If AI Takes All Of Our Jobs... Who's Going To Buy Everything?
Summary
TLDRThe script discusses the impact of AI on the job market, predicting that 40% of global jobs could be affected, with 300 million full-time positions at risk. It highlights the efficiency gains from AI in companies but also raises concerns about reduced consumer buying power if unemployment surges. The video suggests a future where businesses may cater to a wealthy minority, while the rest of society faces economic challenges, paralleling trends in the gaming industry's freemium model. It concludes by pondering the implications of universal basic income in an automated world.
Takeaways
- 😲 Companies have historically sought to minimize labor costs through various means such as downsizing, outsourcing, streamlining, and automation, and AI is the latest in this trend.
- 🤖 Despite not fully living up to initial hype, current AI technologies are already replacing jobs and are improving rapidly, which poses a threat to workers.
- 📉 A new study predicts that AI could affect nearly half of all global jobs, potentially replacing 300 million full-time positions, including those in high-skilled fields like legal and engineering.
- 👨💼 For corporate executives and business owners, the question arises of who will buy their products if AI automation leads to widespread job displacement and reduced consumer purchasing power.
- 📈 Labor reduction through AI has already increased efficiency and reduced man-hours, with companies that use AI in their contact centers hiring significantly fewer agents than those that don't.
- 💡 AI's impact on employment is not entirely negative; it can also lead to more work for fewer staff or allow for the complete replacement of teams in certain roles.
- 🔍 The video script highlights the example of Adobe's AI features, which have automated tasks previously done by humans, leading to job displacement in some companies.
- 📊 Survey data indicates that companies using AI in their contact centers laid off an average of 26.1% of their employees within a year, a significant impact on employment.
- 🏭 Historically, strategies like Henry Ford's $5 workday aimed to create a market for his products by ensuring his workers could afford to buy them, a concept that contrasts with modern automation's potential to reduce consumer bases.
- 🎮 The video game industry exemplifies a shift towards catering to a wealthy minority ('whales') for profit, a strategy that could become more prevalent as AI and automation reduce the value of labor.
- 💰 The increasing value of assets and the availability of credit have created more rich individuals, but this has also led to a situation where few modern fortunes are made through work alone, potentially exacerbated by AI and automation.
- 🤔 Policy fixes like universal basic income are proposed to address potential widespread job displacement, but they come with their own set of challenges and societal implications.
Q & A
What is the primary concern regarding the impact of AI on jobs as discussed in the script?
-The script primarily concerns the potential for AI to replace jobs across various fields, including legal and engineering, leading to a reduction in employment and buying power among the general population.
What historical example is used to illustrate the potential economic impact of AI on workers?
-The script uses the example of Henry Ford doubling the wages of his factory workers in 1914 to illustrate the potential for increased buying power among employees, which could be threatened by AI-induced job losses.
How has the adoption of AI in contact centers affected employment according to the script?
-The script states that companies using AI in their contact centers in 2023 hired 89% more agents than those who did not use AI, and 36.8% of companies laid off an average of 26.1% of their employees within just one year.
What is the 'freemium pricing' model mentioned in the script, and how does it relate to the video game industry?
-The 'freemium pricing' model is a business strategy where a product or service is provided for free, but users can pay for additional features or perks. This model is prevalent in the video game industry, where a small percentage of users spend large amounts of money on in-game purchases, while the majority play for free.
What does the script suggest about the future of wealth and the value of human labor in the context of AI and automation?
-The script suggests that the value of human labor may decrease due to AI and automation, while the value of assets and the importance of owning income-producing assets will increase, leading to a further divide between the wealthy and the rest of the population.
What is the concept of 'universal basic income' discussed in the script?
-Universal basic income is a government payment made to every citizen regardless of their financial status, intended to cover basic living expenses. It is proposed as a solution to support people whose jobs are replaced by automation or outsourcing.
How does the script describe the potential societal division resulting from widespread automation?
-The script describes a potential societal division into two classes: those who rely on a government lifeline (universal basic income) to get by, and those who are wealthy enough to own the businesses that benefit from automation and pay the taxes to fund the lifeline.
What was the outcome of the universal basic income experiment mentioned in the script?
-The experiment found that recipients of the universal basic income ended up earning less for themselves, likely due to reduced work hours, and experienced initial improvements in mental health and food security, but these benefits faded over time due to rising living expenses.
How does the script relate the video game industry's business model to the potential future of the economy under AI and automation?
