Banking titan JPMorgan says it’s looking at data and historical precedent to see whether AI doomsday scenarios hold ground.
In a new report, JPMorgan Private Bank outlines a wide range of estimates for potential AI-driven job losses.
It also mentions Anthropic CEO Dario Amodei’s projection about how AI will wipe out half of white-collar, entry-level jobs in the coming years.
“There is no magic number of how many jobs will be at risk when AI technology has its breakthrough moment. Estimates range from 14% to 30% for displacement, with as many as 80% of Americans being impacted in some way…
Dario Amodei, the CEO of Anthropic, one of the world’s largest AI companies, says 50% of entry-level white collar jobs will be disrupted within five years. He points to the potential of a technological breakthrough that could lead to a spike in unemployment as high as 20%. For context, that is an unemployment rate that supersedes the Great Financial Crisis in 2009 and nears the peak of the Great Depression in 1933.”
But JPMorgan says even if AI reaches a breakthrough moment, labor disruption is unlikely to unfold all at once.
“There may be a singular moment when the technology breaks through, but we believe it’s unlikely to be a singular moment when the layoffs become omnipresent. That requires a speedy pace of adoption, a breadth of applications, standardized regulations to encourage corporations to take on the new technology without legal ramifications, energy capacity, and an infrastructure build-out.”
According to the bank, the pace of AI adoption across sectors will be uneven, with some getting hit faster than others, while noting that policymakers will not sit idly by as a potential labor shock unfolds.
“The diffusion of AI is likely to take place slowly. Whereas it could quickly affect jobs in financial services, law, and tech, applying AI to areas like education and health services will take more time, funding and regulation. The doomsday scenario also assumes the government would not intervene as this was playing out.”
JPMorgan also cites current labor data in software to show that widespread displacement has not yet materialized.
“Employment in this sector is trending lower but isn’t falling at a pace that would suggest widespread displacement is around the corner.”
The bank concludes that while AI will be disruptive, the labor impact is likely to unfold in waves rather than as a sudden shock.
“While AI revolution will be disruptive for the economy, we don’t think the impact on the labour market will be as concentrated as some suggest.”
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