AI could eliminate as many as 25 million US jobs, according to a new Boston Consulting Group (BCG) figure. The new CEO of Verizon (NYSE: VZ | VZ Price Prediction), Dan Schulman, calls this a disaster. The Wall Street Journal reports, “Just months into the job, he has predicted 20% to 30% unemployment within the next two to five years.” The total is based on a current unemployment rate of 5% added to the BCG figure.
Schulman’s figure is higher than most estimates. However, Oxford Economics puts the figure slightly higher than some think tanks do. When the two figures are combined, the total number of unemployed people could exceed 30 million.
The BCG calls the jobs lost, based on their work, “substituted and divergent categories.” They are jobs where AI can perform much better and more efficiently than a human.
The figure, if correct, is higher than the unemployment rate at the peak of the Great Depression. In 1933, it reached 29.4%.
It is hard to imagine this number of people being out of work. It is hard to imagine how many people could be self-supported or supported by the government. The US government would need to raise taxes on both employed workers and corporations. And, those taxes would be high enough to cripple their production. It would be an economical house that would collapse upon itself
There are several arguments about what AI will do to the workforce. Jensen Huang, CEO of Nvidia (NASDAQ: NVDA), says it will both increase productivity and add jobs. If so, productivity would be light-years ahead of where it is today. And, the question is whether productivity has a cap.
Another thought is that the number of jobs in the US will remain flat. People might migrate from one set of jobs to another. Part of this theory is that many people will become plumbers and construction workers, who are less likely to be replaced by AI
Schulman’s view is an economic apocalypse.
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