How AI is poised to disrupt the job market

Artificial intelligence is poised to disrupt the job market — but some workers are in the crosshairs more than others, according to labor experts.

Roughly 1 in 4 (or, 26%) of the jobs posted on career site Indeed over the past year are poised to “radically transform” due to generative artificial intelligence, also known as gen AI, according to a September report by Indeed.

Gen AI — examples of which include OpenAI’s Chat GPT and Google’s Gemini — mimics human brainpower by creating original content like text, images, video, audio or software code from a user prompt.

Industries in which gen AI can supplant a human’s cognitive reasoning skills — like certain jobs in technology and finance — are most at risk, said Laura Ullrich, director of economic research for North America at Indeed.

“The jobs that are more likely to have a high degree of transformation are white-collar jobs,” Ullrich said.

By contrast, certain roles like nursing and blue-collar jobs in manufacturing or construction are more insulated, Ullrich said.

That’s because occupations that rely more heavily on physical labor or human interaction remain outside the current scope of generative AI, at least for now, according to the Indeed report.

Jobs in “higher-paying fields where a college education and analytical skills can be a plus” are most exposed to artificial intelligence, according to a 2023 Pew Research Center study. Budget analysts, data entry keyers, tax preparers, technical writers and web developers are examples of such jobs, it found.

Overall, 19% of American workers in 2022 were in jobs that are the “most exposed to AI,” whereby their most important activities may be replaced or assisted by AI, Pew found.

Already, some companies have hinted at workforce cuts because of AI.

For example, the CEO of Accenture, a global professional services company, recently outlined plans to lay off staff who are unable to reskill on artificial intelligence. Salesforce CEO Marc Benioff said in late August that the firm had cut 4,000 customer support roles due to AI.

“I’ve reduced it from 9,000 heads to about 5,000, because I need less heads,” Benioff said at the time.

However, economists note that the extent of change is minimal at this point.

Despite widespread anxiety over the effects of AI on today’s labor market, such worries remain “largely speculative,” according to an Oct. 1 report by the Yale University Budget Lab.

“Overall, our metrics indicate that the broader labor market has not experienced a discernible disruption since ChatGPT’s release 33 months ago, undercutting fears that AI automation is currently eroding the demand for cognitive labor across the economy,” the researchers wrote.

The technology also has some flaws, experts said. For example, AI can still hallucinate and produce inaccurate work, they said. 

So far, gen AI has had limited impact in terms of fully displacing certain skills, Indeed found.

The technology is “very likely” to fully replace just 19 job-related skills — or 0.7% of the roughly 2,900 skills Indeed analyzed. These include basic math, prompt engineering and image classification, for example, it said.

This analysis only measures the technology’s “transformational potential” — in other words, if all businesses were to fully integrate the technology into their workflows, according to Indeed.

But many businesses aren’t there yet, it said.

A big debate over the job market effect of AI comes down to augmentation versus automation, said Toubia: “Is AI going to automate your job and make you obsolete, or is it going to augment your job and make you more productive?”

That answer may vary by industry. For instance, some companies may decide to completely automate their customer service or call centers with agentic AI. On the other hand, a human programmer may use AI to write and produce lines of code, boosting their productivity. 

Most industries so far are using AI in such a “hybrid” capacity, in which humans and AI co-exist, said Indeed’s Ullrich.

Almost half — 46% — of skills in a typical U.S. job posting are poised for this hybrid transformation by gen AI, according to Indeed. In this state, human oversight is essential and AI can perform a significant chunk of routine tasks, it said.

About 64% of small businesses are using or piloting AI tools to varying degrees, according to a survey by Homebase, which polled 828 “decision-makers” between May and June.

Going forward, most jobs — 54% — are likely to be “moderately” transformed by generative AI, depending on how quickly businesses adopt the technology, according to the Indeed report.

While experts agree that it’s difficult to predict what the future holds, it’s possible that a potential long-term effect from AI is the creation of new jobs and industries that do not exist yet, said Toubia.

Overall, it’s important to start finding ways to interact with AI in productive ways, he said. If you completely ignore the technology, you may “end up being obsolete very quickly,” Toubia said.