-The script suggests that the video game industry's focus on catering to wealthy users with the 'freemium' model could be a preview of a broader economic trend where businesses primarily serve the wealthy, while the rest of the population is kept around for entertainment or basic sustenance.
What is the script's view on the necessity for businesses to adapt to a world where AI and automation are prevalent?
-The script implies that businesses need to consider the social and economic implications of AI and automation, and find ways to ensure that they are not excluded from a potential future where the value of human labor decreases and the importance of owning assets increases.
Outlines
🤖 The Impact of AI on Job Market and Consumerism
This paragraph discusses the historical trend of companies seeking to reduce labor costs through various means, such as downsizing and automation. It highlights the recent advances in AI and its current and potential impact on jobs, including a study predicting nearly half of global jobs could be affected by AI. The paragraph also touches on the irony that while businesses aim to automate to save costs, they must also consider who will buy their products if unemployment rises. It concludes with a hypothetical scenario where businesses might cater exclusively to wealthy individuals, reflecting on the broader implications of AI on the economy and society.
💼 The Shift Towards Wealthy Consumers in an Automated World
The second paragraph delves into the implications of widespread job displacement due to AI and automation. It suggests that as the value of human labor decreases, the value of assets and income-producing investments will increase. The paragraph uses the video game industry's freemium model as an analogy for how businesses might cater to a wealthy minority while providing free services to the majority, who may not have the means to spend. It also discusses the trend of luxury goods becoming more prevalent and the potential societal divide that could arise from automation, hinting at the need for policy solutions like universal basic income.
📈 Universal Basic Income: A Potential Solution to Automation's Challenges
The final paragraph presents findings from a universal basic income experiment, where participants received a monthly stipend with no strings attached. The study aimed to understand the effects of such an income on employment and well-being. It found that while recipients' mental health and food security initially improved, these benefits diminished over time due to rising living costs. The paragraph also critiques the slow societal response to previous economic shifts, such as outsourcing, and calls for proactive measures to ensure that the benefits of automation are inclusive and do not exacerbate inequality.
Mindmap
Keywords
💡AI advances
💡Downsizing
💡Outsourcing
💡Streamlining
💡Understaffing
💡Automating
💡Labor reduction systems
💡Freemium pricing
💡Universal basic income
💡Asset value
💡Wealth inequality
Highlights
Companies have been trying to cut down on workers for as long as workers have demanded pay and benefits.
Recent AI advances are already replacing jobs, and they are getting better every day.
A new study predicts almost half of all global jobs could be affected by artificial intelligence.
AI could replace 300 million full-time jobs, including positions in the legal and engineering fields.
Labor reduction systems have already cut out millions of man-hours in America, making remaining workers more efficient.
Adobe suite's inbuilt AI features can automatically remove backgrounds from images, reducing the need for human labor.
Companies that used AI in 2023 hired 89% more agents than those who did not, indicating a significant impact on hiring practices.
When AI was added to a contact center, 36.8% of companies laid off an average of 26.1% of their employees.
Reduced employment rates could lead to reduced revenue as people without jobs have less buying power.
The video game industry is now bigger than the movie, music, and television industries combined.
Free-to-play games are some of the most profitable due to their freemium pricing model.
The game industry caters to those with financial means, reflecting a broader trend in the economy.
Automation and AI could increase the value of assets as the value of human labor decreases.
Universal basic income has been proposed as a solution to keep the system going if people can't earn an income for themselves.
A recent comprehensive universal basic income experiment showed mixed results, with some improvements in mental health and food security.
The endgame for investors in automation is to build an automated utopian future, but for others, it's about not being excluded from it.
Lamborghini has sold more cars in the last 10 years than in all the rest of the company's history combined, indicating a growing market for luxury goods.
The value of an hour of human labor has stayed stagnant while the value of assets and availability of credit has skyrocketed.
