#161 – Michael Webb on whether AI will soon cause job loss, lower incomes, and higher inequality — or the opposite

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Aug 23, 2023

In this discussion, economist Michael Webb, known for his work at DeepMind and Stanford, tackles the complex implications of AI on the labor market. He explores whether automation will lead to mass unemployment or economic growth. Webb shares historical insights, revealing how past technologies have impacted job dynamics and inequality. Key topics include the scope of job exposure to AI, how technology can initially widen inequality, and the gradual pace of automation adoption. He also contemplates the entrepreneurial possibilities sparked by AI advancements.

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ANECDOTE

ATM Impact

ATMs reduced staff per bank branch but allowed opening more branches, increasing total employment.
This illustrates demand elasticity and complementarity in automation.

INSIGHT

Natural Wastage

Natural wastage, or employee turnover, facilitates adaptation to automation without mass layoffs.
Companies can reduce hiring, allowing natural attrition to shrink the workforce.

INSIGHT

Slow Adoption of Technology

Major technologies like electricity and computers take decades for widespread adoption.
It took 30 years to reach 50% adoption for both, showcasing a slow diffusion process.

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"Do you remember seeing these photographs of generally women sitting in front of these huge panels and connecting calls, plugging different calls between different numbers? The automated version of that was invented in 1892.

However, the number of human manual operators peaked in 1920 -- 30 years after this. At which point, AT&T is the monopoly provider of this, and they are the largest single employer in America, 30 years after they've invented the complete automation of this thing that they're employing people to do. And the last person who is a manual switcher does not lose their job, as it were: that job doesn't stop existing until I think like 1980.

So it takes 90 years from the invention of full automation to the full adoption of it in a single company that's a monopoly provider. It can do what it wants, basically. And so the question perhaps you might have is why?" — Michael Webb

In today’s episode, host Luisa Rodriguez interviews economist Michael Webb of DeepMind, the British Government, and Stanford about how AI progress is going to affect people's jobs and the labour market.

Links to learn more, summary and full transcript.

They cover:

The jobs most and least exposed to AI
Whether we’ll we see mass unemployment in the short term
How long it took other technologies like electricity and computers to have economy-wide effects
Whether AI will increase or decrease inequality
Whether AI will lead to explosive economic growth
What we can we learn from history, and reasons to think this time is different
Career advice for a world of LLMs
Why Michael is starting a new org to relieve talent bottlenecks through accelerated learning, and how you can get involved
Michael's take as a musician on AI-generated music
And plenty more

If you'd like to work with Michael on his new org to radically accelerate how quickly people acquire expertise in critical cause areas, he's now hiring! Check out Quantum Leap's website.

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Producer and editor: Keiran Harris
Audio Engineering Lead: Ben Cordell
Technical editing: Milo McGuire and Dominic Armstrong
Additional content editing: Katy Moore and Luisa Rodriguez
Transcriptions: Katy Moore