Australians will soon be getting ready to vote for a federal government that will lead the country for the next three years.
Disturbingly, there is a lack of in-depth public discussion about how artificial intelligence (AI) will affect jobs, in terms of both unemployment and underemployment. This was the same in the recent US and UK elections, which begs the question why? Whose interest does this lack of focus serve?
AI driven job loss is a significant risk, of high probability, and as such should be a key area of focus for government. AI-driven job losses will occur during the next government's term, as it’s already beginning to happen throughout the globe.
To set the scene, re: why AI should be a key political consideration for voters going to the polls in Australia and throughout the world. There is a strong possibility that Donald Trump will be the president of the United States, when US companies achieve Artificial General Intelligence levels, with the potential to attain Super Intelligence status and Agentic AI capabilities during his term (AI that can autonomously operate effectively as digital employees, millions of digital employees).
The significance of these events should not be underestimated, as incoming governments worldwide will oversee a period of substantial economic and societal change. Not to mention the tension between small government principles and the concept of universal basic income. It concerns me that these critical topics are not hot topics within our election cycles.
The following visual, provides a simple yet compelling representation of where humanity finds itself, in relation to technological progress at least.
(the period of exponential growth has now started).
Based on the current trajectory, which is marked by exponential AI advancement and limited government regulation, AI caused job losses are inevitable in time.
The big tech companies avoid discussing AI caused unemployment because it doesn’t align with their marketing objectives, AI companies don’t wish to spook the horses, notably the regulators and the public.
It of course begs the question, why are the big tech companies peddling euphemisms such as “transformative”, “impactful" or diverting attention to the “new jobs” and not net employment over time.
Are we about to see a significant involuntary transfer of wealth from the employed to the big tech companies as business replace human labour with AI. And will this be further bolstered by an additional transfer of wealth in the US at least from the taxpayers to the soon to be expanded military industrial complex (as the major AI companies join its ranks and sell their services to the military), under the justification of the new AI cold war with China.
Politicians need to stop peddling big tech narratives, take charge and explain how they plan to protect Australian workers from the effects of AI-driven job losses. They need to focus not just on new jobs but net employment. Obviously, cost of living pressures will skyrocket when jobs are lost, and for this reason it must be a key election issue.
When asked about AI’s impact on jobs, politicians the world over often give two simple responses:
AI will create new jobs.
History shows that technological progress has led to better living standards by replacing old jobs with new ones.
These statements sound hopeful, but they are too simplistic and they don’t address the critical issue of the AI transition phase, which we are now entering. The transition to an AI driven economy will present both opportunities and challenges, and the scope of AI’s impact will be extensive. We must ensure that the shorter term, high probability risk of AI driven unemployment remains front and centre within the political debate.
Voters need to push for better answers and detailed plans.
What AI Can Do: The Good and the Bad
AI has the power to improve many aspects of our lives—such as renewable energy, healthcare, and how efficiently we allocate resources. I’ve had the pleasure of working on a number of significant digital transformation projects and have seen how technology and AI can assist in the workplace, even at this embryonic phase. I also assist companies to understand the strategic implications of AI, so they can prepare & adapt where necessary, to grow their businesses & hopefully their teams in the period ahead. The harsh reality is that we are about to enter a period of rapid, unprecedented change, and companies that don’t adapt will struggle to survive the next five years.
While it is clear AI has immense potential, I’m concerned that many business leaders and politicians aren’t prepared for the challenges it will pose, particularly when it comes to politicians and unemployment.
AI’s Impact on Jobs
AI creating enough new jobs to make up for the ones it replaces is highly unlikely, even if it did, its nonsensical to think that all of the for example taxi drivers who lose their jobs to Robotaxis will suddenly be employed as AI computer scientists.
Yes, new jobs for humans will be created, and new types of work will need completion, but in many cases, AI will also be able to do this new work. Put simply if AI can do the old jobs, it will be able to do many of the new jobs (statements that AI won’t be able to do “all” of the jobs, or it won’t be able to do “100%” of a person’s job, are correct in many instances, but this will not prevent AI's downward pressure on employment):
AI is getting more capable, cheaper and more efficient every month; big tech’s objective is for it to be cheaper and faster than its human competition. This will be a key factor within their sales propositions to business and government.
