- Artificial intelligence can replace 11.7% of the US labor market, says MIT study
- AI impact could affect $1.2 trillion in wages across finance, healthcare, services
- The Iceberg Index simulates AI's effect on 150 million US workers in 1,000 jobs
Artificial intelligence (AI) can already replace 11.7 per cent of the US labour market, a new study released by the Massachusetts Institute of Technology (MIT) has found. Conducted using a labour simulation tool called the Iceberg Index, created by MIT and Oak Ridge National Laboratory (ORNL), the study determined that AI's rise could potentially impact $1.2 trillion in wages across the finance, healthcare, and professional services sectors.
The index, which measures a job's potential to be automated, concluded that AI systems possess the cognitive and technical capacity to handle a range of tasks across various disciplines that is not limited to the tech sector. It simulated over 150 million US workers across nearly 1,000 occupations and how they interact as well as overlap with AI's abilities.
"Basically, we are creating a digital twin for the US labour market," Prasanna Balaprakash, ORNL director and co-leader of the research, was quoted as saying by CNBC.
Balaprakash explained that the index runs population-level experiments, revealing how AI reshapes tasks, skills and labour flows long before those changes show up in the real economy.
The researchers stated that the index did not exactly predict when or where jobs will be lost but provided a snapshot of what today's AI systems are capable of doing. The intent is to allow government and policymakers to explore the what-if scenarios when committing real money for reskilling and training investments.
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Unemployment Crisis
In May, Anthropic CEO Dario Amodei warned that AI could soon wipe out 50 per cent of entry-level white-collar jobs within the next five years. He added that governments across the world were downplaying the threat when AI's rising use could lead to a significant spike in unemployment numbers.
"We, as the producers of this technology, have a duty and an obligation to be honest about what is coming. I don't think this is on people's radar," said Amodei.
Similarly, Geoffrey Hinton, regarded by many as the 'godfather of AI', warned that AI will drive profits for companies, but it will come at the expense of workers losing their jobs and unemployment almost certainly rising to catastrophic levels.
"What's actually going to happen is rich people are going to use AI to replace workers," Hinton said in an interview with the Financial Times.
"It's going to create massive unemployment and a huge rise in profits. It will make a few people much richer and most people poorer. That's not AI's fault, that is the capitalist system."
