The Robots Aren't Coming for Your Job
We’ve been hearing a lot about how AI is going to destroy the job market. But I’m pretty sure that isn’t true.
Back in 2016, Geoffrey Hinton (who would go on to win the Nobel Prize for his work on neural networks) proclaimed that we should stop training radiologists because, in five years, AI would be better at the job than humans.
10 years later, the number of radiologists has continued to climb, and the average income for radiologists now exceeds $500k. Turns out AI has made reading scans faster, cheaper, and better, creating more demand for the service.
This is one example of Jevons Paradox. When steam engines made coal more efficient to use, we burned more coal. When vehicles got more fuel-efficient, we bought more cars and drove farther. When professional tools used by lawyers, accountants, and consultants improved, the cost of completing tasks fell, and demand for those services rose.
That pattern shows up reliably across two centuries of technological disruption. And it’s showing up again now.
Apollo published a few charts, which I’ve copied below, to make this point.
First, as the cost of professional work has fallen, the addressable market has expanded, and the total number of firms and workers in professional work has grown.
Second, AI is making it easier for recent college graduates to compete with established firms on certain tasks. That is likely the reason the unemployment rate is falling faster among young workers:
And the number of new businesses created each week is at the highest level in US history:
The story of technology and labor is not a story of disappearing jobs. It is a story of shifting jobs, expanding markets, and rising demand for things we couldn’t afford before. That’s been true of every major technological leap in the last two centuries. There’s no particular reason to believe AI will be the exception.
The radiologists are fine. The lawyers will be fine. And the patient investors who didn’t panic will be fine too.
Personal Note:
This was a big week for me to be proud of some of my favorite sportspeople.
First, as I’ve mentioned before, this is my first year as the President of Fort Bend lacrosse, and our varsity squad won the city championship for the first time in program history.
We had five All-State players, two All-District players, two honorable mentions, and a Coach of the Year.
Second, my local Riverbend teaching pro, Jesse Droemer, won the PGA Professional Championship at Bandon this week. This gets him six exemptions into PGA tour events, along with a spot in the PGA Championship in two weeks.
If you are looking for someone to cheer for, he is your guy.
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