It’s been almost a year since the flowering of artificial intelligence last spring, reminiscent of another flowering: the “tulipmania” of the Dutch Golden Age, one of the most infamous examples of a financial bubble in economic history. But will ChatGPT flourish, with consequences for every worker’s job, or will it wither when the petals fall from the proverbial plant?
Even though people are mixed on whether AI will take your job or make it better, one thing is becoming clear: Managers are starting to pit these innovations against disenfranchised workers.
Just think of IBM, whose shares have risen nearly 17% since the beginning of the year, a benefit attributed in part to the company’s adoption of artificial intelligence. IBM CEO Arvind Krishna has been outspoken that many jobs at IBM can be partially or fully replaced by AI, even writing in an April commentary piece for Fortune that it used AI to reduce the number of employees doing relatively manual HR-related jobs to around 50 from 700 previously, which freed up the company to focus on other things.
But Krishna is a little confused on the topic, having shied away from saying that some roles would be replaced by artificial intelligence to declaring that AI will generate more jobs than it eliminates. That’s all to say: the debate over how decision makers will ultimately embrace and implement AI.
However, bosses are considering following IBM’s lead, as a massive survey suggests: A whopping 41% of managers say they hope to replace workers with cheaper AI products this year, according to a survey of 3,000 managers by beautiful.ai software company.
The report comes amid a wave of worker anger and instability. According to a survey by BambooHR, employees haven’t felt this bad about their jobs since this pandemic first hit. Struggling to make ends meet, many Americans have soured on the workforce and reported a loss of trust in nearly every profession in the most recent Gallup Honesty and Ethics poll.
Wage growth has recently outpaced inflation, although after years of volatility it stands to reason that many families don’t feel the data will necessarily hit their wallets. Although the union’s popularity has recently increased (amid UAW success stories and research on the financial impact of a union), membership is still at an all-time low after decades of decline. The fight for higher pay and a livable wage is evident in the “summer of hot work,” as strike activity has increased 280% in the last year alone.
But it seems some managers get dizzy when the question becomes whether to give a raise or hire a robot. In the new survey, nearly half of managers (48%) reported that their companies would profit from replacing groups of human workers with tools. And 45% said they see these innovations as an opportunity to “lower employee salaries because less human work is needed.”
Are managers becoming science fiction or are they spectators of the surge in artificial intelligence?
Naturally there was a wave of paranoia when AI began to experience its accelerated growth in 2023. The rapid improvement and evolution caused many to move from their positions as 61% of Americans believed that new products could threaten civilization, according to a Reuters/Ipsos poll. .
As knee-jerk reactions to AI faded over the year, new theories emerged about AI’s trajectory. “No, it will not replace you, but a human who could use artificial intelligence better than you,” became a popular version. Some have suggested that the risk of losing your job depends on your industry, seniority level, or location. And junior workers, by nature of vulnerability, reported the greatest fear of losing their jobs to AI. Many employees seek to learn more about the beast they fear (is it the devil, or generative artificial intelligence), as 79% reported wanting to receive training on the subject at consultancy firm Oliver Wyman.
Consider Noah Smith, the influential economics writer who left his perch at Bloomberg Opinion to launch his own Substack, and Niall Ferguson, the Scottish economic historian who held roles at Stanford and Harvard (in addition to Bloomberg Opinion). They have recently chimed in with their own versions of the catastrophe versus accelerationist debate.
“It is very likely that normal humans will have plentiful, well-paying jobs in the era of AI dominance, often doing much the same kind of work they are doing now,” Smith wrote on his Substack, drawing consensus and debate from a number of leading economists they spoke with New York Times’ Peter Coy. Ferguson had cold water to throw on this, stating: “…recent evidence on labor market shocks arising from automation and international trade suggests that the negative impacts of artificial intelligence will be concentrated geographically and demographically, and labor markets in Most affected places will not adapt smoothly.”
Even so, after investors poured billions into AI, triggering comparisons to the stock market of the mid-to-late 1990s, Rana Foroohar of Financial Times warnings that we may be going too far. Warning against the “inevitability” of artificial intelligence to change the world, revolutionize our jobs or increase productivity, he warns that we are still in the early stage of innovation and that it will take decades to develop and, of course, that the bubble might soon burst.
We are in new territory, or shaky ground, if you consider the conflicting predictions of experts. All of this means that managers probably don’t have the AI leverage they think they have to quell a potential worker uprising (if that’s what they want). And even if they did, managers had better worry about their role. Those at the top may be more exposed to AI invasion, even though, by the nature of executive decisions, they are likely shielded from true vulnerability. And 48% of managers believe AI tools pose a threat to their salaries and will lead to pay decreases across the workforce this year. Even more (50%) reported fear that their management position would suffer a pay cut related to AI.
But most managers aren’t actually looking to have a fully robotic workforce. Rather, 66% of managers want to use artificial intelligence tools to improve the productivity of their employees. Only 12% of bosses said they are using AI for the purpose of scaling or spending less on their workforce. So managers could be bluffing or simply weighing their options right now.
“AI may not replace managers, but managers who use it will replace those who don’t,” Rob Thomas, IBM’s chief commercial officer, said at a conference, according to TechCrunch. “It really changes the way people work.”