Andrew Yang, Forward Party co-chair and former Democratic presidential candidate, joins ‘Squawk Box’ to discuss the impact of AI on jobs, regulation around the technology.
CNBC’s Deirdre Bosa joins ‘Money Movers’ to discuss Google’s buyouts for certain parts of the company.
The emergence of artificial intelligence as a substitute for entry-level administrative work is one of the most disruptive forces in the modern labor market. While AI offers efficiency and cost savings for companies it also threatens to dismantle the foundations of professional mobility for millions of workers.
The rapid rise of artificial intelligence is transforming the labor market, especially by eliminating entry-level white-collar jobs. Tasks like customer service, legal research, and data analysis are increasingly automated. Reports from McKinsey and the World Economic Forum estimate that AI could displace up to 50% of these roles by 2035. Major firms like IBM and Accenture are pausing junior hiring as AI tools replace human labor. This shift not only reduces employment opportunities for recent graduates but also threatens long-term career mobility, wage growth, and economic stability, raising concerns about widespread unemployment and the weakening of the professional talent pipeline. CHAPTERS: 0:12 White-Collar 0:47 Entry-Level 1:03 Job Losses 1:25 Internships 2:10 Layoffs 2:58 Career Mobility 3:36 Job Market 4:11 Employment 5:06 Administrative Roles 7:15 Workforce
the job market is changing faster than ever according to a study by the World Economic Forum nearly a quarter of all current professions will change in the next 5 years due to AI half of entry-level white collar jobs disappearing and 10 to 20% unemployment in the next 1 to 5 years the tech sector is already being hit but this will spread to many other sectors of the labor economy tech has already been hit and other industries are just months away from massive cuts even the CEOs of the largest AI companies in the United States are warning about the potential consequences ceo of an artificial intelligence company warns that AI is about to wipe out millions of jobs in the next few years even calling it a bloodbath the effects of this labor revolution could bring significant consequences potentially leading to unemployment rates never seen before it’s not just tech the CEO of a major AI company says could wipe out half of all the white collar starter jobs possibly causing unemployment to soar as high as 20% so how could AI eliminate nearly half of all white collar jobs the accelerated advancement of artificial intelligence is transforming the global job market in unprecedented ways what was once limited to repetitive manual tasks or data processing has now evolved into tools capable of executing complex cognitive functions that were historically the responsibility of entry-level administrative workers use cases for AI continue to grow there is one industry leaning hard into the technology customer support a report by McKenzie Company estimated that generative AI could automate activities that currently represent between 60 and 70% of the working time in certain office occupations the most vulnerable positions are those focused on routine information processing rather than human judgment empathy or interpersonal skills for example in the customer service area AI powered chat bots already handle more than 85% of first level support requests in large tech companies up from 30% in 2020 similarly law firms are using tools like case text to conduct legal research and draft contracts in minutes tasks that previously took a junior lawyer hours at a fraction of the cost of a human lawyer Browder says he is able to use his software to help everyday Americans battle legal issues such as traffic tickets and evictions so far he says his company has helped in more than 1.5 million cases and saved his clients millions of dollars a report by the World Economic Forum projected that by 2027 approximately 83 million jobs could be lost globally due to AI and automation most concerning is that the majority of eliminated jobs are entry-level or junior roles likewise Goldman Sachs estimated that 300 million full-time jobs could be affected by generative AI with a greater impact in developed economies due to their reliance on office work in the US the report identified that up to 46% of tasks performed by entry-level employees could be automated in the next decade in concrete terms if these projections are fulfilled between 10 and 12 million entry-level office jobs could disappear in the US alone considering the current size of the administrative workforce and the behavior of large companies in 2024 and 2025 reflects this transformation all right the layoffs that are rippling through the tech industry aren’t showing any signs of easing ibm is the latest tech giant to do so company announced it will cut about 3,900 jobs mainly in its IT services segment companies like IBM Deote and Accenture have announced pauses or significant reductions in junior level hiring the CEO of IBM stated that the company planned to halt hiring in roles that could be replaced by AI especially in human resources and administrative support these roles represented about 26,000 employees within the company similarly Accenture announced in its 2024 fiscal report the cut of 19,000 jobs mainly among non-billable and entry-level staff while increasing its investment in training and deploying generative AI even in sectors like finance and marketing junior analysts are being replaced by AI tools that offer faster cheaper and more scalable solutions the collapse of entry-level jobs has also affected internships and training programs which have traditionally served as gateways to the professional market according to the National Association of Colleges and Employers the number of