AI is effectively a self-service tool, which will reduce the need for support staff within a business while also reducing the demand for external third-party services, reducing employment activity within the wider business community.
AI-powered robots will affect employment within manufacturing, warehousing, and even home services in time.
AI will boost productivity so that fewer workers are needed to complete specific tasks. For example, a team of 10 developers using AI might be able do the work of 20 people, resulting in job losses or underemployment e.g. 20 staff working 20-hour weeks on reduced salaries.
Big tech companies are also creating AI Agents, which should be termed digital employees—AI services that can handle tasks quickly and cost effectively. Relatively soon these digital capabilities will flood the global job market with millions of digital employees, putting even more downward pressure on employment & employment conditions.
Anecdotally, some leaders focus on AI as a way to cut costs, not as a tool to stimulate growth and create new opportunities. This narrow understanding of AI will drive job losses particularly within larger corporations.
Around the world, big companies are investing heavily in AI, but most of these projects are still in the research and development (R&D) phase. In the U.S., it is estimated that less than 10% of goods and services produced involve AI today, but this will change relatively quickly. When it does it will impact production based labour activity.
It’s important to note that AI is evolving much faster than many industry experts predicted. Additionally, GenAI technology is in its infancy, only entering the public psyche in a material way in the last two years. Month after month AI will increase in intelligence and capability, ongoing growth will be driven by the significant financial and human capital being invested in the sector at a corporate and government level.
AI is already incredibly smart and capable, and we will never see it this dumb again, likewise as has been stated correctly, things have never moved this fast and will never be this slow again. Within my client workshops, attendees often find it quite confronting to realise how intelligent and capable AI already is, while discomfort is not my objective, an objective understanding of where we currently are is, as this is the best way to navigate through the period ahead. We need our politicians to be open, objective and proactive in this critical area.
Despite the technology being relatively new, we are already seeing early signs of job losses and AI’s dampening effect on employment:
Elon Musk “There will be fewer and fewer jobs that a robot cannot do better (than a human)”
Marc Benioff, Salesforce CEO “Salesforce will hire no more software engineers in 2025”
"Klarna implemented an AI assistant that is now handling the workload equivalent to 700 full-time staff members”
Bloomberg “Wall Street Job Losses May Top 200,000 as AI Replaces Roles”
These quotes represent a small sample from around the world.
AI keeps getting smarter, faster, and cheaper. As it improves, it will replace more jobs and outcompete human workers. Yes, employment levels in many western countries are very high, that is simply because AI hasn’t matured yet, but will soon.
Studies around the world are already highlighting the potential impact AI will have on employment.
McKinsey: “between 400 million and 800 million individuals could be displaced by automation and need to find new jobs by 2030 around the world, based on our midpoint and earliest (that is, the most rapid) automation adoption scenarios”
World Economic Forum/CNN: “41% of employers intend to downsize their workforce as AI automates certain tasks”
Forbes: “Goldman Sachs Predicts 300 Million Jobs Will Be Lost Or Degraded By Artificial Intelligence”
What This May Mean for Australia
Large corporations (those that employ greater than 200 staff), employ about a third of Australia’s workforce (~4 million Australians), are likely to invest heavily in AI and use AI to reduce costs, which should benefit consumers in terms of improved services and reduced prices. They are obliged to improve profitability and return shareholder value, and have the right to use AI in that pursuit. It’s the politicians who need to address the countries unemployment risk.
Large established corporations also need to be on their toes, as AI will disrupt market conditions, dissolve traditional barriers to entry, alter competitive forces and change consumer expectations.
On the other hand, small and medium-sized businesses (those that employ less than 200 staff), account for ~ 99% of Australian businesses, could help absorb job losses if they use AI wisely to grow and create opportunities.
We are entering the fourth industrial revolution, and its different to those previous
Past industrial revolutions replaced old jobs with new ones that only humans could do. This time, it’s different. AI & digital employees will compete directly with humans. People will lose their jobs to AI skilled employees and AI digital employees/AI Agents.
The Role of Big Tech and Wealth Inequality
Big tech companies (like OpenAI (loss making ~ $5Billion), Microsoft and Google made over $100 billion in profits last year) promote AI utilisation while highlighting a new period of “abundance” and “shared prosperity.”
