AI-led job loss is real, govt must intervene

The newly formed National Democratic Alliance (NDA) government must prioritise youth unemployment. Sample this: The latest Periodic Labour Force Survey for January–March 2024 shows the unemployment rate in the 15–29 age group at 17%. The situation gets alarming with the potential job losses over the coming years due to the increased usage of artificial intelligence. Data shows that AI-led productivity improvements can increase the global GDP by 7%. However, there is a high possibility of job losses.

In fact, Kristalina Georgieva, managing director of the International Monetary Fund, recently said that AI is like a tsunami hitting the labour market and would impact 60% of jobs in advanced economies and 40% of jobs around the world in the next two years.

A report from Goldman Sachs indicates that AI could replace 300 million jobs globally. AI could impact two-thirds of jobs in the US and Europe, and one-fourth of the jobs could be performed completely by AI. OpenAI and Mckinsey Global Institute estimate that AI would impact half of the job tasks for 20% of the workers.

A recent survey states that AI could impact eight million UK jobs. The survey covering 22,000 job types has revealed that 11% of the tasks in these job types are already exposed to AI. 

The impact on white-collar jobs could be severe. For example, a report from the University of Pennsylvania shows that white collar workers with earnings of $80,000 (about Rs 64
lakh) would be affected by artificial intelligence and automation.

McKinsey Global Institute’s report states that 14% of all employees would need to change careers by 2023 due to advancements in AI. People working in customer service, accountants, sales, research and analysis, administrative, and retail roles would
be impacted.

In India, the IT industry has been the largest employer, providing over 54 lakh jobs and crores of secondary and tertiary jobs. The industry has also been the highest job creator for fresh engineering graduates. With the advent of AI, this is likely to be impacted. 

While IT companies are trying to be “AI-ready” by reskilling their employees, well-known technologist Ray Wang, who tracks the Indian IT sector closely, has indicated that AI and automation could lead to a white-collar recession in India by 2027. 

Not just white-collar jobs; AI and automation would impact blue-collar jobs as well, although at a lower scale. India has 300 million blue-collar employees in manufacturing, construction, logistics, healthcare, and other domains. Some of the labour-intensive tasks can be automated through advanced robotics and AI, but mass job loss is unlikely as AI would co-exist to aid productivity improvement. 

We need a multi-pronged strategy to harness the benefits of AI while addressing the potential AI-led job loss. Mass unemployment can create a furor with potential social and financial instability. The “guarantee” schemes
implemented in some of the states for unemployed youth are not sustainable.

The policymakers at the Centre must lead initiatives by collaborating with industry and industry bodies such as the Confederation of Indian Industries (CII), the National Association of Software and Service Companies (NASSCOM), and academia, thereby creating economic benefit for the overall workforce. The job market is a function of the demand and supply of a workforce. A strong focus group under the Prime Minister’s Office (PMO) should aim at understanding the demand-supply dynamics and getting the workforce “battle-ready” for AI impact.

Firstly, conduct a detailed study of the industries and workforce job types that have a potential risk of job displacement due to AI and automation. The exercise must consider the overall ecosystem as well as the workforce demographics and create a short-, medium-, and long-term possibility of AI-led job losses.

Secondly, a strong reskilling and an “alternate job assistance” programme must be created by providing training to the impacted employees. The government would do well by incentivising companies to cross-skill or upskill the workforce and providing alternate job opportunities. 

Thirdly, get the next generation AI-ready. While National Education Policy 2020 suggests greater use of technologies such as AI, it must be aligned with the findings from the study mentioned above. Considering the risk of job loss across industries, the government must embark on a life-long learning platform. Initiatives such as “FutureSkills PRIME” cover emerging technologies, including AI, which must be strengthened. YUVAi (Youth for Unnati and Vikas with AI), an initiative for familiarising school students from classes 8–12
with AI technologies, should
be expanded.

The government needs to collaborate with businesses and academia to create a framework that will create a future-ready and resilient workforce in India.

(The writer is an ICT professional and columnist based in Bengaluru)