AI’s Great Jobs Debate Requires a History Lesson

Whether the steam engine or electricity, technological leaps forward reshape the labor market profoundly, creating new jobs, retiring old ones and altering how people work, spend and live.

The big question right now: How will artificial intelligence (AI) impact jobs? Will workforce and consumption trends follow the trajectory of the seismic shifts that replaced flails with mechanized harvesters and dusty ledgers with QuickBooks? 

History and recent data provide some clues. 

Seismic labor market changes from “general-purpose technologies”—big inventions that impact entire economies—typically take decades or longer to fully emerge. In 1880, around the same time the Second Industrial Revolution began unleashing new inventions like the internal combustion engine, which mechanized farming and fueled an exodus to factory jobs, nearly three in four rural Americans worked on farms.

Today, farmers comprise less than 2% of the U.S. population. Thomas Edison invented the incandescent light bulb in 1879, yet three decades later, only one in seven American homes were wired for electricity.

“History teaches us that even if AI disrupts the labor market, its impact will unfold over many decades,” a National Bureau of Economic Research (NBER) paper said in January. 

But as AI technologies evolve at warp speed, there’s major angst over whether they will vaporize jobs and fuel mass unemployment.

More than half of adult Americans, or 149 million consumers, regularly engage with the most ubiquitous iteration, generative AI, for routine tasks at home and work and for entertainment, such as making grocery lists, summarizing emails or watching a video of AI-generated cats washing dishes at a restaurant, a recent PYMNTS Intelligence study found. The immersion is accompanied by angst: One in three gen AI users worry AI will replace jobs. Four in 10 Gen Zers fear the same.

Much of the doom-and-gloom is coming straight from the horse’s mouth.

In May, Sam Altman, the CEO of ChatGPT maker OpenAI, told a Congressional hearing that AI could displace 70% of all jobs. That same month, the CEO of AI firm Anthropic, Dario Amodei, told Axios the technology could wipe out half of all entry-level white-collar jobs and create unemployment of 10-20% within the next one to five years. 

Not so fast, some economists say. While the NBER paper co-authors, who include former Treasury Secretary Lawrence Summers, argue that AI “could be a [general-purpose technology] on the scale of prior disruptive innovations,” they write it is “likely too early to assess its full impacts.”

As such, recent data suggests the worriers might want to take a beat.

Employment in advertising, promotions and marketing—all fields widely seen as having core tasks that can be replicated by gen AI—is projected to grow 6% by 2034, faster than the average for all occupations, according to Bureau of Labor Statistics data. 

A March BLS report that looked at professions susceptible to potential AI impacts by 2033 found only credit analysts, claims adjustors and insurance appraisers vulnerable. Everybody else, including software developers, financial advisors, engineers, lawyers, architects and business operations managers, would see more jobs.

Meanwhile, the early evidence suggests AI will help existing workers do their jobs better and create new lines of employment. Bain & Company says the market for AI-related products and services could approach $1 trillion by 2027. Workers are needed to design that software, sell products and manage client relationships over multiple industries, including payments and financial services.

In August, the Federal Reserve’s New York branch found a sharp uptick in AI use by companies in the New York and Northern New Jersey region, with 40% of services firms, including finance, healthcare, business services, hospitality and retail reporting they used AI in the past six months, up from 25% a year ago. At the same time, “layoffs have been almost nonexistent due to AI use,” Richard Deitz, an economic policy advisor at the branch, said about the survey.

What has changed is how those services firms hire. Roughly one in eight surveyed by the Fed said they had hired fewer workers overall in the past six months due to their AI use. Nearly one in four said that would continue over the next six months. But there’s an offset to those reductions. Some 11% of services firms said that when they did hire, they turned to employees with AI skills. By next February, 14% of service firms plan to hire more AI-adept workers. 

Workers in math, computer, office and administrative functions, and business and finance—jobs with more AI exposure—had larger unemployment rate increases between 2022 and 2025, the St. Louis branch of the Fed found last month. But the finding is one of correlation, not causation, the branch emphasized, adding that other factors could explain rising unemployment in AI-exposed occupations, including economic uncertainty, post-pandemic monetary policy tightening and coincidence.

The Federal Reserve Bank of Atlanta found in May that job listings mentioning AI skills were rising quickly for computer and math occupations regardless of the required level of education for the positions—suggesting the upskilling creates more opportunity. At the same time, they’re growing faster for workers with at least a bachelor’s degree, suggesting that such people may have additional, non-AI-related skills that are relevant to their AI knowledge.

In other words, AI hasn’t supplanted other important skills or taken over the show.

A recent PYMNTS Intelligence report revealed how large U.S. companies are increasingly dipping their toes into agentic AI, which has the capacity to autonomously takes actions and makes decisions independent of human oversight, like paying a vendor. But the companies are keeping a tight leash on the software, with human hands on the processes the software handles.

Americans have freaked out before about the impact of technology on jobs. In 1982, Soviet-American economist Wassily Leontief, a Nobel Prize winner, theorized in a Scientific American essay that industrial robotics, automation and computing could mirror the effect of the automobile on the horse. 

Two decades earlier, government economists had concluded the opposite. A government report on President Lyndon Johnson’s National Commission on Technology, Automation, and Economic Progress concluded that “technology eliminates jobs, not work.”

The NBER paper authors agree: “At least in the near term, AI is more likely to ratchet up firms’ expectations of knowledge workers than it is to replace them.” 

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