The proliferation of AI may create new infrastructure and startup jobs in the short term, but more job losses are coming down the line, said economist Nouriel Roubini, famously dubbed “Dr. Doom” for his early prediction of the 2008 housing market bust.
“In the long run, of course, you get the massive increase in productivity, and you start to see job shedding, something we’re already seeing right now among some of the more advanced Big Tech in Magnificent Seven firms. But we’re not seeing it yet. At the aggregate level, the weakness in the labor market has been driven more in the last year by supply of labor, because we have aging of the population and we have restrictions to migration,” explained Roubini on Yahoo Finance’s Opening Bid (video above).
The NYU professor added, “And in the short term, the AI is going to increase the demand for labor. But over the medium long term, of course, there’ll be massive amounts of labor shedding.”
Roubini is one of the world’s most influential economists. His career spans the highest levels of policy and academia, including roles at the White House Council of Economic Advisers, the Treasury Department, and the International Monetary Fund (IMF).
The impact of AI on jobs is already evident in vast layoffs at Block (XYZ), Amazon (AMZN), and reportedly soon at Meta (META).
Companies across five sectors that Morgan Stanley deems most likely to experience significant near-term impacts from AI adoption reported a 4% net reduction in jobs, according to a new survey of employers.
The number of roles eliminated and not replaced was highest among early-career employees, or those with no previous experience.
“I think by 2027 the scrutiny on operating expenses from Wall Street is going to be super-intense, probably by the back half of this year … because you’re going to be able to figure out which organizations are optimizing on using this technology or not,” Circle (CRCL) co-founder and CEO Jeremy Allaire said last week in a Yahoo Finance interview at the Economic Club of New York. “I do think it will impact the labor market in the near term.”
Brian Sozzi is Yahoo Finance’s Executive Editor and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.
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