Economists are warning that AI could push companies into a wave of layoffs that ends in self-destruction.
Gerry Tsoukalas and Brett Falk, authors of „The AI Layoff Trap,“ a research paper published by The Wharton School, said CEOs can become trapped in a race to automate that erodes consumer spending on which their businesses depend.
„The main question we wanted to understand is who’s going to be left to buy products if everyone gets automated and replaced by a robot?“ Tsoukalas, a senior fellow at Wharton, told journalist Katty Kay on the New Normal podcast that was posted on Monday.
starrpamph on
The most expensive thing at a lot of big companies besides assets are the layers of management. The people that turn the screwdrivers cost peanuts in comparison.
nekronics on
Forget who’s going to buy stuff, what are companies going to do when they essentially depend on a single “employee”? Sounds like the strongest union imaginable. Or worse, what stops that employee from just taking over your business?
LeafyLungs on
Please do, cuz fuck ai. All that jargon about AI will benefit society is drinking the kool-aid. AI can fuck itself into oblivion.
igstwagd on
My take is that there’s a bit of game theory / Prisoner’s Dilemma going on here. That is to say, if everyone cooperated by acknowledging that racing to automate with AI is likely to have far reaching consequences and should be approached with caution and regulation, the outcome for everyone in the long run would probably be better than the outcome if everyone acts in their own self interests. In the highly competitive and complex global economy that we live in, it’s nearly impossible to build consensus and cooperation because anyone who defects from that cooperation will likely have a huge competitive advantage over everyone else. As a result, everyone has an incentive to not participate in cooperation.
TLDR:everyone would likely be better off if AI development were slowed and coordinated through regulation, but any company or country that chooses restraint risks falling behind competitors. Because the incentive to defect is so strong, everyone races ahead, even if they believe the long-term consequences could be worse for everyone.
VintageHacker on
So far, I have not seen even one decent chatbot at any bank or business. Has anyone here seen one ?
LLM AI is massively overhyped. Its worse than .com boom.
mistertickertape on
You don’t need to be an economist to understand where this is going. If AI is automating all the jobs, and fewer people are earning an income to buy things, it isn’t going to take long before companies that have automated the hell out of everything (and value engineered their products, cough Amazon cough) collapse due to the bottom falling out of demand.
aka_mythos on
The real trap is that once a company automates and no longer has the a sizeable workforce that is capable of doing the work the AI companies can raise licensing costs as high as they want… demand profit sharing or equity… to put themselves in a position where they can effectively make the decisions from within the employer to ensure the company can never look for an alternative to the AI company’s service.
gralert on
If almost everyone gets jobless, then almost everyone are not paying income tax.
I guess that would be a thing that most countries would protest against sooner or later. Maybe even counteract.
UXyes on
Henry Ford figured this shit out a century ago. His factories were so productive they had more cars than they could sell so he started paying his workers MORE so that they could afford to buy them.
HarmlessRedditor on
It really seems unstoppable because the laws of capitalism, the cheaper option will always win so the first company to automate will survive for a minute by being cheaper but ends up starving itself by destroying its food supply. Let’s let it die.
KanedaSyndrome on
lol these questions are just hitting mainstream now? We’ve been asking this for 3 years now. These people are highly disconnected
Kaiisim on
Tbh I’m convinced most of these negative ai studies and articles are trying to convince us AI will be self limiting so we just need to do nothing and it will collapse.
We need to start making stuff illegal now. Not waiting.
graypasser on
Do smart CEO even does layoff?
I feel that kind of business is reserved for short term profit for leaders.
Nerubim on
Nooooo really? Neeeever could ANYONE have seeen and warned people of happening.
IronyElSupremo on
There will be an overall economic realignment with mass AI-related layoffs, but think humans will want to keep “their” beloved commerce going as long as possible (well if possible) with subsidy checks, QE, and perhaps Ubi. Also pointed out there may not be much left to tax as AI companies do not act as the “gentlemanly” monopolies the Mag – 7 did in carving up segment .. these companies are out for blood.
Contrarian market economists are actually predicting AI-caused layoffs will bring about more permanent QE, sorts of UBI, etc.. while letting entrepreneurs and technologists get their respective freaks on (ex: for date night, don’t think most want a government pizzeria with microwaves offerings nuked behind a wall .. vs Guido spinning the dough for the stone wood fired oven).
There’s actually other massive economic changes happening below the “calm” surface besides AI too (not about to get into military wares). Things will get more expensive and companies need to make more profit while tech hasn’t exactly held the line.
.. Vs.. May get some pushback and economic weirdness like the gold standard crowd getting elected. Still think we’ll be in a subsidy->QE->UBI-funded Jetson’s future sooner or later.
Chocolatency on
They overlook something else. If their business can be run by 5 people with AI, everyone can launch a startup.
VoodooPizzaman1337 on
The real question is should we run faster into this trap to accelerate the consequence ?
DiSTI_Corporation on
AI will probably automate parts of many jobs before it completely replace them. The bigger challenge might be adapting roles and learning new skills fast enough as the keeps improving .
ineedtoknowmorenow on
I do want to know how is it that only now people are talking about? Many people have been saying this exact same thing. If nobody can work nobody can buy things and if a comapny is dependent on only a few people it collapses the moment that person decides for whatever reason to stop. Weird timed
AlienFunHouse on
Nobody accounts for the gangs of hungry people looting stores and homes of the wealthy.
