You’re standing on the beach in the dark, trying to guess whether the next wave, which you can already hear, is going to sweep everyone off their feet, or peter out and merely tickle your toes. This must be roughly how it feels to be a policymaker this year — deeply unsure about what is coming for the labour market, let alone what to do about it.
Kristalina Georgieva, managing director of the IMF, has said that artificial intelligence is “already like a tsunami hitting the labour market”. Ford chief executive Jim Farley thinks AI is going to replace “literally half of all white-collar workers” in the US.
And yet there are counter-signals too: a study of 25,000 workers and 7,000 workplaces in Denmark has found that rapid corporate adoption of generative AI chatbots in 2023 and 2024 had “no significant impact on earnings or recorded hours in any occupation” and “minimal” economic impacts overall. Even within professions, the signs are mixed. Generative AI seems well suited to replacing the work of junior lawyers, for example. Yet salaries for newly qualified lawyers are surging. You don’t have to be an economist to know that the price of something doesn’t usually go up when demand for it goes down.