Ford School professor and economist Betsey Stevenson gave a seminar at the UCSD Economics Roundtable about how AI will affect the labor market and if its effects will be positive or negative. She explained that AI is "still a tool just like a steam engine was a tool, just like electricity provides tools, but now this tool isn't replacing our physical strength it's replacing our intellectual strength."
She laid out what she calls the Utopia vision of AI. Technology has meant "we don't all have to spend our day trying to grow our food, we can actually do other things, and that I think is the at its heart the Utopia vision of AI," said Stevenson, it will free us from some of our work, making us more while productive.
As a conservative estimate, with AI, GDP may increase by 1.1% over the next decade. At the extreme, she calculated that GDP could increase by 8% over the next decade, but she said, these calculations have something missing. "This 8% this is sort of static, this is imagining that we all keep doing what we're currently doing," but "tech revolutions reallocate workers to new and productive jobs, things we haven't always thought about." She went on to list many occupations that have shrunk in the last century but compared those to the occupations that have grown and the new occupations that have been created.
"Major innovations don't often deliver productivity growth until work has been reorganized around them and that takes a really really long time," said Stevenson. She said as of 2023, only 3.9% of companies had adopted AI and 2.6% had plans to adopt it, so now she expects that less than 6% of businesses have adopted AI.
"Most economists say yes that is most economists believe in the Utopia the idea that AI will come along and free us from the drudgery of so much work," said Stevenson. She added that "Reducing work in and of itself is not a bad thing" even though "Americans tend to be a little allergic to it." But she points out that the gains from AI may "allow us to have higher living standards than we've ever had before, and that could be enough to benefit everybody."
Stevenson also pointed out some of the problems with AI. She said that economists are "really uncertain about who will get hurt" as the economy begins to adopt AI. "Use of artificial intelligence over the next 10 years will have a negative impact on the earnings potential of substantial numbers of high skilled workers in advanced countries," she said. "AI will displace some workers AI will augment other workers," she said, but we have to address as a society the problems with ownership, competition, and regulation of AI.
Stevenson suggests, "The skills we need are science and critical thinking skills decision-making skills, not computational skills," because humans will still need to make judgments and decisions. "There's another aspect," said Stevenson, "we're going to have to dive into our Humanity to compete with the Bots." Her final advice to the students listening was to use AI often, she said "I urge you to experiment with it because it is going to make big changes and you want to make sure that you are evolving as the AI evolves."
