TL;DR
Despite warnings of an AI “jobpocalypse,” current labour market data shows limited technology-driven impact. The decline in job openings predates ChatGPT and correlates more closely with interest rate rises. Historical evidence suggests technology creates more jobs than it eliminates.
Headlines vs Data
IMF managing director Kristalina Georgieva recently said AI would hit labour markets “like a tsunami.” London mayor Sadiq Khan warned of “a new era of mass unemployment.” Yet when you examine the data, the picture looks different.
US job vacancies began falling before ChatGPT launched in November 2022. The decline tracks more closely with Federal Reserve interest rate increases—5 percentage points over that period—than with AI adoption. Post-pandemic hiring surges also mean the subsequent reduction appears to reflect normalisation rather than technology displacement.
In the US, only 4.5% of job-cut announcements last year were linked to AI, according to Challenger, Gray & Christmas. As Oxford Economics’ Ben May notes, companies may cite AI over factors like weak demand because it “conveys a more positive message to investors.”
Other Factors at Play
Youth unemployment in Britain has risen partly due to payroll tax increases rather than automation. Entry-level weakness appears largely cyclical, with inexperienced workers typically first to suffer during hiring slowdowns.
In the euro area, a significant rise in university graduates between 2019 and 2024 may explain why graduate unemployment has increased more than overall joblessness. Capital Economics’ Vicky Redwood observes that “beyond some very specific adverse impacts in occupations like software programmers, the impact of AI on graduates is much smaller than is made out.”
Historical Patterns Favour Optimism
Technology has been the main driver of employment growth throughout history. A 2022 study found 60% of US workers are employed in occupations that didn’t exist in 1940. LinkedIn estimates AI generated 1.3 million new jobs globally between 2023 and 2025.
Harvard labour economist David Deming notes that “over the last century, disruptive innovation has generally favoured the young and the well-educated.” Surveys show younger workers use large language models more than older colleagues—companies will need their expertise.
Looking Forward
This isn’t to dismiss concerns entirely. Entry-level roles with high administrative components face genuine risk. US computer programming employment has dropped since ChatGPT’s release, with further declines projected.
But the Burning Glass Institute finds that even as AI automates certain skills, it elevates demand for others within the same roles. “AI isn’t sorting the labour market into winners and losers,” their research concludes. “It’s transforming job content across a broad swath of the economy.”
The bigger challenge may be ensuring education systems help workers access the opportunities AI creates—not bracing for a jobpocalypse that data doesn’t yet support.