00:00So I do want to talk about AI, but let's zoom out a little bit and just talk about where we stand with the labor.
00:05As I said, there's some signs of stabilization. We're getting the next labor report.
00:10Next week, I believe. I mean, where do you what do you make of where we stand?
00:15Right now, because it certainly feels like some of the worst fears that maybe we're talking about a couple of months ago.
00:20Exactly. Come to fruition. Yeah, I mean, not that much is happening. We're in a very low high.
00:25Low fire market. And when I say low, higher, no fire, I mean, like, low.
00:30Low separations generally. So so layoffs are not tremendously high. There's some concern that would be higher.
00:35And quits are really low, really historically low. So really.
00:40Very little is happening. We're still shrinking kind of as you know, relative.
00:45To where we would need to be to to be at a stable unemployment rate.
00:48So we're at.
00:50We're getting roughly 25, 50,000 jobs a month, which is low. We need about two.
00:55200,000 to to kind of break even. Yeah, it feels like it's this sort of unhappy equilibrium.
01:00That we found with the labor market. Let's talk about how AI is impacting things because you.
01:05We hear a lot of consternation about what this means for entry level jobs, the existential fear out there.
01:10That AI is just going to take over entry level jobs and really it's going to.
01:15Make it difficult for a lot of these young workers who are at least trying to enter the workforce.
01:20What have you seen so far?
01:22So so the evidence we see is pretty troubling.
01:25For younger workers that for younger workers who are exposed to AI tasks.
01:30They are the demand for those types of workers is reducing dramatically.
01:35Like a lot more than older workers who are also exposed to those tasks.
01:38So there's something to do with.
01:40AI exposure and age kind of interacting.
01:43So we don't.
01:45We don't really know exactly what drives this, but I think the I think the best read on.
01:50Is that it's probably anticipatory.
01:52It's probably that firms are expecting that they.
01:55Can automate these workers and maybe don't want to take the bet on a younger worker.
02:00Whereas a more experienced hire is just a safer bet generally.
02:02Do you have any sense, though, whether that might actually come to.
02:05fruition, because there's been a lot of mainly anecdotes, this idea of what you said, but also.
02:10The idea that we could actually see a hiring boom when a lot of these companies realize that the AI isn't up to snuff to replace.
02:15All the people they thought they were going to be able to replace.
02:17Yeah, I think that's likely.
02:18I mean, you know, in some way.
02:20Supply creates its own demand.
02:21So, you know, I don't think we can expect the reduction in demand for younger workers.
02:25To to continue, you know, they're they're going to be productive.
02:27They're going to find jobs.
02:28I do think we'll.
02:30We'll see some wage divergence between younger and older workers.
02:35Because they're, you know, with with AI, you know, one way to think about what AI does.
02:40is that it's really executing on tasks, not orchestrating between tasks.
02:43Yes.
02:44And we can think of a job as.
02:45It's a collection of tasks.
02:46So so if we think about orchestration and coordination, those are really the skills.
02:50of older, more experienced workers and, you know, younger people generally.
02:55don't have that much experience coordinating and orchestrating.
02:57There's a big question, though, to also.
03:00As sort of AI and the ancillary technology evolves, this idea are newer jobs.
03:05going to be created.
03:05So what I want to know is, is the aggregate number of jobs basically going to be more.
03:10on a per capita basis, 10, 20 years from now, or are we just going to look at a much smaller
03:14workforce?
03:15Is that our future?
03:16Yeah.
03:16So I think, you know, in the short term.
03:20You know, labor demand really drives, you know, the ebbs and flows of the job market.
03:25In the long term, labor supply really drives that.
03:27So I think, you know, we will we'll see.
03:30some matching of the capabilities of workers and what and, you know, how firms can kind
03:34of.
03:35you know, reallocate.
03:36When you say labor supply, you're basically saying that that the government or at least
03:38our economy has to find a way to.
03:40employ these people one way or the other or they revolt and, you know, overthrow the government.
03:43Yeah.
03:44Yeah.
03:45Something like that.
03:46I hope not.
03:47Sorry.
03:48Not to get too dark, but.
03:49Yeah.
03:50I mean, I think.
03:50There are reasons to be concerned about about, you know, will we see a reduction in labor
03:54supply?
03:55But I think.
03:55Those concerns are really more about demographic shifts, you know, low birth rates, low migration
03:59rates.
04:00Like.
04:00Those.
04:01Those are troubling.
04:02I wouldn't see AI as as something.
04:05That would affect the long term prospects for employment generally, because we are.
04:10Already are seeing more more adoption of new roles.
04:12I mean, we had a piece last week about.
04:14I mean, we had a piece last week about.
04:15consulting firms.
04:16So now consulting firms are hiring these.
04:19AI roles, you know.
04:20new roles they didn't employ before, and those actually exceed the number of.
04:24And.
04:25Entry level consultants.
04:26Okay.
04:27Which is kind of wild.
04:28Because, you know, we think of consulting firms as this launching pad for.
04:30You know, early career hires.
04:31Yeah.
04:32And.
04:33That's less the case now that it has been.
04:35In recent years.
04:36Yeah.
04:37And I'd also love to get your thoughts on, you know, the potential opportunities.
04:40created by AI.
04:41When we talk about AI in the labor market, it's.
04:43Easy to get depressed.
04:44But we heard.
04:45We heard from Jensen Wong, of course, the NVIDIA CEO last week.
04:48He is optimistic that.
04:49We heard from Jensen Wong, of course, the NVIDIA CEO last week.
04:50He is optimistic that.
04:50AI is going to create jobs, specifically jobs related to.
04:55Tradecraft.
04:56He specifically mentioned plumbers and electricians and construction and.
05:00steel workers.
05:01He's not alone in that.
05:02You also had a McKinsey report basically estimate that.
05:05You're going to see big demand when it comes to trained electricians.
05:08As well as construction laborers.
05:10And.
05:11Construction supervisors.
05:12And we're just talking about the U.S. here.
05:14I wonder what you make of.
05:15You know, some of those types of predictions.
05:17And.
05:18I will say it's somewhat ironic that, you know, you have this.
05:20CEO of NVIDIA saying that since.
05:22Yeah.
05:23You know, it's the technology that he's helping to create that.
05:25It could kill a lot of these entry level jobs.
05:27Right.
05:28So we got to take it with a grain of salt.
05:29I mean.
05:30I think that's probably right.
05:31That we're going to see demand for new types of electricians and stuff like that.
05:35People building data centers, you know, supporting this technology.
05:37I think that's.
05:38A.
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05:40Second.
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05:41Secondary story.
05:42I think the bigger story is about how each job is going to change.
05:45So, you know, sometimes we think about technology as affecting jobs as the unit of analysis.
05:50But.
05:51But.
05:52Something that I think we.
05:53We need to.
05:54You know, take a step.
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06:34the demand for, you know, depositing and withdrawing money, it was actually, you know.
06:39A reconfiguration of that job.
06:40So, you know, now bank tellers don't do what they did in the 50s.
06:44And 60s, you know, they do customer support, customer service, relationship management.
06:49And I think that's what we're going to see with jobs today.
06:52Every job is going to look a little different.
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