Human labor is still cheaper than artificial intelligence tools and robots

Before AI technology emerged, the human workforce was already experiencing all sorts of job disruptions. But as AI began to become more capable of completing tasks, workers realized that their jobs would eventually be replaced by technology. As generative AI allowed technology to do more of “human work,” workers found themselves either redundant or having to upskill to work with the technology.

According to the World Economic Forum, by 2027, about 75% of companies will adopt AI technology. In addition, 80% are expected to accelerate the automation process during this period. Some companies have even started to completely replace positions with AI.

Layoffs and redundancies have been ongoing throughout 2023 and are expected to continue this year. Companies are scaling back hiring and replacing some roles with technology. Employees who don’t fit into the restructuring plan are being forced to leave. This is the reality businesses around the world are facing.

While some studies clearly indicate that AI will not replace the human workforce but only augment it, most businesses are optimistic about moving away from humans in favor of AI.

This is a complex and controversial issue with no definitive answer. Ultimately, whether AI will replace the human workforce is not a simple yes or no, but a matter of how, when and where. AI is a powerful and evolving technology that will impact different industries, sectors and regions in different ways. The future of work will depend on how humans adapt, collaborate and innovate with AI.

The relationship between the workforce and AI

As usual when it comes to AI and the workforce, tech companies will say that the technology will enable workers to do their jobs better. But with generative AI capable of writing code and even planning entire trips, what tasks will be left for people working in such roles?

Most studies point to the following three key points when it comes to AI and the workforce:

AI will not replace humans but only enhance human capabilities and create new opportunities.AI can automate repetitive and mundane tasks, but it cannot replicate qualities like creativity, empathy, and intuition. People who use AI will have an advantage over those who do not use AI in the future job market.

AI will replace some jobs, but also create new ones.AI could replace the equivalent of 300 million full-time jobs by 2030, but it could also lead to a productivity explosion and new roles that require human skills.

AI will have a significant impact on the world, but it also depends on how humans use it.AI has the potential to bring positive changes to society, such as improving healthcare, education, and sustainability. But it also poses ethical, social, and economic challenges that need to be addressed. Simply put, AI will change the world, but humans will shape its direction.

While replacing the workforce with AI seems promising in terms of increased productivity and efficiency, its sustainability and actual costs are a matter of concern.

Concerns about sustainability:Running AI requires a lot of energy and computing power. This means that businesses have to invest more in technology, such as expanding data centers and increasing computing power. This leads to increased carbon emissions, which is not sustainable in the long term.

Cost concerns:While the initial cost of using AI may seem lower than human resources, in the long run, the technology will be much more expensive. The reason is that the technology needs to be constantly updated, and these updates are often not free. In addition, the cost of security for AI applications is also a significant amount that businesses need to consider.

The human workforce is still relevant

While concerns about artificial intelligence (AI) tools replacing humans in jobs are rising to alarming levels globally, a new study suggests the economy is not ready for machines to take over the majority of human jobs.

New research suggests that the impact of AI on the labor market is likely to be much slower than previously feared, despite the often-talked-about AI revolution, offering hope to policymakers looking to minimize the negative impact of AI on the labor market.

Researchers from MIT have published a study that shows that the human workforce still plays a vital role for organizations around the world. The study is the first to predict which tasks are technically feasible and economically attractive to automate and which are not.

“The MIT study focused on computer vision, an area with a more mature cost model. We found that at current costs, US businesses would choose not to automate most “AI-touched” vision tasks, and only 23% of workers’ wages for vision tasks are attractive to automate.

This slow AI adoption could be accelerated if costs fall rapidly or if it is deployed via “AI as a service” platforms that scale beyond individual companies, both of which are quantified by the study. Overall, our findings suggest that AI-induced job displacement will be substantial, but also gradual. Policies and retraining are therefore needed to mitigate the unemployment impact,” the study states.

The study, funded by the MIT-IBM Watson AI Lab, used online surveys to collect data on about 1,000 vision-assisted tasks across 800 occupations. The researchers say only 3% of those tasks can be cost-effectively automated today, but that could rise to 40% by 2030 if data costs fall and accuracy improves.

For now, the study clearly shows that the high cost of AI, specifically computer vision, makes the human workforce still the more economical option. However, the study also concludes that as the technology becomes cheaper, businesses may consider adopting it to minimize the impact, both economically on the company and the workforce.

The report also said that “AI as a service” could address some of the issues surrounding the adoption of the technology. However, this raises concerns about how data will be used and may require industry collaboration or policy initiatives to enable data sharing between companies.

Although fields like computer vision represent only a small fraction of total wages and the workforce, the researchers believe their model minimizes the magnitude of future job displacement. And that scale suggests a lower rate of job loss than what has historically occurred in the economy.

“Our results point to a path of AI automation that is significantly different from previous studies, one where the pace is more consistent with traditional job displacement and more amenable to traditional policy interventions, and where the cost-effectiveness of the system is a key determinant of its spread,” the report concludes.

The International Monetary Fund (IMF) has previously warned that nearly 40% of jobs globally could be affected by the development of AI and that this trend could exacerbate existing inequality.

IMF chief Kristalina Georgieva called on governments to set up social safety nets or reskilling programs to counter the negative impacts of AI.

Research by Thompson and his team at MIT could provide policymakers with a foundation to better understand the pace of labor market changes caused by AI, allowing them to develop more specific plans, such as reskilling programs, to mitigate the negative impacts of AI on workers.

In short, the picture of the impact of AI tools on the labor market is becoming clearer. While AI will bring significant changes, the process may be slower than initially anticipated. This gives stakeholders an opportunity to better prepare and adapt, avoiding major disruptions in society.