Transcripts
companies have been trying to cut down on workers for as long as those workers have demanded pay and
benefits whether it's downsizing Outsourcing streamlining understaffing or automating if
there is something a business can do to get rid of workers and their salaries you better believe
they are going to do it but this time does feel a little bit different recent AI advances have been
mocked for not quite living up to the Bold claims of their Tech bro Founders but even in their
current imperfect form llms General use robots and generative models are already replacing jobs
and they are getting better every day so that's bad for workers but if you're a senior corporate
executive or company owner maybe you should be asking yourself if we automate everybody's job
who is going to buy all of your [ __ ] a new study out today predicting almost half of all
Global jobs could be affected by artificial intelligence that 40% of all jobs around the
world will be impacted by Ai and found AI could replace 300 million full-time jobs including
positions in the legal and Engineering Fields so far there are nine robots here doing the work of
more than 250 humans I have some good news and some bad news for your theoretical company the
good news is that labor reduction systems of all varieties have already cut out millions
of manh hours in America alone and made the workers who are left more efficient at their
jobs artificial intelligence is just another tool that your company can use to get more work out a
fewer staff or replace teams entirely even here at little o Works Media Group we used to have someone
working part-time whose job it was to cut out images on Photoshop to use in our goofy little
animations now Adobe suite has inbuilt AI features which can automatically remove backgrounds from
any image with absolutely no human Tim or skill involved now we love our editors so we gave him
more work editing our history videos but there are a lot of companies that now don't need to or
don't want to employ people for these simple jobs according to a survey of 697 companies conducted
by Metro g a research and strategic advisory firm whatever that means companies who did not
use AI in calendar 2023 hired 89% more agents than those who did use AI in their contact centers for
existing employees it was even worse when AI was added to a contact center 36.8% of companies laid
off an average of 26.1% of their employees these alarming numbers were within just one year and
just within call centers which have already been hit by Outsourcing understaffing and automation
harder than most other Professional Services for now so congratulations your business now
has reduced headcount and significantly reduced expenses But Here Comes the bad news in 1914 Henry
Ford doubled the salary of his Factory workers to $5 per day The Story Goes he did this because he
wanted all of his employees to be able to afford a Ford Model tea of Their Own boosting company
Revenue now this is basically complete nonsense in reality Ford just wanted to reduce that turnover
and denied talent to up-and-coming car companies like Dodge to maintain his Monopoly over the
growing automobile industry but as with every good fairy tale there is negative truth in there
if the employment rate suddenly drops as hard as it did in the call centers from the study in
every company around the world then companies will undeniably struggle with reduced Revenue as people
without jobs don't have the buying power they once did and even people with jobs will cut back
out of fear that they might be next but there is a business plan that you as a hypothetical Titan of
Industry might want to consider so that this isn't a problem and that's just making stuff exclusively
for other wealthy business owners while diverting resources away from people who have nothing to
offer you that can't be done more efficiently by a machine or a cheaper worker on the other side
of the world now if you think that sounds a bit crazy you should know that it's already kind of
happening and the best place to see it is in video games yes those occasionally fun distractions
from real life are the perfect example of the shift happening in the real world right now so
let me cook according to Grand View research the video game industry is now bigger than the movie
music and television Industries combined and it is honed in its most profitable strategy free-to-play
games are ironically some of the most profitable games on the market because they have perfected
a business strategy called freemium pricing most people will play their games for free but a select
few a affectionately known in the industry as Wales will spend thousands sometimes even
millions of dollars on a single game to unlock in-game perks that would be almost impossible
to obtain as a free User it's important that these games still have free users though because without
them the wheels would have nobody to show off to or pone with their paid for advantages in a world
where people are looking for budget-friendly forms of entertainment the game industry has realized
that the best way to turn a profit is toer to those who have the financial means or at the very
least the credit limit to spend ridiculous amounts of money on a video game the people who have the
most financial means don't work for their money they own income producing assets and if automation
does replace jobs on an even more widespread scale that will make your ability to work less valuable
and simultaneously income producing assets more valuable the rate of change in Ai and automation
makes the future impossible to predict but if the people investing in these Technologies want to
see a financial return on that investment they are going to learn what the game industry already has
there is more money to be made by catering to other rich people and everybody else can
be kept around as entertainment now if you think that sounds a bit depressing well welcome to this
channel but also I should tell you that market trends already say this is happening AI isn't
going to change your world it's just going to continue a trend that's already been happening
for years now so it's time to learn how money Works to find out how companies are adapting to
a world where nobody can afford anything anymore this this week's lesson is sponsored by brilliant
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off an annual premium subscription in the 1992 movie Glen Gary Glenn Ross the iconic always be
closing scene has Alec Baldwin's character bragging to another salesman about driving
