Workforce Automation Impact

New research joint with Maxim Massenkoff: How is AI affecting the US labor market? In this research brief, we introduce a new measure of AI displacement risk to spot disruption, then test it against employment data. We find limited evidence AI has increased unemployment to date. Our measure, "observed exposure," compares the tasks LLMs are theoretically capable of to the tasks people actually use Claude for at work. We find that actual usage is far from reaching theoretical capability. This measure tracks with independent forecasts. Jobs with higher observed exposure to AI are projected by the BLS to grow more slowly over the next decade. We find limited evidence, however, that AI is playing a role in the broader labor market today. The top 25% of workers most exposed to AI automation have similar trends in unemployment rates to workers with no exposure at all. Hiring of younger workers in the most exposed occupations appears to have slowed faster than for non-exposed roles, but our estimates are imprecise and other non-AI factors may be playing a role. This research is a first step. Our goal is to establish an approach for measuring how AI is affecting employment, and to build on these analyses periodically as more data becomes available.

AI is changing the ladder into the workforce. A paper by Enrique Ide argues that by letting senior workers handle more on their own, AI risks squeezing out entry-level roles, the very places where younger generations build tacit knowledge. His findings: – While automation boosts productivity right away by reducing costs, it can permanently lower economic growth by preventing knowledge transfer to future generations – Conservative estimates suggest AI automation of just 5% of entry-level tasks could reduce annual economic growth by 0.05 percentage points, while more aggressive scenarios could cause losses of 0.35 percentage points per year – While these systems can help workers who missed out on traditional training, they may also reduce younger workers' motivation to engage in hands-on learning, since they expect to rely on AI assistance later We’ll need to build new entry points.

Headlines about AI-driven job loss are everywhere. Anxiety is spiking. It can feel like jobs are already vanishing en mass. 𝐁𝐮𝐭 𝐚𝐫𝐞 𝐭𝐡𝐞𝐲? (𝘚𝘱𝘰𝘪𝘭𝘦𝘳: 𝘯𝘰.) Together w/ the brilliant Martha Gimbel and her incredible The Budget Lab at Yale colleagues --Joshua Kendall and Madeline Lee-- we set out to test whether these fears match the data. In a new paper out today (link in comments), we find no evidence of major AI job displacement in the 33 months since ChatGPT's launch. The % of workers in jobs w/ high, medium, and low AI “exposure” has remained remarkably steady. Even amid rapid AI progress, the story of the labor market so far is stability, not collapse. While these findings may surprise those expecting more rapid displacement, we show they are consistent with the pace of job changes from past tech advances like the computer and internet. Why? In a The Brookings Institution post today (link in comments), we discuss the uneven pace of AI adoption across sectors and the messy reality of workplace tech adoption. So far, AI’s labor market impacts resemble the slower, uneven diffusion of past technologies, which Arvind Narayanan and Sayash Kapoor refer to as ‘AI as normal technology. Two important notes: ➡️ First, this doesn't mean AI has had 𝒏𝒐 impact on jobs at all. Our paper is consistent with emerging evidence from Erik Brynjolfsson & Bharat Chandar that AI may be contributing to unemployment among early-career workers. (It could also be consistent / evidence that a weakening labor market is hurting those same workers.) But our approach zooms out to ask whether AI is already causing economy-wide disruption—and the answer is no. ➡️ Second, these are not predictions. At any point, AI's labor market impact could accelerate, or not. The future requires vigilance. That is why we will continue to monitor these changes monthly. (Be sure to follow The Budget Lab at Yale for more.) But vigilance also requires better data. Anthropicic has led in transparently sharing Claude usage data, an OpenAI has recently shared ChatGPT usage stats. But these offer only a partial view. To truly understand AI’s trajectory, Google, Microsoft, OpenAI, etc should share usage data at both individual and enterprise level. Without this, we are flying blind into one of the most significant technological shifts of our time. Huge thx to Claire Jones for the great Financial Times coverage today. And enormous thx to Martha, Josh, Maddie and the Budget Lab team for an incredibly fun collaboration. Ben Harris Sanjay Patnaik Mark Muro Joshua Gans Nicholas Thompson Simon Johnson Anton Korinek Adrian Brown Anmol Chaddha Michael Kubzansky Bharat Ramamurti Stephanie Bell Ritse Erumi Ellie Bertani Michael Belinsky Alex Tamkin Pamela Mishkin Ajay Agrawal Andrew Sweet Rachel Korberg Zoë Hitzig David Deming Peter McCrory Kevin Delaney Heather Long

