Effects of AI on the Job Market

Alex Myron
Jack Stapleton
Jiabei Gong
Mark Copeland
Matthew Williams

Date: May 12th, 2023

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Executive Summary

Team & Expertise

The report was crafted by five engineering undergraduate students. Each member of the team
is familiar with their individual fields, while each member of the team has sufficient knowledge
and interest about Artificial Intelligence, in addition to their applications and implementations.
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With the implementation of Artificial Intelligence into the job market, the manufacturing industry
has the most significant impact, from the highest unemployment rate to the lowest available
positions provided by such implementations. In addition to job loss, modern AI systems lack
feasibility and compatibility as they’re unqualified for handling advanced production processes,
such as ERP and SCADA. There are also negative effects of AI on society that are inevitable,
including privacy concerns and data abuse.

Though the implementation of AI technology in the workplace raises concerns about issues
such as job loss, user privacy violations, and abuse of data, it can also be beneficial in
improving accuracy and productivity. There are three main arguments regarding implementing
AI technology in the workplace: opposition, support, and those who seek a balance of the two.
The opponents fear that their jobs will be taken over by AI, leading to unemployment, while the
supporters stand for the productivity and efficiency of AI systems. As for the middle ground, they
advocate for AI taking care of repetitive tasks while leaving creative and innovative ones to
human workers.

The rapid growth of AI technology in various fields over the past decade has sparked its
capabilities and ethics, especially regarding the transparency of user data safety and privacy.
Some people believe that AI is a valuable asset in enhancing manufacturing processes and
increasing productivity, others hold the opposite view as AI systems can lead to unemployment
and loss of creativity, not to mention ethical issues such as illegal spying. Considering the fact
that AI technology has not fully merged into the industries, the impacts on the job market still
remain undetermined. Therefore, it is necessary to weigh the balance between the negativity
and benefits of such implementations. Moreover, it is also important to deal with such issues
that will cause those problems before putting AI labor into practice.
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Table of Contents

Executive Summary …………………………………………………………………………………... 2

Introduction & Methods ……………………………………………………………………………… 5

I. Industries at Risk ……………………………………………………………………………….…... 6

II. AI Limitations in Manufacturing …………………………………………………………………. 8

III. Job Loss Due to AI in Manufacturing ………………………………………………….….…… 9

IV. Impact on Society ……………………………………………………..………………..….….… 10

V. Results …………………………………………………………………………………………...…. 12

VI. Discussion ………………………………………………………………………………………… 13

Conclusion & Recommendation ……………………………………………………….….…..….. 14

Bibliography ……………………………………………………….….…………………………..….. 15
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Introduction

Artificial intelligence (AI) has grown into one of the fastest growing fields in the world. It is
affecting more aspects of daily life and improves the efficiency of many industries. For many, AI
is a tool for productivity, while for others, it is a threat to their livelihoods. The implementation of
AI over the last decade has renewed fears of impending job loss due to AI replacing jobs. This
is because of the rapid increase in AI intelligence and capabilities, with many tasks in industries
such as programming, information technology, and customer service being faster and easier
with AI as opposed to their human counterparts. With one McKinsey report claiming that 400
million jobs could be lost around the world by 2030 due to AI implementation. Unlike being
between jobs, this unemployment would be due to structural changes in the job market, with
workers having lost their jobs having no transferable skills. This would be much like the
deindustrialization of the American midwest between the 1970s and 1990s, with many workers
losing their jobs and having little to no transferable skills. This reliance on AI also creates
security risks with the increasing rise of cyberattacks and AI terrorism which could cause partial
or complete shutdowns of supply lines and a more unstable supply chain. There are also
increasing concerns about consumer privacy with AI as more and more industries move towards
AI for handling customer information and interactions. All of these issues raise concerns over
the long term effects of AI on both businesses and consumers. The idea of smart machines is
not a new one. Originally, smart computing dates back to the 1950s with the first logical proof of
AI being possible being Alan Turing’s paper “Computing Machinery and Intelligence” in 1950.
Since then, research continued to grow due to the decreasing cost of computers during the
1970s and 1980s. Since then, AI has grown into an umbrella term for any computer system that
can perform tasks that only humans could previously do including facial recognition, decision
making, and data sorting. This includes methods such as machine learning, neural networks,
deep learning, and many other systems of smart computing and pattern recognition. Currently,
AI sees varied applications in several industries. These include processing large amounts of
data that would otherwise be impossible to sort by hand, demand and supply forecasting, and
optimization of systems, among many others. These implementations help to streamline
production processes and do not cause a lot of job loss. As a result of these concerns, a more
narrow implementation of AI should be explored. This report will discuss the pros and cons of
artificial intelligence’s impact on industry and the scope that artificial intelligence should be
implemented in the future. It will also discuss the industries most likely to be affected by artificial
intelligence’s implementation over the next several years, as well as discussing possible long
term unemployment numbers due to artificial intelligence. Finally, this paper will look at solutions
that will allow artificial intelligence to be used to optimize certain jobs that humans cannot or will
not do while still maintaining human creativity in the workplace and ensure minimal job loss.

