The hum of artificial intelligence is no longer a distant whisper; it’s a roar reshaping the global economy. From automated customer service to AI-driven medical diagnoses, the reach of AI is expanding rapidly. But as businesses embrace this technological revolution, a chilling question lingers: what will become of the human workforce?
With conversations surrounding artificial intelligence raging, noted economist and NYU professor Nouriel Roubini is sounding the alarm bells on the impact of AI on the jobs market.
“There are two views,” Roubini, who is known as “Dr. Doom” for his bleak economic forecasts
said on Yahoo Finance’s Opening Bid podcast last month at the World Economic Forum in Davos, Switzerland. “One is that AI is going to be complementary to existing jobs, replacing some, but creating many new ones — jobs of the future. But then the other view is that over time, eventually many jobs are going to be replaced by AI. We’re not going to have enough jobs, and I think that over time, the latter view is going to be the correct one.”
Roubini warns that the convergence of advanced software and powerful hardware is accelerating the displacement of both blue-collar and white-collar workers at an alarming rate.
“It’s terrifying, but it’s happening in the next — literally — year or two,” Roubini said. “And that’s going to be even a bigger revolution, I think, than [generative] AI.”
“These technologies are capital intensive, high skill bias, and labor-saving,” he continued. “So if you own the machine or the capital that owns the machine, you’re going to do well. But if you’re a low-skilled or medium-skilled white-collar [or] blue-collar [worker], increasingly your job and income is going to be threatened by AI, and there’s not going to be enough jobs in the future.”
Nouriel Roubini aligns with the perspective of futurist Peter Diamandis, co-author of the bestseller “Abundance: The Future Is Better Than You Think.” Diamandis posits that humanity is on the brink of an era where it can fulfill and surpass the fundamental needs of every individual globally. He asserts that abundance for all is within reach. Both Roubini and Diamandis believe that advancements in AI, robotics, and other technologies will enable the production of consumer goods in nearly limitless quantities at continuously decreasing costs. This deflationary trend will likely reduce living expenses for consumers. However, maintaining demand will be challenging, necessitating efforts to tackle wealth inequality.
Roubini envisions the AI revolution leading to substantial wealth growth and significant reductions in consumer prices, potentially accompanied by job losses reaching up to 80% in various sectors. To sustain economic activity and avoid social unrest, he anticipates governments instituting universal basic incomes (UBI), unconditional payments that could replace social security, unemployment benefits, and other welfare programs. Part of the funding for UBI might come from taxing AI-driven industries.
Recognizing the socio-economic implications of AI, influential tech figures such as Elon Musk, Sam Altman of OpenAI, and Jack Dorsey, co-founder of Twitter, have expressed support for UBI. Companies like Google, Apple, and Cisco have contributed financially to UBI pilot programs.
However, introducing UBI prematurely could undermine a nation’s competitive edge. Furthermore, implementing UBI should be integrated into a broader reform of the current social safety net and tax framework.
In a February 2024 article for Project Syndicate titled “Artificial Intelligence vs. Human Stupidity,” Nouriel Roubini expressed optimism about the potential of artificial intelligence to boost productivity and drive economic growth in the future. However, he cautioned that such hopes must be tempered by reality. “Our politics have proven too dysfunctional, and our policies too misguided, to manage even the most obvious threats to our future,” Roubini wrote.
He went on to emphasize the critical need for humanity to address its own shortcomings, warning that AI’s potential may never be realized if we fail to do so. “One hopes that artificial intelligence someday will overcome human stupidity,” Roubini concluded. “But it will never get the chance if we destroy ourselves first.”
This perspective underscores the importance of responsible governance and policy-making in harnessing the benefits of AI while mitigating its risks.
Nouriel Roubini is a Professor Emeritus of Economics and International Business and the Robert Stansky Research Faculty Fellow. He is CEO of Roubini Macro Associates, LLC, a global macroeconomic consultancy firm in New York. He is also Chief Economist for Atlas Capital Team LP, as well as Co-Founder of Rosa & Roubini Associates.
