Understanding the Replacement of Blue-Collar Jobs With Artificial Intelligence

How the Replacement of Blue-Collar Jobs by AI Will Impact the Economy

Understanding the Replacement of Blue-Collar Jobs With Artificial Intelligence

By Sukhayl Niyazov

Our world is on the verge of historically momentous changes. Technological advances will have all-encompassing implications for almost all human endeavors, from manufacturing and transportation to healthcare, education and communication. Emerging technologies and their implementation will have a profound impact on the current political system, society and labor market. The advent of AI and robotics will pose unprecedented challenges and offer an opportunity to reap tremendous economic and social benefits.

According to PwC’s analysis, by 2030, gains from AI implementation will be around $15.7 trillion, with most gains stemming from enhanced productivity and consumption-side effects. Overall, AI will add up to 14% to the American GDP by 2030. The research conducted by Accenture Research and Frontier Economics found that AI would boost US labor productivity by 35% and almost double growth rates from 2.6% to 4.6% by 2035.

In the short term, because American robots work as effectively as Chinese workers and because they don’t demand higher wages, join labor unions and take vacations as American workers do, manufacturing will begin to return from cheap labor countries to the US. This will boost exports, encourage domestic investment and innovation and ultimately make the US a manufacturing hub. In the end, this will diminish the US trade deficit, eliminate the need to borrow money and solve one of the fundamental problems of the American economy.

Nevertheless, as with almost all things in our extremely complicated world, elimination of manual labor jobs from the economy isn’t only expected to lead to positive economic reverberations, but also potentially disruptive repercussions that can shake the very foundations of the US labor markets, economy, society and even the conventional capitalist system itself.

Illustration: © IoT For All