Methods

The research was conducted using the Google Scholar database as well as the Miami
University Library’s database. All data was collected from the Internet. These methods were
primarily used for time management and limited resources. The main resources used were
scholarly articles and research papers on AI and how it is used and will be used in the coming
years. Labor statistics and charts were also pulled from various sites concerning the job market
and the effects of artificial intelligence on various industries as well as on artificial intelligence’s
current usage within various industries. No primary research was conducted and there was no
practical reason or time to conduct independent research or surveys on what the general public
thinks about artificial intelligence and its role in industry. It was also determined that time would
better be used performing secondary research instead of doing surveys or primary, independent
research.
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I. Industries at Risk
There are multiple jobs that are at risk of becoming obsolete due to the advancement of artificial
intelligence from a number of different industries.

The first job industry that is at risk of being replaced by AI is jobs in technology, such as
software engineering and computer science. Despite the fact that coding, computer
programming, and software design are highly demanded skills in today’s society, these jobs can
easily be taken over by AI tools. For example, ChatGPT can easily develop code in any given
programming language, and it is also easily able to do calculations. It can also do this much
faster than a typical human programmer can, so artificial intelligence can allow for greater
productivity and can be very cost-effective for employers. There are several tech companies that
have already considered replacing their coders and software engineers with artificial
intelligence.

Jobs in the legal industry are also at risk of being replaced by artificial intelligence. The number
of jobs in the legal industry is already relatively low as it is, but AI could potentially eliminate all
job positions in this field. Those in the legal industry are required to consume large amounts of
information and digest it through a legal briefing. AI could easily do the research for people,
meaning that there will be an even smaller demand for people to work in the legal industry. One
limitation however is that AI is unable to replicate human judgment which is needed in order to
understand what a human client or employer is looking for. It could be possible however for AI to
replicate this human judgment in the future.

Artificial intelligence can also potentially replace human teachers in the future. As stated earlier,
AI is able to consume large amounts of information. An associate dean at the Rochester
Institute of Technology, said that ChatGPT can easily teach classes despite a few bugs and
inaccuracies that are present in the system. It may currently be incapable of teaching courses in
higher education, but it could easily teach elementary level classes. Despite the fact that AI
could easily teach a class, there will always be a need for human connection in the classroom.
This was evident during the start of the COVID-19 pandemic when many schools canceled
in-person instruction for the remainder of the school year and moved to online instruction. Many
students did not receive a proper education and many felt isolated and depressed as a result of
moving online and not interacting with other people.

Any job position in the financial industry could also be affected by artificial intelligence. Most
jobs in the financial industry require employees to manipulate a significant amount of numerical
data, which can easily be done by AI. AI can also perform additional tasks that are required of
many employees in the financial industry. Some forms of AI are able to identify trends in the
stock market, highlight investments that are doing good or bad, use various forms of data to
forecast a better investment mix, and be able to communicate all of that information. AI could
also lead to higher efficiency and lower costs within the financial sector, as well as improve the
quality of products and services for clients due to a broader and deeper analytical basis.