internship offers from Fortune 500 companies dropped by 22% between 2022 and 2024 in the tech sector the decline was even greater around 34% a blunt new warning for American workers a tech CEO says artificial intelligence is about to wipe out millions of jobs this decline is directly related to the growing use of AI in internal processes companies are finding that young workers once essential for tasks like transcription data labeling or content moderation are no longer indispensable as a result fewer and fewer graduates gain the experience needed to advance to intermediate positions creating bottlenecks in long-term professional development in addition to eliminating jobs AI is also contributing to wage stagnation in administrative roles according to the Federal Reserve Bank of San Francisco real wage growth in entry-level professional jobs fell by 1.8% in 2024 in contrast to a 2.4% increase across the overall economy this stagnation is partly due to the overupp of candidates competing for an evershrinking number of openings as well as the corporate preference for AI based solutions many young people across the country are finding it difficult to find summertime work the labor market also posing a big challenge for young people looking for a summer job a new report suggests there’s been a steep decline in the number of temporary jobs available economists also warn of a growing polarization of the labor market while advanced technical and executive positions remain in high demand and low-wage service jobs persist due to their physical or interpersonal nature the middle tier traditionally filled by young college graduates is disappearing ai is not only increasing human productivity it is directly replacing it whereas previous waves of automation such as spreadsheets supported human work generative AI can perform tasks from start to finish without human intervention and it reflects a troubling increase in businesses and companies opting to cut back human tasks in favor of technology a 2024 MIT study found that the adoption of AI led to a 19% drop in job postings involving repetitive cognitive tasks while job postings for AI engineers and product managers rose by 11% this asymmetry suggests that for every new job created in AI two to three junior jobs disappear or are never posted the disappearance of entry-level jobs poses considerable macroeconomic risks these positions are essential for skill acquisition upward mobility and the renewal of human capital at intermediate and senior levels without them the talent development pipeline could collapse leading to a shortage of qualified personnel in key sectors within a decade moreover rising unemployment among graduates could lead to a decline in consumer spending higher default rates on student loans and increased demand for public subsidies the unemployment rate for people between the ages of 22 and 27 with at least a bachelor’s degree is consistently higher than the national rate all of which would put pressure on the broader economy a projection from the Congressional Budget Office warned that if the current trend continues student loan delinquency could rise from 7.8% 8% to 12.5% by 2027 the emergence of artificial intelligence as a substitute for entry-level administrative work is one of the most disruptive forces in the modern labor market while AI offers efficiency and cost savings for companies it also threatens to dismantle the foundations of professional mobility for millions of workers
amazon CEO Andy Jasse says artificial intelligence will lead uh to a reduction of its corporate workforce eventually uh over the next few years He wrote in a memo to employees that they should figure out uh in his words how to get more done with scrappier teams That’s nice Joining us now former Democratic presidential candidate Andrew Yang It’s um it’s a daunting future we have U Mr obviously and you’ve been I said we I I was at a was it a book party that that uh that I attended for you a book event six years 6 years ago talking about uh this on the horizon and and the need for maybe even back then uh universal uh basic income I guess at this point you’re you’re thinking wow it’s accelerating faster than than you even thought Yeah it’s here even faster than I’d imagined back in 2019 and 2020 And I talked to CEOs who are replacing thousands of customer service workers with AI Entire design departments even coders are being supplanted And Becky and I were just talking about how we used to tell our kids “Hey if you major in computer science you’ll be good to go.” And now those graduates are having a hard time finding jobs It’s starting to appear in the numbers for recent college graduates and entry- level white collar work uh if you you know if you’re a science fiction um believer it’s you know I was going to ask you whether the whole lite chorus that we’ve heard for 150 years that it’s never actually just it’s always been better technology long term not maybe not always but but many times even more jobs are created from the the technologies that’s being deployed whether it’s internal combustion engines or whatever you want to look at you would argue this time is is different with with AI and then it’s it’s not I mean then if you like I said science fiction not just displacing us from work but maybe just displacing us all together uh 100 years from now you have to take a lot of those science fiction style scenarios very seriously Joe in my opinion uh and the most common job in 29 states is still being a truck driver you have robot trucks just now hitting the highways and that they’ll be gone Daario Amadeay the CEO of Anthropic said Look we’re going to automate away a lot of the entry-level white collar jobs And he’s right because I talked to executives at these companies who are doing exactly what Andy Jasse is talking about