"The history of technological innovations going back more than 200 years demonstrates that while certain industries endured major disruption, overall employment saw net gains. The AI revolution will be no different, according to JPMorgan. In a note last month, Jacob Manoukian, U.S. head of investment strategy for JPMorgan Private Bank and Wealth Management, traced the transformations brought about by the advent of the steam engine, electricity, and computers. Instead of creating mass unemployment, the breakthroughs slashed costs and gave rise to new functions that more than offset losses from obsolete jobs, he explained. "We think AI could follow the same trajectory: Violent task churn, then broad productivity growth," Manoukian wrote."
"To be sure, workers performing old tasks have suffered significant losses. For example, hand-loom weavers saw their real wages cut in half between 1806 and 1820 after the introduction of the steam engine. Canal boatmen and cart drivers lost their jobs as steam-powered trains became the dominant form of transportation. But as textile production and consumption soared while shipping costs fell, demand for labor in coal mining, rail maintenance and urban retail took off, he pointed out."
"Electricity and computers spurred similarly broad transformations, many of which were unforeseen. And along the way, productivity boomed. Manoukian estimated that companies needed eight employees for every $1 million in revenue in the 1980s, but that shrank to six by the 2000s. "This highlights another long-term trend: New innovations are contributing more quickly to overall productivity growth," he added. Given how quickly new technologies have been translating to productivity improvements, Manoukian thinks that even AI optimists are underestimating how fast the next boom will be."
Technological revolutions such as the steam engine, electricity, and computers caused major disruption yet produced net employment gains through lower costs and new job categories. Workers tied to obsolete tasks suffered severe losses: hand-loom weavers’ real wages fell sharply and canal boatmen and cart drivers lost work as steam trains dominated. Rising textile output and cheaper shipping created demand for coal mining, rail maintenance, and urban retail. Productivity rose substantially, with employees per $1 million revenue falling from eight in the 1980s to six by the 2000s. AI is likely to trigger violent task churn followed by broad productivity growth and a faster boom.
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