A recent survey by the Federal Reserve Bank of New York shows that companies adopting artificial intelligence (AI) are not significantly cutting jobs. The findings, based on responses from businesses in the New York-Northern New Jersey region, suggest that AI adoption is likely to lead to job growth in the near future, rather than reductions.
The survey, conducted in August 2024, found that about 5% of service firms using AI reduced staff in the last six months, while manufacturers reported no change in workforce size. However, service firms are expected to be net hirers in the next six months, signaling a reversal of trends from the previous period. AI adoption among service firms is forecast to increase from 25% to 32% in the coming months, while manufacturers are expected to maintain their current 16% usage level.
The survey indicated that companies are focusing on retraining existing staff, with 25% to 33% of employees being re-skilled to adapt to AI technology. This trend is expected to intensify, with a significant rise in retraining anticipated in the near future. Marketing, advertising, business analytics, and customer service were among the most common uses of AI technology.
The New York Fed emphasized that while AI's labor market impact has been modest so far, further integration of the technology could bring more significant changes. Nonetheless, the data suggests that AI is more likely to complement the workforce and help firms fill labor shortages rather than lead to widespread job losses.
The survey also pointed to wage stability, with most firms reporting minimal changes in wages due to AI adoption. However, there is optimism that wages for both low-skilled and highly educated workers may rise as AI becomes more entrenched in business processes.
As AI continues to shape the labor market, the Fed will monitor its effects, noting that more significant impacts could emerge as the technology becomes more integrated into various industries.
