Technological Deflation Is Showing Up: AI Going To Crush White Collar Jobs
Over the years I has discussed how people get the inflation and deflation discussion all mixed up. This was put on steroids as people believed the money printing nonsense when we suffered a supply shock due to the shutdown of the global economy. Of course, the Fed doesn't help matters with their nonsense about how strong the economy is and how the job market is resilient.
Moving passed that, this article is going to deal with something far more sinister: technology.
As I have stated, deflation is the wrecking ball. Even Karl Marx was well aware of this when he discussed how the brunt of deflation is felt by the working class.
We now live in an age where it is quickly becoming evident.
Artificial intelligence is going to send a deflationary spiral through economies like we never saw before. The last 30 years in Japan will look like a cake walk compared to what we will see.
Here we will discuss one case that is an indicator of what is coming.
Gizmodo Shut Down Spanish Site And Laid Off People
Gizmodo has done away with this Spanish site. This was, of course, accompanied by the usual layoffs.
What caused this move? Was it not appealing to Spanish speaking individuals? Not at all.
The motivation for this move was technology. Gizmodo still appeals to that audience. The difference is that it is doing so without people.
Instead of having a team write stories and edit them, it is simply using automation.
Back in July, the company started experimenting with it. At that time, there were errors that made the translation unacceptable. The decision to switch was shelved.
Now, a whole 2 months later, the staff was let go.
This is how quickly things move. Of course, the union representing these people are upset and urged readers not to click on the translated stories.
Good luck with that one.
AI Will Go Through White Collar Jobs Like Butter
Welcome to the age of deflation.
How could a piece of software go from unacceptable to replacing an entire unit in just a couple months? The answer lies in the speed of these machine learning models that are being created.
Everywhere we look, generative AI applications are showing up. They exist for text, video, and image creation. Translators are improving whereby a piece of content can be generated in one language and translated into a host of others.
This is all taking place a week after Elon Musk released a video of a new version of Tesla's FSD software that was trained exclusively on video. At the same time, X, formerly Twitter, updated it terms of service to state that it is now allowed to use the data users provide to train its AI services.
Things are accelerating and people are asleep at the wheel.
We are simply starting at the tip of the iceberg. Once the floodgates open, it is going to shock everyone.
Anyone who follows technology knows that one of the results is things are demonetized.
Over the last couple years, I tried to highlight many of the things we once paid for which are now free. When was the last time you paid commission on stock trades? How is your long distance bill looking? Are you paying $15 for a CD of music? How much did the video rental cost you last weekend?
The challenge is that demonetization is another word for deflation. When the money goes out and prices drop, what else leaves? Profits. That means companies have to cut costs, usually opting to lay off workers.
Getting back to Elon's self driving technology. What happens if that becomes better than humans, by an order of magnitude, and regulators approve it? How do you think those who drive for a living will fare? Consider the taxi, Uber, and truck drivers. They will all be out of work.
I showed this before. Here is what I believe to be a clear impact of technology.
This is the United States labor force participation rate. Do not believe the nonsense of people not working because of government handouts due to COVID and they are just lazy. This has been going on for 25 years.
Also, when futurists say that technology always created more jobs than it destroyed, that is hogwash. The numbers show the opposite is true. Of course, it makes sense since technology demonetizes stuff while is another term for deflation.
Where does this materialize? In jobs.
Machines took a lot of blue collar jobs in the 1980s. What was not outsourced ended up being automated away.
Now, we are dealing with knowledge work. White collar jobs are in jeopardy. Software is going to do the same thing it did to those who worked at Gizmodo.
When jobs goes away, a host of other economic issues arise. This sends shockwaves through the economy.
And few are talking about this.
The major issue is that, according to studies, AI technology is doubling in capabilities every 3-4 months. That is a great deal faster than even Moore's Law which is a doubling every 2 years.
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