The cover story for the May 16–22 edition of The Economist was “The jobs apocalypse” with a tagline underneath reading, “Hope for the best, plan for the worst.” But this piece wouldn’t be called Optimism Corner if we believed the headline.

This recent Economist headline prompted us to look back at similar headlines from the past. Here are a few that caught our attention from The New York Times:

• “March of the Machine Makes Idle Hands; Farm Employment Loss with Increased Output” (1928)
• “Does Machine Displace Men in the Long Run?” (1940)
• “A Robot Is After Your Job; New Technology Isn’t a Panacea” (1980)

What Actually Happened?

Since the 1928 article was published, the percentage of U.S. citizens who make their living from farming has declined from nearly 30% of the population to approximately 1–2% today. Machines made farming more efficient, and few would argue that life was better 100 years ago than it is today. Idle hands are certainly not the norm today.

The 1940 article quoted Dr. Karl T. Compton, president of MIT, who argued that while technological progress can sometimes create unemployment in specific situations, it had also created new employment opportunities and made goods and services more accessible to the general public, which otherwise may have been inaccessible to all but a favored few.

Looking back at the 1980 pronouncement, the U.S. today enjoys higher real wages and more than 60 million additional jobs.

A Modern Perspective on AI

A recent opinion piece authored by David Solomon, Chairman and CEO of Goldman Sachs, tackled the question: “Will AI necessitate a job apocalypse, or will it produce a great leap forward for society?” He answered by saying he is in the second camp.

Some highlights from his interview include:

• The United States has a long track record of creating new jobs in response to disruption, from electrification in the early 1900s to the digital revolution of the 1990s. He sees no reason for this to stop.
• Goldman economists estimate that over the next decade, AI may automate 25% of current work hours. However, their research also shows that demand for data centers has created approximately 200,000 construction jobs since 2022. While AI could eliminate jobs in some sectors, it may also lead to growth in others.
• Sixty years ago, the average American didn’t have air conditioning. But as the technology became more affordable, it evolved from a luxury into a necessity for many households.
• In the 1950s, companies such as IBM had computers. Today, over 90% of American adults—and a high percentage of children—walk around with supercomputers in their hands.
• In 1900, global life expectancy at birth was 32 years. Today, it exceeds 70 years.
• Perhaps most importantly, job growth has outpaced population growth. Since 1962, civilian employment in the United States has increased by roughly 145%, while the civilian population has grown by about 128%.

Three Key Takeaways:

1. Goldman estimates that AI will not eliminate 25% of jobs. More likely, it will enable people to find more productive ways to spend their time. When the “older” advisors here at VVP wanted to find stock prices or historical data early in their careers, it would have taken hours to pore through back issues of The Wall Street Journal. Today, our staff can access vast amounts of information in mere seconds.
2. Television didn’t eliminate demand for live entertainment, nor did the internet put real estate agents, fitness instructors, or financial advisors out of business. Instead, these technologies highlighted and enhanced many professions.
3. We’re already seeing the economy adapt. Companies are now looking for people to manage so-called “agentic AI” and incorporate it into a wide variety of areas, from implementation and workflow management to compliance and validation. All of this requires human judgment.

A Word of Caution About Predictions

Solomon also cautioned against overly stark forecasts. In 1930, John Maynard Keynes, one of the most well-respected economists of all time, famously predicted that by 2030 people would work only 15 hours per week. While his vision sadly missed the mark, fears of a job apocalypse may similarly overlook AI’s potential to spur economic growth and a productivity revival.

Looking Ahead

We believe disruption will come, but the American and global economies have consistently thrived by adapting to technological advances rather than shrinking from them.

Happy summer!