AI’s effect on the Economy

By Mat Belyus

Valet Tech

This article will continue from the last one on A.I. (Artificial Intelligence). We see A.I. in almost all articles for writing at this point, and many teachers in school see this in students’ work as well. From the last article, we had a teacher ask how to spot work generated from A.I. We are starting to review tools that will help people to spot work from A.I. ChatGPT is the most prevalent writing software at this time. Still, many others are available, and more are coming as well. This paper is not currently using A.I. that I know of, BUT I may want to entertain the idea. Using A.I. in writing allows getting more done in less time; as I mentioned, a friend using ChatGPT in writing grants saves him several hours per grant, and he does many of them.

I recently saw a statement that major corporations would have a chief artificial intelligence (CIA – this acronym may confuse many people, LOL) to manage the company’s work with AI. I completely agree with this, and I believe some of them already have one or are forming the position now. This position will be needed for corporations to be competitive in the future.

Here is where many facets will come together, which will be discussed over several articles. In many businesses, the most expensive part is labor. Let’s give the example of a worker making $20/hr, which is 41,600 plus benefits of an estimated 30% for about 54K/yr. If the company is publicly traded, you know where this is going. If they can replace one individual of 54K/yr with software of 1-2K/yr, the company will have at least 52K more profit per year.

We are seeing an economic downturn now, and many predict that next year will be a significant downturn. I don’t have a crystal ball, but if companies begin to leverage A.I. to stay competitive in their industries, we may be seeing layoffs and terminations in the 20,000-40,000 range. If the top 20 largest corporations lay off/terminate 20,000, that is 400,000, which is a considerable number, but on the grand scale of the US economy, still a drop in the bucket. There is a trickle-down impact from these losses. Those out of work will find it very hard to find jobs in their field because A.I. will have taken over many of the positions. This will cascade into housing (can’t pay for the house), banking (foreclosures and no one to buy), automotive, and so on. I believe we will see layoffs and terminations into the millions in the next 3-5 years. We will continue this in the following article.

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