Top investor has a major warning about AI that could have a 'terrifying' impact on job market
Ever since AI has started making its presence felt in every industry and all walks of life, different takes about automation putting people out of work have been shared. Stepping in to give his two cents, billionaire investor and co-chairman of Oaktree Capital Management, Howard Marks, has labelled the artificial intelligence boom nearly catastrophic for workers. In his latest memo, "Is it a Bubble?" Marks discussed how the AI boom is an "inflection bubble" and raised questions about its impact on the job market, offering a grim outlook.
"I find the resulting outlook for employment terrifying. I am enormously concerned about what will happen to the people whose jobs AI renders unnecessary, or who can't find jobs because of it," Marks wrote in his latest blog post. The investor expressed concern for the people who will lose their jobs to AI, questioning the notion that technological advancements always lead to job creation. "I hope that’ll hold true in the case of AI, but hope isn’t much to hang one’s hat on, and I have trouble figuring out where those jobs will come from," he wrote, admitting that he isn't much of a "futurist" or "financial optimist".
He also questioned the notion that AI will increase productivity and consequently GDP growth. "Here I have specific quibbles," he expressed. He argued that while a boom in productivity (fewer hours, fewer workers to produce more goods) will come about with AI's efficiency, what will happen to those who lose their jobs because of it? "But if a lot of jobs are lost to AI, how will people be able to afford the additional goods AI enables to be produced?" he wrote.
He further expressed that it was hard for him to imagine a world where AI would work shoulder to shoulder with humans. "How can employment not decline? AI is likely to replace large numbers of entry-level workers, people who process paper without applying judgment, and junior lawyers who scour the lawbooks for precedents. Maybe even junior investment analysts who create spreadsheets and compile presentation materials. It’s said that AI can read an MRI better than the average doctor. Driving is one of the most populous professions in America, and driverless vehicles are already arriving; where will all the people who currently drive taxis, limos, buses, and trucks find jobs?" he asked.
Marks added that it was unclear how the younger generation should prepare for the future. Marks urged them to question, "What jobs won’t be eliminated? What careers should our children and grandchildren prepare for?"
Marks expressed that he wasn't too optimistic about the "universal basic income" either. "The worrier in me finds problems in this, too: Where will the money come from for those checks? The job losses I foresee imply reduced income tax receipts and increased spending on entitlements. This puts a further burden on the declining segment of the population that is working and implies even greater deficits ahead. In this new world, will governments be able to fund ever-increasing deficits?" he wrote.
He explained that people get a lot more from a job than just paychecks, as it gives them a reason to get up in the morning, a productive role, self-respect, and a structure to their day. "How will these things be replaced?" Marks asked. He expressed concerns about more people sitting idle and a correlation between job losses and a rise in opioid addiction.
Watch his video here.
More on Market Realist:
JP Morgan CEO says AI won't reduce jobs dramatically — but he still expects one major thing
New MIT study warns of troubling trend in how AI could replace millions of America jobs
US job openings picked up to the highest level in 5 months — but there's still one major concern
