Every time productivity jumps, the media narrative sows fear that employment will suffer…history disagrees
Every major technological breakthrough seems to trigger the same conversation: “This time is different…it’s going to destroy jobs”
➤ The Mechanical Loom - "Machines will eliminate textile workers entirely"
➤ The Steam Engine & Industrial Machinery - "Automation of physical labor will leave workers unemployed"
➤ Electricity and Assembly Lines - "Electrification and automation will reduce labor needs drastically"
➤ The Computer - "Computers will replace clerical workers and office staff"
➤ ATMs - "Automated teller machines would eliminate bank teller jobs"
➤ The Internet - "E-commerce and digitalization will destroy retail and media jobs"
➤ Robotics in Manufacturing - "Industrial robots will fully replace factory workers"
Sound familiar? Today, the false media narrative is creating fear about AI, but history suggests we may be asking the wrong question.
A concept from economics, Jevons Paradox, offers a more useful lens:
➤ When something becomes more efficient and cheaper to produce, we don’t consume less of it…we consume more
➤ Increased demand can far outweigh the negative, productivity-gain effect on employment
The same dynamic is now showing up in AI:
➤ AI is lowering the cost of intelligence
➤ Analysis, content creation, coding, and customer service are becoming faster and more accessible
➤ When the cost of something valuable falls, demand tends to expand
Demand expansion matters, and it's impact is currently underappreciated:
➤ More businesses can afford capabilities that were previously out of reach
➤ New products and services are created
➤ Previously unimagined use cases emerge across industries
The result is not simply “less work”
➤ It is often more total work, just distributed differently
We have seen this before:
➤ ATMs did not eliminate bank tellers
➤ Spreadsheets did not eliminate finance professionals
➤ AI won’t eliminate developers
➤ It will expand the market (checkout the trend on software engineer job openings 🚀)
That does not mean there will be no disruption:
➤ Routine, repeatable roles will face pressure in the near term
➤ Transition costs are real and should not be dismissed
➤ Should governments and institutions invest in retraining? Absolutely
➤ Will AI create mass, persistent unemployment? Unlikely
There is a strong argument for the opposite dynamic:
➤ New business formation is already accelerating
➤ The cost of building, launching, and scaling ideas continues to fall
➤ Lower barriers tend to expand economic activity, not shrink it
The question is not:
➤ How many jobs will AI eliminate?
It is:
➤ How much demand will AI unlock?
That is where the long-term impact will be determined.