AI could displace millions of workers and the unemployment rate might never move. That's not a hot take. It's how the math works. To be counted as "unemployed," you must have no job AND be actively looking. If AI eliminates your role and you start consulting, freelancing, driving rideshare, or turning a side hustle into your income - you're employed. Every gig worker, every self-employed person, every Etsy seller working one hour per week is employed in the official data. The BLS actually publishes 6 unemployment rates (U-1 through U-6). The broadest one - U-6 - is nearly double the headline number right now (7.9% vs 4.4%). But even U-6 can't detect the most likely form of AI displacement: people working full-time in jobs far below their skills and earning potential. There's no official metric for "I used to be a software engineer and now I'm delivering DoorDash to make rent." Think about it: → Displaced workers who adapt and take lesser roles? Employed. → People who go independent or start consulting? Employed. → New grads who can't break into shrinking fields and take retail jobs? Employed. → Workers who give up looking entirely? Not unemployed - they vanish from the data. The unemployment rate measures cyclical joblessness. It was never designed to capture structural career disruption. AI's real workforce impact will show up in wage compression, career downgrading, and the quiet erosion of opportunity - none of which the headline number can see. For those of us in TA and HR - we're the ones who actually see what's happening. The overqualified applicants. The salary expectations dropping. The 5000 applications flooding a single req. We are the early warning system. The unemployment rate isn't. Stop watching the wrong scoreboard. I go deeper in the article below. 👇

❗Stop Treating AI as a "Replacement Strategy." It’s a "Capacity Strategy"❗ I've heard many iterations of this saying: "AI will not replace managers, but managers who use AI will replace those who don’t." And yet, I observed that not many of the peeps in #HRTransformation and #ChangeManagement communities are aware that the real risk isn't just job loss, it’s "Institutional Skills Atrophy". If we automate the "doing" without preserving the "thinking," we hollow out our future leadership. To increase this topic awareness and to elaborate more on the article I posted yesterday (https://lnkd.in/gGrVXDwS), I’m sharing a high-level blueprint for the "Human-in-Command" Governance Framework, a country-agnostic guides, designed for all organization's maturity levels and sizes. ⬇️ 🚀 The Policy Highlights: HR & Talent Strategy 4.0 (The "4.0" is just to look cool 😎): 1. The Accountability Shield (HR Strategy) Accountability cannot be outsourced to an algorithm. Every AI output must have a Human Sponsor. If the AI-generated strategy fails, the "Failure of Oversight" sits with the human. We don’t accept "The AI told me to" as a defense. 2. The Layers of Autonomy (Org Design): I’ve categorized most tasks into 4 "Layers": Layer 1: Bio-Exclusive. High-empathy tasks (Mental Health, Termination, Vision) stay 100% Human. Layers 2 & 3: Co-Pilot/Logic-Editor. AI drafts; Humans must rewrite/edit at least 30% to ensure "Contextual Nuance". Layers 4: Autonomous. AI handles routine loops with a "Human Kill-Switch." 3. The Succession Safeguard (Talent Management): This is my favorite: "Fresh-Eyes Analog Preservation." To prevent skill atrophy, junior staff must perform 20% of their work in "Analog Mode." We must ensure our future CEOs understand the "First Principles" of the business before they start prompting. 4. The $0.50 Reinvestment Rule (Change Management): (Inspired by 50-Cents , the rapper 😄 ) For every $1 spent on AI tech, $0.50 must be spent on Human Reskilling. This isn't a suggestion; it’s the "Human-AI Value Ratio" that ensures we don't just have better tools, but better people. 📈 The Highlights of SOP for Retention (Not Replacement) How do we implement this without the "R" word? ✔️ Task Triage: Audit roles to find the "Time Dividend" (hours saved). ✔️ Role Enrichment Mapping: Formally reallocate those saved hours to Innovation Projects or Client Relationship Building. ✔️ Outcome-Based Performance: We stop measuring "keystrokes" and start measuring "Decision Quality" and "Prompt Integrity." 🔅 Use AI to let your Entry-level become Analysts, your Managers become Strategists, and your Executives become Visionaries. We don’t use AI to work more. We use AI to work better. Are you seeing "Skill Atrophy" in your company's junior ranks yet? Let’s discuss in the comments! 📳 #GenAI #TalentManagement #HRStrategy #LeadershipDevelopment #OrganizationalDesign #EmployeeRetention

