AI was supposed to destroy jobs. Where’s the carnage?

The prediction was stark: artificial intelligence advancements would wipe out jobs en masse. A month later, OpenAI’s CEO, Sam Altman, went further, foreseeing the end of “certain job categories”. Companies began citing AI in their layoffs.

And students reconsidered their future careers. But a year later, the mass carnage hasn’t shown up. Even as AI capabilities have rapidly advanced and AI companies have hurtled towards trillion-dollar stock market debuts, economic transformation hasn’t kept pace, similar to previous tech revolutions, economists say.

As a result, CEOs are reframing and softening their stances, suggesting AI augments workers rather than replaces them. Despite the lack of mass job devastation, a shift is still under way: AI is changing the nature of work, with employers increasingly expecting job seekers to have AI skills. And over the long term, AI could shift more jobs to freelance and contract work as companies figure out which skills they do need, some economists predict.

Data from a recent Stanford Institute for Economic Policy Research analysis shows that AI hasn’t yet caused major job displacement. Since 2022, the year ChatGPT launched, the unemployment rate for the 20% of workers most exposed to AI rose by 0.77 percentage points, less than the 0.85 percentage-point increase for the least-exposed workers, the report showed. AI could be a factor in recent graduates’ rising unemployment, which hit 5.6% compared with the national average of 4.2% earlier this year.

But factors including remote work and the unwinding of pandemic-era overhiring probably also played roles, the report states. Government statistics are dated by nature and don’t track the impact of specific technologies, while private industry figures, though more current, are less comprehensive. So even though economists generally agree that AI will have an impact, they struggle to predict how big and when.

For now, AI’s biggest impact is not on the number of jobs, but on the nature of them. It’s consolidating roles, discouraging new hiring for tasks that can be automated, and raising the bar for who gets in, leaving unemployment numbers largely untouched. Hiring trends show that AI is becoming more important for employers.