Recent surveys have shown that the rapid development of artificial intelligence (AI) is causing anxiety among high-income individuals, making them hesitant to switch jobs as freely as they used to. According to a report by CNBC, the University of Michigan Survey of Consumers indicates that confidence in the labor market among high-income earners has fallen to near historic lows since the late 1970s.
Similarly, the monthly consumer survey by the New York Federal Reserve also reveals heightened levels of unemployment anxiety. The leading cloud-based human capital management company ADP has pointed out that the mobility rate of traditional white-collar professionals is also hovering near historic lows.
Arend Kapteyn, Chief Economist at UBS, believes that part of the reason for this phenomenon may be attributed to “AI fear,” as white-collar jobs might face greater risks, although other factors cannot be ruled out. The rapid advancement of artificial intelligence has brought about a mixture of concerns and optimism among investors, employers, and employees, with government agencies working diligently to assess the impacts of AI on the economy and its integration into the economic system.
Christopher Waller, a Federal Reserve Board governor, acknowledges that while he has witnessed the birth of space exploration, the rise of personal computers, the explosive growth of the internet, and the proliferation of smartphones, he has never seen such a massive technological revolution before. Companies, households, and government entities are all rushing to embrace it.
Currently, it appears that artificial intelligence is exacerbating people’s anxieties and cautiousness. A study by the University of Michigan last year revealed a general decline in people’s confidence in the labor market, particularly with one-third of high-income earners feeling the lowest level of confidence since the end of the 2009 financial crisis. While the confidence of low-income groups has also declined, it remains higher than that of high-income earners.
The New York Federal Reserve Bank’s monthly consumer expectations survey also indicates that the probability of finding a new job within three months if one were to be unemployed today is nearing the lowest levels since mid-2013. ADP’s private sector employment data shows a decline in employee mobility rates in industries such as finance, information, and business services, with the employee mobility rate in the professional and business services sector hitting a historic low in January.
Nela Richardson, Chief Economist at ADP, points out that the normal pull between job growth and wage growth that has historically sustained the vibrancy of the labor market is weakening. The labor market is no longer active but rather stagnant.
Despite these trends, employment conditions for high-income individuals remain very strong. Data from the US Bureau of Labor Statistics shows that the unemployment rate in the financial industry was only 2.1% in January, remaining largely unchanged from a year ago. The unemployment rate in the professional and business services sector is slightly higher at 4.5%, but has decreased by 0.4 percentage points compared to the same period last year.
Thomas Barkin, President of the Richmond Federal Reserve Bank, recently stated that artificial intelligence will enable people to be more productive. Jeffrey Schmid, President of the Kansas City Federal Reserve Bank, also believes that in the long run, AI will benefit the labor market and the economy by filling labor shortages and serving as an auxiliary tool to assist people in completing tasks.