will it ever replace all workers? No. By the nature of economics, that's basically impossible. People's desires are infinite and there arent infinite resources and labor, so there are always niches to fill. Might it make people poorer? Maybe. I kind of doubt it unless governments uses it as an oppressive system that cracks down on a lot of market activity.
My point here is really that making predictions is a fools errand. People have tried to do it, and at best a few get lucky and pretend they're geniuses and then return to the mean on the next prediction. There are obvious truths you can see, sure, like if the price of compute continues to decrease at an decelerating rate, it will significantly affect AI progress. I think that even as we see continued progress in AI, that will be the fundamental factor that's overlooked. Look at the flop count per dollar on a CPU from 2005 vs 2015 and then a GPU from 2015 vs 2025. Nvidia is squeezing some progress out in other ways, but at massive costs.
So my prediction is simple I guess. AI will be a big boon to the economy. It will take a few years for companies to learn how to cost effectively implement it.Some sectors will disproportionately reap the rewards. I suspect the gains will be in the.5-1% range of additional productivity growth a year, which is a lot. For context, the early industrial revolution was something like 2% growth year on year excluding population growth. With an extra 1% productivity growth the US would be higher than that right now I believe.
I also suspect there are factors that are huge burdens to society which AI can't overcome. Population decline. A war in Taiwan. Developed country and Chinese debt burdens. All of these things could affect AI. Which is ultimaty why all predictions beyond a year or two will be meaningfully wrong.
Minimum wage and related barriers put a finger on the scale though. Currently, very-low-skilled people are unemployable because the assorted costs of hiring them outweigh the expected benefits. In the future, will that extend to moderate skill levels? high? I don't think it'll cut off 100% of people before extinction and/or post-scarcity, but I could see the labor force dropping from about 50% of all people today to 10-20% even if AI remains a normal technology.
This is a fair rebuttal. I don't think Americans workers will ever be willing to support 80% of the population with welfare, let alone the fiscal reality making it totally unfeasible.
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