Customer Service is one job position that has already been taken over by artificial intelligence to
some extent. Many companies use live chat interfaces rather than actual people to assist other
customers and to obtain information from them. These live chat interfaces are imperfect
however, and many customers have reported to have received inaccurate information through
the live chats and have overall been unsatisfied with the service that they received. Although
there are currently several issues with these live chat interfaces, they could be improved and
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ultimately save a lot of time and money as there will no longer be a need for human customer
service representatives.

Media jobs may also be affected by artificial intelligence. Some media jobs include jobs in
advertising, technical writing, and journalism. Artificial intelligence may take over the media
industry partly for the same reason it may take over the legal industry. ChatGPT is able to
consume large amounts of data and digest it in writing, and companies have already started to
experiment with different forms of AI. As stated earlier, artificial intelligence is a lot quicker at
writing down information than humans are, meaning that it will save a lot of time for companies.

Last but not least, graphic design jobs are at risk of being taken over by artificial intelligence.
This is due to its ability to generate images within a matter of seconds. This is particularly
concerning, as it shows the ability for artificial intelligence to replace human creativity. Some
people argue that artificial intelligence in this field is actually a good thing, as it can actually help
artists and graphic designers produce more high quality work, but that does not outweigh the
fact that there may no longer be a need for human creativity. Even if AI does help artists and
graphic designers produce more high quality work, it would cause the wages of these artists and
graphic designers to significantly decrease.

Overall, there are many benefits to using artificial intelligence in various industries, it should not
be used to completely replace human activity. While AI implementation may be beneficial for the
economy and is more efficient than human productivity, it has the potential to cause
unemployment rates to rise across the world. In any given job/industry, artificial intelligence
should only be used as a means of assistance. Artificial intelligence should not replace any
human research or human creativity.
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II. AI Limitations in Manufacturing

AI has many benefits that it can offer the manufacturing industry. However, some of these
benefits will come with time and aren’t currently feasible. With the current level of AI technology,
we aren’t able to use it for things such as IOT technology. There is also a lack of AI standards,
quality, efficiency, and workers with the skills needed to use AI.

IOT, or internet of things, is a system of several computers and devices with unique IDs and the
capability to transfer data over a network without the need for interaction between human to
human, or human to computers. AI’s currently use cloud-based technologies, which lack the
maturity to utilize ERP, and SCADA. These are types of systems which are used in order to
store data and get tasks done. This is why current AI technology is not fully sufficient and
optimized to be used in the manufacturing industry.

ERP stands for Enterprise Resource Planning, which is the system used to manage financing,
HR, manufacturing, and more. Although some of this process is able to be done by AI, as
previously suggested by the Adoption of AI in EU Manufacturing there are still limitations with
how AI handles ERP, meaning that it’s unable to be fully automated by cloud-based AI currently.

SCADA is the Supervisory Control and Data Acquisition. It is a type of system that is used to
collect operational technology real-time data from machines and can be on an onsite or a
remote server. One of the obvious problems with it in combination with AI is onsite server usage.
This is because AI is primarily operating on remote servers, this limits what type of SCADA
system is able to be used. This can especially be an issue for smaller businesses with little easy
access to remote servers to host AI for this system.

AI is a newer field of technology, leaving many unclear standards about its usage. As with all
new technologies, it takes experimentation and work to determine the best way of utilizing it
within different fields. AI might be seen as the potential future of manufacturing, but with no set
standards on how to use it in the field there is much work to be done to understand how it can
be used in the manufacturing industry.

Even with how fast AI technology has been growing, we still haven’t found an efficient way of
determining between what data is good or not. This is important so that only proper data without
any errors is used for making decisions. Until AI is able to manage such tasks, it may not be a
suitable for usage within big data industries, such as manufacturing.

