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Are Robots Taking Our Jobs?

At this point, we’ve all heard about OpenAI’s ChatGPT: the new AI that has professors in a scramble to stop students from using it. However, ChatGPT and the other programs that will inevitably follow have impacts that stretch far beyond academia. Here, I’ll discuss a few of the waves AI will make in the economic world, specifically in terms of labor. 

The primary fear when it comes to AI is the age-old worry that “robots will take our jobs.” Unfortunately, that fear may be founded. To explain, I’ll start with basic microeconomics (thanks, Prof. Owen). When capital (equipment, technology, etc.) becomes cheaper or more efficient, one of two things can happen. The first is the scale effect. If a firm needs human labor to operate this capital, then capital and employment will increase. In this case, capital and labor are complements and work together to make a product. Essentially, production will be “scaled” up. The other possibility is called the substitution effect. Here, labor and capital are substitutes. So, if this capital can take over an employee’s responsibilities, labor will be substituted with capital. This will decrease employment. 

In terms of ChapGPT and other AI, some worry that the substitution effect will dominate. Then, there won’t be a need for employees whose jobs could be done by AI.

 Anu Madgavkar, a partner at McKinsey Global Institute, sheds light on which jobs are in danger. These include customer support, as ChatGPT has been reported to answer customer support questions very well. Tech jobs, specifically in coding and computer programming, could also be at risk. Business Insider reports that ChatGPT can produce code faster than humans. 

The release of ChatGPT also caused much panic in the creative economies. One of ChatGPT’s main strengths is its ability to analyze data and write, threatening the jobs of journalists, advertisers, and other content creators. In fact, most writing-oriented roles are susceptible to substitution. The finance industry could also be potentially affected, jeopardizing the jobs of market analysts, financial analysts, traders, and accountants due to ChatGPT’s skill for interpreting large sets of numerical data.  

The economy, however, will adapt. The emergence of AI is not the end of the world as we know it. In fact, many had the same fears about the impact of the internet, which in reality created entirely new industries. Positive effects will also emerge as AI revolutionizes the economy in almost every sector. In farming, it can be used to analyze datasets in order to improve the health of crops and increase yields. Even scientific discoveries may increase, given the time that will be saved by using AI to analyze data. In the energy industry, weather forecasts can be used to design wind farms. So, if you’ve considered changing your major at any point while reading, take a breath, relax, and read this ChatGPT-generated joke:


Why did the economist refuse to go on a date?

Because he wanted to wait for the perfect market conditions.

See? Maybe we do still need humans.  


~ Madison Keezer ’26

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