Potential impacts of AI: The future of work in the Al era

Source: The post potential impacts of AI has been created, based on the article “The future of work in the Al era” published in “Business standard” on 13th April 2024.

UPSC Syllabus Topic: GS Paper 3 – science and technology – developments and their applications and effects in everyday life

News: The article discusses how artificial intelligence (AI) might lead to job losses across all sectors, increasing productivity but potentially making human labor less valuable. It explores scenarios where AI could either lead to great wealth disparity or universal basic income, enhancing overall welfare.

For details information on artificial intelligence (AI) read here

How might society respond to increased wealth from AI?

There are two main predictions:

Apocalyptic Scenario: In this prediction, AI leads to a significant loss of jobs across various sectors, concentrating wealth in the hands of a few. The resulting inequality could deepen, with most of the wealth and productive surpluses being controlled by a small capital-owning class.

Utopian Scenario: Conversely, the same increase in productivity from AI could result in the wealthy being compelled to share their fortunes. This could be through mechanisms like a universal basic income, ensuring that everyone benefits from the AI-driven economic gains and possibly realizing a Marxist vision of society where all enjoy wealth and freedom.

What are the potential impacts of AI?

Job Displacement Across Sectors: AI could replace a wide range of jobs, from low-wage positions like truck drivers and cashiers to high-paying roles such as doctors, software programmers, and airline pilots. This broad impact highlights the extensive reach of AI in the job market.

Increased Productivity and Economic Inequality: AI may boost overall productivity but could also concentrate wealth significantly. In one scenario, a small, capital-owning class might monopolize these gains, exacerbating inequality.

Psychological and Social Effects: As AI potentially eliminates the need for human labor, people might struggle with the loss of purpose and identity that work provides. This could lead to increased rates of depression, anxiety, and other mental health issues, as well as social consequences like substance abuse and higher suicide rates.

Challenge of Redistribution: In a more optimistic scenario, the massive wealth generated by AI could be redistributed through mechanisms like universal basic income, suggesting a potential solution to the disparities created by AI-driven productivity.

What should be done?

Taxing AI: Imposing higher taxes on AI profits to fund social welfare programs, although this might not be sufficient to counteract the job losses.

Government Intervention: Using government resources to ensure AI complements human labor, as suggested by economist David Autor, but this might delay the inevitable rather than solve the problem.

Question for practice:

Discuss the potential impacts of artificial intelligence on societal wealth distribution and the proposed solutions to address resulting challenges.