The last key roadblock for AI in the manufacturing field is the workers. Most workers don’t
understand how to operate or interact with AI in order to complete their jobs. Training will come
once AI has been fully implemented, however until then training workers on an ever-changing
system is a hurdle.
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III. Job Loss Due to AI in Manufacturing

With the implementation of any automation, AI will have an impact on the economy. This is due
to a few factors including labor employment and income distribution. The use of AI in the
manufacturing industry will lead to the replacement of jobs, thus job loss. It also closes the
future of potential positions being necessary where AI is being used.

AI implementation in manufacturing would drastically increase the unemployment rates, not only
in the United States but all across the world. With AI’s increased use in manufacturing about
47% of the total US employment is at risk and these numbers are only going to increase without
regulations and ethical practices. AI in manufacturing can be a great tool for a company
however only those in high seated positions would be benefiting from it as they wouldn't have to
pay those employees. The economies would crash as countries would not have a continuous
money as mass people would be without jobs and sustainability. In fact around 30-40% of jobs
in advanced economies will be at risk within the next 15-20 years. AI in manufacturing and other
jobs have already seen an increase in layoffs. Companies want to increase productivity to
increase their profit however increasing a profit is futile when there is no money in people's
pockets to buy a product. It is estimated that over the past twenty years companies have laid off
over approximately 11.7% of workers.

Unemployment is the biggest issue with ai’s increased implementation. Companies who employ
these practices will see their productivity increase however it is hurting economies worldwide.
Companies would need to understand that there is a limit that AI should have in the workplace
as it lessens creativity at best and at worst puts most of the job market out of business. AI is
developing quicker and quicker with advancements in technologies. When you increase the
implementation and effect AI has in your company you have to prepare for changes otherwise it
is going to take over. With AI, especially in manufacturing, there are some ethical issues that
have to be factored in order to run an economically stable company. Companies in a capitalistic
economy, like here in the United States, run the economy which is why it is so vital to maintain
a safe implementation of AI. Manufacturing, before AI, was much slower and required a much
larger workforce in order to produce the quantity and quality of the company's product. Jobs
were not greatly affected until the creation of the computer where we began to see certain job
loss from specific areas, but underdeveloped systems cannot take jobs away from the people,
as they were definitely not smart enough too. In 2023 AI is so advanced that there is a
possibility for it to take the jobs of millions of people. In the United States and other countries,
jobs are what is needed for a family or an individual to survive.

AI will eventually not require human input at the current technological growth that the world is
experiencing. Computer scientists can project this event as it would be the downfall for the
nation and its people. Although job loss is inevitable with the increase of technology, with the
foundations in which this nation was created, increased AI implementation would completely
ruin the lives of people. There is too much data that shows the increased job loss due to current
AI implementation to warrant an increase in AI intelligence and implementation in
manufacturing. With job loss nearing 50% in the next 25 to 30 years the only way that you could
safely increase AI in manufacturing is to use AI ethically by means of productivity. AI needs to
enhance the workplace so different types of jobs are created in order to spark creativity. This
would come with the removal of the labor intensive jobs that have been reduced over time.
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IV. Impacts on Society

The implementation of Artificial Intelligence into the manufacturing industries can have both
positive and negative impacts on society, from various aspects.

Beginning with the benefits of AI, such implementation is capable of bringing significant positive
changes to society. From improvement of efficiency to accuracy and productivity among various
industries, AI technology is also alternatively transforming a variety of fields, like the medical
and financial systems. In addition, AI systems are able to potentially enhance medical practices
by coordinating with physicians; as for the financial industries, this kind of implementation will
prevent financial crimes from occurring, while securing the interests of the public.

Accuracy & Efficiency

In terms of accuracy and efficiency in areas such as the medical industry, systems that have
been implemented with AI technology have shown great improvement in patient outcomes by
generating more accurate diagnostic outputs, enhancing treatment plans, and accelerating the
overall medical processes.

Specifically, the diagnosis and treatment of diseases with the help of AI can be traced back to
the 1970s, when the MYCIN system was developed for diagnosing severe infections caused by
bacteria. Though the system still exists in the labs only and hasn’t been put into clinical practice
yet, the accuracy of a successful diagnosis by such a system has been proven to be equal to or
greater than that done by a human.