AI is fundamentally reshaping our workforce, but the impacts are nuanced. The latest report, “Potential Labor Market Impacts of Artificial Intelligence: An Empirical Analysis,” by The White House Council of Economic Advisers, provides critical insights for leaders that will impact everyone's future.. 📊 Key Findings: ✅ 𝐆𝐫𝐨𝐰𝐭𝐡 𝐢𝐧 𝐇𝐢𝐠𝐡-𝐂𝐨𝐦𝐩𝐥𝐞𝐱𝐢𝐭𝐲, 𝐀𝐈-𝐄𝐧𝐡𝐚𝐧𝐜𝐞𝐝 𝐑𝐨𝐥𝐞𝐬 Roles requiring advanced AI skills have increased by 30% over the last five years. Positions such as AI ethics officers and data scientists are on the rise, indicating a shift toward more complex, creative work. Occupations that integrate AI effectively are growing twice as fast as average, suggesting AI's role in complementing human skills rather than replacing them. ❌ 𝐇𝐢𝐠𝐡 𝐑𝐢𝐬𝐤 𝐨𝐟 𝐉𝐨𝐛 𝐃𝐢𝐬𝐩𝐥𝐚𝐜𝐞𝐦𝐞𝐧𝐭 𝐢𝐧 𝐋𝐨𝐰-𝐒𝐤𝐢𝐥𝐥 𝐑𝐨𝐥𝐞𝐬 40% of current jobs are at risk due to high AI exposure but low skill requirements, particularly in administrative and routine manual tasks. These jobs are declining at a rate of 2% annually. Sectors like customer service and data entry are vulnerable, raising concerns about job security and economic stability in these fields. 📍 Regional Disparities: ✅ 𝐎𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐢𝐞𝐬 𝐢𝐧 𝐓𝐞𝐜𝐡 𝐇𝐮𝐛𝐬 Tech-centric regions like Silicon Valley show a high concentration of new, AI-driven job creation, reflecting significant economic opportunities for those regions. Urban centers with strong tech clusters are emerging as key players in AI employment, driving innovation and growth. ❌ 𝐂𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬 𝐟𝐨𝐫 𝐑𝐮𝐫𝐚𝐥 𝐚𝐧𝐝 𝐒𝐦𝐚𝐥𝐥𝐞𝐫 𝐂𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐢𝐞𝐬 Rural areas and smaller towns are facing increased risks of job losses due to AI, without comparable opportunities for new AI-driven roles. This geographic imbalance could exacerbate regional economic disparities. 👉 Here are my questions for Leaders: 1️⃣ Are we ready to leverage AI’s potential while minimizing risks? How are we preparing our teams for a future where AI enhances human capability? 2️⃣ What is our reskilling strategy? With 40% of jobs potentially vulnerable, how are we investing in upskilling our workforce to transition into growth-oriented roles? 3️⃣ How can we balance geographic and economic disparities? Are we focusing enough on regional strategies to ensure inclusive growth? As leaders, our role is to harness AI's potential to foster a resilient, inclusive, and dynamic workforce. Are we ready to lead this change and shape the future of work?

The rise of GenAI is transforming work - not by eliminating jobs at scale, but by reshaping how work gets done and what skills are in demand. I recently spoke with Anjli Raval at the Financial Times about how organisations are navigating this shift. AI isn’t simply automating tasks - it’s evolving roles and enabling people to focus on work that draws more on human judgement and creativity. But with this opportunity comes a critical need to move fast - the pace of change in skills demand is accelerating. Our 2025 Global AI Jobs Barometer which analysed nearly one billion job ads globally offers a rich data set into how AI is reshaping the labour market. A few powerful insights: - Workers with AI skills like prompt engineering now earn a 56% wage premium, more than double last year’s figure. - Industries leveraging AI are seeing 3x higher growth in revenue per employee. - Skills are evolving 66% faster in roles most exposed to AI, such as financial analysts. - Even traditionally less tech focused sectors like mining and construction are expanding their use of AI, showing broad based confidence in its value. These trends suggest that AI is a catalyst for workforce transformation - enhancing productivity, elevating roles and creating new opportunities. For business and workforce leaders, the message is clear: AI is already reshaping how value is created. The moment to act is now, to ensure that this transformation is inclusive, skills-driven and aligned with long term growth. 📢 Read the FT article - https://lnkd.in/egmJ6hWQ 🧭 Explore PwC’s 2025 AI Jobs Barometer - https://pwc.to/3H5lk5r #FutureOfWork #AIJobsBarometer #PwC #WorkforceStrategy #GenAI

Are entry-level jobs vanishing because of AI? The headlines scream displacement. The anxiety is real. But here's what the data actually shows: — No widespread displacement across sectors: the 33 months since ChatGPT's launch and found no evidence of economy-wide AI job displacement (from Martha Gimbel, The Budget Lab at Yale ). Employment patterns remain remarkably stable. — But there ARE specific pockets of impact: Freelance graphic designers and copywriters seeing real declines in work volume and pay. — Additionally, junior software developer employment is down ~20% since late 2022 (Erik Brynjolfsson, Stanford Digital Economy Lab ). But, that doesn’t necessarily mean LLMs are responsible. Companies adopting AI showing dips in junior hiring, especially in tech. Here's the catch: Is this AI, or is it… — Post-COVID retrenchment? — Economic uncertainty? — VC slowdown? — DOGE cuts? — Unwinding of pandemic-era hiring binges? Hard to parse. And that's the point. The strongest story the data tells: AI is displacing tasks, not jobs. The more a role consists of clearly-defined, self-contained tasks, the more vulnerable it is. Freelancers are most exposed—a task IS the job. Junior roles come next—tasks are well-specified and hiring is volatile. But most jobs? They involve defining tasks, considering context, and navigating competing priorities. Here, AI assists rather than replaces. The real challenge: If we're not intentional, we risk destroying our own talent pipeline. Where do senior experts come from if juniors aren't learning the basics? Here’s the opportunity: 83% of global leaders say AI will let employees take on complex, strategic work earlier in their careers (Jared Spataro, Microsoft). One startup skipped hiring a CMO and gave a junior marketer AI to run full-stack campaigns. Entry-level employees *could* become managers from day one because they're managing AI. Bottom line: The story isn't simple displacement. It's transformation. And it requires us to be vigilant, honest about what we're seeing, and intentional about building pathways for the next generation. What are you seeing in your industry? #FutureofWork #AI #TalentStrategy #Leadership

