AI And Work: You WILL Earn A Living, And You MAY Find Meaning

The availability of work for humans when AI fulfills its potential worries many today. The issue raises two questions: how will people earn money, and how will they find fulfillment? For most of human history, simply finding food and shelter was plenty of work. Fulfillment came from survival. As an economist, I believe that earning money will be the easy part. Finding fulfillment will be the greater challenge.

The Economics Of Work With AI And Robotics

Begin with the economics of work. AI and robots are improving, but they are not cheap. The earliest jobs to be eliminated will be those where automation of some kind will be inexpensive relative to the cost of human work. The call centers with a thousand people answering the same questions over and over again will be automated almost entirely. But there may be a few calls that the current AI cannot handle well. That’s fine; the company will keep a few humans around rather than spend an inordinate amount of money solving the rare challenges.

Some jobs won’t be eliminated at all. For years people have been attending live concerts even though the music can be played along with a computer-generated video of a live performance. A massage can be performed by a robot, but not everybody would want one. And the drama of a basketball game would not be quite as entertaining if humans were not competing.

Between the two extremes of the easily-eliminated work and the never-eliminated work will be a spectrum. Businesses will begin with the relatively expensive work that can be replaced by relatively cheap AI. The AI will get better, bringing down the cost of applying it. But what about the business cost reduction from applying AI?

It is misleading to say that we will lose jobs. In standard supply-and-demand thinking, the demand for labor will decline, but the supply will be unchanged. The pulls down the wage rate. Some people will choose not to work at the lower wage rate; that will push us down the labor supply curve, reducing the imbalance between demand and supply. And at lower wage rates, some employers will be less aggressive at implementing AI in the workplace. Eventually, the quantity of labor demanded will come to equal to the quantity supplied. Those who want to work will find jobs.

(Although, the cost of running AI models is rising, that will not be a large deterrent to usage. The cost of AI must be calculated relative to its performance—and that continues to improve much faster than electricity and chip prices are rising.)

I noted in an earlier Forbes article that labor constitutes about two-thirds of production costs across the economy. With labor cheap, the price of goods and services will be cheap. In fact, the purchasing power of an hour of labor will be much greater than it is now. Inflation is a monetary phenomenon: too many dollars chasing too few goods and services. So a simpler explanation comes from thinking of wages relative to consumer prices: the purchasing power of an hour of labor, rather than the dollar amounts.

Some have voiced concern that most income in the economy will be the profits of AI and robotics companies, with wage income very trivial. But if wage income is low, and therefore total consumer spending is low, then the AI and robotics companies will not earn much profit. This may sound confusing and circular, but both history and economic theory confirm that purchasing power of labor rises with total productivity. That’s true even though innovators and investors will earn large profits from AI.

Work And Meaning In Life

Everyone needs meaning in life. Some get it from religion, others from hobbies, many have gotten it from work. Simply getting enough to eat, and helping one’s family have enough to eat, was once meaning enough. Add in clothing, shelter and protection from predators. Survival was work, it was a challenge, and success felt wonderful. Survival enabled continued love, friendship and sense of accomplishment. Survival brought meaning.

Today, some of our most bored people are retirees who once had challenging jobs. Most are grateful—at least, among those I speak with—to not have the stress, the commute, the work-related travel and the corporate politics. But many lack a challenge. One can only play so much golf, and perhaps not any if the body is not strong enough.

As a “mature” person, I’m often asked why I am still working. I imagine myself retired. I would get up and read the economic news, because for all of my adult life I have been fascinated by the interrelationship of people and businesses in complicated economic processes. After digesting the latest news, I would form an opinion. Then I would want to share that opinion with someone, especially someone who would find it valuable. And then I would want to learn more by talking to people actively involved in business. I could do that for free, but sharing my conclusions is more interesting if the listeners really value those opinions. And a consulting fee acts as a filter: Only those who are really interested talk to me.

The particulars of my solution won’t work for everyone, or even most people. But the challenge of finding meaning may provide a solution. People looking for meaning will gravitate to helping others find meaning. An increasing portion of the economy is experiential. McKinsey found a long-run trend toward increased spending on experiences such as travel and event attendance, and declining spending on discretionary physical goods.

In practical terms, people who used to fish as a hobby may now guide others for a fee. Knitters and guitar players may teach their skills to those seeking meaning from crafts or music. The tutors may not make a lot of money, but they will find fulfillment. And again, a small fee ensures that someone really wants the service.

Most activity will be emergent. That is, some people will find ways to perform services for money, others will learn and copy the early entrants, and still others will facilitate further development of services for experiences. No massive program, centrally planned, will be needed.

Some people will fall through the cracks, as always happens. Some people will be bored, some even to the point of depression. The world is not perfect. But humans—most humans—have always found opportunities in the challenges. And those opportunities will generate fulfillment.

Looking Forward At Work In The Age Of AI

Most people will continue to work even when AI has become far more widespread than it is today. Some will work part-time. Others will work what we now call full time, but just for a couple of decades, and then retire. Yet others may not work at all, living off inheritance or a working family member.

People will search for fulfillment, and most will find it. Challenges will abound. People will improve their pickleball games, see ancient ruins, create modern art, help others in myriad ways. It’s a different challenge than survival, but humans are up for a challenge—and will find fulfillment in meeting the challenge.

By Bill Conerly, Senior Contributor