Moreover, AI implementation has also been proven to have great potential in medical imaging,
like X-rays and MRI scans. To be more specific, when it comes to detecting diseases as serious
as cancer, or potential health problems, AI systems are more capable of processing and
analyzing a vast amount of medical images at the same time, with more efficiency but only a
minority of errors. For instance, AI-based diagnostic tools can be used on detecting breast
cancer, which has a much higher accuracy than human radiologists.

Overall, these AI-based systems can have a significant impact on the medical industries, which
will produce high-accuracy diagnostic results, enhance the reliability of treatment plans, and
speed up the medical processes.

Fraud Detection

When it comes to the financial industries, AI is also helpful in analyzing financial data and
identifying abnormal patterns of fraud or suspicious activities, which can be quite useful for
preventing financial crimes.

Using AI-based algorithms, financial institutions will be able to detect fraudulent activities and
suspicious behavior patterns with more efficiency and effectiveness. These systems are also
capable of monitoring and analyzing a huge amount of data at the same time, such as
transaction histories, customers’ spending patterns, or GPS locations, in order to identify any
illegal or suspicious activities on certain accounts.
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Moreover, AI systems are able to enhance security from past failed attempts on suspicious
encounters to improve their detection capabilities. These kinds of systems are highly adaptable
to emerging abnormal patterns and are capable of preventing them from occurring again. It is
crucial for the financial industry to implement such systems or algorithms, not only for their own
interest but also for the sake of society and the public, to secure the interests of both public and
private parties.

Overall, AI-based systems are capable of enhancing the efficiency and accuracy of medical
diagnosis, while keeping the financial systems secured, which protects the interests of both
public and private parties, along with society itself.

On the other hand, AIs can be potential threats to society as they are capable candidates of
challenging the laws and regulations; while with such implementation, there’re various negative
aspects, such as privacy concerns and data abuse issues.

Privacy Concerns

Privacy concerns have been a significant part of the digital era, and it’s becoming quite common
lately with the increasing AI utilization as people are more worried about their private data being
stolen. In addition, AI systems often require tons of data that might include personal information
in order to operate, which raises concerns regarding data privacy. For example, anyone with
access can intercept people’s personal data and the result of that kind of sensitive information
falling into the wrong hands is quite concerning.

Based on an article posted on UNICRI, the US company Clearview AI violated Canadian privacy
laws by collecting photographs of Canadian adults and even children for mass surveillance and
facial recognition without their consent, and for commercial sale, which only serves to further
reduce trust and confidence in AI businesses, as well as to reduce trust and confidence in entire
countries’ ability to appropriately direct matters related to privacy and AI, such as identity theft or
any illegal activities related to fraud.

Data Abuse

From AI systems having access to personal data, the issue of data abuse or data manipulation
is also worth questioning. With almost unlimited access to all sorts of personal data, AI systems
can easily forge believable, in order to trick people into manipulation.

Deepfakes, as one of the many things AI is capable of mimicking, have become a growing
concern as they can manipulate social trends in the way that people behind such activities
desire. For example, AI-faked videos and audios are almost identical to the actual ones and
impossible for the public to distinguish, and they have been widely used on spreading false
information and some of them clearly have a political intuition.