Do you think these companies will share their profits with people who lose their jobs? Globally, almost $1 trillion has been invested in AI, and much of this money will go toward developing labour-saving technologies. Investors will expect returns, and selling AI that replaces human workers will be one way to achieve those returns.
I agree that AI will boost productivity, reduce costs, and do good in a range of areas, it will also affect employment and Politicians need to address this aspect as its of significant importance to the Australian voter.
What Politicians Need to Answer
Politicians need to explain how they’ll deal with AI’s impact on the labour market. They need to address the following questions:
Will the new jobs AI creates outnumber the ones it eliminates?
If so, in what industries, how many and how soon?
How will workers be retrained, and how long will it take?
AI is getting more capable every month, with billions of dollars pouring into the sector to do exactly that, to make it smarter, more capable and be able to operate autonomously as digital employees. As such why wouldn’t AI as it evolves not also do many of these new jobs if it can do so many of the old jobs?
When AI Agents / employees are available to do the work of many government employees, will the government replace jobs with AI to reduce the tax burden on Australians or will they keep employees in roles that are no longer needed?
Specifically how will the government prevent adverse outcomes for Australians, specifically plummeting disposable incomes?
Based on available information, AI will drive down employment and dampen employment within new companies and established companies that are growing i.e. the correlation between company growth and staff growth will diminish.
In essence, over time good hard-working Australians will lose their jobs, and will struggle to find new ones, leading to economic and social distress, and a loss of hope as AI continues to grow in capability, displacing more and more labour.
Is Universal Basic Income the Answer?
Universal Basic Income (UBI) is often suggested as the solution to AI driven unemployment (note: if AI isn’t going to cause net unemployment why do people refer to UBI as a solution, why are terms such as “post labour economics” and questions regarding humanities search for meaning in an AI world, gaining prominence, if AI isn’t going to cause net unemployment?).
UBI studies are deeply flawed due to unrepresentative sampling and inadequate funding, despite which they are often touted as the solution, ultimately, it’s just more distraction, more platitudes. Until the politicians provide clarity and put the necessary systems in place it’s just more noise.
Sydney for example is one the most expensive cities in the world (in the top 30), a paltry universal income of $24,000 per year (which is quite a common sum within UBI studies) will not cover accommodation and put food on the table. Policymakers would need to create an appropriate “universal income”—a much harder task. This task is up to the politicians to solve, and given the speed of AI’s advance, one they need to address now.
In Conclusion
Journalists and politicians should focus less on risks such as AI existential threats (which are also legitimate) and focus more attention on the shorter term, higher probability risk of unemployment.
Politicians may like AI for its productivity and deflationary effects, they need to address the unemployment issue, and superficial references to new jobs, training and previous technological revolutions is an unhelpful distraction.
Big tech CEO’s should be asked, What’s the likelihood that AI will cause large increases in unemployment in the next decade? The honest answer is probably over 80%.
A closing quote to close out todays article, from those who have detailed knowledge of AI “I am in the camp that is concerned about artificial intelligence” …. ‘I agree with Elon Musk and some others on this and don’t understand why some people are not concerned.” ~Bill Gates.” To be clear, having listened to Bill Gates, he is pro AI, as I am, but we need to be both concerned and optimistic, we need to actively work to optimse the positives and minimsie the negatives.
A Call to Action
This is a call for Australia’s media and politicians to make addressing the risk of AI-related unemployment a key election issue. The Media need to ask the hard questions, politicians need to come up with clear plans to handle job losses and fund universal income, and voters should demand solutions. Businesses should also prepare for these changes by creating strategies to adapt and grow in an AI dominated world.
The time to act is now. AI has incredible potential, but if we don’t address its challenges, it could leave many Australians without jobs and hope for the future.
We can’t ignore the issue any longer—the best way to predict the future is to plan for it and create it. The AI story has yet to be told, it’s up to us and the politicians to drive the outcomes we want. I firmly believe that business leaders and government can navigate a path, which leverages the value of AI while building a better society, but this won’t happen naturally by default.
We must demand answers from our politicians and not accept big tech narratives or superficial throw away lines anymore.
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If you would like to discuss how AI may affect your business, or engage in AI training & strategic workshops to enhance positioning, boost productivity and work quality please email me michael@advisorai.com.au