Low-wage occupations such as customer service representatives, management, retail… [+] Warehouse and restaurant jobs are particularly vulnerable to automation due to the repetitive and routine nature of these roles.
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The rapid growth and integration of artificial intelligence into various sectors has raised concerns about its potential impact on the economy and job market, especially for low-wage workers.
Investment bank Goldman Sachs estimates that this fast-growing technology could eliminate or reduce 300 million jobs in the United States and Europe. Low-wage occupations such as customer service representatives and administrative, retail, warehouse, and restaurant positions are particularly vulnerable to automation due to the repetitive and routine nature of these roles.
According to a report from McKinsey & Co., by 2030, generative AI could take over tasks that currently account for 30% of work hours across the U.S. economy. Additionally, employees in low-wage jobs face up to 14 times more risk of going out of business than those in the highest-paying jobs, and most require additional training. Additionally, women are 50% more likely to need to change occupations than men.
As the AI revolution reshapes the employment landscape, certain sectors will bear the brunt of job losses. Office support, customer service and food and beverage services are expected to see the biggest reductions. McKinsey forecasts that demand for office workers could plummet by 1.6 million jobs, with retail workers, administrative assistants and cashiers expected to lose 830,000, 710,000 and 630,000 jobs, respectively. may be faced.
“These jobs often involve repetitive tasks, data collection, and basic data processing, all activities that can be efficiently handled with automated systems,” the report states. . An analysis by a management consulting firm also predicts a slight decrease in the number of production jobs.
Job losses for low-income people can cause significant social disruption and problems.
AI’s potential threat to low-wage jobs
When low-wage workers lose their jobs, they often face sustained reductions in income. Research from the Becker Friedman Institute for Economic Research shows that six years after losing a job, your income falls by 13%, with cumulative lost earnings of more than $40,000, which is more than a year’s worth of wages for many in this category. equivalent to more than a minute. This occurs because some displaced workers struggle to secure new employment that provides stable, full-time work hours.
The impact of these job losses on broader society is profound. Economic insecurity among low-wage workers can increase dependence on social welfare programs, worsen poverty levels, and cause housing and food insecurity.
Lack of access to stable employment opportunities can impede social mobility and perpetuate cycles of poverty, especially among marginalized groups who are overrepresented in low-wage jobs.
Additionally, unemployment can have psychological and social consequences, including poor mental and physical health, social withdrawal, and family breakdown. Unemployed people experience greater distress than employed people. There are also notable differences in symptoms of depression, anxiety, and self-esteem. People who have experienced unemployment show lower satisfaction with their personal lives and family relationships. Unemployment is associated with increased likelihood of suicide and increased mortality after employment ends.
How can low-wage workers withstand the impact of AI?
Although technological advances can create economic uncertainty by exacerbating income inequality, they also present opportunities for economic growth and increased productivity. For example, according to a report from Goldman Sachs, AI could contribute to a 7% increase in the total annual value of goods and services produced worldwide. While AI may replace certain jobs, it is also expected to create new roles, particularly in fields that require AI skills, thereby offsetting some of the job losses.
The extent to which automation will impact the job market will largely depend on how effectively the economy can adapt to these changes. It is important for both politicians and business leaders to establish strong social support systems and comprehensive retraining efforts.
These programs are essential to helping workers find new jobs and minimizing the negative impact of AI on employment. By implementing such measures, policymakers and employers could pave the way for a more inclusive AI-driven economy and reduce the negative impact on low-wage workers. Moreover, the benefits of advances in AI will be distributed equitably to all layers of society, creating an overall more balanced and sustainable economic future.
Low-wage workers can prepare for the impact of AI on their jobs by prioritizing building in-demand skills. Explore alternative career paths by exploring industries and roles that match your interests and skills. To maximize your employability, explore opportunities that are in high demand in the market.
Continuous learning is essential to navigating the changing job market. Many online platforms offer courses, certifications, and training programs to develop new skills.
