White Collar Job Declines Not Due to AI, Economists Say

White-collar job growth has declined, but economists say it’s not due to AI—at least not yet. The slowdown is tied to economic structural issues. Sectors like health care are thriving despite the overall stagnation. There may be future transformations as AI progresses, yet it’s unclear how many jobs will truly be lost or created in that shift.

The latest job numbers might be alarming for those banking on white-collar employment. Economists report that the stagnation in hiring for professional and business services isn’t necessarily a fallout from AI advances, at least not yet. Rather, they point to deeper structural challenges within the economy.

Yeah, the stats don’t paint a pretty picture. For instance, in May the professional and business services sector noted a slight decline in job growth to -0.4%, down from -0.2% just a month before. It’s clear from the Bureau of Labor Statistics that job opportunities are on the wane, with Indeed economist Cory Stahle noting this downward trend.

On a brighter note, other sectors, like health care and construction, are still buzzing with growth. Health care alone contributed a hefty 62,000 new jobs in May, which accounted for nearly half of all job gains, according to the Bureau. But what about those white-collar jobs?

Economists, including Alí Bustamante from the Roosevelt Institute, stress that the stagnation isn’t really about AI taking jobs away. “We know for a fact that it’s not AI,” he states. Stahle concurs, suggesting the situation is more about economic shifts rather than technology-induced disruption.

Diving deeper, it turns out AI hasn’t been the culprit behind this job stall. In fact, Bustamante argues that the faltering job creation has been a long time in the making, predating significant advances in AI. As he aptly puts it, “AI technology was pretty awful” during those years.

Even today, AI systems still need humans to execute many essential tasks. A 2024 report from Indeed even highlights that a significant majority—68.7%—of identified work skills are “very unlikely” to be replaced by generative AI at all. Stahle sums it up: “We might get to a point where they do, but right now, that’s not necessarily a big factor.”

Looking ahead, the conversation shifts. There’s potential for AI to transform the job landscape. Stahle points to the rising tide of consulting roles centered on implementing AI, which have surged over the past year to represent a notable proportion of new job postings.

In fact, a World Economic Forum report from January predicts that AI could usher in 170 million new jobs by 2030, which sounds impressive. Yet, there’s a caveat—this growth could be offset by the estimated 92 million positions likely to be lost to AI displacement.

So, what’s a worker to do? For those in knowledge-driven fields, Stahle recommends investing in AI skills—which could be crucial in navigating the future job market and staying relevant as AI continues to evolve.

In conclusion, while white-collar job growth has indeed taken a hit, economic pressures—not artificial intelligence—are primarily to blame, for now. The job landscape may transform over time, especially with increasing integration of AI technologies. Workers are urged to adapt and acquire new skills to thrive amid these changes or risk falling behind. The relationship between AI and jobs remains an unfolding story, one to keep a careful eye on in the coming years.

Original Source: www.cnbc.com