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From the article
Economists are warning that AI could push companies into a wave of layoffs that ends in self-destruction.
Gerry Tsoukalas and Brett Falk, authors of „The AI Layoff Trap,“ a research paper published by The Wharton School, said CEOs can become trapped in a race to automate that erodes consumer spending on which their businesses depend.
„The main question we wanted to understand is who’s going to be left to buy products if everyone gets automated and replaced by a robot?“ Tsoukalas, a senior fellow at Wharton, told journalist Katty Kay on the New Normal podcast that was posted on Monday.
The most expensive thing at a lot of big companies besides assets are the layers of management. The people that turn the screwdrivers cost peanuts in comparison.
Forget who’s going to buy stuff, what are companies going to do when they essentially depend on a single “employee”? Sounds like the strongest union imaginable. Or worse, what stops that employee from just taking over your business?
Please do, cuz fuck ai. All that jargon about AI will benefit society is drinking the kool-aid. AI can fuck itself into oblivion.
My take is that there’s a bit of game theory / Prisoner’s Dilemma going on here. That is to say, if everyone cooperated by acknowledging that racing to automate with AI is likely to have far reaching consequences and should be approached with caution and regulation, the outcome for everyone in the long run would probably be better than the outcome if everyone acts in their own self interests. In the highly competitive and complex global economy that we live in, it’s nearly impossible to build consensus and cooperation because anyone who defects from that cooperation will likely have a huge competitive advantage over everyone else. As a result, everyone has an incentive to not participate in cooperation.
TLDR:everyone would likely be better off if AI development were slowed and coordinated through regulation, but any company or country that chooses restraint risks falling behind competitors. Because the incentive to defect is so strong, everyone races ahead, even if they believe the long-term consequences could be worse for everyone.
So far, I have not seen even one decent chatbot at any bank or business. Has anyone here seen one ?
LLM AI is massively overhyped. Its worse than .com boom.
You don’t need to be an economist to understand where this is going. If AI is automating all the jobs, and fewer people are earning an income to buy things, it isn’t going to take long before companies that have automated the hell out of everything (and value engineered their products, cough Amazon cough) collapse due to the bottom falling out of demand.
The real trap is that once a company automates and no longer has the a sizeable workforce that is capable of doing the work the AI companies can raise licensing costs as high as they want… demand profit sharing or equity… to put themselves in a position where they can effectively make the decisions from within the employer to ensure the company can never look for an alternative to the AI company’s service.
If almost everyone gets jobless, then almost everyone are not paying income tax.
I guess that would be a thing that most countries would protest against sooner or later. Maybe even counteract.
Henry Ford figured this shit out a century ago. His factories were so productive they had more cars than they could sell so he started paying his workers MORE so that they could afford to buy them.
It really seems unstoppable because the laws of capitalism, the cheaper option will always win so the first company to automate will survive for a minute by being cheaper but ends up starving itself by destroying its food supply. Let’s let it die.
lol these questions are just hitting mainstream now? We’ve been asking this for 3 years now. These people are highly disconnected
Tbh I’m convinced most of these negative ai studies and articles are trying to convince us AI will be self limiting so we just need to do nothing and it will collapse.
We need to start making stuff illegal now. Not waiting.
Do smart CEO even does layoff?
I feel that kind of business is reserved for short term profit for leaders.
Nooooo really? Neeeever could ANYONE have seeen and warned people of happening.
There will be an overall economic realignment with mass AI-related layoffs, but think humans will want to keep “their” beloved commerce going as long as possible (well if possible) with subsidy checks, QE, and perhaps Ubi. Also pointed out there may not be much left to tax as AI companies do not act as the “gentlemanly” monopolies the Mag – 7 did in carving up segment .. these companies are out for blood.
Contrarian market economists are actually predicting AI-caused layoffs will bring about more permanent QE, sorts of UBI, etc.. while letting entrepreneurs and technologists get their respective freaks on (ex: for date night, don’t think most want a government pizzeria with microwaves offerings nuked behind a wall .. vs Guido spinning the dough for the stone wood fired oven).
There’s actually other massive economic changes happening below the “calm” surface besides AI too (not about to get into military wares). Things will get more expensive and companies need to make more profit while tech hasn’t exactly held the line.
.. Vs.. May get some pushback and economic weirdness like the gold standard crowd getting elected. Still think we’ll be in a subsidy->QE->UBI-funded Jetson’s future sooner or later.
They overlook something else. If their business can be run by 5 people with AI, everyone can launch a startup.
The real question is should we run faster into this trap to accelerate the consequence ?
AI will probably automate parts of many jobs before it completely replace them. The bigger challenge might be adapting roles and learning new skills fast enough as the keeps improving .
I do want to know how is it that only now people are talking about? Many people have been saying this exact same thing. If nobody can work nobody can buy things and if a comapny is dependent on only a few people it collapses the moment that person decides for whatever reason to stop. Weird timed
Nobody accounts for the gangs of hungry people looting stores and homes of the wealthy.