Improving Emotional Intelligence in the Age of AI AI just made your technical skills worth less. Here’s the one skill it can never replace. “I don't understand what's happening,” Rahul told me in our first coaching session. “I’ve implemented every framework. I respond to Slack instantly. My code reviews are flawless. But I just lost my third senior software engineer this quarter.” Rahul was a brilliant 38-year-old CTO. He built his identity on being the smartest person in the room. He could debug complex systems, almost in his sleep. But he couldn’t see what was right in front of him. I joined one of his team meetings. Within 20 minutes, I watched him: • Cut off his designer mid-sentence with “That won’t scale” • Respond to a burnout concern with “We all work hard here” • Miss the frustration on his PM’s face when he said “Just follow the sprint plan” He wasn’t being cruel. He genuinely thought he was being efficient. The data was perfect. The human beings were breaking. Your technical edge is shrinking fast. Your emotional intelligence is now your biggest competitive advantage. Here’s why. AI can out-think you. It can’t out-feel you. And that’s exactly where your leadership advantage begins. After three months of focused emotional intelligence work, his team’s productivity increased substantially. Retention improved. Innovation accelerated. People finally felt safe sharing “illogical” ideas. Here’s the reality: As AI masters logical tasks, emotional intelligence becomes your most valuable career skill. The research is clear *: 58% of job performance comes from emotional intelligence 90% of top performers have high EI EI is one of the top 10 most in-demand skills globally Technical skills get you to the table. Emotional intelligence gets you to the top.   Where AI falls short and humans excel: • Reading unspoken dynamics • Creating psychological safety • Managing emotional energy • Building genuine trust Want to strengthen your emotional intelligence? Start here: • Take 60 seconds to check your emotional state before your next meeting • Ask one genuine question about a colleague’s perspective before sharing yours • When receiving criticism, say “Tell me more” instead of defending • Identify your emotional triggers and build a response plan for each The leaders who thrive alongside AI aren’t the smartest. They’re the ones who master the most human skill of all: emotional intelligence. The AI revolution isn’t coming. It’s here.   Which of these 4 emotional intelligence skills do you want to strengthen first? Let me know and I’ll share an exercise you can use today.   Save this post for your next career move. + Follow me for more insights on becoming irreplaceable in an AI-driven world. * Source: Bradberry, Travis. "Why You Need Emotional Intelligence To Succeed." TalentSmartEQ, June, 2022.

The AI job displacement story just got real. Block just laid off nearly half its workforce. The reason? AI productivity gains. This is the first major company to cite AI productivity this directly as the reason for mass layoffs. And it happened the same month January layoffs hit their highest level since 2009. Here's what most people miss: Block isn't cutting jobs because business is bad. They're cutting because AI made their remaining workers more productive. That's a fundamentally different kind of layoff. When companies cut during a recession, hiring bounces back when the economy recovers. When companies cut because AI does the work better, those jobs don't come back. I recently talked with career experts about this exact shift. One insight stuck with me: You cannot be commoditized if you have unique expertise. The workers getting cut are the ones whose tasks AI can replicate. The workers getting promoted are the ones using AI to multiply their output. 💼 What this means for your career: → Your job security equation changed. The question isn't whether your company is profitable. It's whether AI can do your job cheaper. → Build a skill stack, not a job title. Start with your anchor skill, the thing that reliably creates value. Then add skills AI can't easily replace: judgment, relationships, creative problem-solving. → Take 30 minutes this week to audit your career. Write down your anchor skill. Then list two or three adjacent skills you could develop. Clarity is the first step to momentum. 💼 What this means for your portfolio: If you own S&P 500 index funds, you own shares in companies racing to replace workers with AI. There's an irony worth sitting with: the same investments building your retirement are reshaping the job market. That's not a reason to sell. It's a reason to make sure you're positioned on the winning side of this shift, in your career and your investments. What's your anchor skill, and is it AI-proof?