MW A big AI worry? It will destroy old jobs faster than it creates new ones. The only thing lacking is proof.
By Jeffry Bartash
Inventions have never bred mass unemployment
A statue of Frankenstein's monster in Geneva. The rise of artificial intelligence has spawned fears of mass unemployment in the future.
Artificial intelligence is a modern-day Frankenstein's monster that will crush jobs and destroy the livelihood of millions of Americans.
Actually, no - it's just the latest in a long line of inventions, one that enriches workers and improves daily life.
The truth? Everyone has an opinion, but no one really knows.
The impact - or threat - of AI on society took center stage this week in Washington at a conference that brought together the nation's top economists, technologists and lawmakers.
What most everyone seemed to agree on is that AI would be beneficial in the long run. The new technology will make workers more productive and businesses more profitable, allowing them to do more with less. A revolution of sorts is in the making.
So what's the big worry?
Every revolution upends the old order. The risk is that AI could destroy many more jobs in the short run than it creates, ushering in a period of mass unemployment that's not addressable by normal means.
Such a scenario could trigger a massive upheaval that shakes the economic, political and cultural foundations of the country to the core.
"This outcome could cause hardship for many workers and their families," said Lisa Cook, a governor on the Federal Reserve Board.
State of labor
The threat of AI to employment intensified this week after the payment-services company Block (XYZ) said it would cut 40% of its 10,000 employees, supposedly due to greater use of AI. Other high-tech companies have also indicated AI is allowing them to hold employment at current levels or even reduce it.
Read: Block says AI will allow it to cut more than 4,000 jobs. Some argue that's not the whole story.
Yet the fear of AI appears to be vastly outrunning reality, based on current labor-market trends and also the long historical record of new technologies.
The number of people being hired, to be sure, has slowed sharply. The U.S. added fewer new jobs in 2025 than in any nonrecession year since 2003, if the pandemic era is omitted.
Yet the slowdown in hiring began a few years ago, well before the fear of AI erupted. Most economists attribute the current labor-market malaise to the uncertainty spawned by President Trump's high tariffs and strict immigration strategy.
More importantly, there's hardly any evidence AI is costing lots of jobs or raising unemployment.
The rate of layoffs sits near a historic low right now, for one thing. The number of people applying for unemployment benefits each week is hugging a half-century low. And the U.S. unemployment rate is unusually low at 4.3%.
The unemployment rate, in fact, hasn't topped 5% since 2016, aside from a temporary pandemic-induced spike. It's never been that low for that long since the government began keeping track 86 years ago.
The type of employment most affected by AI so far is in high tech, not surprisingly. High-tech jobs hit an all-time high in 2023 and have since declined.
Some tech leaders attribute the drop in industry employment mostly to overhiring following the pandemic, when skilled labor was hard to obtain and retain.
There's also scattered evidence that young workers just starting out in their careers are losing out to AI, but so far the reports are mostly anecdotal.
Michael Schwarz, chief economist at Microsoft $(MSFT)$, said he's not worried about the job prospects of entry-level tech workers in the long run.
"Who is in a better position to become an AI adopter, someone with 40 years of experience or someone with zero years of experience? It's much harder to teach an old dogs new tricks," Schwarz said at a conference this week held by the National Association of Business Economists.
In fact, the employment site Indeed shows that job postings for software developers are up 11% from a year earlier.
History of invention
The fear of AI is arguably just the latest version of the classic "this time it's different" argument - that this time, a groundbreaking technology really will upset the labor-market apple cart in a way it's never done before.
If so, it would be the very first time such a thing has happened. Economists point out that no new technology has ever radically reshaped the U.S. labor market in the short run and led to a big loss in net employment.
Some 90% of Americans lived and worked on farms around 1900, to cite one famous example. But most of them soon moved to urban areas and found abundant jobs at the new companies popping up in a burgeoning industrial age - Ford Motor $(F)$, General Electric $(GE)$ and so on.
More recently, the advent and adoption of the internet in the 1990s and early 2000s led to vast changes in daily life, and spawned lots of new jobs and businesses that previously had not existed.
"Undoubtedly, AI will usher in new tasks and occupations, many of which are impossible for us to conceive of today," the Fed's Cook said. "That is not surprising, considering that 60% of today's occupations did not exist in 1940."
What is more likely, economists say, is that AI will help most employees to do their jobs better, instead of putting them out of work altogether.
Mark Fleming, chief economist at real-estate banking specialist First American $(FAF)$, points to the introduction of modern-day appliances after World War II as a good example of how new technologies tend to free people up.
Washers, dryers, dishwashers and refrigerators freed women from a life of drudgery at home cooking, cleaning, sewing and the like - and even enabled millions to enter the working world, in a big plus for the economy.
Prominent economist Ed Yardeni, who runs a popular market-research firm, said he has incorporated more AI into his business, but it hasn't caused him to reduce staff - it's just made his employees better at their jobs.
In a recent blog post, Yardeni characterizes the current worries as "AI derangement," a fear that eventually will be dispelled.
He might be right, but worries about AI could last quite some time.
CEOs cited disruptions tied to AI and new technology as the biggest risk to their own industries in a new Conference Board survey - more than high tariffs, regulations or political uncertainty.
Ride the wave
So what should workers worried about AI do? Adopt and adapt, just like Americans have always done when new technologies were introduced.
Laura Ullrich of Indeed Hiring Lab said young workers need to think about their job searches in a broader way and highlight all their skills to employers. It will also help for young and old workers alike to become very familiar with artificial intelligence.
"You have to position yourself to be on the AI wave and not get washed over by it," said Ullrich, director of economic research at the Indeed Hiring Lab. "There are new jobs coming up that didn't exist five years ago."
-Jeffry Bartash
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(END) Dow Jones Newswires
March 01, 2026 09:00 ET (14:00 GMT)
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