If AI Takes All Of Our Jobs... Who's Going To Buy Everything?

Summary

The 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

00:00

🤖 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.

05:03

💼 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.

10:08

📈 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.

Keywords

💡AI advances

AI advances refer to the significant progress in artificial intelligence technologies, which in the context of the video, are increasingly capable of performing tasks previously done by humans. The script mentions that even in their current imperfect form, AI technologies like general use robots and generative models are already replacing jobs, indicating a shift in the labor market due to AI's growing capabilities.

💡Downsizing

Downsizing is the process of reducing the number of employees in a company, often as a cost-saving measure. The video script discusses how companies have historically sought to cut down on workers through various methods, including downsizing, to eliminate labor costs. It is a key concept in understanding the impact of AI on the workforce, as AI can automate tasks, potentially leading to downsizing.

💡Outsourcing

Outsourcing is the practice of contracting work to an outside company or individual rather than performing it in-house. The script alludes to outsourcing as one of the strategies businesses have used to reduce their workforce and labor costs, which is relevant to the discussion of AI's potential to further automate and outsource jobs.

💡Streamlining

Streamlining refers to the process of making a system or operation more efficient by removing unnecessary steps or redundancies. In the video, streamlining is mentioned as another method companies have used to reduce their workforce, which can be exacerbated by AI advancements that can automate and simplify processes.

💡Understaffing

Understaffing is the state of having fewer employees than necessary to perform all required tasks. The script discusses understaffing as a strategy that companies have employed, which can be related to AI's impact by suggesting that AI could further reduce the need for human staff, leading to understaffing scenarios.

💡Automating

Automating is the process of making a process or system operate automatically. The video script discusses automation as a historical trend that has been used to reduce the workforce and is now being accelerated by AI technologies, which can perform tasks without human intervention, potentially leading to job displacement.

💡Labor reduction systems

Labor reduction systems are methods or technologies designed to reduce the need for human labor. The video script mentions that these systems have already made workers more efficient and cut out millions of man-hours in America, with AI being a new tool in this arsenal for increasing efficiency and reducing labor needs.

💡Freemium pricing

Freemium pricing is a business model where a product or service is provided for free, but users can pay for additional features or perks. The video script uses the example of the video game industry, which has profited greatly from freemium pricing, to illustrate a potential future where a select few spend large amounts, while the majority benefit from free access, reflecting a broader economic trend that could be exacerbated by AI and automation.

💡Universal basic income

Universal basic income (UBI) is a government payment made to all citizens regardless of their income or employment status, intended to cover basic living expenses. The script discusses UBI as a potential policy solution to address the income disparities that could arise from widespread job displacement due to AI and automation.

💡Asset value

Asset value refers to the worth of a tangible or intangible item owned by an individual or business. The video script suggests that as AI and automation reduce the value of human labor, the value of assets, such as income-producing investments, will increase, leading to a potential shift in wealth distribution.

💡Wealth inequality

Wealth inequality is the disparity in the distribution of wealth among different social classes or individuals. The video script discusses how wealth inequality is not just about billionaires getting richer but also about the increasing number of rich individuals, which is relevant to understanding the potential economic impact of AI and automation on different socioeconomic groups.

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