AI Causes Job Flux

AI Barometer Signals Job Disruption Amid Global Productivity Gains

A recent PwC report highlights significant productivity improvements worldwide, but also points to potential job disruption due to artificial intelligence (AI). Described as the “Industrial Revolution of knowledge work,” AI is transforming how workers utilize information, generate content, and deliver results at unprecedented speed and scale. The 2024 AI Jobs Barometer, released by PwC, aims to provide empirical data on the impact of AI on global employment. AI Causes Job Flux but not necessarly job loss.

Thank you for reading this post, don't forget to subscribe!

AI Causes Job Flux

The analysis involved examining over half a billion job ads across 15 advanced economies, including the U.S., Canada, Singapore, Australia, New Zealand, and several European nations. PwC sought to uncover the effects of AI on jobs, skills, wages, and productivity by monitoring the rise of positions requiring specialist AI skills across various industries and regions. The findings show that AI adoption is accelerating, with workers proficient in AI commanding substantial wage premiums.

Broader Workforce Impact

Interestingly, the impact of AI extends beyond workers with specialized AI skills. According to PwC, the majority of workers leveraging AI tools do not require such expertise. In many cases, a small number of AI specialists design tools that are then used by thousands of customer service agents, analysts, or legal professionals—none of whom possess advanced AI knowledge. This trend is driven largely by generative AI applications, which can typically be operated using simple, everyday language without technical skills.

AI’s Economic Promise

AI is leading a productivity revolution. Labor productivity growth has stagnated in many OECD countries over the past two decades, but AI may offer a solution. To better understand its effect on productivity, PwC analyzed jobs based on their “AI exposure,” indicating the extent to which AI can assist with tasks within specific roles. The report found that industries with higher AI exposure are experiencing much greater labor productivity growth. Knowledge-based jobs, in particular, show the highest AI exposure and the greatest demand for workers with advanced AI skills.

Sectors such as financial services, professional services, and information and communications are leading the way, with AI-related job shares 2.8x, 3x, and 5x higher, respectively, than other industries. Overall, these sectors are witnessing nearly fivefold productivity growth due to AI integration.

AI is also playing a role in alleviating labor shortages. Jobs in customer service, administration, and IT, among others, are still growing but at a slower rate. AI-driven productivity may help fill gaps caused by shrinking working-age populations in advanced economies.

Wage Premiums for AI Skills

Workers in AI-specialist roles are seeing significant wage premiums—up to 25% on average. Since 2016, demand for these roles has outpaced the growth of the overall job market. The highest wage premiums are found in the U.S. (25%) and the U.K. (14%), with data specialists commanding premiums of over 50% in both countries. Financial analysts, lawyers, and marketing managers also enjoy substantial wage boosts.

The Disruption of Job Markets

The skills required for AI-exposed jobs are evolving rapidly. PwC’s report reveals that new skills are emerging 25% faster in AI-exposed occupations compared to those less affected by AI. Jobs requiring AI proficiency have grown 3.5 times faster than other roles since 2016, and this trend predates the rise of popular tools like ChatGPT.

However, while AI is driving demand for new skills, it is also reducing the need for certain old ones. Jobs in fields like IT, design, sales, and data analysis are seeing slower growth, as tasks in these areas are increasingly automated by AI technologies.

The Future of Work

The PwC report stresses that AI will not necessarily result in fewer jobs overall, but will change the nature of work. Instead of asking whether AI can replicate existing tasks, the focus should be on how AI enables new opportunities and industries.

Tectonic recommends you work on this trail of thought by implementing AI Acceptable Use Policies in your company. Encourage your teams to explore AI tools that increase productivity but clearly outline what is and is not acceptable AI usage.

PwC outlines several steps for policymakers, business leaders, and workers to take to ensure a positive transition into the AI era. Policymakers are encouraged to promote AI adoption through supportive policies, digital infrastructure, and workforce development. Business leaders should embrace AI as a complement to human workers, focusing on generating new ways to create value. Meanwhile, workers must build AI-complementary skills and experiment with AI tools to remain competitive in the evolving job market.

Ultimately, while AI is disrupting the job landscape, it also presents vast opportunities for those who are willing to adapt. Like past technological revolutions, those who embrace change stand to benefit the most from AI’s transformative power.