at Amazon looking around saying “Hey guys instead of hiring a bunch of 22 year olds maybe we should have AI do that work.” Uh so I I fear for the next generation because all of the experience that maybe we got in our 20s uh and 30s there might not be that kind of ladder available to them Look Andy Jasse said that he he wants employees to kind of take advantage and learn how to use AI learn how to do their jobs better maybe make things easier Maybe it takes care of some of the grunt level work you don’t like doing but it allows you to have more space and room to do things creatively Should we be afraid of that oh well what what this means in real life Becky is you have a department of six people let’s say say coders or designers and then you end up eliminating four or five of them and then there’s one designer coder empowered by AI So there’s going to be a beneficiary in the organization but you’re just not going to need as many people in that department and that’s going to play out over and over again The Pope had some some interesting thing and and he’s getting involved Uh last pope was you know big on climate change this this might be uh important and he says the worlds of Leo the worlds of science and politics uh need to immediately tackle this problem without without allowing scientific progress to advance with arrogance harming those who have to submit to power and he’s going to host a lot of people but right now it’s just break neck there’s no there’s no governors on on what’s happening whatsoever no I mean if you think about the incentives of the individual firm it’s just to go go go as fast as possible because there there’s like a bit of an arms race in terms of compute literally and the data and the model literally and then they’ll they’ll look up and say our competitor is China so I got to go go uh the question is what happens to people and and I’m someone who look I’m not anti-progress anti- innovation I think all that stuff is very positive but you have to be cleareyed about the impact on people on organizations on workers and in my estimation this fourth industrial revolution is the most dramatic thing that’s happened to our society in history uh AI might be the most radical breakthrough in human history And so we have to to think much much bigger about that allows more spare time that allows people to uh we become so rich from AI that maybe you can do UBI and and not everyone has to work 5 days You gave me a thumbs up Is that the answer for you uh to me that is the answer Uh the question is how do we get from point A to point B because right now the beneficiaries of AI are going to be a small handful of firms And then the average 22-year-old or uh truck truck driver or whatnot is going to be just looking around saying “Where did my job go?” Uh and they’re not going to be experiencing that kind of value That to me is what government and politics are for That’s what got me into the Democratic race in 2020 Unfortunately right now our political class is very very far away from these problems And one of our goals should be to try and bring them together the way the Pope’s describing All right So what do you think of the I don’t know if you call it a rider but the the initiative that’s trying to be pushed into the budget bill the one big beautiful bill right now that has made it through the House version We don’t know what’s going to happen with the Senate entirely because of the bird rules and others but it it’s a move to say the state attorney generals other states have no way of setting any rules or guidelines or laws around AI that it should be only allowed at a federal level And by the way there are backers a lot of the big AI names that are backing and kind of lobbying for that Oh certainly if you’re an AI company the last thing you want is a hodgepodge of state rules uh that you then have to navigate or run a foul of And on a lot of these fronts uh including social media by the way what you see is you see a federal hands-off approach and then the states at some point step up and say you know what I don’t love the this treatment of customer data Uh they’re trying to avoid that in AI If you’re going to have that then you would need a buttoned up sensible approach from the federal government guidelines before you Yes Exactly in but the incentives for the corporates will be let us do whatever we want and then even for the individual legislators will be like oh do I want to mess with the AI guys not really so you’re going to end up with an a wild west approach what what do you hear you you say that you talk to CEOs who are talking about all the people they’re they’re getting rid of jobs that they’re replacing with AI what what what do you say to them what what’s your approach to say hey this may not be great in the in the long term I say come clean I say just and by the way Andy Jasse uh making those public statements Dario Amade making those public statements they’re signaling to us guys we are going to be getting rid of a lot of workers We’re going to get leaner and meaner So please please if you’re in government do something about it because their responsibility is not societywide Their responsibility is just to make their organization successful And those interests are going to diverge from the the average workers pretty sharply It used to be when you guys saw a company increase headcount you’d say “Okay good They’re they’re growing They’re healthy.” Increasingly headcount is going to be a bad sign And you’re going to look at them and say “Wait a minute What are you guys doing wrong?” It’s always been the case on Wall Street though I can I think back 20 years and even longer than that where you know you talk about on the floor how they’re they’re laying people off They do Yeah There’s a bump when when there’s a you know a cut back in workers