an $80,000 BMW adjusted for $1 1992 according to the Bureau of Labor Statistics that would be the
equivalent of just under $182,000 today that is a very expensive automobile to be sure but these
days if you drive around a major city you likely to see dozens of cars that cost that much or more
and they probably wouldn't even stand out that much according to company sales data and historic
records Lamborghini has sold more cars in the last 10 years alone than it did in all the rest of the
company's history combined because there is simply a bigger market for $300,000 cars than ever before
the same general trend is true for Other Extreme luxury Brands like Bentley Ferrari Paddock Philipe
luxury groceries at aroan gym memberships that cost more than rent hotels that make Hilton look
like a Holiday Inn and to top it off private jets are all now way more popular than they
ever have been one thing that often gets lost in discussions of wealth inequality is that yes
billionaires are getting richer but there are also far more rich people around than ever before and
it's because the value of an hour of human labor has stayed more or less stagnant while the value
of an asset and the availability of credit has skyrocketed people who held on to an even modest
portfolio over the last 4 years now have enormous fortunes certain individuals got incredibly lucky
with good Investments and other people accessed easy credit to get absolutely jacked to the tits
on Leverage and ride the longest asset Bull Run in history very few people have made Modern fortunes
through work alone and you might have even noticed how investing went from something that you should
do to secure your retirement to something you need to do to have any quality of life at all if robots
really do take over then it will just continue to push the value of an hour of human work down
because it could be done by a machine instead and it will rally the value of assets because business
owners and investors will benefit from the Free Labor substitute this is where people point to
policy fixes like a universal basic income if you haven't heard about this idea by now that's
impressive but it's basically a government payment made to everybody regardless of personal financial
conditions that should be enough to cover basic living expenses it's been proposed as a solution
to keep the whole system going if people can't earn an income for themselves because their
labor has been outsourced or automated but that is still not a desirable outcome for anybody if
comprehensive automation of human labor gets as far as needing this then you will fall into one
of two defined classes of people you will either be getting by based on a government Lifeline or
you will be in the class of people that own the businesses complaining about all the taxes they
need to pay to fund that Lifeline I find it a little bit easier to sympathize with one of those
groups but there are still no winners just last week the result of one of the most comprehensive
Universal basic income experiments was published the research gave 1,000 people living in Texas
and Illinois $1,000 a month with no conditions attached to qualify for this study their 2019
household income had to be less than 300% of the federal poverty line or $ 37,40 for an individual
there was also an unlucky control group of 2,000 people who were only given $50 a month this is
because when your personal finances are being studied you are more likely to be careful about
your spending decisions and the researchers wanted to control for these changes the study itself was
funded by an organization called open research which is not technically affiliated with open
AI but they are both managed by Sam Alman who has been very vocal about how this technology
could displace billions of jobs now if you ever find yourself running an AI startup that burns
millions of dollars a day then one of the best ways to ensure that you keep that investor money
coming is to pretend to be really scared about how your technology is going to replace workers
because well replacing workers is really exciting to investors so realistically this study was
probably little more than marketing stun conducted by one of the best funded organizations in the
space but that doesn't mean that the results aren't still interesting the key results related
to employment was that the group that received the $1,000 payment ended up earning significantly
less for themselves than the control group after the payment was accounted for they still earned
more but $122,000 a loan is not enough to live anywhere in America without other forms of support
all households ended up earning more but that was largely because this experiment started right at
the beginning of Co when employment particularly in low-wage professions was hurt by lockdowns the
reason the researchers gave as to why households receiving the subsidy ended up earning less money
for themselves was because many people took it as an opportunity to cut down on how much they
were working and commit more time to leisure in looking after their family this fits the
optimistic idea of an AI future where we can have machines do everything for us while we just relax
and collect Universal basic income but the finding still told a story of people who were financially
struggling mental health improved because people were less stressed but those improvements Faded
by the end of the first year food security also increased but again only in the first year as
even people with additional income fell victim to Rising living expenses and that was when
they could work to earn additional money when compared to being plunged into poverty it's an
okay compromise but this isn't going to happen overnight Outsourcing turned entire cities in
America into ghost towns but it happened so slowly that big changes like this never got addressed the
endgame for people investing in automation is to build that automated utopian future the end
game for everyone else is to make sure that they aren't excluded from it now if you want to get
these videos a day early and get articles that can never be made into YouTube videos then be
sure to subscribe to my email newsletter Linked In the video description now while everybody is
worried about not getting enough work there is one country that has decided the solution is getting
people to work 6 days a week so go and watch this video to keep on learning how money works
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