Which workers will AI hurt most - the young or the experienced?

Straits Times

12 hours ago

Zooming in on the fields that have deployed AI most widely thus far tends to paint a dire picture for entry-level workers.
NEW YORK - When Amazon chief executive officer Andy Jassy wrote in June that he expected the company's use of artificial intelligence to 'reduce our total workforce' over the next few years, it confirmed the fear among many workers that AI would replace them. The fear was reinforced two weeks later when Microsoft said it was laying off about 9,000 people, roughly 4 per cent of its workforce.
That AI is poised to displace white-collar workers is indisputable. But what kind of workers, exactly? Mr Jassy's announcement landed in the middle of a debate over just this question.
Some experts argue that AI is most likely to affect novice workers, whose tasks are generally simplest and therefore easiest to automate. Dario Amodei, CEO of the AI company Anthropic, recently told Axios that the technology could cannibalise half of all entry-level white-collar roles within five years. An uptick in the unemployment rate for recent college graduates has aggravated this concern, even if it doesn't prove that AI is the cause of their job market struggles.
But other captains of the AI industry have taken the opposite view, arguing that younger workers are likely to benefit from AI and that experienced workers will ultimately be more vulnerable. In an interview at a New York Times event in late June, Brad Lightcap, the chief operating officer of OpenAI, suggested that the technology could pose problems for 'a class of worker that I think is more tenured, is more oriented toward a routine in a certain way of doing things.'
The ultimate answer to this question will have vast implications. If entry-level jobs are most at risk, it could require a rethinking of how we educate college students, or even the value of college itself. And if older workers are most at risk, it could lead to economic and even political instability as large-scale layoffs become a persistent feature of the labour market.
David Furlonger, a vice president at the research firm Gartner who helps oversee its survey of CEOs, has considered the implications if AI displaces more experienced workers.
'What are those people going to do? How will they be funded? What is the impact on tax revenue?' he said. 'I imagine governments are thinking about that.'
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Is AI making better managers?
Economists and other experts who study AI often draw different conclusions about whom it's more likely to displace.
Zooming in on the fields that have deployed AI most widely thus far tends to paint a dire picture for entry-level workers. Data from ADP, the payroll processing firm, shows that in computer-related fields, employment for workers with less than two years of tenure peaked in 2023 and is down about 20 per cent to 25 per cent since then. There is a similar pattern among customer service representatives, who are increasingly reliant on AI as well.
Over the same period, employment in these industries has increased for workers with two or more years of job tenure, according to Ruyu Chen, a Stanford University researcher who analysed the data.
Other studies point in a similar direction, if in a roundabout way. In early 2023, Italy temporarily banned ChatGPT, which software developers there relied on to help them code. A team of researchers at the University of California, Irvine, and Chapman University compared the change in the productivity of Italian coders with the productivity of coders in France and Portugal, which did not ban the software, to isolate the impact of ChatGPT.
While the study did not look at job loss, it did find that the AI tool had transformed the jobs of midlevel workers in more favourable ways than the jobs of entry-level workers. According to the researchers, the junior coders used AI to complete their tasks somewhat faster; the experienced coders often used it to benefit their teams more broadly. For example, the AI helped midlevel coders review the work of other coders and suggest improvements, and to contribute to projects in languages they didn't know.
'When people are really good at things, what they end up doing is helping other people as opposed to working on their own projects,' said Sarah Bana, one of the paper's authors, adding that the AI essentially reinforced this tendency. Ms Bana said the paper's result suggested that AI would prompt companies to hire fewer junior coders (because fewer would be needed to complete entry-level tasks) but more midlevel coders (because AI amplified their value to their whole team).
On the other hand, Danielle Li, an economist at the Massachusetts Institute of Technology who studies the use of AI in the workplace, said there were scenarios in which AI could undermine higher-skilled workers more than entry-level workers. The reason is that it can, in effect, untether valuable skills from the humans who have traditionally possessed them. For instance, you may no longer have to be an engineer to code, or a lawyer to write a legal brief.
'That state of the world is not good for experienced workers,' she said. 'You're being paid for the rarity of your skill, and what happens is that AI allows the skill to live outside of people.'
Ms Li said AI would not necessarily be good for less experienced workers, either. But she speculated that the uptick in unemployment for new college graduates resulted from employers' expectations that they will need fewer workers overall in the age of AI, not just fewer novice workers. An overall hiring slowdown can have a bigger impact on workers right out of college, since they don't have a job to begin with.
Robert Plotkin, a partner in a small law firm specialising in intellectual property, said AI had not affected his firm's need for lower-skilled workers like paralegals, who format the documents that his firm submits to the patent office. But his firm now uses roughly half as many contract lawyers, including some with several years of experience, as it used a few years ago, before the availability of generative AI, he added.
These more senior lawyers draft patent applications for clients, which Mr Plotkin then reviews and asks them to revise. But he can often draft applications more efficiently with the help of an AI assistant, except when the patent involves a field of science or technology that he is unfamiliar with.
'I've become very efficient at using AI as a tool to help me draft applications in a way that's reduced our need for contract lawyers,' Mr Plotkin said.
Some of the companies at the cutting edge of AI adoption appear to have made similar calculations, laying off experienced employees rather than simply hiring fewer entry-level workers. Google, Meta and Amazon have all done layoffs since 2022. Two months before its most recent layoff announcement, Microsoft laid off 6,000 employees, many of them software developers, while the July layoffs included many middle managers.
The value of Inexperience
Gil Luria, an equity analyst who covers Microsoft for the investment bank D.A. Davidson, said one reason for layoffs was that companies like Microsoft and Google were cutting costs to prop up their profit margins as they invested billions in chips and data centres to develop AI. But another reason is that software engineers are susceptible to replacement by AI at all skill levels – including experienced engineers who make a large salary but are reluctant to embrace the technology.
Microsoft 'can do math quickly – see who's adding value, who's overpaid, who's not overpaid, who's adapting well,' Mr Luria said. 'There are senior people who have figured out how to get leverage out of AI and senior people who are insistent that AI can't write code.'
Harper Reed, CEO of 2389 Research, which is building autonomous AI agents to help companies perform a variety of tasks, said the combination of higher salaries and a reluctance to embrace AI was likely to put the jobs of experienced coders at risk.
'How you decrease cost is not by firing the cheapest employees you have,' Mr Reed said. 'You take the cheapest employee and make them worth the expensive employee.'
A number of studies have suggested that this is possible. In a recent study by researchers at Microsoft and three universities, an AI coding assistant appeared to increase the productivity of junior developers substantially more than it increased the productivity of their more experienced colleagues.
Mr Reed said that from a purely financial perspective, it would increasingly make sense for companies to hire junior employees who used AI to do what was once midlevel work, a handful of senior employees to oversee them and almost no middle-tier employees. That, he said, is essentially how his company is structured. NYTIMES