00:00And I want to talk to you just about the labor market.
00:02There is a lot of hand-rigging lately about the way AI could reduce the number of white-collar jobs
00:08in particular.
00:09And you've done a lot of research on this.
00:12What are your projections from Bloomberg Economics telling us about what it will mean for white-collar workers?
00:18Yeah, so, Nancy, you know, and so I'm an economist.
00:21And in my tribe of people, the prevailing view tends to be that innovation should over time boost employment rather
00:32than lower employment.
00:33But I would say that that prevailing view might be wrong when it comes to AI.
00:39I think that one way, certainly one correct way of looking at this is, well, you go through all the
00:46innovations over history.
00:47Look at electricity, look at train, look at Internet, and look for the pattern.
00:55And based on that, it's true that ultimately innovation should boost employment.
01:01And that assumes that that's because over time, the real wages will grow.
01:08And as people's wages grow, they will buy more, and the whole economic pie expands.
01:13And here's where AI, I think, potentially could challenge those assumptions.
01:19The first one is the speed of adoption.
01:23So, in Bloomberg, we have access to a trove of earning calls.
01:26And what my team just did is we actually use AI to go through these troves of earning transcript.
01:34And the AI is telling us that AI is really going to be a big thing.
01:41And what I'm seeing in the earning transcript is, first of all, the speed of adoption.
01:48The way that firms talk about AI adoption is no longer about, you know, in a very aspirational way.
01:55They're actually giving us numbers on how much this improved their margin, how this improved, for example,
02:02for consumer discretionary firms like Meta, Facebook, they're talking about how AI chat bots has increased the conversion rate from
02:13marketing to revenues.
02:15So, it's like there's a clear quantitative aspect to this.
02:20And then Bank of America CEO is talking about how the company hires 18,000 coders and AI is replacing
02:2930% of it and that they have actually less need for 2,000 coders.
02:34So, we are getting very specific information from earning calls.
02:38So, back to your question, Nancy.
02:41I think that, so, I think AI adoption is happening so fast that this transitional period where you could have,
02:50where you go from adoption to a higher real wages,
02:54I think we might probably be going into an extended period of lower real wages before it gets to the
03:02higher real wages.
03:03And I think what matters for politics as well is this transition period, how disruptive, how fast it is, and
03:11how the politics climate will swing.
03:15Like, by 2028, would the progressive wing be very popular amongst young people because unemployment rate for the young people
03:25have climbed to 15% as it is in China.
03:28And in fact, in China, it's probably 20%.
03:30So, my team's projecting the unemployment rate to stay elevated at 4.6% this year because we are penciling
03:40in a sizable impact on unemployment from AI.
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