A recent study led by Torsten Slok finds that AI is currently slowing wage growth rather than causing significant job losses, with new business creation driven by AI potentially offsetting employment declines. Experts emphasize the importance of thoughtful AI integration and workforce retraining to harness productivity gains and job creation while maintaining employee morale.
The recent study led by Torsten Slok, chief economist at Apollo, analyzes the early impact of AI on the labor market by comparing data before and after the introduction of ChatGPT. The findings reveal that AI’s influence is currently more evident in slowing wage growth rather than causing significant job losses. Occupations highly exposed to AI are experiencing weaker wage increases, but employment levels remain largely unaffected. This challenges the common narrative that AI will lead to widespread labor displacement in the immediate term.
Slok highlights that while automation could reduce demand for certain jobs, AI is simultaneously fostering a more dynamic economy by enabling easier business creation. The U.S. is witnessing record levels of new business formation, driven by AI tools that help generate ideas and streamline processes. This entrepreneurial surge may offset potential job losses by creating new employment opportunities, making the overall labor market impact uncertain at this stage.
From a policy perspective, the uncertainty about AI’s long-term effects complicates decision-making. If AI leads to high unemployment, policies should focus on worker displacement and support. Conversely, if AI fuels economic growth and job creation, policymakers might need to address risks of an overheating economy. Given this ambiguity, Slok advises a cautious “wait and see” approach, allowing the market to reveal clearer trends before implementing major policy shifts.
Diane Gherson, former head of HR at IBM, adds insight into how AI is affecting different job categories. Jobs with high attrition and lower wages, such as customer service and business services, are more susceptible to automation and wage pressure, especially for contractors. However, companies are also exploring ways to retrain workers and redefine roles, particularly in professions like legal services, where AI can handle routine tasks but human oversight and higher-level expertise remain essential.
Finally, Gherson emphasizes the importance of workforce motivation and thoughtful AI integration. Companies like Walmart have successfully involved employees in AI adoption, framing it as a tool to enhance their work rather than replace them. This approach helps maintain morale and productivity. She cites radiologists as an example where AI has augmented rather than replaced professionals, allowing them to focus on higher-value tasks and improving their compensation. Overall, the outlook on AI’s impact is cautiously optimistic, with potential for both productivity gains and job creation if managed well.