This is it. This is really it: According to the doomsayers, we are witnessing the very moment in history when technology is finally starting to wipe out the labor market. The most precient reporting earlier this year solemnly recorded the unpleasant fact that artificial intelligence had triggered the beginning of a job apocalypse, which was said to be coming for white collar workers. (What? Not just blue collar workers?!?)
And as of last week, it was no longer a prediction; the AI bloodbath was officially underway. JPMorgan Chase, Goldman Sachs, and Walmart, among many others, were all saying they expect to hold down headcount. Note bene: This is how an AI job apocalypse unfolds.
But this hysteria will almost surely turn out to be false alarmism—the latest episode in a long series of historical panics over the specter of technology displacing human workers. As ITIF documented in 2017, waves of automation have come for us many times before, but while they have certainly disrupted all sorts of occupations—from elevator operators to bowling pin setters—they have never wiped out demand for work.
The truth is that technological disruption has no real bearing on total employment. Outside of a recession, the number of jobs in the economy will always equal the number of workers. Technologies that automate work just raise productivity, which raises incomes, which increases demand for everything people spend money on—from eating out, to having personal trainers, to renovating their homes—which creates work opportunities. It’s a neverending cycle.
But the bigger picture in recent decades has been that occupational curn has been declining, not increasing, as evidenced by figure 1, which shows quarterly job losses as a share of total employment. Put aside the pandemic, and the trend has been inexorably downward…
Figure 1: Quarterly job losses as a share of total employment
Doomsayers will say this time is about to be different: After all, we’ve never before seen technology like AI hit the labor market. Which is true—just as earlier generations had never seen, say, mechanized farming. Until it happened. Then it changed things. But demand for work didn’t stop, because people’s demand for more bountiful lives is almost infinite. Therefore, the need to supply more bounty is almost infinite.
Figure 1 is based on the last 30 years’ worth of data from the Bureau of Labor Statistics series on Business Employment Dynamics (BDM) and Current Employment Statistics (CES). The most up-to-date datasets only cover 2024—before the dreaded AI job apocalyse allegedly began. So, let’s keep an eye on that trendline as more data comes out. Maybe it will jag upward, like a pandemic-caliber event, and lead to higher unemployment. But history suggests otherwise.