In conclusion, it is important to address these privacy concerns and ensure that data is being
collected in a transparent and ethical way to ensure that individuals have control over their
personal data of how and where they’re being used.
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V. Results
Overall, there are a few general concerns over the implementation of AI technology in the
workplace. Chief among these being job loss in multiple industries, concerns about user privacy,
and abuse of data. There are also benefits to implementation of AI as well, including higher
productivity, higher accuracy in measurements, and higher efficiency in various fields. The key
arguments within the implementation of AI stem from these core issues and benefits. There are
three main arguments about AI in the workplace, those who are opposed to it in most
capacities, those who support it in all applications, and others that want to create a middle
ground between the two. In arguments against AI’s implementation in the workplace, the issues
primarily focus on the humanitarian aspects of job loss as well as security issues more broadly.
For many, their argument against AI is similar to that of those who were against outsourcing or
implementation of robotic assembly lines from the 1970s through the 2000s, in which well
paying skilled or unskilled jobs were either moved overseas or replaced by robots. This caused
the displaced workers to not have many transferable skills and high unemployment from those
formerly in the manufacturing sector. Supporters of this argument want to see AIs
implementation limited to only jobs that are impossible by humans. Another key position is
where AI is implemented in as many areas as possible for increased productivity and efficiency.
While this does not factor in the negatives of AI, it would result in the technology being
harnessed to its full potential. AI can be better than humans in tasks involving fraud detection,
accuracy, and predictions based on preexisting models. While being perceived as insensitive to
affected workers, the increase in productivity with lower costs would be seen as a net benefit to
society as a whole. The third and final position on the argument of AI implementation is to find a
middle ground in which AI optimization is used to supplement human creativity. Supporters of
this option believe that AI technology is a good tool, however it can go too far in replacing
humans and should be used to do jobs that are challenging for humans to do on their own while
allowing humans to do most of the work. AI in this case would be used in areas like crunching
large datasets and the creation of tools that can do repetitive tasks faster than a human can,
allowing for time and resources to be allocated towards other tasks, increasing productivity.
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VI. Discussion
Over the last ten years, AI technology has been growing exponentially in various industries.
Debate over AI’s capabilities and ethics has become a large part of technological ethics over the
last decade, picking up especially in the last few years with the advent of ChatGPT and other
powerful AI. Overall, many have seen issues with AI’s transparency with user data. As
cyberattacks and data breaches become more common, many developers see AI as a weak link
that could cause intrusions to become more common. There is also widespread concern over
how companies deal with data internally with selling user data and using data for marketing and
advertising purposes. This corresponds to an increasing concern over data and consumer
privacy in the digital age, as corporations are trusted more and more with consumer data and
information. Despite this, many believe that AI is a valuable tool that can optimize many
processes that were too difficult or time consuming for humans to do. This also leads to the idea
of controlled optimization, in which the AI is utilized as a tool to help human workers get more
done by doing repetitive tasks. This is contrasted by controversy over what the limit should be
for defining human creativity. As some consider human creativity to be anything a human can do
regardless of efficiency without taking optimization into account. While others see human
creativity as needing optimization as the perceived limit of development is human technology.
Overall, the general consensus is that AI is a useful tool that can be used to streamline certain
processes while having certain concerns regarding ethics, job loss, and data security. Overall,
not a lot of progress has been made in solving these issues as the technology is still quite new
and has not been implemented on a large scale. Society has yet to see all of the effects of AI in
several industries. This will be critical going forward as engineers and business leaders look into
AI as a way of solving issues with cost of labor and labor shortages.
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VII. Conclusion and Recommendation

Conclusion

Artificial intelligence has proven to be a valuable resource in countless industries, has

revolutionized the world of business, and become a key element of the fourth industrial
revolution. Although some evidence suggests that AI is not completely ready to be
implemented, there are many companies that have started to make this transition.

Even with AI not able to entirely automate manufacturing, it can still be used for some smaller
tasks as it is capable of aiding manufacturers. The main limitations with AI are in it being tied to
the cloud, not being able to work locally, not being able to gather real time data, or filtering out
any bad data that is caused by errors. It is still possible to have a worker filter out inaccurate
data and then send the filtern information to the AI, which would need to be cloud based.

Proposed Solution

In response to the challenges caused by AI technology in the job market, solutions can be
recommended from various aspects. In order to keep the jobs intact in these fields such as the
financial and manufacturing industries, labor and worker law should be enhanced and corrected
to protect employees’ rights from their jobs being taken by AI. Furthermore, to address the issue
of AI limitations in the manufacturing industry, setting standards on how to manipulate the AI
systems, and training the employees to utilize these systems in helping the production process
can be quite significant in improving overall efficiency and minimizing the limitations. Moreover,
when it comes to privacy concerns and data abuse, addressing relevant laws and regulations
are necessary in preventing AI from eavesdropping and modifying private information, to make
sure that all data collected by AI systems are transparent and do not cause any ethical issues.
 15

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