TL;DR:
- Advocates of stronger regulation of artificial intelligence (AI) have concerns about misinformation and the long-term risk of AI surpassing human control.
- AI is predicted to disrupt a significant number of jobs in the U.S. and Europe, potentially leading to a labor crisis.
- The declining birth rate in developed countries adds to the concern, as there may not be enough young people to support the aging population.
- Former Google CEO Eric Schmidt believes that AI can bring positive benefits by enhancing efficiency and replacing hard-to-fill professions.
- Financial concerns, student debt, and career focus contribute to the declining birth rate in the U.S.
- The demographic and labor crisis resulting from fewer young people could occur within the next few decades.
- Governments propose measures such as incentives and relaxed immigration policies to counter the demographic crisis.
- AI can help address labor shortages and job resignations, but its rapid growth poses immediate challenges.
- OpenAI’s study suggests that 80% of U.S. workers may experience some impact on their jobs due to AI
- Schmidt acknowledges that while AI can improve workforce efficiency, short-term job losses are inevitable.
- Striking a balance between regulating AI and reaping its benefits is crucial for future societal well-being.
Main AI News:
Advocates of stricter regulations for artificial intelligence (AI) have expressed a plethora of concerns and potential risks, supporting their arguments with various examples. These range from immediate dangers, such as the dissemination of believable misinformation, to more far-reaching existential threats, like superintelligent AI taking control of humanity, akin to the depiction in the popular “Terminator” franchise, as referenced by entrepreneur Elon Musk. Among these concerns, a more intermediate-term fear revolves around AI’s potential to disrupt jobs on an unprecedented scale, comparable to major disruptions witnessed in recent history. Goldman Sachs estimated that the technology could soon replace approximately 300 million jobs in the United States and Europe, presenting a significant challenge to the employment landscape.
However, according to former Google CEO and executive chairman Eric Schmidt, the perceived threat of job displacement caused by AI may be overshadowed by another critical issue facing society: the rapidly declining birth rate in developed countries. Schmidt highlighted this concern during his participation at the Wall Street Journal’s CEO Council Summit in London. He argued that the diminishing number of children being born poses a demographic crisis, whereby the aging population may lack sufficient support from younger generations.
Schmidt challenged the prevailing narrative that new technologies inherently lead to disruption and widespread job losses. In the case of AI, he contended that the net impact is likely to be positive due to enhanced efficiency and the technology’s ability to replace occupations that are already becoming increasingly challenging to fill in a shrinking labor market.
The United States, for instance, currently experiences a historically tight labor market that could further tighten in the coming decades due to the declining birth rate. Despite a temporary increase in births in 2021 attributed to the pandemic, U.S. fertility rates have exhibited a steady decline since the mid-2000s, including a record-breaking 4% drop in 2020. Numerous factors contribute to this trend, including couples’ concerns about financial stability, burdensome student loans and credit card debts, and a greater emphasis on career aspirations.
Additionally, in more developed countries, the decision to have fewer children is often a matter of personal choice. Similar shifts in birth rates are observed in Europe and East Asia, potentially leading to severe economic consequences in the years to come. With baby boomers retiring in large numbers each year, the scarcity of younger individuals to replace an aging workforce may result in a demographic and labor crisis within the next few decades.
Schmidt emphasized the aggregate demographic projections indicating a shortage of human resources for available jobs in the foreseeable future. He asserted that for at least the next 30 years, there would be an imbalance between the number of job opportunities and the available workforce, suggesting a surplus of positions and a scarcity of individuals to fill them adequately.
Governments worldwide have proposed various policies to mitigate the potential adverse effects of a demographic crisis. China, for instance, recently introduced comprehensive measures and incentives to reverse its population decline. These efforts include improving maternal health care services, granting 30 days of paid marriage leave in specific provinces, and discouraging abortions. Similarly, many countries are exploring options for recruiting overseas workers. Japan, historically reluctant to diversify its labor force with foreign staff, has recently relaxed its entry requirements.
In the United States, population growth rebounded last year after stagnating in 2021, largely due to increased immigration. Several business leaders, including Sundar Pichai, the current CEO of Google and Alphabet, have long advocated for welcoming more migrants to supplement the country’s labor pool.
AI could also play a crucial role in addressing the labor force challenges faced by countries, particularly in occupations that experienced significant worker resignations during the early stages of the pandemic. Throughout history, technology has typically filled gaps created by labor shortages. A 2021 study conducted by the Massachusetts Institute of Technology (MIT) revealed that aging populations accounted for 35% of the adoption of robots and automation in different countries. The study’s authors further argued that fast-aging countries like Germany, South Korea, and Japan, which have heavily invested in their robotics industries, are witnessing better labor market outcomes compared to the United States.
Companies have already started leveraging AI and automation technologies to address labor shortages in professions like truck driving and bartending—jobs that many workers voluntarily left during the pandemic. However, the recent pace of AI advancement poses a more immediate and pervasive threat. A study by OpenAI, the creator of ChatGPT, conducted in March, revealed that 80% of U.S. workers could experience at least a 10% impact on their jobs due to AI. The potential risks to jobs posed by AI were among the factors that prompted OpenAI CEO Sam Altman to urge Congress to regulate AI during his recent testimony.
Schmidt maintained that AI would ultimately serve as a tool for workforce efficiency. While it may eventually yield a net-positive outcome for the labor force, job losses in the near term might be inevitable. He acknowledged that job conflagration—wherein certain jobs are created while others are lost—is a reality that businesses, like those represented at the CEO Council Summit, should anticipate.
Conlcusion:
The interplay between artificial intelligence (AI), declining birth rates, and potential job disruptions has significant implications for the market. Stricter regulations on AI could shape the landscape of technological advancements, impacting industries reliant on automation and innovation. The declining birth rates in developed countries pose challenges for future labor markets, potentially leading to a shortage of skilled workers. This demographic shift may necessitate a reevaluation of hiring practices, talent acquisition strategies, and workforce development initiatives to address the anticipated labor crisis.
Businesses should also be prepared to adapt to the changing dynamics of job roles and responsibilities as AI technologies continue to advance. Embracing AI as a tool for efficiency while mitigating short-term job losses will be essential for maintaining a competitive edge in the market. Additionally, exploring opportunities in immigration policies and overseas recruitment may provide avenues to alleviate labor shortages. Overall, proactive measures and strategic planning will be crucial for businesses to navigate the evolving market conditions influenced by AI and demographic shifts.
